Exhibit 10.15

LOAN AGREEMENT

Dated as of December 28, 2012

By and among

THE ENTITIES SET FORTH ON SCHEDULE I ATTACHED HERETO,
collectively, as Borrower

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Lender

 

 

 
 

TABLE OF CONTENTS

 

 

ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION Section 1.1 Definitions  
Section 1.2 Principles of Construction         ARTICLE II - GENERAL TERMS  
Section 2.1 Loan commitment; Disbursement of Borrower   2.1.1 Agreement to Lend
and Borrow   2.1.2 Single Disbursement to Borrower   2.1.3 The note, Mortgage
and Loan Documents   2.1.4 Use of Proceeds   Section 2.2 Interest Rate   2.2.1
Interest Rate   2.2.2 Interest Calculation   2.2.3 Default Rate   2.2.4 Usury
Savings   Section 2.3 Loan Payment   2.3.1 Monthly Debt Service Payments Until
the Anticipated Repayment Date   2.3.2 Payments After the Anticipated Repayment
Date   2.3.3 Payments Generally   2.3.4 Payment on Maturity Date   2.3.5 Late
Payment Charge   2.3.6 Method and Place of Payment   Section 2.4 Prepayments  
2.4.1 Voluntary Prepayments   2.4.2 Mandatory Prepayments   2.4.3 Prepayments
After Default   Section 2.5 Intentionally omitted   Section 2.6 Release of
Property   2.6.1 Release of All of the Property   2.6.2 Release of Individual
Property   Section 2.7 Lockbox Account/Cash Management   2.7.1 Lockbox Account  
2.7.2 Cash Management Account   2.7.3 Payments Received under the Cash
Management Agreement         ARTICLE III - CONDITIONS PRECEDENT   Section 3.1
Conditions Precedent to Closing         ARTICLE IV - REPRESENTATIONS AND
WARRANTIES   Section 4.1 Borrower Representations   4.1.1 Organization   4.1.2
Proceedings   4.1.3 No Conflicts   4.1.4 Litigation   4.51.5 Agreements   4.1.6
Title   4.1.7 Solvency   4.1.8 Full and Accurate Disclosure   4.1.9 No Plan
Assets   4.1.10 Compliance   4.1.11 Financial Information   4.1.12 Condemnation
  4.1.13 Federal Reserve Regulations   4.1.14 Utilities and Public Access  
4.1.15 Not a Foreign Person   4.1.16 Separate Lots   4.1.17 Assessments   4.1.18
Enforceability   4.1.19 No Prior Assignment   4.1.20 Insurance   4.1.21 Use of
Property   4.1.22 Certificate of Occupancy; Licenses   4.1.23 Flood Zone  
4.1.24 Physical Condition   4.1.25 Boundaries   4.1.26 Leases   4.1.27 Survey  
4.1.28 Inventory   4.1.29 Filing and Recording Taxes   4.1.30 Special Purpose
Entity/Separateness   4.1.31 Management Agreement   4.1.32 Illegal Activity  
4.1.33 No Change in Facts or Circumstances; Disclosure   4.1.34 Investment
Company Act   4.1.35 Embargoed Person   4.1.36 Principal Place of Business;
State of Organization   4.1.37 Environmental Representations and Warranties  
4.1.38 Cash Management   4.1.39 Intentionally Omitted   Section 4.2 Survival of
Representations         ARTICLE V - BORROWER COVENANTS   Section 5.1 Affirmative
Covenants   5.1.1 Existence; Compliance with Legal Requirements   5.1.2 Taxes
and Other Charges   5.1.3 Litigation   5.1.4 Access to Properties   5.1.5 Notice
of Default   5.1.6 Cooperate in Legal Proceedings   5.1.7 Perform Loan Documents
  5.1.8 Award and Insurance Benefits   5.1.9 Further Assurances   5.1.10
Principal Place of Business, State of Organization   5.1.11 Financial Reporting
  5.1.12 Business and Operations   5.1.13 Title to the Properties   5.1.14 Costs
of Enforcement   5.1.15 Estoppel Statement   5.1.16 Loan Proceeds   5.1.17
Performance by Borrower   5.1.18 Confirmation of Representations   5.1.19
Environmental Covenants   5.1.20 Leasing Matters   5.1.21 Alterations   5.1.22
Operation of Property   5.1.23 Embargoed Person   5.1.24 Supplemental Mortgage
Affidavits   Section 5.2 Negative covenants   5.2.1 Operation of Property  
5.2.2 Liens   5.2.3 Dissolution   5.2.4 Change In Business   5.2.5 Debt
Cancellation   5.2.6 Zoning   5.2.7 No Joint Assessment   5.2.8 Intentionally
Omitted   5.2.9 ERISA   5.2.10 Transfers         ARTICLE VI - INSURANCE;
CASUALTY; CONDEMNATION   Section 6.1 Insurance   Section 6.2 Casualty   Section
6.3 Condemnation   Section 6.4 Restoration         ARTICLE VII - RESERVE FUNDS  
Section 7.1 Required Repairs   7.1.1 Deposits   7.1.2 Release of Required Repair
Fund   Section 7.2 Tax and Insurance Escrow Fund   Section 7.3 Intentionally
Omitted   Section 7.4 Intentionally Omitted   Section 7.5 Excess Cash Flow
Reserve Fund   7.5.1 Deposits of Excess Cash Flow Reserve Fund   7.5.2 Release
of Excess Cash Flow Reserve Funds   Section 7.6 Reserve Funds, Generally        
ARTICLE VIII - DEFAULTS   Section 8.1 Event of Default   Section 8.2 Remedies  
Section 8.3 Remedies Cumulative; Waivers         ARTICLE IX - SPECIAL PROVISIONS
  Section 9.1 Securitization   9.1.1 Sale of Notes and Securitization   9.1.2
Securitization costs   Section 9.2 Uncross of Properties   Section 9.3
Exculpation   Section 9.4 Matters Concerning Manager   Section 9.5 Servicer    
    ARTICLE X - MISCELLANEOUS   Section 10.1 Survival   Section 10.2 Lender’s
Discretion   Section 10.3 Governing Law   Section 10.4 Modification, Waiver in
Writing   Section 10.5 Delay Not a Waiver   Section 10.6 Notices   Section 10.7
Trial by Jury   Section 10.8 Headings   Section 10.9 Severability   Section
10.10 Preferences   Section 10.11 Waiver of Notice   Section 10.12 Remedies of
Borrower   Section 10.13 Expenses; Indemnity   Section 10.14 Schedules
Incorporated   Section 10.15 Offsets, Counterclaims and Defenses   Section 10.16
No Joint Venture or Partnership; No Third Party Beneficiaries   Section 10.17
Publicity   Section 10.18 Cross-Default; Cross-Collateralization; Waiver of
Marshalling of Assets   Section 10.19 Waiver of Counterclaim   Section 10.20
Conflict; Construction of Documents; Reliance   Section 10.21 Brokers and
Financial Advisors   Section 10.22 Prior Agreements   Section 10.23 Joint and
Several Liability   Section 10.24 Certain Additional Rights of Lender (VCOC)  
Section 10.25 Release of IREIC              

 

 

 
 

SCHEDULES

 

 

Schedule I   List of Borrowers Schedule II   Alteration Conditions Schedule III
  Organizational Chart of Borrower Schedule IV   Form of Cash Management
Agreement Schedule V   Leasing Conditions Schedule VI   Purchase Options /
Rights of First Refusal Schedule VII   Required Repairs Schedule VIII  
Individual Properties Schedule IX   Release Amounts

 

 

 
 

LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of December 28, 2012 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking
association chartered under the laws of the United States of America, having an
address at 383 Madison Avenue, New York, New York 10179 (together with its
successors and assigns, “Lender”) and THE ENTITIES SET FORTH ON SCHEDULE I
ATTACHED HERETO, each a Delaware limited liability company, having its principal
place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523 (each, an
“Individual Borrower” and, collectively, “Borrower”).

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the terms of this Agreement and the other Loan Documents (as
hereinafter defined).

NOW THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:

ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION.

Section 1.1            Definitions.

For all purposes of this Agreement, except as otherwise expressly required or
unless the context clearly indicates a contrary intent:

“Accrual Period” shall mean the period commencing on and including the first
(1st) day of each calendar month during the term of the Loan and ending on and
including the final calendar date of such calendar month; however, the initial
Accrual Period shall commence on and include the Closing Date and shall end on
and include the final calendar date of the calendar month in which the Closing
Date occurs.

“Accrued Interest” shall have the meaning set forth in Section 2.3.2 hereof.

“Adjusted Release Amount” shall mean, for each Individual Property, the sum of
(a) the Release Amount for such Individual Property and (b) twenty percent (20%)
of the Release Amount for such Individual Property.

“Affected Property” shall have the meaning set forth in Section 9.2 hereof.

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, is in Control of, is Controlled by or is under common Control with
such Person or is a director or officer of such Person or of an Affiliate of
such Person.

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“Affiliate Loan” shall mean a loan made by Lender prior to, on, or after the
date hereof, to any Affiliate of Borrower and/or IREIT that is secured by one
(1) or more properties tenanted by Dollar General (or an Affiliate thereof).

“Affiliated Manager” shall mean any Manager in which Borrower, Principal, or
Guarantor has, directly or indirectly, any legal, beneficial or economic
interest.

“Agent” shall mean any Eligible Institution acting as Agent under the Cash
Management Agreement.

“Aggregate Debt Service Coverage Ratio” shall mean a ratio for the applicable
period in which:

(a) the numerator is the Net Operating Income (excluding interest on credit
accounts and using annualized operating expenses for any recurring expenses not
paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth
in the statements required hereunder, without deduction for (i) actual
management fees incurred in connection with the operation of the Property, or
(ii) amounts paid to the Reserve Funds, less (A) management fees equal to the
greater of (1) assumed management fees of 3.0% of Gross Income from Operations
and (2) the actual management fees incurred, and (B) assumed reserves for
Capital Expenditures equal to $0.20 per square foot of gross leasable area at
the Property, and (C) rollover reserve contributions equal to $0.72 per square
foot of gross leasable area at the Property; and

(b) the denominator is the aggregate amount of Debt Service for such period
assuming for purposes of this calculation that the Debt Service for each Accrual
Period is equal to the sum of (A) Monthly Debt Service Payment Amount, and (B)
any scheduled principal (if any) and interest payments due under the Existing
Mezzanine Loan.

“Alteration Conditions” shall have the meaning set forth on Schedule II hereof.

“Annual Budget” shall mean the operating budget, including all planned Capital
Expenditures, for each Individual Property prepared by Borrower in accordance
with Section 5.1.11(d) hereof for the applicable Fiscal Year or other period.

“Anticipated Existing Mezzanine Loan Repayment Date” shall mean January 1, 2014.

“Anticipated Repayment Date” shall mean January 1, 2020.

“Applicable Interest Rate” shall mean (i) prior to the Anticipated Repayment
Date, the Initial Interest Rate and (ii) on and after the Anticipated Repayment
Date, the Revised Interest Rate.

“Approved Annual Budget” shall have the meaning set forth in Section 5.1.11(d)
hereof.

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“Assignment of Management Agreement” shall mean that certain Assignment of
Management Agreement and Subordination of Management Fees, dated as of the date
hereof, among Lender, each Individual Borrower and Manager, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Award” shall mean any compensation paid by any Governmental Authority in
connection with a Condemnation in respect of all or any part of any Individual
Property.

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing
a voluntary petition under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law; (b) the filing of an involuntary petition against
such Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law; (c) such Person filing an answer consenting to or otherwise
acquiescing in or joining in any involuntary petition filed against it, by any
other Person under the Bankruptcy Code or any other Federal or state bankruptcy
or insolvency law; (d) such Person consenting to or acquiescing in or joining in
an application for the appointment of a custodian, receiver, trustee, or
examiner for such Person or any portion of any Individual Property; (e) such
Person making an assignment for the benefit of creditors, or admitting, in
writing in any legal proceeding, its insolvency or inability to pay its debts as
they become due.

“Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §101,
et seq., as the same may be amended from time to time, and any successor statute
or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors’ rights or any other Federal or state bankruptcy or insolvency law.

“Borrower” shall have the meaning set forth in the introductory paragraph
hereto, together with its successors and permitted assigns.

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York, or the place of business of the
trustee under a Securitization (or, if no Securitization has occurred, Lender),
or any Servicer or the financial institution that maintains any collection
account for or on behalf of any Servicer or any Reserve Funds or the New York
Stock Exchange or the Federal Reserve Bank of New York is not open for business.

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under GAAP (including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements).

“Cash Management Account” shall have the meaning set forth in Section 2.7.2
hereof.

“Cash Management Agreement” shall mean a Cash Management Agreement, by and among
Borrower, Lender and Agent, in the form attached hereto as Schedule IV (or such
other form as Lender shall accept in its sole discretion) as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

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shall mean (a) (i) during the Existing Mezzanine Loan Period, the Aggregate Debt
Service Coverage Ratio based on the trailing three (3) month period immediately
preceding the date of such determination is less than 1.15 to 1.00, or (ii)
after the termination of the Existing Mezzanine Loan Period, the Debt Service
Coverage Ratio based on the trailing three (3) month period immediately
preceding the date of such determination is less than 1.80 to 1.00

“Cash Management Period” shall mean the period commencing on the occurrence of a
Cash Management Event and continuing until the payment in full of all principal
and interest on the Loan and all other amounts payable under the Loan Documents
in accordance with the terms and provisions of the Loan Documents.

“Cash Sweep Event” shall mean the occurrence of:

(a) an Event of Default (a “Default Trigger”);

(b) any Bankruptcy Action of an Individual Borrower (a “Borrower BK Trigger”);

(c) any Bankruptcy Action of Manager (a “Property Manager BK Trigger”);

(d) (i) during the Existing Mezzanine Loan Period, the Aggregate Debt Service
Coverage Ratio based on the trailing three (3) month period immediately
preceding the date of such determination is less than 1.15 to 1.00, or (ii)
after the termination of the Existing Mezzanine Loan Period, the Debt Service
Coverage Ratio based on the trailing three (3) month period immediately
preceding the date of such determination is less than 1.65 to 1.00 (a “DSCR
Trigger”);

(e) any Bankruptcy Action of Dollar General (a “Tenant BK Trigger”);

(f) a Tenant Go Dark Event occurring with respect to any three (3) or more
Individual Properties (a “Tenant Go Dark Trigger”);

(g) the long-term unsecured debt rating of Dollar General by any two (2) Rating
Agencies falls below “BB+” (or its equivalent), or any two (2) Rating Agencies
withdraw their rating of Dollar General and EBITDA is $1,375,275,000 or less (a
“Tenant Rating Trigger”); or

(h) the Loan shall have not been repaid in full pursuant to the terms hereof on
or before the Payment Date that is one (1) month prior to the Anticipated
Repayment Date (an “ARD Trigger”); or

(i) an Existing Mezzanine Loan Trigger.

“Cash Sweep Event Cure” shall mean

(a) if the Cash Sweep Event is caused solely by a Default Trigger, the
acceptance by Lender of a cure of such Event of Default (which cure Lender is
not obligated to accept and may reject or accept in its sole and absolute
discretion, unless required by law),

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(b) if the Cash Sweep Event is caused solely by a Bankruptcy Action of an
Individual Borrower based on an involuntary petition against such Individual
Borrower with respect to which neither Individual Borrower, Guarantor nor any
Affiliate of any Individual Borrower or Guarantor solicited or caused to be
solicited petitioning creditors or consented to or otherwise acquiesced in or
joined in such involuntary petition, upon the same being discharged, stayed or
dismissed within thirty (30) days of such filing; provided that such filing does
not result in any adverse consequences to the Loan or the Property, as
determined by Lender in its sole discretion;

(c) if the Cash Sweep Event is caused solely by a Property Manager BK Trigger,
if Borrower replaces the Manager with a Qualified Manager under a Replacement
Management Agreement;

(d) if the Cash Sweep Event is caused solely by the occurrence of a DSCR Cash
Sweep Trigger Event, (i) during the Existing Mezzanine Loan Period, the
achievement of a Debt Service Coverage Ratio of 1.20 to 1.00 or greater, and
(ii) after the termination of the Existing Mezzanine Loan Period, the
achievement of a Debt Service Coverage Ratio of 1.75 to 1.00 or greater, in each
case for six (6) consecutive months based upon the trailing six (6) month period
immediately preceding the date of determination;

(e) if the Cash Sweep Event is caused solely by a Tenant BK Trigger, (A) the
dismissal of the applicable bankruptcy proceeding pursuant to a final,
non-appealable order of a court of competent jurisdiction without material
modification to any Dollar General Lease, and Dollar General delivers to Lender
one (1) or more estoppel certificates confirming that it (or a subtenant
approved by Lender) is open for business and paying full unabated rent at each
Individual Property, (B) the affirmation by Dollar General of each Dollar
General Lease in the applicable bankruptcy proceeding pursuant to a final,
non-appealable order of a court of competent jurisdiction and Dollar General
delivers to Lender one (1) or more estoppel certificates confirming that it (or
a subtenant approved by Lender) is open for business and paying full unabated
rent at each Individual Property, or (C) the entire demised premises pursuant to
each Dollar General Lease is re-leased to a replacement Tenant acceptable to
Lender, pursuant to a Lease entered into pursuant to the terms hereof, and such
replacement Tenant delivers to Lender one (1) or more estoppel certificates
confirming that it is open for business and paying full unabated rent at each
Individual Property;

(f) if the Cash Sweep Event is caused solely by a Tenant Go Dark Trigger, (I)
(A) Dollar General subsequently delivers to Lender one (1) or more estoppel
certificates confirming that, with respect to the applicable Individual
Properties, it (or a subtenant approved by Lender) is open for business and
paying full unabated rent, or (B) such Individual Property is re-leased or
subleased to a replacement Tenant acceptable to Lender, pursuant to a Lease
entered into pursuant to the terms hereof, and such replacement Tenant or
subtenant delivers to Lender an estoppel certificate confirming (x) the
replacement Lease is in full force and effect, (y) neither the Borrower nor
replacement Tenant is in default under the replacement Tenant's Lease, and (z)
replacement Tenant is in occupancy of and conducting business in the applicable
Individual Property and is paying full unabated rent, and (II) not more than two
(2) Individual Properties then remains subject to a Tenant Go Dark Event;

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(g) if the Cash Sweep Event is caused solely by the occurrence of a Tenant
Rating Trigger, the determination by Lender that the long-term unsecured debt
rating of Dollar General by not less than two (2) nationally recognized Rating
Agencies is "BB+" (or its equivalent) or better for two (2) consecutive calendar
quarters, or EBITDA exceeds $1,375,275,000; or

(h) if the Cash Sweep Event is caused solely by the occurrence of an ARD
Trigger, if Borrower provides Lender with a fully executed commitment letter in
a form and substance reasonably acceptable to Lender evidencing the refinance of
the Loan; or

(i) if the Cash Sweep Event is caused solely by an Existing Mezzanine Loan
Trigger, the repayment in full of the Existing Mezzanine Loan in accordance with
its terms;

provided, however, that such Cash Sweep Event Cure set forth in this definition
shall be subject to the following conditions, (i) no Event of Default shall have
occurred and be continuing under this Agreement or any of the other Loan
Documents, (ii) a Cash Sweep Event Cure may occur no more than a total of five
(5) times in the aggregate during the term of the Loan, and (iii) Borrower shall
have paid all of Lender’s reasonable expenses incurred in connection with such
Cash Sweep Event Cure including, reasonable attorney’s fees and expenses, and
(iv) in the case of a Cash Sweep Cure Event pursuant to clause (h) above, if the
Loan has not been repaid in full within sixty (60) days after such Cash Sweep
Event Cure, such Cash Sweep Event Cure shall be deemed ineffective and the Cash
Sweep Period shall be reinstated. Notwithstanding the foregoing, there shall be
no Cash Sweep Event Cure following a Cash Sweep Event caused by a Bankruptcy
Action of Borrower or an ARD Trigger, except to the extent specifically set
forth in clauses (b) and (h), respectively, above.

“Cash Sweep Period” shall mean each period commencing on the occurrence of a
Cash Sweep Event and continuing until the earlier of (a) the Payment Date next
occurring following the related Cash Sweep Event Cure (or, if such day is not a
Business Day, the immediately preceding Business Day), or (b) until payment in
full of all principal and interest on the Loan and all other amounts payable
under the Loan Documents in accordance with the terms and provisions of the Loan
Documents.

“Casualty” shall have the meaning set forth in Section 6.2 hereof.

“Casualty/Condemnation Prepayment” shall have the meaning set forth in Section
6.4(e) hereof.

“Casualty Consultant” shall have the meaning set forth in Section 6.4(b)(iii)
hereof.

“Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

“Certified Rent Roll” shall have the meaning set forth in Section 4.1.26 hereof.

“Closing Date” shall mean the date of the funding of the Loan.

“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be
further amended from time to time, and any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

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“Collective Group” shall have the meaning set forth in Section 10.23 hereof.

“Condemnation” shall mean a temporary or permanent taking by any Governmental
Authority as the result or in lieu or in anticipation of the exercise of the
right of condemnation or eminent domain, of all or any part of an Individual
Property, or any interest therein or right accruing thereto, including any right
of access thereto or any change of grade affecting such Individual Property or
any part thereof.

“Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b).

“Contribution Agreement” shall mean that certain Contribution Agreement, dated
as of the date hereof, by and among each Individual Borrower, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a Person,
whether through ownership of voting securities, by contract or otherwise.
“Controlled” and “Controlling” shall have correlative meanings.

“Debt” shall mean the outstanding principal amount set forth in, and evidenced
by, this Agreement and the Note together with all interest accrued and unpaid
thereon and all other sums (including any Yield Maintenance Premium and any
Yield Maintenance Default Premium) due to Lender in respect of the Loan under
the Note, this Agreement, the Mortgage or any other Loan Document.

“Debt Service” shall mean, with respect to any particular period of time, the
scheduled principal (if any) and interest payments due under this Agreement and
the Note.

“Debt Service Coverage Ratio” shall mean a ratio for the applicable period in
which:

(a) the numerator is the Net Operating Income (excluding interest on credit
accounts and using annualized operating expenses for any recurring expenses not
paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth
in the statements required hereunder, without deduction for (i) actual
management fees incurred in connection with the operation of the Property, or
(ii) amounts paid to the Reserve Funds, less (A) management fees equal to the
greater of (1) assumed management fees of 3% of Gross Income from Operations and
(2) the actual management fees incurred, and (B) assumed capital replacement
costs contributions equal to $0.20 per square foot of gross leasable area at the
Property, and (C) assumed reserves for tenant improvements and leasing
commissions equal to $0.72 per square foot of gross leasable area at the
Property; and

(b) the denominator is the aggregate amount of Debt Service for such period
assuming for purposes of this calculation that the Debt Service for each Accrual
Period is equal to the Monthly Debt Service Payment Amount.

“Default” shall mean the occurrence of any event hereunder or under any other
Loan Document which, but for the giving of notice or passage of time, or both,
would be an Event of Default.

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“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above the
Applicable Interest Rate.

“Disclosure Documents” shall have the meaning set forth in Section 9.1.1(b)
hereof.

“Dollar General” shall mean DolgenCorp, LLC, a Kentucky limited liability
company.

“Dollar General Lease” shall mean, individually or collectively, as the context
requires, each Lease between Borrower and Dollar General.

“EBITDA” shall mean Dollar General’s earnings before interest, taxes,
depreciation and amortization as determined by Lender based on Dollar General’s
most recently available quarterly financial statements from the most recent four
(4) quarters.

“Eligible Account” shall mean a separate and identifiable account from all other
funds held by the holding institution that is either (a) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution or (b) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000.00
and subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.

“Eligible Institution” shall mean JPMorgan Chase Bank, National Association, or
a depository institution or trust company insured by the Federal Deposit
Insurance Corporation, the short term unsecured debt obligations or commercial
paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by
Fitch in the case of accounts in which funds are held for thirty (30) days or
less (or, in the case of accounts in which funds are held for more than thirty
(30) days, the long-term unsecured debt obligations of which are rated at least
“AA-” by Fitch and S&P and “Aa3” by Moody’s).

“Embargoed Person” shall mean any person, entity or government subject to trade
restrictions under U.S. law, including, but not limited to, The USA PATRIOT Act
(including the anti-terrorism provisions thereof), the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated
thereunder including Executive Order 13224 dated September 24, 2001 and those
other Executive Orders or regulations related to Specially Designated Nationals
and Specially Designated Global Terrorists, with the result that the investment
in Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by the Lender is in violation
of law.

“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement, dated as of the date hereof, executed by Borrower and Guarantor in
connection with the Loan for the benefit of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

8

 

“Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to Hazardous
Substances, relating to liability for or costs of Remediation or prevention of
Releases of Hazardous Substances or relating to liability for or costs of other
actual or threatened danger to human health or the environment. Environmental
Law includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues: the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery
Act (including but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.
Environmental Law also includes, but is not limited to, any present and future
federal, state and local laws, statutes ordinances, rules, regulations and the
like, as well as common law, conditioning transfer of property upon a negative
declaration or other approval of a Governmental Authority of the environmental
condition of the Property; requiring notification or disclosure of Releases of
Hazardous Substances or other environmental condition of the Property to any
Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property; imposing conditions or
requirements in connection with permits or other authorization for lawful
activity; relating to nuisance, trespass or other causes of action related to
the environmental conditions of the Property; or relating to wrongful death,
personal injury, or property or other damage in connection with any
environmental condition or use or presence of Hazardous Substances on or at the
Property.

“Environmental Liens” shall have the meaning set forth in Section 5.1.19 hereof.

“Environmental Report” shall have the meaning set forth in Section 4.1.37
hereof.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.

“Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

“Excess Cash Flow” shall have the meaning set forth in the Cash Management
Agreement.

“Excess Cash Flow Reserve Account” shall have the meaning set forth in
Section 7.5 hereof.

“Excess Cash Flow Reserve Fund” shall have the meaning set forth in Section 7.5
hereof.

“Exchange Act” shall have the meaning set forth in Section 9.1.1(e) hereof.

9

 

“Existing Mezzanine Lender” shall mean JPMorgan Chase Bank, National
Association, or any successor holder of the Existing Mezzanine Loan.

“Existing Mezzanine Loan” shall mean that certain loan in the original principal
amount of $2,480,000.00 made by Lender to IREIT DG SPE II Member, L.L.C., a
Delaware limited liability company.

“Existing Mezzanine Loan Documents” shall mean that certain: (i) Mezzanine
Promissory Note; (ii) Mezzanine Pledge and Security Agreement; (iii) Mezzanine
Guaranty Agreement; and (iv) Mezzanine Control Agreement.

“Existing Mezzanine Loan Period” shall mean the period commencing on the date
hereof, and terminating on the Payment Date on which the Existing Mezzanine Loan
is repaid in full (or if such date is not a Payment Date, the next occurring
Payment Date thereafter.

“Existing Mezzanine Loan Trigger” shall mean that the Existing Mezzanine Loan is
not repaid in full on or before the Anticipated Existing Mezzanine Loan
Repayment Date.

“Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(e)
hereof.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1
and ending on December 31 during each year of the term of the Loan.

“Fitch” shall mean Fitch, Inc.

“GAAP” shall mean generally accepted accounting principles in the United States
of America as of the date of the applicable financial report.

“Governmental Authority” shall mean any court, board, agency, commission, office
or other authority of any nature whatsoever for any governmental unit (foreign,
federal, state, county, district, municipal, city or otherwise) whether now or
hereafter in existence.

“Gross Income from Operations” shall mean, during any period, all sustainable
income as reported on the financial statements delivered by Borrower in
accordance with this Agreement, computed in accordance with GAAP, derived from
the ownership and operation of the Property from whatever source during such
period, including, but not limited to, (i) Rents from Tenants that are in
occupancy, open for business and paying contractual rent without right of offset
or credit, (ii) utility charges, (iii) escalations, (iv) forfeited security
deposits, (v) interest on credit accounts, (vi) service fees or charges, (vii)
license fees, (viii) parking fees, (ix) income from vending machines, (x)
business interruption or other loss of income or rental insurance proceeds, (xi)
other required pass-throughs, (xii) rent concessions or credits, and (xiii)
interest on Reserve Accounts, if any, but excluding (i) Rents from
month-to-month Tenants, Tenants during a free-rent period, or Tenants that are
included in any Bankruptcy Actions (unless such Tenant has affirmed its Lease
and is in occupancy, open for business and paying unabated, post-petition Rent),
(ii) sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, (iii) refunds and
uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v)
Insurance Proceeds (other than business interruption or

10

 

other loss of income or rental insurance), (vi) Awards, (vii) unforfeited
security deposits, (viii) utility and other similar deposits and (ix) any
disbursements to any Individual Borrower from the Reserve Funds, if any. Gross
income shall not be diminished as a result of the Mortgage or the creation of
any intervening estate or interest in the Property or any part thereof.

“Guarantor” shall mean, individually or collectively as the context may require,
Inland Real Estate Investment Corporation, a Delaware corporation, and Inland
Real Estate Income Trust, Inc., a Maryland corporation.

“Guaranty” shall mean that certain Guaranty Agreement, dated as of the date
hereof, executed and delivered by Guarantor in connection with the Loan to and
for the benefit of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

“Hazardous Substances” include but are not limited to any and all substances
(whether solid, liquid or gas) defined, listed, or otherwise classified as
pollutants, hazardous wastes, hazardous substances, hazardous materials,
extremely hazardous wastes, or words of similar meaning or regulatory effect
under any present or future Environmental Laws or that may have a negative
impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables,
explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally
occurring or otherwise), but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.

“Identified Affiliate” shall mean (i) Inland Real Estate Corporation, a Maryland
corporation, (ii) Inland Real Estate Investment Corporation, a Delaware
corporation, (iii) Retail Properties of America, Inc. (formerly known as Inland
Western Retail Real Estate Trust, Inc.), a Maryland corporation, (iv) Inland
American Real Estate Trust, Inc., a Maryland corporation, (iv) Inland
Diversified Real Estate Trust, Inc., a Maryland corporation, (v) IREIT, (vi) any
other real estate investment trust sponsored by Inland Real Estate Investment
Corporation, or (vii) any other entity composed entirely of any of the
foregoing, by merger or other business combination.

“Identified Affiliate Related Entities” shall have the meaning set forth in
Section 5.2.10(e)(iii) hereof.

“IREIC” shall mean Inland Real Estate Investment Corporation, a Delaware
corporation.

“IREIT” shall mean Inland Real Estate Income Trust, Inc., a Maryland
corporation.

“Improvements” shall have the meaning set forth in the granting clause of the
related Mortgage with respect to each Individual Property

“Indebtedness” of a Person, at a particular date, shall mean the sum (without
duplication) at such date of (a) all indebtedness or liability of such Person
(including, without limitation, amounts for borrowed money and indebtedness in
the form of mezzanine debt or preferred equity); (b) obligations evidenced by
bonds, debentures, notes, or other similar

11

 

instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed (other than the Permitted Encumbrances).

“Indemnified Liabilities” shall have the meaning set forth in Section 10.13(b)
hereof.

“Indemnified Parties” shall mean Lender and, its designee, (whether or not it is
the Lender), any Affiliate of Lender that has filed any registration statement
relating to the Securitization or has acted as the sponsor or depositor in
connection with the Securitization, any Affiliate of Lender that acts as an
underwriter, placement agent or initial purchaser of Securities issued in the
Securitization, any other co underwriters, co placement agents or co initial
purchasers of Securities issued in the Securitization, and each of their
respective officers, directors, partners, employees, representatives, agents and
Affiliates and each Person or entity who Controls any such Person within the
meaning of Section 15 of the Securities Act of 1933 as amended or Section 20 of
the Security Exchange Act of 1934 as amended, any Person who is or will have
been involved in the origination of the Loan, any Person who is or will have
been involved in the servicing of the Loan secured hereby, any Person in whose
name the encumbrance created by the Mortgage is or will have been recorded, any
Person who may hold or acquire or will have held a full or partial interest in
the Loan secured hereby (including, but not limited to, investors or prospective
investors in the Securities, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the Loan secured
hereby for the benefit of third parties) as well as the respective directors,
officers, shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to, any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan, whether during the term of the Loan or as
a part of or following a foreclosure of the Loan and including, but not limited
to any successors by merger, consolidation or acquisition of all or a
substantial portion of Lender’s assets and business).

“Individual Borrower” shall have the meaning set forth in the introductory
paragraph hereto, together with its successors and permitted assigns.

“Individual Property” shall mean each parcel of real property set forth on
Schedule VIII hereto, the Improvements thereon and all personal property owned
by Borrower and encumbered by a Mortgage, together with all rights pertaining to
such property and Improvements, as more particularly described in the granting
clauses of the related Mortgage and referred to therein as the “Property”.

“Initial Interest Rate” shall mean a rate of four and 347/1000 (4.347%) percent
per annum.

“Insurance Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

12

 

“Insurance Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Joinder Agreement” shall mean that certain Joinder Agreement attached hereto,
given by Guarantor in favor of Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

“JV Partner” shall have the meaning set forth in Section 5.2.10 hereof.

“JV Transferee” shall have the meaning specified in Section 5.2.10 hereof.

“Lease” shall mean, with respect to each Individual Property, any lease,
sublease or subsublease, letting, license, concession or other agreement
(whether written or oral and whether now or hereafter in effect) pursuant to
which any Person is granted a possessory interest in, or right to use or occupy
all or any portion of any space in such Individual Property by or on behalf of
Borrower, and (a) every modification, amendment or other agreement relating to
such lease, sublease, subsublease, or other agreement entered into in connection
with such lease, sublease, subsublease, or other agreement and (b) every
guarantee of the performance and observance of the covenants, conditions and
agreements to be performed and observed by the other party thereto.

“Leasing Conditions” shall mean the conditions set forth on Schedule V hereof.

“Legal Requirements” shall mean, all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting an Individual
Property or any part thereof, or the construction, use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits, licenses and authorizations and regulations relating thereto, and
all covenants, agreements, restrictions and encumbrances contained in any
instruments, either of record or known to an Individual Borrower, at any time in
force affecting such Individual Borrower, an Individual Property or any part
thereof, including, without limitation, any which may (a) require repairs,
modifications or alterations in or to an Individual Property or any part
thereof, or (b) in any way limit the use and enjoyment thereof.

“Lender” shall have the meaning set forth in the introductory paragraph hereto.

“Lien” shall mean, with respect to any Individual Property, any mortgage, deed
of trust, deed to secure debt, indemnity deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Borrower, the Property, any portion thereof or
any interest therein, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic’s, materialmen’s and other similar liens and
encumbrances.

“Life and Safety Repairs” shall have the meaning set forth in Section 7.1.1
hereof.

“Loan” shall mean the loan made by Lender to Borrower pursuant to this
Agreement.

13

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Environmental Indemnity, the Assignment of Management Agreement,
the Guaranty, the Lockbox Agreement (if any), the Cash Management Agreement (if
any), the Contribution Agreement, and all other documents executed and/or
delivered by Borrower and/or Guarantor in connection with the Loan.

“Loan to Value Ratio” shall mean, as of the date of its calculation, the ratio
of (i) the sum of the outstanding principal amount of the Loan as of the date of
such calculation to (ii) the fair market value (for purposes of the REMIC
provisions, counting only real property and excluding any personal property or
going concern value) of the Properties, as determined, in Lender’s sole
discretion, by any commercially reasonable method permitted to a REMIC Trust.

“Lockbox Account” shall have the meaning set forth in Section 2.7.1 hereof.

“Lockbox Agreement” shall mean a clearing account agreement or similar agreement
among Borrower, Lender, Manager and Lockbox Bank, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time,
relating to funds deposited in the Lockbox Account.

“Lockbox Bank” shall mean Bank of America, N.A. or any other clearing bank which
establishes, maintains and holds the Lockbox Account, which shall be an Eligible
Institution.

“Management Agreement” shall mean (a) the management agreement entered into by
and between Borrower and Manager, pursuant to which Manager is to provide
management and other services with respect to the Property; or (b) if the
context requires, the Replacement Management Agreement.

“Manager” shall mean Inland National Real Estate Services, LLC, a Delaware
limited liability company, or, if the context requires, a Qualified Manager who
is operating and managing an Individual Property in accordance with the terms
and provisions of this Agreement pursuant to a Replacement Management Agreement.

“Material Action” means to file any insolvency, or reorganization case or
proceeding, to institute proceedings to have any Individual Borrower be
adjudicated bankrupt or insolvent, to institute proceedings under any applicable
insolvency law, to seek any relief under any law relating to relief from debts
or the protection of debtors, to consent to the filing or institution of
bankruptcy or insolvency proceedings against any Individual Borrower, to file a
petition seeking, or consent to, reorganization or relief with respect to any
Individual Borrower under any applicable federal or state law relating to
bankruptcy or insolvency, to seek or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator, custodian, or any similar official
of or for any Individual Borrower or a substantial part of its property, to make
any assignment for the benefit of creditors of any Individual Borrower, to admit
in writing in any insolvency case or proceeding any Individual Borrower’s
inability to pay its debts generally as they become due, or to take action in
furtherance of any of the foregoing.

“Maturity Date” shall mean October 1, 2027, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

14

 

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

“Monthly Debt Service Payment Amount” shall mean (i) on each Payment Date up to
and including the Anticipated Repayment Date, an amount equal to interest only
at the Initial Interest Rate on the outstanding principal balance of the Loan
for the related Accrual Period and (ii) on each Payment Date occurring after the
Anticipated Repayment Date, a constant monthly payment of $22,653.41.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Mortgage” shall mean, with respect to each Individual Property, that certain
first priority Deed of Trust, Assignment of Leases and Rents and Security
Agreement, Deed to Secure Debt, Assignment of Leases and Rents and Security
Agreement or Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing, or similar instrument, dated the date hereof, executed and
delivered by Borrower to Lender as security for the Loan and encumbering one or
more Individual Properties, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time

“Net Cash Flow” shall mean, with respect to the Property for any period, the
amount obtained by subtracting Operating Expenses and Capital Expenditures for
such period from Gross Income from Operations for such period.

“Net Operating Income” shall mean the amount obtained by subtracting Operating
Expenses from Gross Income from Operations.

“Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi)
hereof.

“Net Proceeds Prepayment” shall have the meaning set forth in Section 6.4(e)
hereof.

“New Note” shall have the meaning set forth in Section 9.2 hereof.

“Non-Life and Safety Repairs” shall have the meaning set forth in Section 7.1.1
hereof.

“Note” shall mean that certain Promissory Note, dated the date hereof, in the
principal amount of $4,140,000.00, made by Borrower in favor of Lender, as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized officer of Borrower or the general partner,
managing member or sole member of Borrower, as applicable.

15

 

“Operating Expenses” shall mean the total of all expenditures, computed in
accordance with GAAP, of whatever kind relating to the operation, maintenance
and management of the Property that are incurred on a regular monthly or other
periodic basis, including without limitation, ground rent (if any), bad debt,
utilities, ordinary repairs and maintenance, insurance, license fees, property
taxes and assessments, advertising expenses, management fees, payroll and
related taxes, computer processing charges, operational equipment or other lease
payments as approved by Lender, and other similar costs, but excluding
depreciation, Debt Service, Capital Expenditures and contributions to the
Reserve Funds.

“Other Charges” shall mean all ground rents, maintenance charges, impositions
other than Taxes, and any other charges, including, without limitation, vault
charges and license fees for the use of vaults, chutes and similar areas
adjoining an Individual Property, now or hereafter levied or assessed or imposed
against such Individual Property or any part thereof.

“Other Obligations” shall have the meaning as set forth in the Mortgage.

“Payment Date” shall mean the first (1st) day of each calendar month during the
term of the Loan.

“Permitted Affiliate Transfer” shall have the meaning set forth in Section
5.2.10(c).

“Permitted Affiliate Transferee” shall have the meaning set forth in Section
5.2.10(c).

“Permitted Encumbrances” shall mean, with respect to each Individual Property,
collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental
Authority not yet due or delinquent (or the applicable Individual Borrower is
contesting in accordance with the terms of Section 5.1.2 hereof), and (d)
easements or other encumbrances granted pursuant to Section 5.2.10(j) hereof,
and (e) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender’s reasonable discretion, which Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the applicable Individual Property or Individual Borrower’s
ability to repay the Loan.

“Permitted Investments” shall mean any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, including
those issued by Servicer, the trustee under any Securitization or any of their
respective Affiliates, payable on demand or having a maturity date not later
than the Business Day immediately prior to the first Payment Date following the
date of acquiring such investment and meeting one of the appropriate standards
set forth below:

(i)                 obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business

16

 

Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

(ii)               Federal Housing Administration debentures;

(iii)             obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the
Farm Credit System (consolidated systemwide bonds and notes), the Federal Home
Loan Banks (consolidated debt obligations), the Federal National Mortgage
Association (debt obligations), the Financing Corp. (debt obligations), and the
Resolution Funding Corp. (debt obligations); however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have
an “r” highlighter affixed to their rating, (C) if such investments have a
variable rate of interest, such interest rate must be tied to a single interest
rate index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity;

(iv)             federal funds, unsecured certificates of deposit, time
deposits, bankers’ acceptances and repurchase agreements with maturities of not
more than 365 days of any bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other Rating
Agency, as confirmed in writing that such investment would not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

(v)               fully Federal Deposit Insurance Corporation-insured demand and
time deposits in, or certificates of deposit of, or bankers’ acceptances issued
by, any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in

17

 

a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

(vi)             debt obligations with maturities of not more than 365 days and
at all times rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities) in its
highest long-term unsecured rating category; provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;

(vii)           commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) in its highest short-term unsecured debt rating;
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

(viii)         units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share and
invest solely in obligations backed by the full faith and credit of the United
States, which funds have the highest rating available from each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities) for money market funds; and

18

 

 

(ix)             any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial, or,
if higher, then current ratings assigned to the Securities by such Rating
Agency;

provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of 120% of the yield to maturity at par
of such underlying investment.

“Permitted Par Prepayment Date” shall mean any Business Day after the Payment
Date that is three (3) months prior to the Anticipated Repayment Date.

“Permitted Prepayment Date” shall mean the second (2nd) anniversary of the first
(1st) Payment Date (or, if such day is not a Business Day, the immediately
succeeding Business Day).

“Permitted Transfer” shall mean any of the following: (a) any transfer, directly
as a result of the death of a natural person, of stock, membership interests,
partnership interests or other ownership interests previously held by the
decedent in question to the Person or Persons lawfully entitled thereto and
(b) any transfer, directly as a result of the legal incapacity of a natural
person, of stock, membership interests, partnership interests or other ownership
interests previously held by such natural person to the Person or Persons
lawfully entitled thereto, (c) any public issuance of interests in IREIT, (d)
any private sale or transfer of non-controlling interests in IREIT through a
transaction brokered by a FINRA licensed broker dealer not affiliated with
IREIT, or (e) issuances of membership interests in Manager to employees or other
Persons affiliated with The Inland Group of Companies, Inc. or Manager pursuant
to employee compensation programs.

“Person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

“Personal Property” shall have the meaning set forth in the granting clause of
the Mortgage with respect to each Individual Property.

“Physical Conditions Report” shall mean, with respect to each Individual
Property, a report prepared by a company satisfactory to Lender regarding the
physical condition of such Individual Property, satisfactory in form and
substance to Lender in its sole discretion, which report shall, among other
things, (a) confirm that such Individual Property and its use complies, in all
material respects, with all applicable Legal Requirements (including, without
limitation, zoning, subdivision and building laws) and (b) include a copy of a
final certificate of occupancy with respect to all Improvements on such
Individual Property.

19

 

“Policies” shall have the meaning specified in Section 6.1(b) hereof.

“Policy” shall have the meaning specified in Section 6.1(b) hereof.

“Prepayment Rate” shall mean the bond equivalent yield (in the secondary market)
on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to, but not
exceeding, the remaining term to the Anticipated Repayment Date as most recently
published in “Statistical Release H.15 (519), Selected Interest Rates,” or any
successor publication, published by the Board of Governors of the Federal
Reserve System, or on the basis of such other publication or statistical guide
as Lender may reasonably select.

“Prepayment Rate Determination Date” shall mean the date which is five (5)
Business Days prior to the date that such prepayment shall be applied in
accordance with the terms and provisions of Section 2.4.1 hereof.

“Principal” shall mean the Special Purpose Entity that is the general partner of
an Individual Borrower, if such Individual Borrower is a limited partnership,
managing member of an Individual Borrower, if such Individual Borrower is a
multi-member limited liability company, or beneficiary of an Individual
Borrower, if such Individual Borrower is a Delaware statutory trust. If an
Individual Borrower is a limited liability company with only one member, there
shall be no Principal.

“Property” or “Properties” shall mean, collectively, each and every Individual
Property which is subject to the terms of this Agreement.

“Provided Information” shall mean any and all financial and other information
provided at any time prepared by, or on behalf of, Borrower, Principal,
Guarantor and/or Manager.

“Qualified Manager” shall mean a reputable and experienced management
organization reasonably satisfactory to Lender, which organization or its
principals possess at least ten (10) years experience in managing properties
similar in scope, size, use and value of the Property, provided that, (i) if a
Securitization has occurred, Borrower shall, at Lender’s option, obtain prior
written confirmation from the Rating Agencies that management of the Property by
such entity will not cause a downgrading, withdrawal or qualification of the
then current rating of the Securities issued pursuant to the Securitization, and
(ii) if a Securitization has not occurred, Borrower shall have obtained the
prior written consent of Lender. Lender acknowledges that on the Closing Date,
Manager shall be deemed a Qualified Manager.

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch, and Realpoint or any
other nationally recognized statistical rating agency which has been approved by
Lender and designated by Lender to assign a rating to the Securities.

“Realpoint” shall mean Realpoint, LLC, a Pennsylvania limited liability company.

“Related Entities” shall have the meaning set forth in Section 5.2.10(d) hereof.

20

 

“Release” of any Hazardous Substance includes but is not limited to any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Substances.

“Release Amount” shall mean for an Individual Property the amount set forth on
Schedule IX hereto, as the same may be reduced pursuant to Section 2.4.2 hereof.

“Release Debt Service Coverage Ratio” shall mean the product of 3.00 multiplied
by a fraction of which (a) the numerator is the sum of the Release Amounts of
all Properties subject to the Liens of the Mortgages (including the Individual
Property to be released), and (b) the denominator is the sum of the then-current
outstanding principal amount of the Loan.

“Release Premium” shall mean, with respect to the related Individual Property
released in accordance with Section 2.6.2 hereof, the difference between the
Adjusted Release Amount and the Release Amount for such Individual Property.

“Relevant Leasing Threshold” shall mean any Lease for an amount of leaseable
square footage equal to or greater than Zero (0) square feet with respect to
each Individual Property.

“Relevant Restoration Threshold” shall mean $50,000.00 with respect to the
Individual Properties in the aggregate at any one time.

“Remediation” includes but is not limited to any response, remedial, removal, or
corrective action, any activity to cleanup, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Substance, any actions to prevent, cure or
mitigate any Release of any Hazardous Substance, any action to comply with any
Environmental Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances.

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the
meaning of Section 860D of the Code that holds the Note.

“Rents” shall mean, with respect to each Individual Property, all rents
(including percentage rents), rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents (including, without limitation, any and all
termination fees payable to Borrower by Dollar General under, or in connection
with, the Dollar General Lease), royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, all other amounts payable as rent under any Lease or other agreement
relating to the Property, including, without limitation, charges for
electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and any
other energy, telecommunication, telephone, utility or similar items or time use
charges, HVAC equipment charges, sprinkler charges, escalation charges, license
fees, maintenance fees, charges for Taxes, operating expenses or other
reimbursables payable to Borrower (or to the Manager for the account of
Borrower) under any Lease, and other consideration of whatever form or nature
received by or paid to or for the account of or benefit of Borrower or its
agents or employees

21

 

from any and all sources arising from or attributable to the Individual
Property, and proceeds, if any, from business interruption or other loss of
income insurance.

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a
management agreement with a Qualified Manager substantially in the same form and
substance as the Management Agreement, or (ii) a management agreement with a
Qualified Manager, which management agreement shall be reasonably acceptable to
Lender in form and substance, provided, with respect to this subclause (ii),
Lender, at its option, may require that Borrower shall have obtained prior
written confirmation from the applicable Rating Agencies that such management
agreement will not cause a downgrade, withdrawal or qualification of the then
current rating of the Securities or any class thereof and (b) an assignment of
management agreement and subordination of management fees substantially in the
form executed in connection herewith (or of such other form and substance
reasonably acceptable to Lender), executed and delivered to Lender by Borrower
and such Qualified Manager at Borrower’s expense.

“Required Repair Account” shall have the meaning set forth in Section 7.1.1
hereof.

“Required Repair Fund” shall have the meaning set forth in Section 7.1.1 hereof.

“Required Repairs” shall have the meaning set forth in Section 7.1.1 hereof.

“Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Fund, the
Excess Cash Flow Reserve Fund, the Required Repair Fund and any other escrow
fund established by the Loan Documents.

“Restoration” shall have the meaning set forth in Section 6.2 hereof.

“Restricted Party” shall mean collectively, (a) Borrower, Principal, and any
Guarantor, or (b) any shareholder, partner, member, non-member manager, any
direct or indirect legal or beneficial owner of, Borrower, Principal, or any
Guarantor (other than any shareholder or any other direct or indirect legal or
beneficial owner of interests in IREIT and other than Persons that are indirect
legal or beneficial owners of Borrower or Principal solely by being a
shareholder of IREIT; provided, however, that any shareholder or any other
direct or indirect legal or beneficial owner of interests in IREIT that owns
nine and nine-tenths percent (9.9%) or more of the outstanding stock of IREIT is
deemed to be a Restricted Party).

“Revised Interest Rate” shall mean three percent (3%) per annum plus the greater
of (i) the Initial Interest Rate, or (ii) the seven (7) year swap yield as of
the first (1st) Business Day after the Anticipated Repayment Date (as determined
by Lender in its sole discretion); provided, however, that the Revised Interest
Rate shall not exceed the Initial Interest Rate plus five percent (5%) per
annum.

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill
Companies.

“Securities” shall have the meaning set forth in Section 9.1 hereof.

22

 

“Securitization” shall have the meaning set forth in Section 9.1 hereof.

“Servicer” shall have the meaning set forth in Section 9.5 hereof.

“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.

“Special Purpose Entity” shall mean a corporation, limited partnership or
limited liability company that, since the date of its formation and at all times
on and after the date hereof, has complied with and shall at all times comply
with the following requirements unless it has received either prior consent to
do otherwise from Lender or a permitted administrative agent thereof, or, while
the Loan is securitized, confirmation from each of the applicable Rating
Agencies that such noncompliance would not result in the requalification,
withdrawal, or downgrade of the ratings of any Securities or any class thereof:

(i)                 is and shall be organized solely for the purpose of (A) in
the case of an Individual Borrower, acquiring, developing, owning, holding,
selling, leasing, transferring, exchanging, managing and operating the
applicable Individual Property, entering into and performing its obligations
under the Loan Documents with Lender, refinancing the applicable Individual
Property in connection with a permitted repayment of the Loan, and transacting
lawful business that is incident, necessary and appropriate to accomplish the
foregoing; or (B) in the case of a Principal, acting as a general partner of the
limited partnership that owns the applicable Individual Property or as member of
the limited liability company that owns the applicable Individual Property and
transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing;

(ii)               has not engaged and shall not engage in any business
unrelated to (A) the acquisition, development, ownership, management or
operation of the applicable Individual Property, or (B) in the case of a
Principal, acting as general partner of the limited partnership that owns the
applicable Individual Property or acting as a member of the limited liability
company that owns the applicable Individual Property, as applicable;

(iii)             has not owned and shall not own any real property other than,
in the case of an Individual Borrower, the applicable Individual Property;

(iv)             does not have, shall not have and at no time had any assets
other than (A) in the case of an Individual Borrower, the applicable Individual
Property and personal property necessary or incidental to its ownership and
operation of the applicable Individual Property, or (B) in the case of a
Principal, its partnership interest in the limited partnership or the member
interest in the limited liability company that owns the applicable Individual
Property and personal property necessary or incidental to its ownership of such
interests;

(v)               has not engaged in, sought, consented or permitted to and
shall not engage in, seek, consent to or permit (A) any dissolution, winding up,
liquidation, consolidation or merger, (B) any sale or other transfer of all or
substantially all of its assets or any sale of assets outside the ordinary
course of its business, except as permitted by the Loan Documents, or (C) in the
case of a Principal, any transfer of its partnership or membership interests;

23

 

 

(vi)             shall not cause, consent to or permit any amendment of its
limited partnership agreement, articles of incorporation, articles of
organization, certificate of formation, operating agreement or other formation
document or organizational document (as applicable) with respect to the matters
set forth in this definition;

(vii)           if such entity is a limited partnership, has and shall have at
least one general partner and has and shall have, as its only general partners,
Special Purpose Entities each of which (A) is a corporation or single-member
Delaware limited liability company, (B) Intentionally Deleted, and (C) holds a
direct interest as general partner in the limited partnership of not less than
0.5%;

(viii)         if such entity is a corporation, shall not cause or permit the
board of directors of such entity to take any Material Action either with
respect to itself or, if the corporation is a Principal, with respect to
Borrower unless one hundred percent (100%) of the members of its board of
directors shall have participated in such vote and shall have voted in favor of
such action;

(ix)             if such entity is a limited liability company (other than a
limited liability company meeting all of the requirements applicable to a
single-member limited liability company set forth in this definition of “Special
Purpose Entity”), has and shall have at least one (1) member that is a Special
Purpose Entity, that is a corporation and that directly owns at least
one-half-of-one percent (0.5%) of the equity of the limited liability company;

(x)               if such entity is a single-member limited liability company,
(A) is and shall be a Delaware limited liability company, (B) Intentionally
Deleted, (C) Intentionally Deleted, and (D) has and shall have either (1) a
member which owns no economic interest in the company, has signed the company’s
limited liability company agreement and has no obligation to make capital
contributions to the company, or (2) two natural persons or one entity that is
not a member of the company, that has signed its limited liability company
agreement and that, under the terms of such limited liability company agreement
becomes a member of the company immediately prior to the withdrawal or
dissolution of the last remaining member of the company;

(xi)             has not and shall not (and, if such entity is (a) a limited
liability company, has and shall have a limited liability agreement or an
operating agreement, as applicable, (b) a limited partnership, has a limited
partnership agreement, or (c) a corporation, has a certificate of incorporation
or articles that, in each case, provide that such entity shall not) (1)
dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of
its assets; (3) amend its organizational documents with respect to the matters
set forth in this definition without the consent of Lender; or (4) without the
affirmative vote of all directors of the corporation (that is such entity or the
general partner or managing or co-managing member or manager of such entity):
(A) file or consent to the filing of any bankruptcy, insolvency or
reorganization case or proceeding, institute any proceedings under any
applicable insolvency law or otherwise seek relief under any laws relating to
the relief

24

 

from debts or the protection of debtors generally, file a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings; (B) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for the entity or a substantial
portion of its property; (C) make an assignment for the benefit of the creditors
of the entity; or (D) take any action in furtherance of any of the foregoing;

(xii)           is solvent and pays its debts and liabilities (including, as
applicable, shared personnel and overhead expenses) from its assets as the same
become due, and is maintaining adequate capital for the normal obligations
reasonably foreseeable within the following thirty (30) day period for a
business of its size and character and in light of its contemplated business
operations (unless any such insolvency, or failure to pay its debts and
liabilities, or failure to maintain adequate capital is due to an insufficiency
in Gross Income from Operations); provided, however, that the foregoing shall
not require any member, partner or beneficiary to make additional capital
contributions;

(xiii)         has not failed and shall not fail to correct any known
misunderstanding regarding the separate identity of such entity and has not
identified and shall not identify itself as a division of any other Person;

(xiv)         has maintained and shall maintain its books of account, books and
records, and bank accounts (subject to clause (xvi) below) separate from those
of any other Person and, to the extent that it is required to file tax returns
under applicable law, has filed and shall file its own tax returns, except to
the extent that it is required by law to file consolidated tax returns and, if
it is a corporation, has not filed and shall not file a consolidated federal
income tax return with any other corporation, except to the extent that it is
required by law to file consolidated tax returns, or to the extent that an
Individual Borrower is treated as a “disregarded entity” for tax purposes and is
not required to file tax returns under applicable law;

(xv)           has maintained and shall maintain its own records, books,
resolutions and agreements;

(xvi)         has not commingled and shall not commingle its funds or assets
with those of any other Person and has not participated and shall not
participate in any cash management system with any other Person, except as
required by the Loan Documents and except with respect to a custodial account
maintained by the Manager on behalf of Borrower and certain Affiliates of
Borrower in which the funds have been and are separately accounted, and will
continue to be separately accounted, for each item of income and expense
applicable to each Individual Property and the Individual Borrower;

(xvii)       has held and shall hold its assets in its own name;

(xviii)     has conducted and shall conduct its business in its name or in a
name franchised or licensed to it by an entity other than an Affiliate of itself
or of an Individual Borrower, except for business conducted on behalf of itself
by another Person under a business management services agreement that is on
commercially-reasonable terms, so

25

 

long as the manager, or equivalent thereof, under such business management
services agreement holds itself out as an agent of an Individual Borrower;

(xix)         (A) has maintained and shall maintain its financial statements,
accounting records and other entity documents separate from those of any other
Person; (B) has shown and shall show, in its financial statements, its asset and
liabilities separate and apart from those of any other Person; and (C) has not
permitted and shall not permit its assets to be listed as assets on the
financial statement of any of its Affiliates except as required by GAAP (or if
such entity is disregarded for federal tax purposes, permitted by GAAP);
provided, however, that any such consolidated financial statement contains a
note indicating that the Special Purpose Entity’s separate assets and credit are
not available to pay the debts of such Affiliate and that the Special Purpose
Entity’s liabilities do not constitute obligations of the consolidated entity;

(xx)           has paid and shall pay its own liabilities and expenses,
including the salaries of its own employees, out of its own funds and assets,
and has maintained and shall maintain a sufficient number of employees in light
of its contemplated business operations, which may be none;

(xxi)         has observed and shall observe all partnership, corporate or
limited liability company formalities, as applicable;

(xxii)       has not incurred Indebtedness other than (i) acquisition financing
with respect to the applicable Individual Property; construction financing with
respect to the Improvements and certain off-site improvements required by
municipal and other authorities as conditions to the construction of the
Improvements; and first mortgage financings secured by the applicable Individual
Property; and Indebtedness pursuant to letters of credit, guaranties, interest
rate protection agreements and other similar instruments executed and delivered
in connection with such financings, (ii) unsecured trade payables and
operational debt not evidenced by a note, and (iii) Indebtedness incurred in the
financing of equipment and other personal property used on the applicable
Individual Property;

(xxiii)     has and will have no Indebtedness (including loans (whether or not
such loans are evidenced by a written agreement) between an Individual Borrower
and any Affiliates of an Individual Borrower or relating to the management of
funds in any segregated custodial account maintained by Manager for the sole
benefit of an Individual Borrower) other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership and
operation of the applicable Individual Property and the routine administration
of an Individual Borrower, which liabilities are (A) not more than sixty (60)
days past the date incurred (unless disputed in accordance with applicable law),
(B) not evidenced by a note, (C) paid when due, (D) normal and reasonable under
the circumstances, and (E) in an aggregate amount with respect to each
Individual Property not exceeding three percent (3%) of the applicable Release
Amount for such Individual Property at any time, and (iii) such other
liabilities that are permitted pursuant to this Agreement;

26

 

 

(xxiv)     has not assumed, guaranteed or become obligated and shall not assume
or guarantee or become obligated for the debts of any other Person, has not held
out and shall not hold out its credit as being available to satisfy the
obligations of any other Person or has not pledged and shall not pledge its
assets for the benefit of any other Person, in each case except as permitted
pursuant to this Agreement;

(xxv)       has not acquired and shall not acquire obligations or securities of
its partners, members or shareholders or any other owner or Affiliate;

(xxvi)     has allocated and shall allocate fairly and reasonably any overhead
expenses that are shared with any of its Affiliates, constituents, or owners, or
any guarantors of any of their respective obligations, or any Affiliate of any
of the foregoing, including, but not limited to, paying for shared office space
and for services performed by any employee of an Affiliate;

(xxvii)   has maintained and used and shall maintain and use separate
stationery, invoices and checks bearing its name and not bearing the name of any
other entity unless such entity is clearly designated as being the Special
Purpose Entity’s agent;

(xxviii) has not pledged and shall not pledge its assets to or for the benefit
of any other Person other than with respect to loans secured by the applicable
Individual Property and no such pledge remains outstanding except to Lender to
secure the Loan;

(xxix)     has held itself out and identified itself and shall hold itself out
and identify itself as a separate and distinct entity under its own name or in a
name franchised or licensed to it by an entity other than an Affiliate of an
Individual Borrower and not as a division or part of any other Person except as
provided in (xvi) above;

(xxx)       has maintained and shall maintain its assets in such a manner that
it shall not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person except as provided in (xvi)
above;

(xxxi)     has not made and shall not make loans to any Person and has not held
and shall not hold evidence of indebtedness issued by any other Person or entity
(other than cash and investment-grade securities issued by an entity that is not
an Affiliate of or subject to common ownership with such entity);

(xxxii)   has not identified and shall not identify its partners, members or
shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;

(xxxiii) other than capital contributions and distributions permitted under the
terms of its organizational documents, has not entered into or been a party to,
and shall not enter into or be a party to, any transaction with any of its
partners, members, shareholders or Affiliates except in the ordinary course of
its business and on terms which are

27

 

commercially reasonable terms comparable to those of an arm’s-length transaction
with an unrelated third party;

(xxxiv) has not had and shall not have any obligation to, and has not
indemnified and shall not indemnify its partners, officers, directors or
members, as the case may be, in each case unless such an obligation or
indemnification is fully subordinated to the Debt;

(xxxv)   has not had and shall not have any of its obligations guaranteed by any
Affiliate except as provided by the Loan Documents;

(xxxvi) has not formed, acquired or held and shall not form, acquire or hold any
subsidiary, except that a Principal may acquire and hold its interest in an
Individual Borrower;

(xxxvii)                       is in compliance with and shall comply with all
of the terms and provisions contained in its organizational documents.

(xxxviii)                     intentionally omitted;

(xxxix) has not permitted and shall not permit any Affiliate or constituent
party independent access to its bank accounts, except as provided in (xvi)
above;

(xl)             is, has always been and shall continue to be duly formed,
validly existing, and in good standing in the state of its incorporation or
formation and in all other jurisdictions where it is qualified to do business;

(xli)           has paid all taxes which it owes;

(xlii)         has paid any and all judgments against it;

(xliii)       has no material contingent or actual obligations not related to
the applicable Individual Property.

“State” shall mean, the State or Commonwealth in which the applicable Individual
Property or any part thereof is located.

“Survey” shall mean a survey of the Property prepared by a surveyor licensed in
the State and satisfactory to Lender and the company or companies issuing the
Title Insurance Policy, and containing a certification of such surveyor
satisfactory to Lender.

“Tax and Insurance Escrow Account” shall have the meaning set forth in
Section 7.2 hereof.

“Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2
hereof.

“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against an Individual Property or

28

 

part thereof; for the avoidance of doubt, until such time as each Individual
Property is comprised of one (1) or more parcels which constitute a separate tax
lot or lots and does not constitute a portion of any other tax lot not a part of
such Individual Property, Taxes shall include any taxes imposed upon the entire
tax lot of which such Individual Property is a part.

“Tenant” shall mean Dollar General, or any other person or entity with a
possessory right to all or any portion of an Individual Property under a Lease.

“Tenant Direction Letter” shall have the meaning set forth Section 2.7.1(b)
hereof.

“Tenant Go Dark Event” shall mean if Dollar General has ceased to operate or be
open for business at any Individual Property, other than for commercially
reasonable periods of time in the ordinary course of business (e.g. to conduct
inventory) and/or as a result of fire, casualty and/or condemnation.

“Tenant Insurance Conditions” shall have the meaning set forth in Section 6.1(g)
hereof.

“Threshold Amount” shall mean $50,000.00 with respect to the Individual
Properties in the aggregate at any one time.

“Title Insurance Policy” shall mean the mortgagee title insurance policy issued
with respect to an Individual Property and insuring the lien of the applicable
Mortgage.

“Transfer” shall have the meaning set forth in Section 5.2.10(a) hereof.

“Transferee” shall have the meaning set forth in Section 5.2.10(d)(i) hereof.

“Transferee’s Principals” shall mean collectively, (A) Transferee’s managing
members, general partners or principal shareholders and (B) such other members,
partners or shareholders which directly or indirectly shall own a fifty-one
percent (51%) or greater economic and voting interest in Transferee.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State in which the Property is located.

“U.S. Obligations” shall mean non-redeemable securities evidencing an obligation
to timely pay principal and/or interest in a full and timely manner that are
(a) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged, or (b) to the extent acceptable to the
Rating Agencies, other “government securities” within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended.

“Yield Maintenance Default Premium” shall mean an amount equal to the greater of
(a) three percent (3%) of the outstanding principal balance of the Loan to be
prepaid or satisfied and (b) the excess, if any, of (i) the sum of the present
values of all then-scheduled payments of principal and interest under the Note
assuming that all scheduled payments are made timely and that the remaining
outstanding principal and interest on the Loan is paid on the Anticipated
Repayment Date (with each such payment and assumed payment discounted to its
present value

29

 

at the date of prepayment at the rate which, when compounded monthly, is
equivalent to the Prepayment Rate when compounded semi-annually and deducting
from the sum of such present values any short-term interest paid from the date
of prepayment to the next succeeding Payment Date in the event such payment is
not made on a Payment Date), over (ii) the principal amount being prepaid.

“Yield Maintenance Premium” shall mean an amount equal to the greater of (a) one
percent (1%) of the outstanding principal of the Loan to be prepaid or satisfied
and (b) the excess, if any, of (i) the sum of the present values of all
then-scheduled payments of principal and interest under the Note assuming that
all scheduled payments are made timely and that the remaining outstanding
principal and interest on the Loan is paid on the Anticipated Repayment Date
(with each such payment and assumed payment discounted to its present value at
the date of prepayment at the rate which, when compounded monthly, is equivalent
to the Prepayment Rate when compounded semi-annually and deducting from the sum
of such present values any short-term interest paid from the date of prepayment
to the next succeeding Payment Date in the event such payment is not made on a
Payment Date), over (ii) the principal amount being prepaid.

Section 1.2            Principles of Construction.

All references to sections and schedules are to sections and schedules in or to
this Agreement unless otherwise specified. All uses of the word “including”
shall mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.

ARTICLE II - GENERAL TERMS

Section 2.1            Loan Commitment; Disbursement to Borrower.

2.1.1        Agreement to Lend and Borrow.

Subject to and upon the terms and conditions set forth herein, Lender hereby
agrees to make and Borrower hereby agrees to accept the Loan on the Closing
Date.

2.1.2        Single Disbursement to Borrower.

Borrower may request and receive only one (1) borrowing hereunder in respect of
the Loan and any amount borrowed and repaid hereunder in respect of the Loan may
not be reborrowed. Borrower acknowledges and agrees that the Loan has been fully
funded as of the Closing Date.

2.1.3        The Note, Mortgage and Loan Documents.

The Loan shall be evidenced by the Note and secured by the Mortgage and the
other Loan Documents.

2.1.4        Use of Proceeds.

Borrower shall use the proceeds of the Loan to (a) acquire the Property or repay
and discharge any existing loans relating to the Property, (b) pay all past-due
basic carrying costs, if any, with respect to the Property, (c) make deposits
into the Reserve Funds on the Closing Date in the amounts provided herein,
(d) pay costs and expenses incurred in connection with the closing of the Loan,
as approved by Lender, (e) fund any working capital requirements of the Property
and (f) distribute the balance, if any, to Borrower.

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Section 2.2            Interest Rate.

2.2.1        Interest Rate.

Interest on the outstanding principal balance of the Loan shall accrue from (and
including) the Closing Date to but excluding the Anticipated Repayment Date at
the Initial Interest Rate. Interest on the outstanding principal balance of the
Loan (including any Accrued Interest) shall accrue from and including the
Anticipated Repayment Date to but excluding the Maturity Date at the Revised
Interest Rate.

2.2.2        Interest Calculation.

Interest on the outstanding principal balance of the Loan shall be calculated by
multiplying (a) the actual number of days elapsed in the relevant Accrual Period
by (b) a daily rate based on the Applicable Interest Rate and a three hundred
sixty (360) day year by (c) the outstanding principal balance of the Loan.

2.2.3        Default Rate.

In the event that, and for so long as, any Event of Default shall have occurred
and be continuing, the outstanding principal balance of the Loan and, to the
extent permitted by law, all accrued and unpaid interest in respect of the Loan
and any other amounts due pursuant to the Loan Documents, shall accrue interest
at the Default Rate, calculated from the date such payment was due without
regard to any grace or cure periods contained herein.

2.2.4        Usury Savings.

This Agreement, the Note and the other Loan Documents are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
Lender to either civil or criminal liability as a result of being in excess of
the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan
Documents, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of the Maximum Legal Rate,
the Applicable Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.

Section 2.3            Loan Payment.

2.3.1        Monthly Debt Service Payments Until the Anticipated Repayment Date.

Borrower shall pay to Lender (i) on the Closing Date, an amount equal to
interest only on the outstanding principal balance of the Loan for the initial
Accrual Period, and (ii) on January 1, 2013, and on each Payment Date thereafter
up to and including the Anticipated Repayment Date, an amount equal to the
Monthly Debt Service Payment Amount, which payments shall be applied first to
accrued and unpaid interest and the balance (if any) to principal.

2.3.2        Payments After the Anticipated Repayment Date.

On each Payment Date occurring after the Anticipated Repayment Date Borrower
shall (i) make a payment to Lender of

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principal and interest in the amount of the applicable Monthly Debt Service
Payment Amount, such payment to be applied to interest in an amount equal to
interest that would have accrued on the outstanding principal balance of the
Loan (without adjustment for Accrued Interest) at the Initial Interest Rate and
the remainder (if any) to the principal balance of the Loan, and (ii) pay to
Lender the other amounts required to be paid in accordance with the Loan
Documents. In addition, to the extent there is Excess Cash Flow for the
preceding month, Borrower shall pay to Lender such Excess Cash Flow, such
payment to be applied as follows: (A) first, to the reduction of the principal
balance of the Note until the entire outstanding principal balance of the Note
is paid in full; and (B) then, to the payment of Accrued Interest. “Accrued
Interest” shall mean interest calculated at the Revised Interest Rate, and
deferred and not paid on a current basis pursuant to this Section 2.3.2.

2.3.3        Payments Generally.

For purposes of making payments hereunder (including, without limitation,
payments due pursuant to Article VII below), but not for purposes of calculating
Accrual Periods, if the day on which such payment is due is not a Business Day,
then amounts due on such date shall be due on the immediately preceding Business
Day and with respect to payments of principal due on the Maturity Date, interest
shall be payable at the Applicable Interest Rate or the Default Rate, as the
case may be, through and including the day immediately preceding such Maturity
Date. All amounts due under this Agreement and the other Loan Documents shall be
payable without setoff, counterclaim, defense or any other deduction whatsoever.

2.3.4        Payment on Maturity Date.

Borrower shall pay to Lender on the Maturity Date the outstanding principal
balance of the Loan, all accrued and unpaid interest and all other amounts due
hereunder and under the Note, the Mortgage and the other Loan Documents.

2.3.5        Late Payment Charge.

If any principal, interest or any other sums due under the Loan Documents are
not paid by Borrower on or prior to the date on which it is due (except, in the
case of Debt Service during a Cash Sweep Period, provided no Event of Default
shall then exist and there are sufficient funds in the Cash Management Account
to pay such Debt Service pursuant to the terms of the Cash Management
Agreement), Borrower shall pay to Lender upon demand an amount equal to the
lesser of five percent (5%) of such unpaid sum and the Maximum Legal Rate in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents to the extent permitted by applicable law. The foregoing
late payment charge shall not apply to the payment of all outstanding principal,
interest and other sums due on the Maturity Date.

2.3.6        Method and Place of Payment.

Except as otherwise specifically provided herein, all payments and prepayments
under this Agreement and the Note shall be made to Lender not later than 2:00
P.M., New York City time, on the date when due and shall be made in lawful money
of the United States of America in immediately available funds at Lender’s
office or as otherwise directed by Lender, and any funds received by Lender
after such time shall, for all purposes hereof, be deemed to have been paid on
the next succeeding Business Day.

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Section 2.4            Prepayments.

2.4.1        Voluntary Prepayments.

 

(a)                Except as otherwise expressly provided in this Section 2.4,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Anticipated Repayment Date.

(b)               On any Business Day after the Permitted Prepayment Date
through the Maturity Date, Borrower may, at its option, prepay the Debt in full
(or, to the extent set forth in Section 2.6.2 hereof, in part), provided that
(i) Borrower submits a notice to Lender setting forth the projected date of
prepayment, which date shall be no less than thirty (30) days from the date of
such notice, and (ii) Borrower pays to Lender (A) the unpaid principal amount of
the Note, (B) all interest accrued and unpaid on the principal balance of the
Note to and including the date of prepayment, (C) all other sums due under the
Note, this Agreement and the other Loan Documents, (D) if such prepayment occurs
prior to the Permitted Par Prepayment Date, the Yield Maintenance Premium, and
(E) if such prepayment is not paid on a regularly scheduled Payment Date (or, if
such day is not a Business Day, the immediately preceding Business Day),
interest for the full Accrual Period during which the prepayment occurs.

(c)                Notwithstanding anything contained in Section 2.4.1(a) above
to the contrary, Borrower may prepay a portion of the Loan after the Permitted
Prepayment Date in accordance with Section 2.6.2 hereof.

2.4.2        Mandatory Prepayments.

 

(a)                On the next occurring Payment Date following the date on
which Lender actually receives any Net Proceeds (or, if such day is not a
Business Day, the immediately succeeding Business Day), if Lender is not
obligated to make such Net Proceeds available to Borrower for the Restoration of
the applicable Individual Property or otherwise remit such Net Proceeds to
Borrower pursuant to Section 6.4 hereof, Lender shall apply Net Proceeds as a
prepayment of all or a portion of the outstanding principal balance of the Loan
together with accrued interest and any other sums due hereunder in an amount
equal to one hundred percent (100%) of such Net Proceeds; provided, however, if
an Event of Default has occurred and is continuing, Lender may apply such Net
Proceeds to the Debt (until paid in full) in any order or priority in its sole
discretion. No yield maintenance premium or other premium shall be due in
connection with any prepayment made pursuant to this Section 2.4.2. Any partial
prepayment under this Section 2.4.2 shall be applied by Lender in such order and
priority as Lender shall determine in its sole and absolute discretion.

(b)               On the date on which Borrower tenders a Casualty/Condemnation
Prepayment pursuant to Section 6.4(f) hereof, such tender shall include (a) all
accrued and unpaid interest and the principal indebtedness being prepaid,
including interest on the outstanding principal amount of the Loan being prepaid
through the last day of the month within which such tender occurs, and (b) any
other sums due hereunder relating to the Loan. No yield maintenance or other
premium shall be due in connection with any Casualty/Condemnation Prepayment.

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2.4.3        Prepayments After Default.

If following an Event of Default, payment of all or any part of the Debt is
tendered by Borrower or otherwise recovered by Lender, such tender or recovery
shall be (a) deemed made on the next occurring Payment Date together with the
Monthly Debt Service Payment, and (b) deemed a voluntary prepayment by Borrower
in violation of the prohibition against prepayment set forth in Section 2.4.1
hereof, and Borrower shall pay, in addition to the Debt, an amount equal to the
Yield Maintenance Default Premium which can be applied by Lender in such order
and priority as Lender shall determine in its sole and absolute discretion.

Section 2.5            Intentionally omitted.

Section 2.6            Release of Property.

Except as set forth in this Section 2.6, no repayment or prepayment of all or
any portion of the Loan shall cause, give rise to a right to require, or
otherwise result in, the release of the Lien of the Mortgage on any Individual
Property.

2.6.1        Release of All of the Property.

 

(a)                If Borrower has elected to prepay the entire Loan and the
requirements of Section 2.4 and this Section 2.6 have been satisfied, all of the
Properties shall be released from the Lien of their respective Mortgages.

(b)               In connection with the release of the Mortgages, Borrower
shall reimburse Lender and Servicer for any costs and expenses Lender and
Servicer incur arising from such release (including reasonable attorneys’ fees
and expenses) and Borrower shall pay, in connection with such release, (i) all
recording charges, filing fees, taxes or other expenses payable in connection
therewith, and (ii) to any Servicer, the current fee being assessed by such
Servicer to effect such release. In addition, Borrower shall comply with
Lender’s or Servicer’s reasonable requirements in connection with such release.

2.6.2        Release of Individual Property

. On any Business Day after the Permitted Prepayment Date through the
Anticipated Repayment Date, Borrower may, at its option, prepay a portion of the
Loan in connection with the release of an Individual Property, provided the
requirements of Section 2.4.1 and this Section 2.6.2 have been satisfied, and
Borrower may obtain the release of the related Individual Property from the Lien
of the related Mortgage thereon (and related Loan Documents) and the release of
the related Individual Borrower’s obligations under the Loan Documents with
respect to such Individual Property (other than those expressly stated to
survive). In connection with such partial prepayment and release, the following
conditions must be satisfied:

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(a)                The amount of the outstanding principal balance of the Loan
to be prepaid shall equal or exceed the Adjusted Release Amount for the
applicable Individual Property, and such prepayment shall be deemed a voluntary
prepayment for all purposes hereunder;

(b)               No Event of Default has occurred and is continuing (and no
event has occurred which, with notice, the passage or time, or both would
constitute an Event of Default shall have occurred);

(c)                Subsequent to such release, each remaining Individual
Borrower shall continue to be a Special Purpose Entity pursuant to, and in
accordance with, Section 4.1.30 hereof;

(d)               Borrower shall deliver to Lender and the Rating Agencies an
authority opinion;

(e)                Borrower shall deliver an opinion of tax counsel that would
be acceptable to a prudent lender acting reasonably, prepared and delivered at
Borrower’s expense, stating that as a result of such release of the applicable
Individual Property any REMIC Trust that has acquired the Loan (i) will not fail
to maintain its status as a REMIC Trust, (ii) does not constitute a “significant
modification” of the Loan under Section 1001 of the Code, and (iii) will not be
subject to tax on any “prohibited transactions” or “prohibited contributions”;

(f)                After giving effect to the release of the applicable
Individual Property, (A) the Debt Service Coverage Ratio for the Properties then
remaining subject to the Liens of the Mortgages based on the trailing twelve
(12) month period immediately preceding the release of the applicable Individual
Property shall be equal to or greater than the greater of (i) the Release Debt
Service Coverage Ratio, and (ii) the Debt Service Coverage Ratio for all of the
Properties then subject to the Liens of the Mortgages (including the Individual
Property requested to be released) immediately preceding the release of the
applicable Individual Property based on the trailing twelve (12) month period
immediately preceding the release of the applicable Individual Property, and (B)
the Loan To Value Ratio for the Properties then remaining subject to the Liens
of the Mortgages shall be less than or equal to fifty percent (50%).

(g)               If the Loan or any portion thereof is included in a REMIC
Trust, after giving effect to the release of the applicable Individual Property,
the Loan to Value Ratio for the Properties then remaining subject to the Liens
of the Mortgages is equal to or less than 125% (such value to be determined, in
Lender’s sole discretion, by any commercially reasonable method permitted to a
REMIC Trust);

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(h)               Borrower must deliver to Lender, without any cost or expense
to Lender, such endorsements to Lender’s title insurance policy as Lender may
deem necessary at the time of the release, all in form and substance reasonably
satisfactory to Lender, including, without limitation, an endorsement or
endorsements to Lender’s title insurance policy insuring the Liens of the
Mortgages, extending the effective date of such policies to the date of such
release;

(i)                 Borrower shall reimburse Lender and Servicer for any costs
and expenses Lender and Servicer incur arising from such release (including
reasonable attorneys’ fees and expenses) and Borrower shall have paid, in
connection with such release, (i) all recording charges, filing fees, taxes or
other expenses payable in connection therewith, (ii)  all costs and expenses of
the Rating Agencies incurred with respect to such release, and (iii) to any
Servicer, the current fee being assessed by such Servicer to effect such
release, which fee shall not exceed $5,000 per Individual Property being
released; and

(j)                 Borrower shall comply with Lender’s or Servicer’s reasonable
requirements in connection with such release.

In connection with any initial written request by Borrower related to a release
under this Section 2.6.2, provided Borrower shall conspicuously state on the top
of the first page of its letter, in large bold type, that “PURSUANT TO SECTION
2.6.2 OF THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S CONSENT. LENDER’S
RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS," Lender shall use
commercially reasonable efforts to reply within such ten (10) Business Day
period, and subsequently shall use commercially reasonable efforts to respond
promptly to Borrower thereafter in connection with such request.

Further notwithstanding anything in this Section 2.6.2 to the contrary, Borrower
shall not be entitled to any partial release during the Existing Mezzanine Loan
Period without Lender’s written consent, which may be granted or withheld in
Lender’s reasonable discretion.

Section 2.7            Lockbox Account/Cash Management.

2.7.1        Lockbox Account.

 

(a)                Within five (5) Business Days of Borrower’s receipt of
Lender’s notice that a Cash Management Event has occurred, Borrower shall
establish and maintain an account (the “Lockbox Account”) with a Lockbox Bank
acceptable to Lender and Agent in their reasonable discretion in trust for the
benefit of Lender, which Lockbox Account shall be under the sole dominion and
control of Lender. The Lockbox Account shall be entitled “IREIT Mobile Moffett
DG, L.L.C., a Delaware limited liability company, as Borrower and JPMorgan Chase
Bank, National Association, as Lender, pursuant to Loan Agreement dated as of
December 28, 2012 – Lockbox Account”. Borrower, Lender and Lockbox Bank shall
execute a Lockbox Agreement in form and substance acceptable to Lender whereby
Borrower shall grant to Lender a first-priority security interest in the Lockbox
Account and all deposits at any time contained therein

36

 

and the proceeds thereof and agrees to take all actions necessary to maintain in
favor of Lender a perfected first priority security interest in the Lockbox
Account, including, without limitation, filing UCC-1 Financing Statements and
continuations thereof. Lender (or Servicer on Lender’s behalf) shall have the
sole right to make withdrawals from the Lockbox Account and all costs and
expenses for establishing and maintaining the Lockbox Account shall be paid by
Borrower. All monies now or hereafter deposited into the Lockbox Account shall
be deemed additional security for the Debt. The Lockbox Agreement and Lockbox
Account shall remain in effect until the Loan has been repaid in full.

(b)               On or before the Closing Date, each Individual Borrower shall
(or shall cause Manager to) execute and deliver to Lender a written notice to
all Tenants at its applicable Individual Property under Leases directing such
Tenants to deliver all Rents payable thereunder directly to the Lockbox Account,
leaving only the account number blank (a “Tenant Direction Letter”). In
connection with each Lease executed after the date hereof, each applicable
Individual Borrower shall (or shall cause Manager to) deliver to Lender an
executed Tenant Direction Letter. Lender shall hold the Tenant Direction Letters
in escrow and shall not complete and deliver the Tenant Direction Letters to
Tenants unless (i) a Cash Management Event occurs and (ii) Borrower shall have
failed promptly thereafter to provide satisfactory written evidence to Lender
that Borrower has delivered completed Tenant Direction Letters to Tenants.
Borrower shall, and shall cause Manager to, deposit all amounts received by
Borrower or Manager constituting Rents into the Lockbox Account within two (2)
Business Days after receipt thereof.

(c)                Prior to a Cash Sweep Event, funds in the Lockbox Account
shall be transferred daily to an account maintained by Borrower and under
Borrower’s dominion and control. During a Cash Sweep Period, Lockbox Bank shall
transfer to the Cash Management Account in immediately available funds by
federal wire transfer all amounts on deposit in the Lockbox Account once every
Business Day throughout the term of the Loan. Following a Cash Sweep Event Cure,
such sweep to the Cash Management Account shall be terminated and funds in the
Lockbox Account again shall be transferred to an account maintained by Borrower
and under Borrower’s dominion and control pursuant to Borrower’s written
instruction.

(d)               Intentionally omitted.

(e)                Upon the occurrence of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any
sums then present in the Lockbox Account to the payment of the Debt in any order
in its sole discretion.

(f)                The Lockbox Account shall not be commingled with other monies
held by Borrower, any Affiliate of Borrower, Manager or Lockbox Bank.

(g)               Borrower shall not further pledge, assign or grant any
security interest in the Lockbox Account or the monies deposited therein or
permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto.

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(h)               Borrower shall indemnify Lender and hold Lender harmless from
and against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and
reasonable attorneys’ fees and expenses) arising from or in any way connected
with the Lockbox Account and/or the Lockbox Agreement (unless arising from the
gross negligence or willful misconduct of Lender) or the performance of the
obligations for which the Lockbox Account was established.

2.7.2        Cash Management Account.

 

(a)                Within five (5) Business Days of Borrower’s receipt of
Lender’s notice that a Cash Sweep Event has occurred, Borrower shall establish
and maintain a segregated Eligible Account (the “Cash Management Account”) to be
held by Agent in trust and for the benefit of Lender, which Cash Management
Account shall be under the sole dominion and control of Lender. The Cash
Management Account shall be entitled “IREIT Mobile Moffet DG, L.L.C., a Delaware
limited liability company, as Borrower and JPMorgan Chase Bank, National
Association, as Lender, pursuant to Loan Agreement dated as of December 28, 2012
- Cash Management Account.” Borrower, Lender and Agent shall execute a Cash
Management Agreement whereby Borrower shall grant to Lender a first-priority
security interest in the Cash Management Account and all deposits at any time
contained therein and the proceeds thereof and will take all actions necessary
to maintain in favor of Lender a perfected first priority security interest in
the Cash Management Account, including, without limitation, filing UCC-1
Financing Statements and continuations thereof. Borrower will not in any way
alter or modify the Cash Management Account and will notify Lender of the
account number thereof. Lender (or Servicer on Lender’s behalf) shall have the
sole right to make withdrawals from the Cash Management Account and all costs
and expenses for establishing and maintaining the Cash Management Account shall
be paid by Borrower.

(b)               The insufficiency of funds on deposit in the Cash Management
Account shall not relieve Borrower from the obligation to make any payments, as
and when due pursuant to this Agreement and the other Loan Documents, and such
obligations shall be separate and independent, and not conditioned on any event
or circumstance whatsoever.

(c)                All funds on deposit in the Cash Management Account following
the occurrence of an Event of Default may be applied by Lender in such order and
priority as Lender shall determine.

(d)               Borrower hereby agrees that Lender may modify the Cash
Management Agreement for the purpose of establishing additional sub-accounts in
connection with any payments otherwise required under this Agreement and the
other Loan Documents and Lender shall provide notice thereof to Borrower.

(e)                In the event of a Cash Sweep Period related solely to an
Existing Mezzanine Loan Trigger and no other Cash Sweep Event then exists, all
Excess Cash Flow in the Cash Management Account shall be delivered to Existing
Mezzanine Lender and applied in accordance with the Existing Mezzanine Loan
Documents.

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2.7.3        Payments Received under the Cash Management Agreement.

Notwithstanding anything to the contrary contained in this Agreement or the
other Loan Documents, and provided no Event of Default has occurred and is
continuing, Borrower’s obligations with respect to the payment of the Monthly
Debt Service Payment Amount and amounts required to be deposited into the
Reserve Funds, if any, shall be deemed satisfied to the extent sufficient
amounts are deposited in the Cash Management Account to satisfy such obligations
pursuant to this Agreement on the dates each such payment is required,
regardless of whether any of such amounts are so applied by Lender.

ARTICLE III - CONDITIONS PRECEDENT

Section 3.1            Conditions Precedent to Closing.

The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of all of the conditions precedent
to closing set forth in the application or term sheet for the Loan delivered by
Borrower to Lender and the commitment or commitment rider, if any, to the
application or term sheet for the Loan issued by Lender.

ARTICLE IV - REPRESENTATIONS AND WARRANTIES

Section 4.1            Borrower Representations.

Each Individual Borrower represents and warrants as of the date hereof that:

4.1.1        Organization.

Each Individual Borrower has been duly organized and is validly existing and in
good standing with requisite power and authority to own its Individual Property
and to transact the businesses in which it is now engaged. Each Individual
Borrower is duly qualified to do business and is in good standing in each
jurisdiction where it is required to be so qualified in connection with its
businesses and operations. Each Individual Borrower possesses all rights,
licenses, permits and authorizations, governmental or otherwise, necessary to
entitle it to own its Individual Property and to transact the businesses in
which it is now engaged, and the sole business of each Individual Borrower is
the ownership, management and operation of its Individual Property. The
ownership interests in each Individual Borrower are as set forth on the
organizational chart attached hereto as Schedule III. Each Individual Borrower’s
organizational identification number assigned by the state of incorporation or
organization is correctly set forth in Schedule I to this Agreement.

4.1.2        Proceedings.

Each Individual Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents. This Agreement and such other Loan Documents have been duly executed
and delivered by or on behalf of each Individual Borrower and constitute legal,
valid and binding obligations of each Individual Borrower enforceable against
each Individual Borrower in accordance with their respective terms, subject only
to applicable bankruptcy, insolvency and similar laws affecting rights of
creditors generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).

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4.1.3        No Conflicts.

The execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance (other than pursuant to the
Loan Documents) upon any of the property or assets of Borrower pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement, partnership
agreement, management agreement or other agreement or instrument to which
Borrower is a party or by which any Individual Property or any of Borrower’s
assets is subject, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any Governmental
Authority having jurisdiction over Borrower or any of Borrower’s properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such Governmental Authority required
for the execution, delivery and performance by Borrower of this Agreement or any
other Loan Documents has been obtained and is in full force and effect.

4.1.4        Litigation.

There are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or, to each Individual
Borrower’s knowledge, threatened against or affecting any Individual Borrower,
Guarantor, Principal or any Individual Property, which actions, suits or
proceedings, if determined against any Individual Borrower, Guarantor, Principal
or any Individual Property, might materially adversely affect the condition
(financial or otherwise) or business of any Individual Borrower, Guarantor,
Principal or the condition or ownership of any Individual Property.

4.1.5        Agreements.

Except for those instruments and agreements set forth as Permitted Exceptions in
the Title Insurance Policy, no Individual Borrower is a party to any agreement
or instrument or subject to any restriction which might materially and adversely
affect such Individual Borrower or its Individual Property, or any Individual
Borrower’s business, properties or assets, operations or condition, financial or
otherwise. To each Individual Borrower’s knowledge, no Individual Borrower is in
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which such Individual Borrower or its
Individual Property is bound. No Individual Borrower has any material financial
obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which such Individual
Borrower or its Individual Property is otherwise bound, other than (a)
obligations incurred in the ordinary course of the operation of such Individual
Property as permitted pursuant to clause (xxiii) of the definition of “Special
Purpose Entity” set forth in Section 1.1 hereof and (b) obligations under the
Loan Documents.

4.1.6        Title.

Each Individual Borrower has good, marketable and insurable fee simple title to
the real property comprising part of its Individual Property and good title to
the balance of its Individual Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant to
the Loan Documents and the Liens created by the Loan Documents. To the best of
Borrower’s knowledge, the Permitted Encumbrances in the aggregate do not
materially and adversely affect the value, operation or use of any Individual
Property (as currently used) or the related Individual Borrower’s ability to
repay the Loan. Each Mortgage, when properly recorded in the appropriate
records, together

40

 

with any Uniform Commercial Code financing statements required to be filed in
connection therewith, will create (a) a valid, perfected first priority lien on
the related Individual Property, subject only to Permitted Encumbrances and the
Liens created by the Loan Documents and (b) perfected security interests in and
to, and perfected collateral assignments of, all personalty (including the
Leases), all in accordance with the terms thereof, in each case subject only to
any applicable Permitted Encumbrances, such other Liens as are permitted
pursuant to the Loan Documents and the Liens created by the Loan Documents. To
Borrower’s actual knowledge after due inquiry, there are no claims for payment
for work, labor or materials affecting any Individual Property which are or may
become a Lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

4.1.7        Solvency.

No Individual Borrower has (a) entered into this transaction or executed the
Note, this Agreement or any other Loan Documents with the actual intent to
hinder, delay or defraud any creditor or (b) not received reasonably equivalent
value in exchange for its obligations under such Loan Documents. Giving effect
to the Loan, the fair saleable value of each Individual Borrower’s assets
exceeds and will, immediately following the making of the Loan, exceed such
Individual Borrower’s total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of each Individual Borrower’s assets is and will, immediately
following the making of the Loan, be greater than such Individual Borrower’s
probable liabilities, including the maximum amount of its contingent liabilities
on its debts as such debts become absolute and matured. Each Individual
Borrower’s assets do not and, immediately following the making of the Loan will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. No Individual Borrower intends to, nor
does it believe that it will, incur debt and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debt and
liabilities as they mature (taking into account the timing and amounts of cash
to be received by each Individual Borrower and the amounts to be payable on or
in respect of obligations of each Individual Borrower). No petition in
bankruptcy has been filed against any Individual Borrower or, to the best of
each Individual Borrower’s knowledge, any Guarantor, Affiliate Manager or any
shareholder, partner, member, non-member manager of Borrower, or any other owner
of a direct interest in any Individual Borrower in the last seven (7) years, and
no Individual Borrower, nor, to the best of each Individual Borrower’s
knowledge, any Guarantor, Affiliate Manager or any shareholder, partner, member,
non-member manager of Borrower, or any other owner of a direct interest in any
Individual Borrower in the last seven (7) years has ever made an assignment for
the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. No Individual Borrower, nor, to the best of each Individual
Borrower’s knowledge, any Guarantor, Affiliate Manager or any shareholder,
partner, member, non-member manager of Borrower, or any other owner of a direct
interest in any Individual Borrower are contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of such Individual Borrower’s assets or
property, and to the best of each Individual Borrower’s knowledge, no Guarantor,
Affiliate Manager or any shareholder, partner, member, non-member manager of
Borrower, or any other owner of a direct interest in any Individual Borrower is
contemplating the filing of any such petition against it or such Guarantor,
Affiliate Manager or any shareholder, partner, member, non-member manager of
Borrower, or any other direct legal or beneficial owner of any Individual
Borrower.

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4.1.8        Full and Accurate Disclosure.

To Borrower’s knowledge, no statement of fact made by Borrower in this Agreement
or in any of the other Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no material fact presently
known to Borrower which has not been disclosed to Lender which adversely
affects, nor as far as Borrower can foresee, might adversely affect, any
Individual Property or the business, operations or condition (financial or
otherwise) of Borrower.

4.1.9        No Plan Assets.

No Individual Borrower sponsors, or is obligated to contribute to, and no
Individual Borrower is an “employee benefit plan,” as defined in Section 3(3) of
ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of the
assets of any Individual Borrower constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) no Individual Borrower is a “governmental plan” within the meaning
of Section 3(32) of ERISA and (b) transactions by or with any Individual
Borrower are not subject to any state or other statute , regulation or other
restriction regulating investments of, or fiduciary obligations with respect to,
governmental plans within the meaning of Section 3(32) of ERISA which is similar
to the provisions of Section 406 of ERISA or Section 4975 of the Code and which
prohibit or otherwise restrict the transactions contemplated by this Agreement,
including but not limited to the exercise by Lender of any of its rights under
the Loan Documents.

4.1.10    Compliance.

Except as disclosed in the zoning information delivered to Lender in connection
with the origination of the Loan (but only to the extent that no Individual
Borrower has actual knowledge after due inquiry of any inconsistencies contained
therein), each Individual Borrower and each Individual Property and the use
thereof comply in all material respects with all applicable Legal Requirements,
including, without limitation, building and zoning ordinances and codes.
Borrower is not in default or violation of any order, writ, injunction, decree
or demand of any Governmental Authority. There has not been committed by any
Individual Borrower or, to each Individual Borrower’s actual knowledge after due
inquiry, any other Person in occupancy of or involved with the operation or use
of any Individual Property any act or omission affording the federal government
or any other Governmental Authority the right of forfeiture as against the
related Individual Property or any part thereof or any monies paid in
performance of such Individual Borrower’s obligations under any of the Loan
Documents. To Borrower’s actual knowledge after due inquiry, the Improvements at
each Individual Property were in material compliance with applicable law on the
Closing Date.

4.1.11    Financial Information.

All financial data, including, without limitation, the statements of cash flow
and income and operating expense, that have been delivered to Lender in
connection with the Loan (a) are true, complete and correct in all material
respects, (b) accurately represent the financial condition of each Individual
Borrower and each Individual Property, as applicable, as of the date of such
reports, and (c) to the extent prepared or audited by an independent certified
public accounting firm, have been prepared in accordance with GAAP throughout
the periods covered, except as disclosed therein; provided, however, that if any
financial data is delivered to Lender by any Person other than Borrower,
Guarantor or any

42

 

Affiliate of Borrower or Guarantor, or if such financial data has been prepared
by or at the direction of any Person other than Borrower, Guarantor or any
Affiliate of Borrower or Guarantor, then the foregoing representations with
respect to such financial data shall be to the best of each of Borrower’s
knowledge, after due inquiry. Except for Permitted Encumbrances, Borrower does
not have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a material
adverse effect on any Individual Property or the operation thereof as retail (or
in the case of an Office Property, office) property, except as referred to or
reflected in said financial statements. Since the date of such financial
statements, there has been no material adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.

4.1.12    Condemnation.

No Condemnation or other similar proceeding has been commenced or, to each
Individual Borrower’s best knowledge, is threatened or contemplated with respect
to all or any portion of its respective Individual Property or for the
relocation of roadways providing access to such Individual Property.

4.1.13    Federal Reserve Regulations.

No part of the proceeds of the Loan will be used for the purpose of purchasing
or acquiring any “margin stock” within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System or for any other purpose which would
be inconsistent with such Regulation U or any other Regulations of such Board of
Governors, or for any purposes prohibited by Legal Requirements or by the terms
and conditions of this Agreement or the other Loan Documents.

4.1.14    Utilities and Public Access.

Each Individual Property has rights of access to public ways and is served by
water, sewer, sanitary sewer and storm drain facilities adequate to service such
Individual Property for its respective intended uses. All public utilities
necessary or convenient to the full use and enjoyment of each Individual
Property are located either in the public right-of-way abutting such Individual
Property (which are connected so as to serve such Individual Property without
passing over other property) or in recorded easements serving such Individual
Property and such easements are set forth in and insured by the Title Insurance
Policy. All roads necessary for the use of each Individual Property for its
current purposes have been completed and dedicated to public use and accepted by
all Governmental Authorities.

4.1.15    Not a Foreign Person.

No Individual Borrower is a “foreign person” within the meaning of §1445(f)(3)
of the Code.

4.1.16    Separate Lots.

Each Individual Property is comprised of one (1) or more parcels which
constitute a separate tax lot or lots and does not constitute a portion of any
other tax lot not a part of such Individual Property.

4.1.17    Assessments.

There are no pending or, to each Individual Borrower’s knowledge, proposed
special or other assessments for public improvements or otherwise affecting its
respective Individual Property, nor are there any contemplated improvements to
any Individual Property that may result in such special or other assessments.

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4.1.18    Enforceability.

The Loan Documents are not subject to any right of rescission, set off,
counterclaim or defense by any Individual Borrower or Guarantor, including the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable (subject to principles of equity and bankruptcy, insolvency and
other laws generally affecting creditors’ rights and the enforcement of debtors’
obligations), and no Individual Borrower or Guarantor has asserted any right of
rescission, set off, counterclaim or defense with respect thereto.

4.1.19    No Prior Assignment.

There are no prior assignments of the Leases or any portion of the Rents which
are presently outstanding.

4.1.20    Insurance.

Each Individual Borrower has obtained and has delivered to Lender certified
copies of the Policies reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. To the best of each Individual
Borrower’s knowledge, no claims have been made or are currently pending,
outstanding or otherwise remain unsatisfied under any such Policy, which would
materially and adversely affect the value, operation or use of any Individual
Property or any Individual Borrower’s ability to repay the Loan, and no Person,
including each Individual Borrower, has done, by act or omission, anything which
would impair the coverage of any such Policy.

4.1.21    Use of Property.

Each Individual Property is used exclusively for retail purposes and other
appurtenant and related uses.

4.1.22    Certificate of Occupancy; Licenses.

All certifications, permits, licenses and approvals, including without
limitation, certificates of completion and occupancy permits required to be
obtained by an Individual Borrower for the legal use, occupancy and operation of
its Individual Property have been obtained and are in full force and effect, and
to the best of each Individual Borrower’s knowledge after due inquiry, all
certifications, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required to be obtained by any
Person other than such Individual Borrower for the legal use, occupancy and
operation of its Individual Property for retail pursposes, have been obtained
and are in full force and effect. The use being made of each Individual Property
is in conformity with the certificate of occupancy issued for such Individual
Property.

4.1.23    Flood Zone.

None of the Improvements on any Individual Property are located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards, or, if so located, the flood insurance required pursuant to
Section 6.1(a)(i) is in full force and effect with respect to such Individual
Property.

4.1.24    Physical Condition.

Except as disclosed in the Physical Conditions Reports delivered to Lender in
connection with the Loan, to each Individual Borrower’s knowledge, its
respective Individual Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and

44

 

repair in all material respects; there exists no structural or other material
defects or damages in its Individual Property, whether latent or otherwise, and
no Individual Borrower has received notice from any insurance company or bonding
company of any defects or inadequacies in its Individual Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.

4.1.25    Boundaries.

To each Individual Borrower’s actual knowledge after due inquiry, all of the
improvements which were included in determining the appraised value of its
Individual Property lie wholly within the boundaries and building restriction
lines of such Individual Property, and no improvements on adjoining properties
encroach upon its Individual Property, and no easements or other encumbrances
upon such Individual Property encroach upon any of the Improvements, so as to
affect the value or marketability of the applicable Individual Property except
those which are insured against by the Title Insurance Policy.

4.1.26    Leases.

No Individual Property is subject to any Leases other than the Leases described
in the certified rent roll delivered to Lender in connection with the closing of
the Loan (the “Certified Rent Roll”), which rent roll is true, complete and
accurate in all respects as of the Closing Date. With respect to each Individual
Property, the applicable Individual Borrower is the owner and lessor of
landlord’s interest in the Leases. No Person has any possessory interest in any
Individual Property or right to occupy the same except under and pursuant to the
provisions of the applicable Leases. The current Leases are in full force and
effect, and, to each Individual Borrower’s knowledge after due inquiry, there
are no defaults thereunder by either party and there are no conditions that,
with the passage of time or the giving of notice, or both, would constitute
defaults thereunder. No Rent has been paid more than one (1) month in advance of
its due date. All security deposits are held by the applicable Individual
Borrower in accordance with applicable law. All work to be performed by the
applicable Individual Borrower under each Lease has been performed as required
and has been accepted by the applicable Tenant, and any payments, free rent,
partial rent, rebate of rent or other payments, credits, allowances or
abatements required to be given by the applicable Individual Borrower to any
Tenant has already been received by such Tenant. There has been no prior sale,
transfer or assignment, hypothecation or pledge of any Lease or of the Rents
received therein which is outstanding. To each Individual Borrower’s knowledge
after due inquiry, no Tenant listed on the Certified Rent Roll has assigned its
Lease or sublet all or any portion of the premises demised thereby, no such
Tenant holds its leased premises under assignment or sublease, nor does anyone
except such Tenant and its employees occupy such leased premises. Except as
disclosed on Schedule VI hereto, no Tenant under any Lease has a right or option
pursuant to such Lease or otherwise to purchase all or any part of the leased
premises or the building of which the leased premises are a part. No Tenant
under any Lease has any right or option for additional space in the
Improvements.

4.1.27    Survey.

The Survey for each Individual Property delivered to Lender in connection with
this Agreement does not fail to reflect any material matter affecting such
Individual Property or the title thereto.

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4.1.28    Inventory.

The applicable Individual Borrower is the owner of all of the Equipment,
Fixtures and Personal Property (as such terms are defined in the Mortgage)
located on or at its Individual Property , other than Equipment, Fixtures and
Personal Property owned by the Tenants under the Leases, and no Individual
Borrower shall lease any Equipment, Fixtures or Personal Property other than as
permitted hereunder. All of the Equipment, Fixtures and Personal Property are
sufficient to operate such Individual Property in the manner required hereunder
and in the manner in which it is currently operated.

4.1.29    Filing and Recording Taxes.

All transfer taxes, deed stamps, intangible taxes or other amounts in the nature
of transfer taxes required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the acquisition of each
Individual Property by the applicable Individual Borrower have been paid or are
simultaneously being paid. All mortgage, mortgage recording, stamp, intangible
or other similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, each applicable Mortgage, have been
paid.

4.1.30    Special Purpose Entity/Separateness.

 

(a)                Until the Debt has been paid in full, each Individual
Borrower hereby represents, warrants and covenants that (i) it has been since
its formation, is now, and shall continue to be a Special Purpose Entity and
(ii) each Principal (if any) has been since its formation, is now, and shall
continue to be a Special Purpose Entity.

(b)               The representations, warranties and covenants set forth in
Section 4.1.30(a) shall survive for so long as the outstanding balance of the
Loan remains unpaid.

(c)                Intentionally omitted.

(d)               Intentionally omitted.

(e)                Each amendment and each restatement of the organizational
documents of each Individual Borrower or Principal, if any, has been
accomplished in accordance with, and was permitted by, the relevant provisions
of each such document prior to its amendment or restatement from time-to-time.

4.1.31    Management Agreement.

The Management Agreement is in full force and effect and there is no default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or the giving of notice would constitute a default thereunder. The
Management Agreement was entered into on commercially reasonable terms.

4.1.32    Illegal Activity.

No portion of any Individual Property has been or will be purchased with
proceeds of any illegal activity.

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4.1.33    No Change in Facts or Circumstances; Disclosure.

All information submitted by and on behalf of each Individual Borrower to Lender
and in all financial statements, rent rolls (including the Certified Rent Roll),
reports, certificates and other documents submitted in connection with the Loan
or in satisfaction of the terms thereof and all statements of fact made by
Borrower (or any Individual Borrower) in this Agreement or in any other Loan
Document, are true, complete and correct in all material respects, provided,
however, that if such information was provided to an Individual Borrower by
non-affiliated third parties, such Individual Borrower represents that such
information is, to the best of its knowledge after due inquiry, true, complete
and correct in all material respects. There has been no material adverse change
in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects or might materially
and adversely affect the use, operation or value of any Individual Property or
the business operations or the financial condition of the applicable Individual
Borrower. Each Individual Borrower has disclosed to Lender all material facts
and has not failed to disclose any material fact that could cause any Provided
Information or representation or warranty made herein to be materially
misleading.

4.1.34    Investment Company Act.

No Individual Borrower is not (a) an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended; (b) a “holding company” or a “subsidiary
company” of a “holding company” or an “affiliate” of either a “holding company”
or a “subsidiary company” within the meaning of the Public Utility Holding
Company Act of 1935, as amended; or (c) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.

4.1.35    Embargoed Person.

As of the date hereof and at all times throughout the term of the Loan,
including after giving effect to any Transfers permitted pursuant to the Loan
Documents, (a) none of the funds or other assets of any Individual Borrower,
Principal or Guarantor constitute property of, or are beneficially owned,
directly or indirectly, by any Embargoed Person; (b) no Embargoed Person has any
interest of any nature whatsoever in any Individual Borrower, Principal or
Guarantor, as applicable, with the result that the investment in any Individual
Borrower, Principal or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c)
none of the funds of any Individual Borrower, Principal or Guarantor, as
applicable, have been derived from any unlawful activity with the result that
the investment in any Individual Borrower, Principal or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law. Notwithstanding the foregoing, to the extent that an Embargoed
Person acquires a non-controlling interest in IREIT or IREIC, either (1) without
the knowledge of Borrower, IREIT or IREIC, through a transaction brokered by a
FINRA licensed broker dealer not affiliated with IREIT or IREIC, provided such
broker dealer has executed a dealer agreement or selling agreement with IREIT or
IREIC or an affiliate of IREIT or IREIC in which it covenants to, among other
things, comply with The USA PATRIOT Act (or any successor legislation), or (2)
without the knowledge of Borrower, IREIT or IREIC, after the initial sale or
offering of such

47

 

interests in IREIT or IREIC, the resulting breach of the foregoing
representations shall be deemed to be unintentional and not willful or grossly
negligent for purposes of Section 9.3 hereof.

4.1.36    Principal Place of Business; State of Organization.

Each Individual Borrower’s principal place of business is as set forth in the
introductory paragraph of this Agreement, and the organizational identification
number assigned by the state of incorporation or organization of each Individual
Borrower is correctly set forth in Schedule I to this Agreement. No Individual
Borrower shall change its principal place of business set forth in the
introductory paragraph of this Agreement without first giving Lender thirty (30)
days prior written notice. No Individual Borrower shall change the place of its
organization without the prior written consent of Lender, which consent shall
not be unreasonably withheld, conditioned or delayed. Upon Lender’s request, any
Individual Borrower shall execute and deliver additional financing statements,
security agreements and other instruments which may be necessary to effectively
evidence or perfect Lender’s security interest in its Individual Property as a
result of such change of principal place of business or place of organization.

4.1.37    Environmental Representations and Warranties.

Except as otherwise disclosed by those certain Phase I environmental reports (or
Phase II environmental reports, if required) delivered to Lender by Borrower in
connection with the origination of the Loan (such report is referred to below as
the “Environmental Report”), (a) there are no Hazardous Substances or
underground storage tanks in, on, or under any Individual Property, except those
that are (i) in compliance with Environmental Laws and with permits issued
pursuant thereto (to the extent such permits are required under Environmental
Law), (ii) de-minimis amounts necessary to operate such Individual Property for
the purposes set forth in the Loan Agreement which will not result in an
environmental condition in, on or under such Individual Property and which are
otherwise permitted under and used in compliance with Environmental Law and
(iii) fully disclosed to Lender in writing pursuant the Environmental Report;
(b) to the best of each Individual Borrower’s knowledge, there are no past,
present or threatened Releases of Hazardous Substances in, on, under or from any
Individual Property which has not been fully remediated in accordance with
Environmental Law; (c) to the best of each Individual Borrower’s knowledge,
there is no threat of any Release of Hazardous Substances migrating to any
Individual Property; (d) to the best of each Individual Borrower’s knowledge,
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with any Individual Property
which has not been fully remediated in accordance with Environmental Law; (e) no
Individual Borrower knows of, nor has any Individual Borrower received, any
written or oral notice or other communication from any Person (including but not
limited to a Governmental Authority) relating to Hazardous Substances or
Remediation thereof, of possible liability of any Person pursuant to any
Environmental Law, other environmental conditions in connection with its
respective Individual Property, or any actual or potential administrative or
judicial proceedings in connection with any of the foregoing; and (f) each
Individual Borrower has truthfully and fully disclosed to Lender, in writing,
any and all information relating to environmental conditions in, on, under or
from its respective Individual Property that is known to such Individual
Borrower and has provided to Lender all information that has been requested by
Lender relating to Hazardous Substances in, on, under or from such

48

 

Individual Property and/or to the environmental condition of such Individual
Property, to the extent such is contained in such Individual Borrower’s files
and records. To each Individual Borrower’s actual knowledge based on the
applicable Environmental Report delivered to Lender in connection herewith, no
hazardous wastes or toxic substances, as defined by applicable federal, state or
local statutes, rules and regulations, have been disposed, stored or treated by
any tenant under any Lease on or about the leased premises nor does any
Individual Borrower have any knowledge of any tenant’s intention to use its
leased premises for any activity which, directly or indirectly, involves the
use, generation, treatment, storage, disposal or transportation of any petroleum
product or any toxic or hazardous chemical, material, substance or waste, except
in either event, in compliance with applicable federal, state or local statues,
rules and regulations.

4.1.38    Cash Management

. Each Individual Borrower hereby represents and warrants to Lender that its
Individual Property is not subject to any cash management system as of the date
hereof, and any and all existing tenant instruction letters issued in connection
with any previous financing have been duly terminated prior to the date hereof.

4.1.39    Intentionally Omitted

.

Section 4.2            Survival of Representations.

Each Individual Borrower agrees that all of its representations and warranties
set forth in Section 4.1 hereof and elsewhere in this Agreement and in the other
Loan Documents shall survive for so long as any amount remains owing to Lender
under this Agreement or any of the other Loan Documents by Borrower. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by an Individual Borrower shall be deemed to have
been relied upon by Lender notwithstanding any investigation heretofore or
hereafter made by Lender or on its behalf.

ARTICLE V - BORROWER COVENANTS

Section 5.1            Affirmative Covenants.

From the date hereof and until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien of the Mortgages encumbering the Properties (and all related obligations)
in accordance with the terms of this Agreement and the other Loan Documents,
each Individual Borrower hereby covenants and agrees with Lender that:

5.1.1        Existence; Compliance with Legal Requirements.

Each Individual Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements
applicable to it and its Individual Property, including, without limitation,
building and zoning codes and certificates of occupancy. There shall never be
committed by any Individual Borrower, and its Individual Borrower shall never
permit any other Person in occupancy of or involved with the operation or use of
any Individual Property to commit any act or omission affording the federal
government or any state or local government the right of

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forfeiture against such Individual Property or any part thereof or any monies
paid in performance of each Individual Borrower’s obligations under any of the
Loan Documents. Each Individual Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Each Individual Borrower shall at all times maintain, preserve and
protect all franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and shall keep its
Individual Property in good working order and repair, and from time to time
make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Loan Documents. Each Individual Borrower shall keep its Individual
Property insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and maintain liability and such other
insurance, as is more fully provided in this Agreement. After prior written
notice to Lender, Borrower, at Borrower’s own expense, may contest by
appropriate legal proceeding promptly initiated and conducted in good faith and
with due diligence, the validity of any Legal Requirement, the applicability of
any Legal Requirement to each Individual Borrower or each Individual Property or
any alleged violation of any Legal Requirement, provided that (i) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any instrument to which such Individual Borrower is subject and
shall not constitute a default thereunder and such proceeding shall be conducted
in accordance with all applicable statutes, laws and ordinances; (ii) no
Individual Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (iii) such Individual
Borrower shall promptly upon final determination thereof comply with any such
Legal Requirement determined to be valid or applicable or cure any violation of
any Legal Requirement; (iv) such proceeding shall suspend the enforcement of the
contested Legal Requirement against such Individual Borrower or such Individual
Property; and (v) such Individual Borrower shall furnish such security as may be
required in the proceeding, or as may be requested by Lender, to insure
compliance with such Legal Requirement, together with all interest and penalties
payable in connection therewith. Lender may apply any such security, as
necessary to cause compliance with such Legal Requirement at any time when, in
the reasonable judgment of Lender, the validity, applicability or violation of
such Legal Requirement is finally established or such Individual Property (or
any part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost.

5.1.2        Taxes and Other Charges.

Each Individual Borrower shall pay or cause to be paid all Taxes and Other
Charges now or hereafter levied or assessed or imposed against its Individual
Property or any part thereof as the same become due and payable; provided,
however, each Individual Borrower’s obligation to directly pay Taxes shall be
suspended for so long as such Individual Borrower escrows taxes in accordance
with the terms and provisions of Section 7.2 hereof. Each Individual Borrower
will deliver to Lender receipts for payment or other evidence satisfactory to
Lender that the Taxes and Other Charges have been so paid or are not then
delinquent no later than ten (10) days prior to the date on which the Taxes
and/or Other Charges would otherwise be delinquent if not paid (provided,
however, such Individual Borrower is not required to furnish such receipts for
payment of Taxes in the event that such Taxes have been paid by Lender pursuant
to Section 7.2 hereof). If any Individual Borrower pays or causes to be paid all
Taxes and Other Charges and provides a copy of the receipt

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evidencing the payment thereof to Lender, then, Lender shall reimburse such
Individual Borrower provided that there are then sufficient proceeds in the Tax
and Insurance Escrow Fund. Upon written request of any Individual Borrower, if
Lender has paid such Taxes pursuant to Section 7.2 hereof, Lender shall provide
such Individual Borrower with evidence that such Taxes have been paid. No
Individual Borrower shall suffer and each Individual Borrower shall promptly
cause to be paid and discharged any Lien or charge whatsoever which may be or
become a Lien or charge against its Individual Property, and shall promptly pay
for all utility services provided to such Individual Property. After prior
written notice to Lender, an Individual Borrower, at such Individual Borrower’s
own expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Taxes or Other Charges, provided that (i)
[intentionally omitted]; (ii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
such Individual Borrower is subject and shall not constitute a default
thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) neither the applicable
Individual Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (iv) such Individual
Borrower shall promptly upon final determination thereof pay the amount of any
such Taxes or Other Charges, together with all costs, interest and penalties
which may be payable in connection therewith; (v) such proceeding shall suspend
the collection of such contested Taxes or Other Charges from the applicable
Individual Property; and (vi) such Individual Borrower shall furnish such
security as may be required in the proceeding, or as may be requested by Lender,
to insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon. Lender may pay over any such cash deposit or
part thereof held by Lender to the claimant entitled thereto at any time when,
in the reasonable judgment of Lender, the entitlement of such claimant is
established or any Individual Property (or part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost or
there shall be any danger of the Lien of the Mortgage being primed by any
related Lien.

5.1.3        Litigation.

Each Individual Borrower shall give prompt written notice to Lender of any
litigation or governmental proceedings pending or threatened against such
Individual Borrower and/or Guarantor which might materially adversely affect
such Individual Borrower’s or Guarantor’s condition (financial or otherwise) or
business or its Individual Property.

5.1.4        Access to Properties.

Each Individual Borrower shall permit agents, representatives and employees of
Lender to inspect its Individual Property or any part thereof at reasonable
hours upon reasonable advance notice, subject to the rights of Tenants under
their respective Leases.

5.1.5        Notice of Default.

Each Individual Borrower shall promptly advise Lender of any material adverse
change in such Individual Borrower’s or Guarantor’s condition, financial or
otherwise, or of the occurrence of any Default or Event of Default of which such
Individual Borrower has knowledge.

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5.1.6        Cooperate in Legal Proceedings.

Each Individual Borrower shall cooperate fully with Lender with respect to any
proceedings before any court, board or other Governmental Authority which may in
any way affect the rights of Lender hereunder or any rights obtained by Lender
under any of the other Loan Documents and, in connection therewith, permit
Lender, at its election, to participate in any such proceedings.

5.1.7        Perform Loan Documents.

Each Individual Borrower shall observe, perform and satisfy all the terms,
provisions, covenants and conditions of, and shall pay when due all costs, fees
and expenses to the extent required under the Loan Documents executed and
delivered by, or applicable to, such Individual Borrower.

5.1.8        Award and Insurance Benefits.

Each Individual Borrower shall cooperate (or cause the applicable Tenant to
cooperate) with Lender in obtaining for Lender the benefits of any Awards or
Insurance Proceeds lawfully or equitably payable in connection with its
Individual Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and the payment by such Individual Borrower of the expense of an appraisal on
behalf of Lender in case of Casualty or Condemnation affecting such Individual
Property or any part thereof) out of such Insurance Proceeds.

5.1.9        Further Assurances.

Each Individual Borrower shall, at its sole cost and expense:

(a)                furnish to Lender all instruments, documents, boundary
surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every
other document, certificate, agreement and instrument required to be furnished
by such Individual Borrower pursuant to the terms of the Loan Documents or which
are reasonably requested by Lender in connection therewith;

(b)               execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the collateral at any time
securing or intended to secure the obligations of such Individual Borrower under
the Loan Documents, as Lender may reasonably require; and

(c)                do and execute all and such further lawful and reasonable
acts, conveyances and assurances for the better and more effective carrying out
of the intents and purposes of this Agreement and the other Loan Documents, as
Lender shall reasonably require from time to time.

5.1.10    Principal Place of Business, State of Organization.

No Individual Borrower will cause or permit any change to be made in its name,
identity (including its trade name or names), place of organization or formation
or such Individual Borrower’s corporate or partnership or other structure unless
such Individual Borrower shall have first notified Lender in writing of such
change at least thirty (30) days prior to the effective date of such change, and
shall have first taken all action required by Lender for the purpose of
perfecting or protecting the lien and security interests of Lender pursuant to
this Agreement, and the other Loan Documents and, in the case of a change in
such Individual Borrower’s structure, without first obtaining the

52

 

prior written consent of Lender, which consent may given or denied in Lender’s
sole discretion. Upon Lender’s request, any Individual Borrower shall, at such
Individual Borrower’s sole cost and expense, execute and deliver additional
security agreements and other instruments which may be necessary to effectively
evidence or perfect Lender’s security interest in the Property as a result of
such change of principal place of business or place of organization. Each
Individual Borrower’s principal place of business and chief executive office,
and the place where such Individual Borrower keeps its books and records,
including recorded data of any kind or nature, regardless of the medium or
recording, including software, writings, plans, specifications and schematics,
has been for the preceding four months (or, if less, the entire period of the
existence of such Individual Borrower) and will continue to be the address of
such Individual Borrower set forth at the introductory paragraph of this
Agreement (unless such Individual Borrower notifies Lender in writing at least
thirty (30) days prior to the date of such change). Each Individual Borrower
shall promptly notify Lender of any change in its organizational identification
number. If any Individual Borrower does not now have an organizational
identification number and later obtains one, such Individual Borrower promptly
shall notify Lender of such organizational identification number.

5.1.11    Financial Reporting.

 

(a)                Borrower will keep and maintain or will cause to be kept and
maintained on a Fiscal Year basis, in accordance with the requirements for a
Special Purpose Entity set forth herein and GAAP (or such other accounting basis
acceptable to Lender, consistently applied), proper and accurate books, records
and accounts reflecting all of the financial affairs of each Individual Borrower
and all items of income and expense in connection with the operation of each
Individual Property. Lender shall have the right from time to time at all times
during normal business hours upon reasonable notice to examine such books,
records and accounts at the office of any Individual Borrower or any other
Person maintaining such books, records and accounts and to make such copies or
extracts thereof as Lender shall desire. After the occurrence and during the
continuance of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to any
Individual Property, as Lender shall reasonably determine to be necessary or
appropriate in the protection of Lender’s interest.

(b)               Borrower will furnish, or cause to be furnished, to Lender
annually, within ninety (90) days following the end of each Fiscal Year a
consolidated and annotated annual financial statement of Borrower, IREIT (i.e.,
Borrower's statement shall be consolidated on IREIT’s financial statement) and
Principal (if any) certified by an accounting firm or other independent
certified public accountant reasonably acceptable to Lender (except that with
respect to the 2012 annotated annual statement of IREIT only, such financial
statements may be certified by the Chief Account Officer or other authorized
officer of IREIT) in accordance with GAAP (or such other accounting basis
acceptable to Lender, consistently applied) covering the Properties on a
combined basis for such Fiscal Year, together with unaudited financial
statements relating to each Individual Borrower and each Individual Property.
Such financial statements for each Individual Property for such Fiscal Year
shall contain statements of profit and loss for each applicable Individual
Borrower and each Individual Property and a balance sheet for each applicable
Individual Borrower. Such statements shall set forth the financial condition and
the

53

 

results of operations for each Individual Property for such Fiscal Year, and
shall include, but not be limited to, amounts representing annual Net Cash Flow,
Net Operating Income, Gross Income from Operations and Operating Expenses.
Borrower’s annual financial statements shall be accompanied by (i) a comparison
of the budgeted income and expenses and the actual income and expenses for the
prior Fiscal Year, (ii) an Officer’s Certificate stating that each such annual
financial statement presents fairly the financial condition and the results of
operations of each Individual Borrower and each Individual Property and has been
prepared in accordance with GAAP (or such other accounting basis acceptable to
Lender, consistently applied), (iii) an unqualified opinion of an accounting
firm or other independent certified public accountant reasonably acceptable to
Lender that IREIT’s annual financial statement presents fairly the financial
condition and the results of operations of IREIT, (iv) a certified rent roll
containing current rent, lease expiration dates and the square footage occupied
by each tenant, (v) an Officer’s Certificate with a schedule certified
reconciling Net Operating Income to Net Cash Flow (the “Net Cash Flow
Schedule”), which shall itemize all adjustments made to Net Operating Income to
arrive at Net Cash Flow deemed material by the certifying officer of Borrower.
Together with Borrower’s annual financial statements, Borrower shall furnish to
Lender an Officer’s Certificate certifying as of the date thereof whether there
exists an event or circumstance which constitutes a Default or Event of Default
under the Loan Documents executed and delivered by, or applicable to, Borrower,
and if such Default or Event of Default exists, the nature thereof, the period
of time it has existed and the action then being taken to remedy the same.

(c)                Borrower will furnish, or cause to be furnished, to Lender on
or before forty five (45) days after the end of each calendar quarter the
following items, accompanied by an Officer’s Certificate stating that such items
are true, correct, accurate, and complete and fairly present the financial
condition and results of the operations of each Individual Borrower and each
Individual Property (subject to normal year-end adjustments) as applicable:
(i) a rent roll for the subject months; (ii) quarterly and year-to-date
operating statements (including Capital Expenditures) prepared for each calendar
quarter, noting Net Operating Income, Gross Income from Operations, and
Operating Expenses (not including any contributions to any reserves required
hereunder) and other information necessary and sufficient to fairly represent
the financial position and results of operation of such Individual Property
during such calendar quarter, and containing a comparison of budgeted income and
expenses and the actual income and expenses together with a detailed explanation
of any variances of five percent (5%) or more between budgeted and actual
amounts for such periods, all in form satisfactory to Lender; (iii) a
calculation reflecting the annual Debt Service Coverage Ratio (and during the
Existing Mezzanine Loan Period, the annual Aggregate Debt Service Coverage
Ratio) for the immediately preceding three (3) month, six (6) month and twelve
(12) month periods, respectively, as of the last day of each such period; and
(iv) a Net Cash Flow Schedule. In addition, such certificate shall also be
accompanied by an Officer’s Certificate stating that (I) the representations and
warranties of each Individual Borrower set forth in Section 4.1.30(a) are true
and correct as of the date of such certificate and (II) a Tenant Go Dark Event
has not occurred with respect to any Individual Property (or if a Tenant Go Dark
Event has occurred, stating with specificity which Individual Properties are
affected).

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(d)               For the partial year period commencing on the date hereof and
for each Fiscal Year thereafter, each Individual Borrower shall submit to Lender
an Annual Budget not later than thirty (30) days prior to the commencement of
such period or Fiscal Year in form reasonably satisfactory to Lender; provided,
that if no Event of Default or Cash Sweep Event then exists, Borrower shall have
an additional sixty (60) days (i.e., for thirty (30) days after the commencement
of such period or Fiscal Year) within which to submit the Annual Budget. During
a Cash Sweep Period, the Annual Budget shall be subject to Lender’s written
approval (each such Annual Budget, an “Approved Annual Budget”). Each Individual
Borrower’s written request therefor shall be delivered together with such
materials reasonably requested by Lender in order to evaluate such request (it
being acknowledged and agreed that no request for consent shall be effective
unless and until such materials have been delivered to Lender) and shall
conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.1.11(d) OF
THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S CONSENT. THE PROPOSED ANNUAL
BUDGET SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY
WITHIN FIFTEEN (15) DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. In the
event that Lender fails to approve or disapprove the foregoing written request
within such fifteen (15) day period, then Lender’s consent shall be deemed to
have been granted. In the event that Lender objects to a proposed Annual Budget
submitted by any Individual Borrower, Lender shall advise such Individual
Borrower of such objections within fifteen (15) days after receipt thereof (and
deliver to such Individual Borrower a reasonably detailed description of such
objections) and such Individual Borrower shall promptly revise such Annual
Budget and resubmit the same to Lender. Such notice shall conspicuously state,
in large bold type, that “PURSUANT TO SECTION 5.1.11(d) OF THE LOAN AGREEMENT,
THIS IS A REQUEST FOR LENDER’S CONSENT. THE PROPOSED ANNUAL BUDGET SHALL BE
DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10) DAYS’
OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. In the event that Lender fails to
approve or disapprove the second written request within such ten (10) day
period, then Lender’s consent shall be deemed to have been granted. Lender shall
advise such Individual Borrower of any objections to such revised Annual Budget
within ten (10) days after receipt thereof (and deliver to such Individual
Borrower a reasonably detailed description of such objections) and such
Individual Borrower shall promptly revise and resubmit the same to Lender until
Lender approves the Annual Budget. Until such time that Lender approves a
proposed Annual Budget (or such proposed Annual Budget is deemed approved
pursuant to this Section 5.1.11(d)), the most recently Approved Annual Budget
shall apply; provided, that, such Approved Annual Budget shall be adjusted to
reflect actual increases in Taxes, Insurance Premiums and Other Charges.

55

 

 

In the event that Lender objects to a proposed Annual Budget submitted by any
Individual Borrower, Lender shall advise such Individual Borrower of such
objections within fifteen (15) days after receipt thereof (and deliver to such
Individual Borrower a reasonably detailed description of such objections) and
such Individual Borrower shall promptly revise such Annual Budget and resubmit
the same to Lender. Lender shall advise such Individual Borrower of any
objections to such revised Annual Budget within ten (10) days after receipt
thereof (and deliver to Borrower a reasonably detailed description of such
objections) and such Individual Borrower shall promptly revise the same in
accordance with the process described in this Section 5.1.11(d) until Lender
approves the Annual Budget. Until such time that Lender approves a proposed
Annual Budget, the most recently Approved Annual Budget shall apply; provided,
that, such Approved Annual Budget shall be adjusted to reflect actual increases
in Taxes, Insurance Premiums and Other Charges.

(e)                During a Cash Sweep Period, in the event that any Individual
Borrower must incur an extraordinary operating expense or capital expense not
set forth in the Approved Annual Budget (each, an “Extraordinary Expense”), then
such Individual Borrower shall promptly deliver to Lender a reasonably detailed
explanation of such proposed Extraordinary Expense for Lender’s approval, which
may be given or denied in Lender’s reasonable discretion. Individual Such
Borrower’s written request therefor shall be delivered together with such
materials reasonably requested by Lender in order to evaluate such request (it
being acknowledged and agreed that no request for consent shall be effective
unless and until such materials have been delivered to Lender) and shall
conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.1.11(e) OF
THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S CONSENT. THIS REQUEST SHALL
BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10)
DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. In the event that Lender
fails to approve or disapprove the foregoing written request within such ten
(10) day period, then Lender’s consent shall be deemed to have been granted.
Notwithstanding the foregoing, this Section 5.1.11(e) does not impose on Lender
any obligation to disburse any funds if an Event of Default then exists.

(f)                Each Individual Borrower shall furnish to Lender, within ten
(10) Business Days after request (or as soon thereafter as may be reasonably
possible), such further detailed information with respect to the operation of
its applicable Individual Property and the financial affairs of such Individual
Borrower as may be reasonably requested by Lender.

(g)               Each Individual Borrower shall furnish to Lender, within ten
(10) Business Days after Lender’s request (or as soon thereafter as may be
reasonably possible), financial and sales information from any Tenant designated
by Lender (to the extent such financial and sales information is required to be
provided under the applicable Lease and same is received by such Individual
Borrower after request therefor).

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(h)               Borrower will cause Guarantor to furnish to Lender annually,
within one hundred twenty (120) days following the end of each Fiscal Year of
Guarantor, financial statements audited by an independent certified public
accountant, which shall include an annual balance sheet and profit and loss
statement of Guarantor, in the form reasonably required by Lender.
Notwithstanding the foregoing, with respect to IREIC only, such audited
financial statements shall not be required to be delivered by Borrower to Lender
until one hundred eighty (180) days following the end of the Fiscal Year of
IREIC; provided, however, that Borrower shall cause IREIC to furnish to Lender
financial statements in unaudited form within one hundred twenty (120) days
following the end of the Fiscal Year of IREIC. Further notwithstanding the
foregoing, the obligation for Borrower to deliver to Lender such audited
financial statements of IREIT shall not commence until 2014, when Borrower shall
be so obligated to deliver to Lender the Fiscal Year financial statements of
IREIT for the calendar year 2013.

(i)                 Any reports, statements or other information required to be
delivered under this Agreement shall be delivered (i) in electronic form or (ii)
in any other format reasonably requested by Lender. Borrower agrees that Lender
may disclose information regarding each Individual Property and each Individual
Borrower that is provided to Lender pursuant to this Section 5.1.11(i) in
connection with the Securitization to such parties requesting such information
in connection with such Securitization.

5.1.12    Business and Operations.

Each Individual Borrower will continue to engage in the businesses presently
conducted by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Property. Each Individual Borrower
will qualify to do business and will remain in good standing under the laws of
the jurisdiction of its formation as and to the extent the same are required for
the ownership, maintenance, management and operation of its Individual Property.
Each Individual Borrower shall at all times during the term of the Loan,
continue to own all of the Personal Property which are necessary to operate its
Individual Property in the manner required hereunder and in the manner in which
it is currently operated.

5.1.13    Title to the Properties.

Each Individual Borrower will warrant and defend (a) the title to its Individual
Property and every part thereof, subject only to Liens permitted hereunder
(including Permitted Encumbrances) and (b) the validity and priority of the Lien
of the Mortgage on each Individual Property, subject only to Liens permitted
hereunder (including Permitted Encumbrances), in each case against the claims of
all Persons whomsoever. Each Individual Borrower shall reimburse Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and
expenses) incurred by Lender if an interest in its Individual Property, other
than as permitted hereunder, is claimed by another Person.

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5.1.14    Costs of Enforcement.

In the event (a) that the Mortgage encumbering any Individual Property is
foreclosed in whole or in part or that the Mortgage is put into the hands of an
attorney for collection, suit, action or foreclosure, (b) of the foreclosure of
any mortgage encumbering any Individual Property prior to or subsequent to the
Mortgage in which proceeding Lender is made a party, or (c) of the bankruptcy,
insolvency, rehabilitation or other similar proceeding in respect of any
Individual Borrower or any of its constituent Persons or an assignment by any
Individual Borrower or any of its constituent Persons for the benefit of its
creditors, such Individual Borrower, its successors or assigns, shall be
chargeable with and agrees to pay all costs of collection and defense, including
reasonable attorneys’ fees and expenses, incurred by Lender or such Individual
Borrower in connection therewith and in connection with any appellate proceeding
or post judgment action involved therein, together with all required service or
use taxes.

5.1.15    Estoppel Statement.

 

(a)                After request by Lender, which shall not occur more than one
(1) time per calendar year unless a default or an Event of Default then exists,
each Individual Borrower shall within ten (10) days furnish Lender with a
statement, duly acknowledged and certified, setting forth (i) the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the Applicable Interest Rate of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, claimed by such Individual Borrower, and (vi) that
the Note, this Agreement, the Mortgage and the other Loan Documents are valid,
legal and binding obligations and have not been modified or if modified, giving
particulars of such modification.

(b)               Each Individual Borrower shall use commercially reasonable
efforts to deliver to Lender upon request, tenant estoppel certificates from
each commercial Tenant leasing space at its Individual Property in form and
substance reasonably satisfactory to Lender (in the form attached to the
applicable Tenant’s lease, if required pursuant to such Lease) provided that
such Individual Borrower shall not be required to deliver such certificates more
frequently than one (1) time in any calendar year unless a default or an Event
of Default then exists.

(c)                Within thirty (30) days of a written request by any
Individual Borrower, Lender shall deliver to such Individual Borrower a
statement setting forth the items described at (a)(i), (ii), (iii) and (iv) of
this Section 5.1.15 provided that Lender shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year.

(d)               Intentionally omitted.

5.1.16    Loan Proceeds.

Each Individual Borrower shall use the proceeds of the Loan received by it on
the Closing Date only for the purposes set forth in Section 2.1.4 hereof.

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5.1.17    Performance by Borrower.

Each Individual Borrower shall in a timely manner observe, perform and fulfill
each and every covenant, term and provision of each Loan Document executed and
delivered by, or applicable to, such Individual Borrower, and shall not enter
into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered
by, or applicable to, such Individual Borrower without the prior written consent
of Lender.

5.1.18    Confirmation of Representations.

Each Individual Borrower shall deliver, in connection with any Securitization,
(a) one (1) or more Officer’s Certificates certifying as to the accuracy of all
representations made by such Individual Borrower in the Loan Documents as of the
date of the closing of such Securitization, and (b) certificates of the relevant
Governmental Authorities in all relevant jurisdictions indicating the good
standing and qualification of such Individual Borrower, Principal and Guarantor
as of the date of the Securitization.

5.1.19    Environmental Covenants.

 

(a)                Each Individual Borrower covenants and agrees that: (i) all
uses and operations on or of its applicable Individual Property, whether by such
Individual Borrower or any other person or entity, shall be in compliance with
all Environmental Laws and permits issued pursuant thereto; (ii) there shall be
no Releases of Hazardous Substances in, on, under or from the applicable
Individual Property; (iii) there shall be no Hazardous Substances in, on, or
under the applicable Individual Property, except those that are both (A) in
compliance with all Environmental Laws and with permits issued pursuant thereto,
(B) in de-minimis amounts necessary to operate the applicable Individual
Property for the purposes set forth in the Loan Agreement which will not result
in an environmental condition in, on or under such Individual Property and which
are otherwise permitted under and used in compliance with Environmental Law, and
(C) fully disclosed to Lender in writing; (iv) subject to a right to contest
under applicable environmental law, provided any such contest stays any
enforcement proceeding by the applicable authority, such Individual Borrower
shall keep its applicable Individual Property free and clear of all liens and
other encumbrances imposed pursuant to any Environmental Law, whether due to any
act or omission of such Individual Borrower or any other person or entity (the
“Environmental Liens”); (v) such Individual Borrower shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to
subsection (b) below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (vi) such
Individual Borrower shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of environmental conditions
in connection with its applicable Individual Property, pursuant to any
reasonable written request of Lender made in the event that Lender has a good
faith reason to believe based upon credible evidence or information that an
environmental hazard exists on or affects the applicable Individual Property
(including but not limited to sampling, testing and analysis of soil, water,
air, building materials, and other materials and substances whether solid,
liquid or gas), and share with Lender the reports and other results thereof, and
Lender and other Indemnified Parties shall be entitled to rely on such reports
and other results thereof; (vii) such Individual Borrower shall, at its sole
cost

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and expense, comply with all reasonable written requests of Lender made in the
event that Lender has a good faith reason to believe based on credible evidence
or information that an environmental hazard exists on or affects its applicable
Individual Property to (A) reasonably effectuate Remediation of any condition
(including but not limited to a Release of a Hazardous Substance) in, on, under
or from the applicable Individual Property; (B) comply with any Environmental
Law; (C) comply with any directive from any Governmental Authority; and (D) take
any other reasonable action necessary or appropriate for protection of human
health or the environment; (viii) such Individual Borrower shall not do or allow
any tenant or other user of its applicable Individual Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any Person (whether on or off such Individual
Property), impairs or may impair the value of such Individual Property, is
contrary to any requirement of any insurer, involves Hazardous Substances or an
environmental condition and constitutes a public or private nuisance, involves
Hazardous Substances or an environmental condition and constitutes waste, or
involves Hazardous Substances or an environmental condition and constitutes and
violates any covenant, condition, agreement or easement applicable to such
Individual Property; and (ix) such Individual Borrower shall immediately notify
Lender in writing of (A) any presence or Releases or threatened Releases of
Hazardous Substances in, on, under, from or migrating towards its applicable
Individual Property; (B) any non-compliance with any Environmental Laws related
in any way to such Individual Property; (C) any actual or potential
Environmental Lien; (D) any required or proposed Remediation of environmental
conditions relating to such Individual Property; and (E) any written or oral
notice or other communication of which any Individual Borrower becomes aware
from any source whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any Person pursuant to any Environmental Law, other environmental
conditions in connection with such Individual Property, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Section.

(b)               In the event that Lender has reason to believe that an
environmental hazard exists on any Individual Property that may, in Lender’s
sole discretion, endanger any Tenants or other occupants of such Individual
Property or their guests or the general public, or may materially and adversely
affect the value of such Individual Property, upon reasonable notice from
Lender, the applicable Individual Borrower shall, at such Individual Borrower’s
expense, promptly cause an engineer or consultant satisfactory to Lender to
conduct an environmental assessment or audit (the scope of which shall be
determined in Lender’s sole and absolute discretion) and take any samples of
soil, groundwater or other water, air, or building materials or any other
invasive testing requested by Lender and promptly deliver the results of any
such assessment, audit, sampling or other testing; provided, however, if such
results are not delivered to Lender within a reasonable period or if Lender has
reason to believe that an environmental hazard exists on such Individual
Property that, in Lender’s sole judgment, endangers any Tenant or other occupant
of such Individual Property or their guests or the general public or may
materially and adversely affect the value of such Individual Property, upon
reasonable notice to Borrower, Lender and any other Person designated by Lender,
including but not limited to any receiver, any representative of a governmental
entity, and any environmental consultant, shall have the right, but not the
obligation, to enter upon such Individual Property at all reasonable times to
assess any and all

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aspects of the environmental condition of such Individual Property and its use,
including but not limited to conducting any environmental assessment or audit
(the scope of which shall be determined in Lender’s sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Each
Individual Borrower shall cooperate with and provide Lender and any such Person
designated by Lender with access to its Individual Property.

5.1.20    Leasing Matters.

(a)                Each Individual Borrower may enter into Leases or modify
existing Leases demising a portion of its Individual Property less than or equal
to the Relevant Leasing Threshold without Lender’s prior written approval
provided such Leases are to unaffiliated, third-party tenants and shall be on
commercially reasonable terms and shall not contain any terms which would
materially affect Lender’s rights under the Loan Documents, and further provided
that such Leases shall provide that (x) they are subordinate to the Mortgage
encumbering the applicable Individual Property, and (y) the tenant thereunder
agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of
sale.

(b)               No Individual Borrower may enter into a Lease with an
Affiliate covering all or substantially all of its Individual Property without
the prior written approval of Lender, which approval may be given or withheld in
the sole discretion of Lender.

(c)                No Individual Borrower may enter into Leases or modify
existing Leases demising a portion of its Individual Property greater than the
Relevant Leasing Threshold without the prior written approval of Lender,
provided, however, subject to Section 5.1.20(b) hereof, Lender shall not
withhold such approval if such Individual Borrower delivers to Lender, together
with its request for approval, an abstract or summary of the proposed Lease
terms and an Officer’s Certificate certifying that the Leasing Conditions have
been satisfied. With respect to the approval of a Lease (or modification of an
existing Lease) demising a portion of the applicable Individual Property greater
than the Relevant Leasing Threshold, (i) the failure to satisfy one or more of
the Leasing Conditions shall not, in an of itself, be a basis for disapproval,
and (ii) Lender shall taken into consideration current market conditions when
determining whether to approve such a Lease (or modification).

(d)               To the extent Lender’s written approval is required pursuant
to this Section 5.1.20 to any Lease or modification (excluding a Lease for all
or substantially all of an Individual Property entered into with an Affiliate,
the approval of which is required pursuant to Section 5.1.20(b) hereof), any
Individual Borrower’s written request therefor shall be delivered together with
such materials reasonably requested by Lender in order to evaluate such request
(it being acknowledged and agreed that no request for consent shall be effective
unless and until such materials have been delivered to Lender) and shall
conspicuously state, in large bold type, that

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“PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THIS IS A REQUEST FOR
LENDER’S CONSENT. LENDER’S RESPONSE IS REQUESTED WITHIN TEN (10) BUSINESS DAYS.
LENDER’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD WILL ENABLE BORROWER TO
DELIVER A SECOND NOTICE REQUESTING LENDER’S CONSENT”. In the event Lender fails
to approve or disapprove to such request within ten (10) Business Days’ of the
effective date of such initial request, such Individual Borrower may deliver to
Lender a second written request for approval, which second written request for
approval shall conspicuously state, in large bold type, that “THIS IS A REQUEST
FOR LENDER’S CONSENT. LENDER’S CONSENT IS REQUESTED WITHIN FIVE (5) BUSINESS
DAYS. THE LEASE SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE
CONTRARY WITHIN FIVE (5) BUSINESS DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN
NOTICE”. In the event that Lender fails to approve or disapprove the second
written request within such five (5) Business Day period, then Lender’s consent
shall be deemed to have been granted.

(e)                Each Individual Borrower shall furnish Lender with executed
copies of all Leases and a copy of the executed Tenant Direction Letter signed
by such Individual Borrower and to the extent available, the Tenant.

(f)                Each Individual Borrower (i) shall observe and perform the
obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce the terms, covenants and conditions
contained in the Leases upon the part of the Tenant thereunder to be observed or
performed in a commercially reasonable manner and in a manner not to impair the
value of its Individual Property involved except that, subject to the terms of
this Section 5.1.20, no termination by such Individual Borrower or acceptance of
surrender by a tenant of any Lease shall be permitted without the written
consent of Lender which consent may be withheld in the sole discretion of
Lender; (iii) shall not collect any of the rents more than one (1) month in
advance (other than security deposits); (iv) shall not execute any other
assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (v) shall not alter, modify or change the
terms of the Leases in a manner inconsistent with the provisions of the Loan
Documents; and (vi) shall execute and deliver at the request of Lender all such
further assurances, confirmations and assignments in connection with the Leases
as Lender shall from time to time reasonably require. Notwithstanding the
foregoing, any Individual Borrower may, without the prior written consent of
Lender, terminate (or accept a surrender of) any Lease which demises less than
the Relevant Leasing Threshold under any of the following circumstances: (i) the
tenant under said Lease is in default beyond any applicable grace and cure
period, and such Individual Borrower has the right to terminate such Lease; (ii)
such termination is permitted by the terms of the Lease in question and such
Individual Borrower has secured an obligation from a third party to lease the
space under the Lease to be terminated at a rental equal to or higher than the
rental due under the Lease to be terminated; and (iii) if the tenant under the
Lease to be terminated has executed a right under said Lease to terminate its
Lease upon payment of a termination fee to such Individual Borrower and has in
fact terminated its Lease and paid said fee, such Individual Borrower may accept
said termination. Notwithstanding anything to the contrary contained herein, all
new Leases and all amendments, modifications, extensions, and renewals of
existing Leases with Tenants that are Affiliates of any Individual Borrower
shall be subject to the prior written consent of Lender.

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5.1.21    Alterations

. Subject to the rights of Dollar General to make alterations pursuant to the
terms of its respective Leases, each Individual Borrower shall obtain Lender’s
prior written consent to any alterations to any Improvements, which consent
shall not be unreasonably withheld or delayed except with respect to alterations
that may have a material adverse effect on such Individual Borrower’s financial
condition, the value of its Individual Property or such Individual Property’s
Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall not
be required in connection with any alterations that will not have a material
adverse effect on any Individual Borrower’s financial condition, the value of
its Individual Property or such Individual Property’s Net Operating Income,
provided that such alterations are made in connection with (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof, or any Lease executed after the date hereof to a Lessee
that is not an Affiliate of such Individual Borrower for which Lender’s approval
was not required or was given, (b) tenant improvement work performed pursuant to
the terms and provisions of a Lease and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements, (c) alterations performed in connection with the Restoration of
such Individual Property after the occurrence of a Casualty or Condemnation in
accordance with the terms and provisions of this Agreement, or (d) any
alteration which costs less than the Threshold Amount (in the aggregate for all
current alterations at such Individual Property), provided that, in all of the
foregoing clauses (a) through (d), such Individual Borrower complies with the
Alteration Conditions. If the total unpaid amounts due and payable with respect
to alterations to the Improvements at any Individual Property (other than such
amounts to be paid or reimbursed by Tenants under the Leases) shall at any time
exceed the Threshold Amount, the applicable Individual Borrower shall promptly
deliver to Lender as security for the payment of such amounts and as additional
security for such Individual Borrower’s obligations under the Loan Documents any
of the following: (A) cash, (B) U.S. Obligations, (C) other securities having a
rating acceptable to Lender and that, at Lender’s option, the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned to any Securities or any class thereof in connection
with any Securitization or (D) a completion bond or an irrevocable letter of
credit (payable on sight draft only) issued by a financial institution having a
rating by S&P of not less than “A-1+” if the term of such bond or letter of
credit is no longer than three (3) months or, if such term is in excess of three
(3) months, issued by a financial institution having a rating that is acceptable
to Lender and that, at Lender’s option, the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned to any Securities or class thereof in connection with any
Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the
applicable Individual Property (other than such amounts to be paid or reimbursed
by Tenants under the Leases) over the Threshold Amount and Lender may apply such
security from time to time at the option of Lender to pay for such alterations.

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5.1.22    Operation of Property.

 

(a)                Each Individual Borrower shall cause its Individual Property
to be operated, in all material respects, in accordance with the Management
Agreement (or Replacement Management Agreement) as applicable. In the event that
the Management Agreement expires or is terminated (without limiting any
obligation of an Individual Borrower to obtain Lender’s consent to any
termination or modification of the Management Agreement in accordance with the
terms and provisions of this Agreement), such Individual Borrower shall promptly
enter into a Replacement Management Agreement with Manager or another Qualified
Manager, as applicable.

(b)               Each Individual Borrower shall: (i) promptly perform and/or
observe, in all material respects, all of the covenants and agreements required
to be performed and observed by it under the Management Agreement and do all
things necessary to preserve and to keep unimpaired its material rights
thereunder; (ii) promptly notify Lender of any material default under the
Management Agreement of which it is aware; and (iii) enforce the performance and
observance of all of the covenants and agreements required to be performed
and/or observed by Manager under the Management Agreement, in a commercially
reasonable manner.

5.1.23    Embargoed Person.

Each Individual Borrower has performed and shall perform reasonable due
diligence to insure that at all times throughout the term of the Loan, including
after giving effect to any transfers permitted pursuant to the Loan Documents,
(a) none of the funds or other assets of any Individual Borrower, Principal and
Guarantor constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person; (b) no Embargoed Person has any interest of
any nature whatsoever in any Individual Borrower, Principal or Guarantor, as
applicable, with the result that the investment in such Individual Borrower,
Principal or Guarantor, as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of law; and (c) none of the funds
of any Individual Borrower, Principal or Guarantor, as applicable, have been
derived from, or are the proceeds of, any unlawful activity, including money
laundering, terrorism or terrorism activities, with the result that the
investment in any Individual Borrower, Principal or Guarantor, as applicable
(whether directly or indirectly), is prohibited by law or the Loan is in
violation of law, or may cause any Individual Property to be subject to
forfeiture or seizure. Notwithstanding the foregoing, to the extent that an
Embargoed Person acquires a non-controlling interest in IREIT or IREIC, either
(1) without the knowledge of Borrower, IREIT or IREIC, through a transaction
brokered by a FINRA licensed broker dealer not affiliated with IREIT or IREIC,
provided such broker dealer has executed a dealer agreement or selling agreement
with IREIT, IREIC or an affiliate of IREIT or IREIC in which it covenants to,
among other things, comply with The USA PATRIOT Act (or any successor
legislation), or (2) provided Borrower performs reasonable due diligence,
without the knowledge of Borrower, IREIT or IREIC, after the initial sale or
offering of such interests in IREIT or IREIC, the resulting breach of the
foregoing representations shall be deemed to be unintentional and not willfully
or grossly negligent for purposes of Section 9.3 hereof.

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5.1.24    Supplemental Mortgage Affidavits

. As of the date hereof, each Individual Borrower represents that it has paid
all state, county and municipal recording and all other taxes imposed upon the
execution and recordation of the Mortgages. If at any time Lender determines (i)
based on applicable law, that Lender is not being afforded the maximum amount of
security available from any one or more of the Properties as a direct or
indirect result of applicable taxes not having been paid with respect to any
Individual Property or (ii) Lender and/or the Rating Agencies, in connection
with a Securitization, require the amount secured by any Mortgage be increased,
Borrower agrees that it will execute, acknowledge and deliver to Lender,
immediately upon Lender’s request, supplemental affidavits and/or Mortgages
increasing the amount of the Debt attributable to any such Individual Property
(as set forth as the Release Amount on Schedule VI annexed hereto) for which all
applicable taxes have been paid to an amount determined by Lender, and Borrower
shall, on demand, pay any additional taxes.

Section 5.2            Negative Covenants

. From the date hereof until payment and performance in full of all obligations
of Borrower under the Loan Documents or the earlier release of the Lien of the
Mortgage and any other collateral in accordance with the terms of this Agreement
and the other Loan Documents, each Individual Borrower covenants and agrees with
Lender that it will not do, directly or indirectly, any of the following:

5.2.1        Operation of Property

. No Individual Borrower shall, without Lender’s prior written consent (which
consent shall not be unreasonably withheld): (i) surrender, terminate, cancel,
amend or modify the Management Agreement; provided, that such Individual
Borrower may, without Lender’s consent, replace the Manager so long as the
replacement manager is a Qualified Manager pursuant to a Replacement Management
Agreement; (ii) reduce or consent to the reduction of the term of the Management
Agreement; (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement, or (iv) otherwise modify, change,
supplement, alter or amend, or waive or release any of its rights and remedies
under, the Management Agreement in any material respect.

5.2.2        Liens

. No Individual Borrower shall create, incur, assume or suffer to exist any Lien
on any portion of its Individual Property or permit any such action to be taken,
except for Permitted Encumbrances.

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5.2.3        Dissolution

. No Individual Borrower shall (a) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (b) engage in
any business activity not related to the ownership and operation of its
Individual Property, (c) transfer, lease or sell, in one transaction or any
combination of transactions, the assets or all or substantially all of the
properties or assets of such Individual Borrower except to the extent permitted
by the Loan Documents, (d) modify, amend, waive or terminate its organizational
documents or its qualification and good standing in any jurisdiction or (e)
cause the Principal to (i) dissolve, wind up or liquidate or take any action, or
omit to take an action, as a result of which the Principal would be dissolved,
wound up or liquidated in whole or in part, or (ii) amend, modify, waive or
terminate the organizational documents of the Principal, in each case, without
obtaining the prior written consent of Lender or Lender’s designee.

5.2.4        Change In Business

. No Individual Borrower shall enter into any line of business other than the
ownership and operation of its Individual Property, or make any material change
in the scope or nature of its business objectives, purposes or operations, or
undertake or participate in activities other than the continuance of its present
business. Nothing contained in this Section 5.2.4 is intended to expand the
rights of any Individual Borrower contained in Section 5.2.10(d) hereof.

5.2.5        Debt Cancellation

. No Individual Borrower shall cancel or otherwise forgive or release any claim
or debt (other than termination of Leases in accordance herewith) owed to such
Individual Borrower by any Person, except for adequate consideration and in the
ordinary course of such Individual Borrower’s business.

5.2.6        Zoning

. No Individual Borrower shall initiate or consent to any zoning
reclassification of any portion of its Individual Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
such Individual Property in any manner that could result in such use becoming a
non conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior written consent of Lender.

5.2.7        No Joint Assessment

. No Individual Borrower shall suffer, permit or initiate the joint assessment
of its Individual Property (a) with any other real property constituting a tax
lot separate from such Individual Property, and (b) any portion of such
Individual Property which may be deemed to constitute personal property, or any
other procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to such real property
portion of such Individual Property.

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5.2.8        Intentionally Omitted.

5.2.9        ERISA.

(a)                No Individual Borrower shall engage in any transaction which
would cause any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under the Note, this Agreement or the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA.

(b)               Each Individual Borrower further covenants and agrees to
deliver to Lender such certifications or other evidence from time to time
throughout the term of the Loan, as requested by Lender in its sole discretion,
that (A) such Individual Borrower is not and does not maintain an “employee
benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA;
(B) such Individual Borrower is not subject to any state statute regulating
investment of, or fiduciary obligations with respect to governmental plans and
(C) one or more of the following circumstances is true:

(i)                 Equity interests in such Individual Borrower are publicly
offered securities, within the meaning of 29 C.F.R. §2510.3-101(b)(2);

(ii)               Less than twenty-five percent (25%) of each outstanding class
of equity interests in such Individual Borrower are held by “benefit plan
investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2); or

(iii)             Such Individual Borrower qualifies as an “operating company”
or a “real estate operating company” within the meaning of 29 C.F.R.
§2510.3-101(c) or (e).

5.2.10    Transfers.

(a)                Borrower acknowledges that Lender has examined and relied on
the creditworthiness and experience of Borrower and its general partner,
managing member, limited partners, members and beneficial owners, as applicable,
in owning and operating properties such as the Property in agreeing to make the
loan secured by the Mortgage, and that Lender will continue to rely on
Borrower’s ownership of the Property as a means of maintaining the value of the
Property as security for repayment of the Debt. Borrower shall not without
Lender’s prior written consent and except as otherwise expressly provided in
this Section 5.2.10: (i) sell, assign, convey, mortgage, grant, pledge, assign,
grant options with respect to, transfer or otherwise dispose of its legal or
beneficial interests in the Property or any part thereof other than pursuant to
Leases permitted under, and entered into in accordance with, Section 5.1.20
hereof, (ii) permit any owner, directly or indirectly, of an ownership interest
the Property, to transfer or dispose of such interest, whether by transfer of
stock or other interest in a Restricted Party, or otherwise, (iii) incur
Indebtedness (other than the Indebtedness permitted pursuant to the terms of
this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a
security interest in the Property or any part thereof, (v) sell, assign, convey,
transfer, mortgage, encumber, grant a

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security interest in, or otherwise transfer or dispose of any direct or indirect
ownership interest in any Restricted Party, or permit any Restricted Party that
owns an interest in another Restricted Party to do the same, or (vi) file a
declaration of condominium with respect to the Property (any of the foregoing
transactions, a “Transfer”). Notwithstanding the foregoing, for purposes hereof,
a “Transfer” shall not include Permitted Transfers.

(b)               Notwithstanding Section 5.2.10(a), at any time other than the
period commencing thirty (30) days prior to a Securitization and ending thirty
(30) days after a Securitization, Lender’s consent shall not be required in
connection with one or a series of Transfers, of up to forty-nine percent (49%)
of the stock, limited partnership interests or membership interests (as the case
may be) in a Restricted Party; provided, however, no such Transfer shall result
in the change of Control in such Restricted Party, and as a condition to each
such Transfer, Lender shall receive not less than thirty (30) days prior written
notice of such proposed Transfer. In addition, at all times, IREIT must continue
to (i) Control the applicable Restricted Party, and (ii) own, directly or
indirectly, not less than fifty-one percent (51%) of the legal and beneficial
interest in the applicable Restricted Party.

(c)                Notwithstanding Section 5.2.10(a), at any time other than the
period commencing thirty (30) days prior to a Securitization and ending thirty
(30) days after a Securitization, Lender shall not withhold its consent to a
Transfer of the entire Property or all of the outstanding ownership interests in
Borrower in a single transaction to one newly-formed Special Purpose Entity
which shall be a wholly-owned subsidiary of IREIT (“Permitted Affiliate
Transferee”) which shall be approved by Lender in its reasonable discretion
(“Permitted Affiliate Transfer”), provided (1) no Event of Default shall have
occurred and be continuing, (2) the creditworthiness of IREIT, as applicable,
has not deteriorated, in the sole discretion of Lender, from the Closing Date to
the date of the proposed Transfer, and (3) Borrower shall have paid all
reasonable and customary third party expenses (including reasonable attorneys’
fees and disbursements) actually incurred by Lender in connection with such
Transfer (but not any assumption or processing fee).

(d)               Notwithstanding Section 5.2.10(a), at any time after other
than during the period that is thirty (30) days prior to and thirty (30) days
after a Securitization, Lender shall not withhold its consent to a Transfer of
the Property and assumption of the Loan, provided that Lender receives thirty
(30) days’ prior written notice of such Transfer and further provided that the
following additional requirements are satisfied:

(i)                 the proposed transferee of the Property shall be a Special
Purpose Entity (the “Transferee”) which at the time of such transfer will be in
compliance with, and must be able to satisfy all of, the representations,
warranties and covenants contained in Section 4.1.30, Section 4.1.35, Section
5.1.23 and Section 5.2.9 and which shall have assumed in writing (subject to the
terms of Section 9.3 hereof) and agreed to comply with all the terms, covenants
and conditions set forth in this Loan Agreement and the other Loan Documents,
expressly including, without limitation the representations, warranties and
covenants contained in Section 4.1.30, Section 4.1.35, Section 5.1.1 and Section
5.1.23 hereof;

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(ii)               Borrower shall deliver confirmation in writing from the
Rating Agencies that such proposed Transfer will not cause a downgrading,
withdrawal, reduction or qualification of the ratings in effect immediately
prior to such Transfer for the Securities, or any class thereof, issued in
connection with a Securitization which are then outstanding;

(iii)             Transferee and Transferee’s Principals shall, as of the date
of such transfer, have an aggregate net worth and liquidity not worse than the
net worth and liquidity of Borrower and its Principals as of the date hereof or
an aggregate net worth and liquidity otherwise reasonably acceptable to Lender;

(iv)             Transferee or Transferee’s Principals must have demonstrated
expertise in owning and operating properties similar in location, size, class
and operation to the Property, which expertise shall be reasonably determined by
Lender;

(v)               Transferee, Transferee’s Principals and all other entities
which may be owned or Controlled directly or indirectly by Transferee’s
Principals (“Related Entities”) must not have been party to any bankruptcy
proceedings, voluntary or involuntary, made an assignment for the benefit of
creditors or taken advantage of any insolvency act, or any act for the benefit
of debtors within seven (7) years prior to the date of the proposed Transfer;

(vi)             Transferee shall assume all of the obligations of Borrower
under the Loan Documents in a manner satisfactory to Lender in all respects,
including, without limitation, by entering into an assumption agreement in form
and substance reasonably satisfactory to Lender;

(vii)           there shall be no material litigation or regulatory action
pending or threatened against Transferee, Transferee’s Principals or Related
Entities which is not reasonably acceptable to Lender;

(viii)         the Property shall be managed by a Qualified Manager pursuant to
a Replacement Management Agreement;

(ix)             Transferee, Transferee’s Principals and Related Entities shall
not have defaulted under its or their obligations with respect to any other
Indebtedness in a manner which is not reasonably acceptable to Lender;

(x)               no Event of Default shall have occurred and be continuing and
no Default or Event of Default shall otherwise occur as a result of such
Transfer;

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(xi)             Borrower shall deliver, at its sole cost and expense, an
endorsement to each existing Title Insurance Policy insuring the related
Mortgage, as modified by the assumption agreement, as a valid first lien on the
Property and naming Transferee as owner of the fee estate (or leasehold estate,
as applicable) of the Property, which endorsement shall insure that, as of the
date of the recording of the assumption agreement, such Property shall not be
subject to any additional exceptions or liens other than those contained in such
Title Insurance Policy issued on the date hereof and the Permitted Encumbrances
relating thereto;

(xii)           Intentionally omitted;

(xiii)         Intentionally omitted;

(xiv)         Transferee, at its sole cost and expense, shall deliver opinions
regarding existence, authority and enforceability, which opinions may be relied
upon by Lender, the Rating Agencies and their respective counsel, agents and
representatives with respect to the proposed transaction;

(xv)           Transferee and Transferee’s Principals shall deliver (1) all
organizational documentation reasonably requested by Lender, which shall be
reasonably acceptable to Lender, and (2) all certificates, agreements and
covenants reasonably required by Lender;

(xvi)         Prior to any release of Guarantor, one (1) or more substitute
guarantors reasonably acceptable to Lender shall have assumed all of the
liabilities and obligations of Guarantor under the Guaranty and Environmental
Indemnity (if any) executed by Guarantor or execute a replacement guaranty and
environmental indemnity (if applicable) reasonably satisfactory to Lender;

(xvii)       Borrower shall have paid an assumption fee equal to one-half of one
percent (0.5%) of the then outstanding principal balance of the Loan in
connection with the first such Transfer, and an assumption fee equal to one
percent (1.0%) of the then outstanding principal balance of the Loan in
connection with each subsequent Transfer, provided, however, no such assumption
fee shall be payable if the Transferee is wholly owned by an Identified
Affiliate; and;

(xviii)     Borrower shall pay (or cause to be paid) any and all reasonable
out-of-pocket costs actually incurred by Lender in connection with such Transfer
(including, without limitation, Lender’s reasonable counsel fees and
disbursements) and all recording fees, title insurance premiums and mortgage and
intangible taxes and the fees and expenses of the Rating Agencies (if any)
pursuant to clause (ii) above.

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(e)                Notwithstanding Section 5.2.10(a), at any time after other
than during the period that is thirty (30) days prior to and thirty (30) days
after a Securitization, Lender shall not withhold its consent to a Transfer of
all of the outstanding ownership interests in Borrower in a single transaction
to an Identified Affiliate, provided that Lender receives thirty (30) days’
prior written notice of such Transfer and further provided that the following
additional requirements are satisfied:

(i) Borrower shall deliver confirmation in writing from the Rating Agencies that
such proposed Transfer will not cause a downgrading, withdrawal, reduction or
qualification of the ratings in effect immediately prior to such Transfer for
the Securities, or any class thereof, issued in connection with a Securitization
which are then outstanding;

(ii) The Identified Affiliate shall, as of the date of such transfer, have an
aggregate net worth and liquidity not worse than the net worth and liquidity of
IREIT as of the date hereof or an aggregate net worth and liquidity otherwise
reasonably acceptable to Lender;

(iii) The Identified Affiliate and all other entities which may be owned or
Controlled directly or indirectly by the Identified Affiliate (“Identified
Affiliate Related Entities”) must not have been party to any bankruptcy
proceedings, voluntary or involuntary, made an assignment for the benefit of
creditors or taken advantage of any insolvency act, or any act for the benefit
of debtors within seven (7) years prior to the date of the proposed Transfer;

(iv) there shall be no material litigation or regulatory action pending or
threatened against the Identified Affiliate or Identified Affiliate Related
Entities which is not reasonably acceptable to Lender;

(v) the Property shall continue to be managed by Manager or be managed by a
Qualified Manager pursuant to a Replacement Management Agreement;

(vi) no Event of Default shall have occurred and be continuing and no Default or
Event of Default shall otherwise occur as a result of such Transfer;

(vii) intentionally omitted;

(viii) The Identified Affiliate, at its sole cost and expense, shall deliver
opinions regarding existence, authority and enforceability, which opinions may
be relied upon by Lender, the Rating Agencies and their respective counsel,
agents and representatives with respect to the proposed transaction;

(ix) The Identified Affiliate shall deliver (A) all organizational documentation
reasonably requested by Lender, which shall be reasonably acceptable to Lender,
and (B) all certificates, agreements and covenants reasonably required by
Lender;

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(x) Prior to any release of Guarantor, the Identified Affiliate shall have
assumed all of the liabilities and obligations of Guarantor under the Guaranty
and Environmental Indemnity (if any) executed by Guarantor or execute a
replacement guaranty and environmental indemnity (if applicable) reasonably
satisfactory to Lender; and

(xi) Borrower shall pay all of Lender’s reasonable and customary third-party
expenses (including reasonable attorneys’ fees and disbursements) actually
incurred by Lender in connection with such Transfer and a processing fee equal
to $5,000 and all expenses of the Rating Agencies (if any) pursuant to clause
(i) above.

 

(f)                Notwithstanding Section 5.2.10(a), Lender’s consent shall not
be required with respect to the merger of IREIT with any other Identified
Affiliate; provided that (i) Lender shall receive not less than thirty (30) days
prior written notice of any such proposed merger, (ii) no Event of Default shall
have occurred and be continuing, (iii) the net worth of the entity surviving
such merger shall equal or exceed the net worth of IREIT immediately prior to
such merger, and (iv) immediately following such merger, the entity surviving
the merger shall be publicly registered with the Securities and Exchange
Commission.

(g)               Notwithstanding Section 5.2.10(a), at any time other than the
period commencing thirty (30) days prior to a Securitization and ending thirty
(30) days after a Securitization, Lender’s consent shall not be required in
connection with the acquisition by IREIT of any entity whether by merger, stock
purchase, asset purchase or any other manner; provided that: (i) Lender shall
receive not less than thirty (30) days prior written notice of any such proposed
transaction, (ii) no Event of Default shall have occurred and be continuing,
(iii) IREIT is the surviving entity following such a transaction, and (iv) the
net worth of IREIT after the transaction shall equal or exceed the net worth of
IREIT immediately prior to such a transaction.

(h)               Notwithstanding Section 5.2.10(a), at any time other than the
period that is thirty (30) days prior to and thirty (30) days after a
Securitization, Lender shall not withhold its consent to, and shall not charge
an assumption fee in connection, with a Transfer by IREIT of one hundred percent
(100%) of the membership interests in Borrower to a joint venture in which IREIT
owns at least twenty-five percent (25%) of the stock, partnership interests or
membership interests (“JV Transferee”), provided that (i) Lender receives at
least thirty (30) days’ prior written notice of such Transfer, (ii) no Event of
Default shall have occurred and be continuing at the time of such written notice
or the Transfer, (iii) IREIT maintains operational and managerial control of the
JV Transferee and Borrower, (iv) subject to Section 5.16 of the Guaranty
Agreement, IREIT and IREIC continue to be Guarantor, (v) IREIT’s partner in the
JV Transferee (the “JV Partner”) or the JV Partner’s parent entity shall have at
least $350,000,000.00 in assets, (vi) the JV Partner or the JV Partner’s parent
entity shall have a net worth of at least $175,000,000.00; (vii) neither the JV
Partner nor any of its Affiliates shall have been a party to any bankruptcy
proceedings, voluntary or involuntary, made an assignment for the benefit of
creditors or taken advantage of any insolvency act, or any act for the benefit
of debtors within

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seven (7) years prior to the date of the proposed Transfer, (viii) Borrower
shall pay all of Lender’s reasonable and customary third-party expenses
(including reasonable attorneys’ fees and disbursements) actually incurred by
Lender in connection with such Transfer and a processing fee equal to $5,000,
and (ix) if required or requested by any of the Rating Agencies, Borrower shall
deliver a substantive non-consolidation opinion with respect to such Transfer to
the JV Transferee.

(i)                 Lender shall approve or disapprove any proposed Transfer
governed by this Section 5.2.10 within thirty (30) days of Lender’s receipt of a
written notice from Borrower requesting Lender’s approval, provided such notice
includes all information necessary to make such decision, and further provided
that such written notice from Borrower shall conspicuously state, in large bold
type, that “PURSUANT TO SECTION 5.2.10 OF THE LOAN AGREEMENT, A RESPONSE IS
REQUIRED WITHIN THIRTY (30) DAYS’ OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”.
If Lender fails to disapprove any proposed Transfer within such period, Borrower
shall provide a second written notice requesting approval, which written notice
shall conspicuously state, in large bold type, that “PURSUANT TO SECTION 5.2.10
OF THE LOAN AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF
LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN FIFTEEN (15) BUSINESS DAYS’ OF
LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. Thereafter, if Lender does not
disapprove the proposed Transfer within said fifteen (15) Business Day period,
Lender's consent to the proposed Transfer shall be deemed to have been given;
provided, however, and notwithstanding the foregoing, no such consent to the
proposed Transfer shall be deemed given unless and until Borrower shall have
delivered confirmation in writing from the Rating Agencies that such proposed
Transfer will not cause a downgrading, withdrawal, reduction or qualification of
the ratings in effect immediately prior to such Transfer for the Securities, or
any class thereof, issued in connection with a Securitization which are then
outstanding, or Lender has determined that Rating Agency confirmation is not
required.

(j)                 Borrower, without the consent of Lender, may grant
easements, restrictions, covenants, reservations and right of way in the
ordinary course of business for access, parking, water and sewer lines,
telephone and telegraph lines, electric lines and other utilities or for other
similar purposes, provided that no such transfer, conveyance or encumbrance
shall materially impair the utility and operation of the Property or materially
adversely affect the value of such Property or the Net Operating Income of such
Property. In connection with any transfer, conveyance or encumbrance permitted
in the immediately preceding sentence, the Lender shall execute and deliver any
instrument reasonably necessary or appropriate to evidence its consent to said
action or to subordinate the Lien of the Mortgage to such easements,
restrictions, covenants, reservations and rights of way or other similar grants
upon receipt by the Lender of: (A) a copy of the instrument of transfer; and (B)
an Officer’s Certificate stating with respect to any transfer described above,
that such transfer does not materially impair the utility and operation of the
Property or materially reduce the value of such Property or the Net Operating
Income of such Property. If Borrower shall receive any consideration in
connection with any of said described transfers or conveyances, Borrower shall
have the right to use any such proceeds in connection with any alterations
performed in connection therewith, or required thereby, provided, however,
during a Cash Management Period, to the extent any such proceeds are not used in
connection

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with alterations (or any such proceeds exceeds the amount required to perform
the related alterations), Borrower shall immediately deposit such amount or the
remainder thereof, as the case may be, into the Lockbox Account.

(k)               Except as set forth herein, no sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer all or any part of the Property, shall
be permitted during the term of the Loan without Lender’s prior written
approval. Lender shall not be required to demonstrate any actual impairment of
its security or any increased risk of default hereunder in order to declare the
Debt immediately due and payable upon Borrower’s sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Property without Lender’s
consent if such consent is required herein. This provision shall apply to every
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Property.

(l)                 Lender’s consent to any sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to
be a waiver of Lender’s right to require such consent in the future. Any sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property made in contravention of this Section shall be null and void and of no
force or effect.

(m)             Borrower agrees to bear and shall pay or reimburse Lender on
demand for all reasonable expenses (including, without limitation, Lender’s
actual out-of-pocket attorneys’ fees and disbursements, title search costs,
rating agency fees and title insurance endorsement premiums) incurred by Lender
in connection with the review, approval or disapproval, and documentation of any
such sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer;
provided, however, that Borrower is not obligated to pay any administrative fee,
processing fee or other similar fee unless any such fee is specifically set
forth elsewhere in this Section 5.2.10.

ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION;

Section 6.1            Insurance.

 

(a)                Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and each Individual Property providing at
least the following coverages:

(i)                 comprehensive all risk “special form” insurance including,
but not limited to, loss caused by any type of windstorm or hail on the
Improvements and the Personal Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent (100%)
of the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co insurance provisions; (C) providing for no
deductible in excess of

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Ten Thousand and No/100 Dollars ($10,000.00) for flood coverage and no
deductible in excess of One Hundred Thousand and No/100 Dollars ($100,000) for
all such insurance coverage, provided however with respect to windstorm
coverage, and including loss caused directly by the peril of Flood occurring in
conjunction with a “Named Windstorm”, providing for no deductible in excess of
Two Hundred Fifty Thousand and No/100 Dollars ($250,000) or five percent (5%) of
total insurable value, whichever is higher; and (D) containing an “Ordinance or
Law Coverage” or “Enforcement” endorsement if any of the Improvements or the use
of the applicable Individual Property shall at any time constitute legal non
conforming structures or uses. In addition, Borrower shall obtain: (y) if any
portion of the Improvements is currently or at any time in the future located in
a federally designated “special flood hazard area”, flood hazard insurance in an
amount equal to the lesser of (1) the outstanding principal balance of the Note
or (2) the insurable value replacement costs (including, if applicable, the
replacement costs of any contents stored or located in the Improvements); and
(z) earthquake insurance in amounts and in form and substance satisfactory to
Lender in the event any Individual Property is located in an area with a high
degree of seismic activity, provided that the insurance pursuant to clauses (y)
and (z) hereof shall be on terms consistent with the comprehensive all risk
insurance policy required under this subsection (i);

(ii)               commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in or
about the Properties, such insurance (A) to be on the so called “occurrence”
form with a combined limit of not less than Two Million and No/100 Dollars
($2,000,000.00) in the aggregate and One Million and No/100 Dollars
($1,000,000.00) per occurrence; (B) to continue at not less than the aforesaid
limit until required to be changed by Lender in writing by reason of changed
economic conditions making such protection inadequate; and (C) to cover at least
the following hazards: (1) premises and operations; (2) products and completed
operations on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all legal contracts; and (5) contractual liability
covering the indemnities contained in Article 9 of the Mortgages to the extent
the same is available

(iii)             rental business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance provided
for in subsection (i) above; (C) covering rental losses or business
interruption, as may be applicable, for a period of at least twelve (12) months
after the date of the casualty and (unless Dollar General is providing casualty
insurance satisfying the requirements of this Section 6.1 with respect to its
Improvements at any Individual Property in accordance with Section 6.1(g)
hereof) containing an extended period of indemnity endorsement which provides
that after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of
twelve (12) months from the date that the applicable Individual Property is
repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period; and
(D) in an annual amount equal to one hundred percent (100%) of the rents or
projected gross revenues from the operation of the applicable Individual
Property

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(as reduced to reflect expenses not incurred during a period of Restoration).
The amount of such business income insurance shall be determined prior to the
date hereof and at least once each year thereafter based on Borrower’s
reasonable estimate of the gross income from the applicable Individual Property
for the succeeding twelve (12) month period. All proceeds payable to Lender
pursuant to this subsection shall be held by Lender and shall be applied in
Lender’s sole discretion to the obligations secured by the Loan Documents from
time to time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligation to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

(iv)             at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if the
Individual Property coverage form does not otherwise apply, (A) owner’s
contingent or protective liability insurance otherwise known as “Owner
Contractor’s Protective Liability,” covering claims not covered by or under the
terms or provisions of the above mentioned commercial general liability
insurance policy; and (B) the insurance provided for in subsection (i) above
written in a so called builder’s risk completed value form (1) on a non
reporting basis, (2) against all risks insured against pursuant to subsection
(i) above, (3) including permission to occupy such Individual Property, and (4)
with an agreed amount endorsement waiving co insurance provisions;

(v)               comprehensive boiler and machinery insurance, if steam boilers
or other pressure fixed vessels are in operation, in amounts as shall be
reasonably required by Lender on terms consistent with the commercial property
insurance policy required under subsection (i) above;

(vi)             automobile liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits per
occurrence of One Million Dollars and 00/100 Dollars ($1,000,000.00), if
applicable;

(vii)           worker’s compensation and employer’s liability subject to the
worker’s compensation laws of the applicable state, if applicable;

(viii)         umbrella and excess liability insurance in an amount not less
than Ten Million and No/100 Dollars ($10,000,000.00) per occurrence on terms
consistent with the commercial general liability insurance policy required under
subsection (ii) above, including, but not limited to, supplemental coverage for
employer liability and automobile liability, if applicable, which umbrella
liability coverage shall apply in excess of the automobile liability coverage in
subsection (vi) above;

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(ix)             the insurance required under this Section 6.1(a) shall cover
perils of terrorism and acts of terrorism (including, without limitation,
domestic, foreign, certified and uncertified as set forth in TRIA) and Borrower
shall maintain insurance for loss resulting from perils and acts of terrorism on
terms (including amounts) consistent with those required under this Sections
6.1(a) at all times during the term of the Loan; and

(x)               upon sixty (60) days’ written notice, such other reasonable
insurance including, but not limited to, sinkhole or land subsidence insurance,
and in such reasonable amounts as Lender from time to time may reasonably
request against such other insurable hazards which at the time are commonly
insured against for property similar to the Individual Property located in or
around the region in which such Individual Property is located.

(b)               All insurance provided for in Section 6.1(a) above shall be
obtained under valid and enforceable policies (collectively, the “Policies” or
in the singular, the “Policy”), and shall be subject to the approval of Lender
as to insurance companies, amounts, deductibles, loss payees and insureds. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the State and having a rating of “A:X” or
better in the current Best’s Insurance Reports and a claims paying ability
rating of “A” or better by at least two (2) of the Rating Agencies, including
(i) S&P, (ii) Fitch, and (iii) Moody’s, if Moody’s is rating the Securities. The
Policies described in Section 6.1 (other than those strictly limited to
liability protection) shall designate Lender as loss payee. Not less than
fifteen (15) days prior to the expiration dates of the Policies theretofore
furnished to Lender, certificates of insurance evidencing the Policies. Evidence
satisfactory to Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender once they are due.

(c)                Any blanket insurance Policy shall specifically allocate to
each Individual Property the amount of coverage from time to time required
hereunder and shall otherwise provide the same protection as would a separate
Policy insuring only such Individual Property in compliance with the provisions
of Section 6.1(a) hereof.

(d)               All Policies of insurance provided for or contemplated by
Section 6.1(a), except for the Policy referenced in Section 6.1(a)(vii), shall
name Borrower as the insured and Lender as the additional insured, as its
interests may appear, and in the case of property damage, boiler and machinery,
flood and earthquake insurance, shall contain a so called New York standard
non-contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender.

(e)                All Policies shall contain clauses or endorsements to the
effect that:

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(i)                 no act or negligence of Borrower, or anyone acting for
Borrower, or of any Tenant or other occupant, or failure to comply with the
provisions of any Policy, which might otherwise result in a forfeiture of the
insurance or any part thereof, shall in any way affect the validity or
enforceability of the insurance insofar as Lender is concerned;

(ii)               the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least thirty (30)
days written notice to Lender and any other party named therein as an additional
insured;

(iii)             the issuers thereof shall give written notice to Lender if the
Policy has not been renewed thirty (30) days prior to its expiration; and

(iv)             Lender shall not be liable for any Insurance Premiums thereon
or subject to any assessments thereunder.

(f)                If at any time Lender is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Lender shall
have the right, after five (5) Business Days written notice to Borrower, to take
such action as Lender deems necessary to protect its interest in the Properties,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate. All premiums incurred by Lender
in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and, until paid, shall be
secured by the Mortgages and shall bear interest at the Default Rate.

(g)               Notwithstanding the foregoing, if Dollar General provides
insurance satisfying the requirements hereof with respect to its Improvements at
any Individual Property, such insurance shall satisfy Borrower’s obligations
hereunder, provided that (x) such insurance shall name each of Borrower and
Lender as the additional insured, and (y) the Tenant Insurance Conditions are
satisfied. For purposes hereof, “Tenant Insurance Conditions” shall mean that
(i) no default shall exist under the applicable Dollar General Lease beyond the
expiration of any applicable notice and cure periods, (ii) the applicable Dollar
General Lease has not expired or been terminated and is in effect, (iii) no
Event of Default shall exist, and (iv) Borrower timely provides to Lender
satisfactory evidence of all required insurance as to the applicable Dollar
General Individual Property as required pursuant to this Agreement. In the event
that the insurance coverage provided by Dollar General is ineffective upon
termination of the Dollar General Lease or otherwise fails to satisfy the
requirements of Section 6.1 above, in whole or in part, Borrower shall, or shall
cause Guarantor to, provide a “different in conditions” policy that insures the
Tenant’s premises in accordance with the terms of this Section 6.1 above.

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Section 6.2            Casualty.

If any Individual Property shall be damaged or destroyed, in whole or in part,
by fire or other casualty (a “Casualty”), Borrower shall give prompt written
notice of such damage to Lender and shall promptly commence and diligently
prosecute the completion of the Restoration of such Individual Property pursuant
to Section 6.4 hereof as nearly as possible to the condition such Individual
Property was in immediately prior to such Casualty, with such alterations as may
be reasonably approved by Lender and otherwise in accordance with Section 6.4
hereof (a “Restoration”). Borrower shall pay all costs of such Restoration
whether or not such costs are covered by insurance. Lender may, but shall not be
obligated to make proof of loss if not made promptly by Borrower. In addition,
Lender may participate in any settlement discussions with any insurance
companies (and shall approve the final settlement, which approval shall not be
unreasonably withheld or delayed) with respect to any Casualty in which the Net
Proceeds or the costs of completing the Restoration are equal to or greater than
the Relevant Restoration Threshold and Borrower shall deliver to Lender all
instruments required by Lender to permit such participation.

Section 6.3            Condemnation.

Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of any Individual Property
and shall deliver to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such proceedings, and
Borrower shall from time to time deliver to Lender all instruments requested by
it to permit such participation. Borrower shall, at its expense, diligently
prosecute any such proceedings, and shall consult with Lender, its attorneys and
experts, and cooperate with them in the carrying on or defense of any such
proceedings. Notwithstanding any taking by any public or quasi-public authority
through Condemnation or otherwise (including, but not limited to, any transfer
made in lieu of or in anticipation of the exercise of such taking), Borrower
shall continue to pay the Debt at the time and in the manner provided for its
payment in the Note and in this Agreement and the Debt shall not be reduced
until any Award shall have been actually received and applied by Lender, after
the deduction of expenses of collection, to the reduction or discharge of the
Debt. Lender shall not be limited to the interest paid on the Award by the
condemning authority but shall be entitled to receive out of the Award interest
at the rate or rates provided herein or in the Note. If any portion of an
Individual Property is taken by a condemning authority, Borrower shall promptly
commence and diligently prosecute the Restoration of such Individual Property
pursuant to Section 6.4 hereof and otherwise comply with the provisions of
Section 6.4 hereof. If any Individual Property is sold, through foreclosure or
otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.

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Notwithstanding the foregoing provisions of this Section 6.3, and Section 6.4
hereof, if the Loan or any portion thereof is included in a REMIC Trust and,
immediately following a release of any portion of the Lien of any Mortgage in
connection with a Condemnation (but taking into account any proposed Restoration
on the remaining portion of the applicable Individual Property), the Loan to
Value Ratio is greater than 125% (such value to be determined, in Lender’s sole
discretion, by any commercially reasonable method permitted to a REMIC Trust),
the principal balance of the Loan must be paid down by the least of the
following amounts: (i) the net Condemnation Proceeds, (ii) the fair market value
of the released property at the time of the release, or (iii) an amount such
that the Loan to Value Ratio (as so determined by Lender) does not increase
after the release, unless the Lender receives an opinion of counsel that if such
amount is not paid, the Securitization will not fail to maintain its status as a
REMIC Trust as a result of the related release of such portion of the Lien of
the Mortgages.

Section 6.4            Restoration.

The following provisions shall apply in connection with the Restoration of any
Individual Property:

(a)                If the Net Proceeds shall be less than the Relevant
Restoration Threshold and the costs of completing the Restoration shall be less
than the Relevant Restoration Threshold, the Net Proceeds will be disbursed by
Lender to Borrower upon receipt, provided that all of the conditions set forth
in Section 6.4(b)(i) hereof are met and Borrower delivers to Lender a written
undertaking to expeditiously commence and to satisfactorily complete with due
diligence the Restoration in accordance with the terms of this Agreement.

(b)               If the Net Proceeds are equal to or greater than the Relevant
Restoration Threshold or the costs of completing the Restoration is equal to or
greater than the Relevant Restoration Threshold, Lender shall make the Net
Proceeds available for the Restoration in accordance with the provisions of this
Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4 shall
mean: (1) the net amount of all insurance proceeds received by Lender pursuant
to Section 6.1 (a)(i), (iv), (ix) and (x) as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same
(“Insurance Proceeds”), or (2) the net amount of the Award, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever
the case may be.

(i)                 The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:

(A)             no Event of Default shall have occurred and be continuing;

(B)              (1) in the event the Net Proceeds are Insurance Proceeds, and
(x) less than twenty-five percent (25%) of the total floor area of the
Improvements on the Individual Property has been damaged, destroyed or rendered
unusable as a result of such Casualty or (y) Borrower is required under a Lease
exceeding the

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Relevant Leasing Threshold to use the Net Proceeds for the Restoration of the
Property, or (2) in the event the Net Proceeds are Condemnation Proceeds, and
(x) less than ten percent (10%) of the land constituting the Individual Property
is taken, and such land is located along the perimeter or periphery of the
Individual Property, and no portion of the Improvements is located on such land,
or (y) Borrower is required under a Lease exceeding the Relevant Leasing
Threshold to use the Net Proceeds for the Restoration of such Individual
Property;

(C)              Leases demising in the aggregate a percentage amount equal to
or greater than the Rentable Space Percentage of the total rentable space in an
Individual Property which has been demised under executed and delivered Leases
in effect as of the date of the occurrence of such Casualty or Condemnation,
whichever the case may be, shall remain in full force and effect during and
after the completion of the Restoration, notwithstanding the occurrence of any
such Casualty or Condemnation, whichever the case may be, and Borrower and/or
Tenant, as applicable under the respective Lease, will make all necessary
repairs and restorations thereto at their sole cost and expense. The term
“Rentable Space Percentage” shall mean (1) in the event the Net Proceeds are
Insurance Proceeds, a percentage amount equal to fifty percent (50%) and (2) in
the event the Net Proceeds are Condemnation Proceeds, a percentage amount equal
to fifty percent (50%);

(D)             Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than ninety (90) days after such Casualty or
Condemnation, whichever the case may be, occurs) and shall diligently pursue the
same to satisfactory completion;

(E)              Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Note, which
will be incurred with respect to the Individual Property as a result of the
occurrence of any such Casualty or Condemnation, whichever the case may be, will
be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to
in Section 6.1(a)(iii) hereof, if applicable, or (3) by other funds of Borrower;

(F)               Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months prior to the
Anticipated Repayment Date, (2) the earliest date required for such completion
under the terms of any Leases, (3) such time as may be required under all
applicable Legal Requirements in order to repair and restore the applicable
Individual Property to the condition it was in immediately prior to such
Casualty or to as nearly as possible the condition it was in immediately prior
to such Condemnation, as applicable, or (4) the expiration of the insurance
coverage referred to in Section 6.1(a)(ii) hereof;

(G)             the Individual Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable Legal
Requirements;

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(H)             the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;

(I)                such Casualty or Condemnation, as applicable, does not result
in the loss of access to the related Individual Property or the related
Improvements;

(J)                the Debt Service Coverage Ratio for the affected Individual
Property, after giving effect to the Restoration, based on the trailing six (6)
month period immediately preceding the date of determination, shall be equal to
or greater than 2.0 to 1.0;

(K)             Borrower shall deliver, or cause to be delivered, to Lender a
signed detailed budget approved in writing by Borrower’s architect or engineer
stating the entire cost of completing the Restoration, which budget should be
consistent with restoration budgets of similar retail properties then owned and
operated by nationally recognized owners and operators of retail properties
located in the areas in which the applicable Individual Property is located; and

(L)              the Net Proceeds together with any cash or cash equivalent
deposited by Borrower with Lender are sufficient in Lender’s discretion to cover
the cost of the Restoration.

(ii)               The Net Proceeds shall be held by Lender in an
interest-bearing Eligible Account and, until disbursed in accordance with the
provisions of this Section 6.4(b), shall constitute additional security for the
Debt and Other Obligations under the Loan Documents. The Net Proceeds shall be
disbursed by Lender to, or as directed by, Borrower from time to time during the
course of the Restoration, upon receipt of evidence satisfactory to Lender that
(A) all materials installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement) in connection
with the Restoration have been paid for in full, and (B) there exist no notices
of pendency, stop orders, mechanic’s or materialman’s liens or notices of
intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Individual Property which have not either been fully bonded to
the satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the
applicable Title Insurance Policy.

(iii)             All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects by
Lender and by an independent consulting engineer selected by Lender (the
“Casualty Consultant”), such review and acceptance not to be unreasonably
withheld or delayed. Lender shall have the use of the plans and specifications
and all permits, licenses and approvals required or obtained in connection with
the Restoration. The identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under

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which they have been engaged, shall be subject to prior review and approval by
Lender and the Casualty Consultant, such review and acceptance not to be
unreasonably withheld or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s fees, shall be paid by Borrower.

(iv)             In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually incurred
from time to time for work in place as part of the Restoration, as certified by
the Casualty Consultant, minus the Casualty Retainage. The term “Casualty
Retainage” shall mean an amount equal to ten percent (10%) of the costs actually
incurred for work in place as part of the Restoration, as certified by the
Casualty Consultant, until the Restoration has been completed. The Casualty
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this Section 6.4(b), be less than the amount actually held back
by Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Section 6.4(b) and that all approvals
necessary for the re-occupancy and use of the Individual Property have been
obtained from all appropriate governmental and quasi-governmental authorities,
and Lender receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the Casualty
Retainage; provided, however, that Lender will release the portion of the
Casualty Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor’s, subcontractor’s or
materialman’s contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the related Title Insurance Policy, and
Lender receives an endorsement to the related Title Insurance Policy insuring
the continued priority of the lien of the related Mortgage and evidence of
payment of any premium payable for such endorsement. If required by Lender, the
release of any such portion of the Casualty Retainage shall be approved by the
surety company, if any, which has issued a payment or performance bond with
respect to the contractor, subcontractor or materialman.

(v)               Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.

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(vi)             If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation with the
Casualty Consultant, be sufficient to pay in full the balance of the costs which
are estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and Other
Obligations under the Loan Documents.

(vii)           The excess, if any, of the Net Proceeds (and the remaining
balance, if any, of the Net Proceeds Deficiency) deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 6.4(b), and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be deposited in the Cash
Management Account to be disbursed in accordance with this Agreement, provided
no Event of Default shall have occurred and shall be continuing under the Note,
this Agreement or any of the other Loan Documents.

(c)                All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 6.4(b)(vii) hereof may be retained and applied by Lender
toward the payment of the Debt in accordance with Section 2.4.2 hereof, whether
or not then due and payable in such order, priority and proportions as Lender in
its sole discretion shall deem proper (provided no Event of Default exists,
Borrower shall not be required to pay any Yield Maintenance Premium in
connection with such payment), or, at the discretion of Lender, the same may be
paid, either in whole or in part, to Borrower for such purposes as Lender shall
approve, in its discretion.

(d)               Notwithstanding anything in Section 6.4(a), (b) or (c) above,
if immediately after giving effect to the release of a portion of the Property
taken through Condemnation, the Loan To Value ratio of the remaining Property,
as determined by Lender in its sole discretion using any commercially reasonable
valuation method, exceeds 125%, all Condemnation Proceeds shall be retained and
applied by Lender toward the payment of the Debt in accordance with Section
2.4.2 hereof, whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper.

(e)                In the event of foreclosure of the Mortgage with respect to
an Individual Property, or other transfer of title of an Individual Property in
extinguishment in whole or in part of the Debt all right, title and interest of
Borrower in and to the Policies that are not blanket Policies then in force
concerning such Individual Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or Lender or other
transferee in the event of such other transfer of title.

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(f)                Lender shall with reasonable promptness following any
Casualty or Condemnation notify Borrower whether or not Net Proceeds are
required to be made available to Borrower for Restoration pursuant to this
Section 6.4. All Net Proceeds not required to be made available for Restoration
shall be retained and applied by Lender in accordance with Section 2.4.2(a)
hereof (a “Net Proceeds Prepayment”). If such Net Proceeds Prepayment with
respect to any Casualty or Condemnation shall be equal to or greater than sixty
percent (60%) of the applicable Release Amount, the applicable Individual
Borrower shall have the right to elect to prepay the Release Amount of the
applicable Individual Property in whole, but not in part (a
“Casualty/Condemnation Prepayment”) in accordance with Section 2.4.2(b) hereof
upon satisfaction of the following conditions: (i) within thirty (30) days
following the proposed date of the intended Net Proceeds Prepayment, Borrower
shall provide Lender with written notice of Borrower’s intention to prepay the
applicable Release Amount less the amount of the Net Proceeds Prepayment, (ii)
Borrower shall prepay the applicable Release Amount in accordance with Section
2.4.2(b) hereof on or before the second Payment Date (or, if such day is not a
Business Day, the immediately succeeding Business Day) occurring following the
proposed date of the intended Net Proceeds Prepayment, and (iii) no Event of
Default shall exist on the date of such Casualty/Condemnation Prepayment.
Notwithstanding anything in Section 6.2 or Section 6.3 to the contrary, Borrower
shall not have any obligation to commence Restoration of the applicable
Individual Property upon delivery of the written notice set forth in clause (i)
of the preceding sentence (unless Borrower subsequently shall fail to satisfy
the requirement of clause (ii) of the preceding sentence).

(g)               If a Tenant leases all or substantially all of a building
located on an Individual Property, and the Improvements thereon suffer a
Casualty or Condemnation, then provided (i) such Tenant is not in monetary or
material non-monetary default under its Lease, (ii) such Lease remains in full
force and effect notwithstanding such Casualty or Condemnation, (iii) such
Tenant remains liable for the obligations under such Lease (without reduction or
abatement unless covered by business interruption/rent loss insurance), and (iv)
such Lease requires Restoration of the Improvements, such Lease shall govern and
control in the event of a conflict between the foregoing provisions of this
Section 6.4 and such Lease.

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ARTICLE VII - RESERVE FUNDS

Section 7.1            Required Repairs.

7.1.1        Deposits

. Borrower shall perform (or cause to be performed by Seller or otherwise) the
repairs at the Property as more particularly set forth on Schedule VII hereto
(such repairs hereinafter referred to as “Required Repairs”), and shall provide
to Lender photographic or such other reasonable evidence and an Officer’s
Certificate certifying that the Required Repairs have been completed on or
before the required deadline for each repair as set forth in this Section 7.1.1.
With respect to Required Repairs set forth on Schedule VII that are designated
as “life and safety repairs” (whether the responsibility of Borrower or any
other person) (collectively, the “Life and Safety Repairs”), Borrower shall
deposit with Lender on the date hereof the amount of $0. Borrower shall
complete, or cause to be completed by Seller or otherwise, the Life and Safety
Repairs within ninety (90) days after the Closing Date. With respect to the
Required Repairs set forth on Schedule VII that are not Life and Safety Repairs
(collectively, the “Non-Life and Safety Repairs”), Borrower shall complete, or
cause to be completed by Seller or otherwise, such Non-Life and Safety Repairs
within six (6) months after the Closing Date; provided, however, if Borrower is
diligently pursuing completion of the Non-Life and Safety Repairs, Lender shall
extend such six (6) month period for such time as is reasonably necessary for
Borrower to complete (or cause to be completed by Seller, or otherwise) the
Non-Life and Safety Repairs, such extension period not to exceed an additional
six (6) months. If Borrower has not delivered to Lender, on or before the date
that is six (6) months from the Closing Date (or, if Borrower is diligently
pursuing completion of the Non-Life and Safety Repairs and Lender has granted an
extension pursuant to the immediately preceding sentence, on or before the date
that is twelve (12) months from the Closing Date), photographic or such other
reasonable evidence and an Officer’s Certificate certifying that the Non-Life
and Safety Repairs have been completed, Borrower shall immediately deposit with
Lender the amount for any incomplete Non-Life and Safety Repairs set forth on
such Schedule VII hereto. Amounts deposited with Lender under this Section 7.1.1
shall be held by Lender in accordance with Section 7.6 hereof and disbursed in
accordance with Section 7.1.2 hereof. All amounts so deposited under this
Section 7.1.1 shall hereinafter be referred to as Borrower’s “Required Repair
Fund” and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s “Required Repair Account”. Upon the occurrence of an
Event of Default, Lender, at its option, may withdraw all Required Repair Funds
from the Required Repair Account and Lender may apply such funds either to
completion of the Required Repairs or toward payment of the Debt in such order,
proportion and priority as Lender may determine in its sole discretion. Lender’s
right to withdraw and apply Required Repair Funds shall be in addition to all
other rights and remedies provided to Lender under this Agreement and the other
Loan Documents.

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7.1.2        Release of Required Repair Fund

. Lender shall disburse to Borrower the Required Repair Funds from the Required
Repair Account from time to time upon satisfaction by Borrower of each of the
following conditions: (a) Borrower shall submit a written request for payment to
Lender at least fifteen (15) days prior to the date on which Borrower requests
such payment be made and specifies the Required Repairs to be paid, (b) on the
date such request is received by Lender and on the date such payment is to be
made, no Default or Event of Default shall exist and remain uncured, (c) Lender
shall have received an Officer’s Certificate (i) stating that all Required
Repairs to be funded by the requested disbursement have been completed in good
and workmanlike manner and in accordance with all applicable federal, state and
local laws, rules and regulations, such certificate to be accompanied by a copy
of any license, permit or other approval by any Governmental Authority required
to commence and/or complete the Required Repairs (or a statement that none are
required), and (ii) stating that each such Person who has supplied materials or
labor in connection with the Required Repairs to be funded by the requested
disbursement has been paid in full or will be paid in full upon such
disbursement, (d) Borrower shall provide to Lender a copy of an invoice (and if
applicable, a check) or other evidence of payment demonstrating that each Person
that is not an Affiliate who has supplied materials or labor in connection with
the Required Repairs to be funded by the requested disbursement has been paid in
full or will be paid in full upon such disbursement, and (e) Lender shall have
received such other evidence as Lender shall reasonably request that the
Required Repairs to be funded by the requested disbursement have been completed
and are paid for or will be paid upon such disbursement to Borrower. Lender
shall not be required to make disbursements from the Required Repair Account
with respect to the Property (i) more than once a calendar month and (ii) unless
such requested disbursement is in an amount greater than $5,000.00 (or a lesser
amount if the total amount in the Required Repair Account is less than
$5,000.00), in which case only one disbursement of the amount remaining in the
account shall be made) and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2. Upon
satisfaction of the requirements of this Section 7.1.2, Lender shall release all
sums in the Required Repair Account.

Section 7.2            Tax and Insurance Escrow Fund.

Borrower shall pay to Lender (a) on the Closing Date an initial deposit and (b)
on each Payment Date thereafter (i) one-twelfth (1/12) of the Taxes and Other
Charges that Lender estimates will be payable during the next ensuing
twelve (12) months in order to accumulate with Lender sufficient funds to pay
all such Taxes and Other Charges at least thirty (30) days prior to their
respective due dates, and (ii) one-twelfth (1/12) of the Insurance Premiums that
Lender estimates will be payable for the renewal of the coverage afforded by the
Policies upon the expiration thereof in order to accumulate with Lender
sufficient funds to pay all such Insurance Premiums at least thirty (30) days
prior to the expiration of the Policies (said amounts in (a) and (b) above
hereinafter called the “Tax and Insurance Escrow Fund” and the account in which
such amounts are held shall hereinafter be referred to as Borrower’s “Tax and
Insurance Escrow Account”). Lender will apply the Tax and Insurance Escrow Fund
to payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to Section 5.1.2 hereof and under the Mortgage. In making any payment

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relating to the Tax and Insurance Escrow Fund, Lender may do so according to any
bill, statement or estimate procured from the appropriate public office (with
respect to Taxes) or insurer or agent (with respect to Insurance Premiums),
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof; provided, however, Lender shall use reasonable efforts to pay
such real property taxes sufficiently early to obtain the benefit of any
available discounts to which it has knowledge. If the amount of the Tax and
Insurance Escrow Fund shall exceed the amounts due for Taxes, Other Charges and
Insurance Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its sole
discretion, return any excess to Borrower or credit such excess against future
payments to be made to the Tax and Insurance Escrow Fund. The Tax and Insurance
Escrow Fund shall be held by Lender in an interest-bearing account and shall at
Lender’s option be held in Eligible Account at an Eligible Institution. All
interest earned on the Tax and Insurance Escrow Fund shall be for the benefit of
Borrower but shall be added to and become a part of the Tax and Insurance Escrow
Fund. If at any time Lender reasonably determines that the Tax and Insurance
Escrow Fund is not or will not be sufficient to pay Taxes, Other Charges and
Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall
notify Borrower of such determination and Borrower shall increase its monthly
payments to Lender by the amount that Lender estimates is sufficient to make up
the deficiency at least thirty (30) days prior to the due date of the Taxes and
Other Charges and/or thirty (30) days prior to expiration of the Policies, as
the case may be.

Notwithstanding anything to the contrary hereinbefore contained, Lender shall
waive the requirement set forth herein for Borrower to make deposits for the
payment of Insurance Premiums (for an individual building on an Individual
Property) into the Tax and Insurance Escrow Fund so long as (a) no Event of
Default has occurred and is continuing, (b) each Dollar General Lease remains in
full force and effect with no event of default thereunder, (c) Dollar General is
required under the applicable Dollar General Lease to provide, and does provide,
a Policy that satisfies the applicable requirements of Section 6.1 hereof
(including, without limitation, naming Lender as an additional insured) and pays
the related Insurance Premiums directly to the applicable insurance company, and
(d) Borrower delivers to Lender not less than thirty (30) days prior to the
expiration dates of the applicable Policies certificates of insurance evidencing
such Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder.

Further notwithstanding anything to the contrary hereinbefore contained, Lender
shall waive the requirement set forth herein for Borrower to make deposits for
the payment of Taxes into the Tax and Insurance Escrow Fund so long as (a) no
Event of Default then exists, (b) Dollar General (x) with respect to each
Individual Property, occupies one (1) or more parcels which constitute a
separate tax lot or lots and does not constitute a portion of any other tax lot
not a part of such Individual Property, and (y) is required under each Dollar
General Lease to pay, and does pay, Taxes directly to the appropriate public
office, (c) Borrower provides to Lender, at least ten (10) days prior to the
date on which such Taxes would be delinquent, evidence satisfactory (as
determined by Lender) that such Taxes have been paid by Dollar General, and (d)
each Dollar General Lease remains in full force and effect with no event of
default thereunder.

Section 7.3            Intentionally Omitted.

Section 7.4            Intentionally Omitted.

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Section 7.5            Excess Cash Flow Reserve Fund.

7.5.1        Deposits to Excess Cash Flow Reserve Fund.

During a Cash Sweep Period prior to the Anticipated Repayment Date that is not
solely related to an Existing Mezzanine Loan Trigger, all Excess Cash Flow in
the Cash Management Account shall be deposited with Lender and held by Lender as
additional security for the Loan and amounts so held shall be hereinafter
referred to as the “Excess Cash Flow Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Excess Cash Flow
Reserve Account”. If on or prior to the Anticipated Repayment Date Borrower does
not pay to Lender the outstanding principal balance of the Loan, all accrued and
unpaid interest and all other amounts due hereunder and under the Note, the
Mortgages and the other Loan Documents, then, on the Anticipated Repayment Date,
all funds in the Excess Cash Flow Reserve Account and all Excess Cash Flow that
accrues thereafter shall be applied pursuant to the second sentence of Section
2.3.2 hereof (including, for the avoidance of doubt, any and all termination
fees payable to Borrower by Dollar General under the Dollar General Lease).
Following the Anticipated Repayment Date, all Excess Cash Flow in the Cash
Management Account shall be applied by Lender pursuant to Section 2.3.2 hereof.

7.5.2        Release of Excess Cash Flow Reserve Funds.

Upon the occurrence of a Cash Sweep Event Cure, all Excess Cash Flow Reserve
Funds shall be deposited into the Lockbox Account to be disbursed in accordance
with Section 2.7.1 hereof.  Any Excess Cash Flow Reserve Funds remaining after
the Debt has been paid in full shall be paid to Borrower..

Section 7.6            Reserve Funds, Generally.

 

(a)                Borrower grants to Lender a first-priority perfected security
interest in each of the Reserve Funds and any and all monies now or hereafter
deposited in each Reserve Fund as additional security for payment of the Debt.
Until expended or applied in accordance herewith, the Reserve Funds shall
constitute additional security for the Debt.

(b)               Upon the occurrence of an Event of Default, Lender may, in
addition to any and all other rights and remedies available to Lender, apply any
sums then present in any or all of the Reserve Funds to the payment of the Debt
in any order in its sole discretion. In addition, if an Event of Default shall
exist, Borrower shall not be entitled to disbursements from any Reserve Fund.

(c)                The Reserve Funds shall not constitute trust funds and may be
commingled with other monies held by Lender. The Reserve Funds shall be held in
an Eligible Account in Permitted Investments as directed by Lender or Lender’s
Servicer. All interest on a Reserve Fund other than the Excess Cash Flow Reserve
Fund (which shall accrue for the benefit of Lender) shall be added to and become
a part thereof and shall be disbursed in accordance with the terms hereof.
Borrower shall be responsible for payment of any federal, state or local income
or other tax applicable to the interest earned on the Reserve Funds credited or
paid to Borrower.

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(d)               Borrower shall not, without obtaining the prior written
consent of Lender, further pledge, assign or grant any security interest in any
Reserve Fund or the monies deposited therein or permit any lien or encumbrance
to attach thereto, or any levy to be made thereon, or any UCC-1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto.

(e)                Neither Lender nor Lender’s Servicer shall be liable for any
loss sustained on the investment of any funds constituting the Reserve Funds
unless occasioned by the gross negligence or willful misconduct of Lender and/or
Lender’s Servicer, as applicable. Borrower shall indemnify Lender and Servicer
and hold Lender and Servicer harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys’ fees and
expenses) arising from or in any way connected with the Reserve Funds or the
performance of the obligations for which the Reserve Funds were established
unless occasioned by the gross negligence or willful misconduct of Lender and/or
Lender’s Servicer, as applicable, provided, however, it being acknowledged and
agreed that any default in the payment under a Permitted Investment shall not
constitute the gross negligence or willful misconduct of Lender and/or Lender’s
Servicer. Borrower shall assign to Lender all rights and claims Borrower may
have against all persons or entities supplying labor, materials or other
services which are to be paid from or secured by the Reserve Funds; provided,
however, that Lender may not pursue any such right or claim unless an Event of
Default has occurred and remains uncured.

(f)                The required monthly deposits into the Reserve Funds and the
Monthly Debt Service Payment Amount, shall be added together and shall be paid
as an aggregate sum by Borrower to Lender.

(g)               Any amount remaining in the Reserve Funds after the Debt has
been paid in full shall be returned to Borrower.

ARTICLE VIII - DEFAULTS

Section 8.1            Event of Default.

 

(a)                Each of the following events shall constitute an event of
default hereunder (an “Event of Default”):

(i)                 if any portion of the Debt is not paid when due, except,
with respect to the payment of the Monthly Debt Service Payment Amount during a
Cash Sweep Period caused solely by a DSCR Trigger, to the extent there are
sufficient funds in the Cash Management Account to pay such Monthly Debt Service
Payment Amount when due;

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(ii)               if any of the Taxes or Other Charges are not paid prior to
the date when the same become delinquent, except to the extent that (x) Borrower
is contesting the same in accordance with the terms of Section 5.1.2 hereof, or
(y) during a Cash Sweep Period caused solely by a DSCR Trigger, there are
sufficient funds in the Tax and Insurance Escrow Account (after deducting funds
deposited into such account in respect of Premiums) to pay such Taxes or Other
Charges and Lender fails to or refuses to pay the same to the extent required
under this Agreement;

(iii)             if the Policies are not kept in full force and effect, or if
certified copies of the Policies are not delivered to Lender within ten (10)
days of request;

(iv)             if Borrower Transfers or otherwise encumbers any portion of any
Individual Property without Lender’s prior written consent (to extent such
consent is required) or otherwise violates any of the provisions of this
Agreement and Article 6 of the Mortgage;

(v)               if any representation or warranty made by Borrower herein or
in any other Loan Document, or in any report, certificate, financial statement
or other instrument, agreement or document furnished to Lender shall have been
false or misleading in any material respect as of the date the representation or
warranty was made;

(vi)             if Borrower or Principal shall make an assignment for the
benefit of creditors;

(vii)           if a receiver, liquidator or trustee shall be appointed for
Borrower or Principal or any other guarantor under any guarantee issued in
connection with the Loan or if Borrower or Principal shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Borrower
or Principal, or if any proceeding for the dissolution or liquidation of
Borrower or Principal shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower or Principal upon the same not being discharged, stayed
or dismissed within ninety (90) days;

(viii)         if Borrower attempts to assign its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;

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(ix)             if Guarantor or any guarantor or indemnitor under any guaranty
or indemnity issued in connection with the Loan shall make an assignment for the
benefit of creditors or if a receiver, liquidator or trustee shall be appointed
for Guarantor or any guarantor or indemnitor under any guarantee or indemnity
issued in connection with the Loan or if Guarantor or such other guarantor or
indemnitor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Guarantor or such other guarantor or indemnitor, or if any
proceeding for the dissolution or liquidation of Guarantor or such other
guarantor or indemnitor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Guarantor or such other guarantor or indemnitor, upon the same
not being discharged, stayed or dismissed within ninety (90) days; provided,
further, however, it shall be at Lender’s option to determine whether any of the
foregoing shall be an Event of Default;

(x)               if Borrower breaches any covenant contained in Section 4.1.30
hereof or any negative covenant contained in Section 5.2 hereof;

(xi)             with respect to any term, covenant or provision set forth
herein which specifically contains a notice requirement or grace period, if
Borrower shall be in default under such term, covenant or condition after the
giving of such notice or the expiration of such grace period;

(xii)           intentionally omitted;

(xiii)         intentionally omitted;

(xiv)         if Borrower shall continue to be in Default under any of the
terms, covenants or conditions of Section 9.1 hereof, or fails to cooperate with
Lender in connection with a Securitization pursuant to the provisions of
Section 9.1 hereof, for five (5) days after notice to Borrower from Lender;

(xv)           if Borrower shall continue to be in Default under any of the
other terms, covenants or conditions of this Agreement not specified in
subsections (i) to (xiv) above, for ten (10) days after notice to Borrower from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non-monetary Default is susceptible of
cure but cannot reasonably be cured within such thirty (30) day period and
provided further that Borrower shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds
to cure the same, such thirty (30) day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed one hundred twenty (120)
days; or

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(xvi)         if there shall be default under any of the other Loan Documents
beyond any applicable cure periods contained in such documents, whether as to
any Individual Borrower or any Individual Property, or if any other such event
shall occur or condition shall exist, if the effect of such default, event or
condition is to accelerate the maturity of any portion of the Debt or to permit
Lender to accelerate the maturity of all or any portion of the Debt.

(b)               Upon the occurrence of an Event of Default (other than an
Event of Default described in clauses (vi), (vii) or (viii) above) and at any
time thereafter, in addition to any other rights or remedies available to it
pursuant to this Agreement and the other Loan Documents or at law or in equity,
Lender may take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to all
or any Individual Property, including, without limitation, declaring the Debt to
be immediately due and payable, and Lender may enforce or avail itself of any or
all rights or remedies provided in the Loan Documents against Borrower and any
or all of the Properties, including, without limitation, all rights or remedies
available at law or in equity; and upon any Event of Default described in
clauses (vi), (vii) or (viii) above, the Debt and Other Obligations of Borrower
hereunder and under the other Loan Documents shall immediately and automatically
become due and payable, without notice or demand, and Borrower hereby expressly
waives any such notice or demand, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

Section 8.2            Remedies.

 

(a)                Upon the occurrence of an Event of Default, all or any one or
more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to all or any part of any Individual Property. Any such actions taken by
Lender shall be cumulative and concurrent and may be pursued independently,
singularly, successively, together or otherwise, at such time and in such order
as Lender may determine in its sole discretion, to the fullest extent permitted
by law, without impairing or otherwise affecting the other rights and remedies
of Lender permitted by law, equity or contract or as set forth herein or in the
other Loan Documents. Without limiting the generality of the foregoing, Borrower
agrees that if an Event of Default is continuing (i) Lender is not subject to
any “one action” or “election of remedies” law or rule, and (ii) all liens and
other rights, remedies or privileges provided to Lender shall remain in full
force and effect until Lender has exhausted all of its remedies against the
Properties and each Mortgage has been foreclosed, sold and/or otherwise realized
upon in satisfaction of the Debt or the Debt has been paid in full.

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(b)               With respect to Borrower and the Properties, nothing contained
herein or in any other Loan Document shall be construed as requiring Lender to
resort to any Individual Property for the satisfaction of any of the Debt in any
preference or priority to any other Individual Property, and Lender may seek
satisfaction out of all of the Properties, or any part thereof, in its absolute
discretion in respect of the Debt. In addition, to the extent permitted by
applicable law, Lender shall have the right from time to time to partially
foreclose the Mortgages in any manner and for any amounts secured by the
Mortgages then due and payable as determined by Lender in its sole discretion
including, without limitation, the following circumstances: (i) in the event
Borrower defaults beyond any applicable grace period in the payment of one or
more scheduled payments of principal and interest, Lender may foreclose one or
more of the Mortgages to recover such delinquent payments or (ii) in the event
Lender elects to accelerate less than the entire outstanding principal balance
of the Loan, Lender may foreclose one or more of the Mortgages to recover so
much of the principal balance of the Loan as Lender may accelerate and such
other sums secured by one or more of the Mortgages as Lender may elect.
Notwithstanding one or more partial foreclosures, the Property shall remain
subject to the Mortgages to secure payment of sums secured by the Mortgages and
not previously recovered.

(c)                Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the “Severed Loan Documents”) in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender following the occurrence of an Event of Default as
its true and lawful attorney, coupled with an interest, in its name and stead to
make and execute all documents necessary or desirable to effect the aforesaid
severance, Borrower ratifying all that its said attorney shall do by virtue
thereof; provided, however, Lender shall not make or execute any such documents
under such power until three (3) days after notice has been given to Borrower by
Lender of Lender’s intent to exercise its rights under such power. Borrower
shall be obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents and
the Severed Loan Documents shall not contain any representations, warranties or
covenants not contained in the Loan Documents and any such representations and
warranties contained in the Severed Loan Documents will be given by Borrower
only as of the Closing Date.

(d)               As used in this Section 8.2, a “foreclosure” shall to the
extent permitted by applicable law, include, without limitation, any sale by
power of sale

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Section 8.3            Remedies Cumulative; Waivers.

The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights, powers
and remedies may be pursued singularly, concurrently or otherwise, at such time
and in such order as Lender may determine in Lender’s sole discretion. No delay
or omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

ARTICLE IX - SPECIAL PROVISIONS

Section 9.1            Securitization.

9.1.1        Sale of Notes and Securitization.

 

(a)                Borrower acknowledges and agrees that Lender may sell all or
any portion of the Loan and the Loan Documents, or issue one or more
participations therein, or consummate one or more private or public
securitizations of rated single- or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in all or any portion of the Loan
and the Loan Documents or a pool of assets that include the Loan and the Loan
Documents (such sales, participations and/or securitizations, collectively, a
“Securitization”).

(b)               At the request of Lender, and to the extent not already
required to be provided by or on behalf of Borrower under this Agreement,
Borrower shall use reasonable efforts to provide information not in the
possession of Lender or which may be reasonably required by Lender or take other
actions reasonably required by Lender, in each case in order to satisfy the
market standards to which Lender customarily adheres or which may be reasonably
required by prospective investors and/or the Rating Agencies in connection with
any such Securitization. Lender shall have the right to provide to prospective
investors and the Rating Agencies any information in its possession, including,
without limitation, financial statements relating to Borrower, Guarantor, if
any, mezzanine borrower, if any, the Property and any Tenant of the
Improvements. Borrower acknowledges that certain information regarding the Loan
and the parties thereto and the Property may be included in a private placement
memorandum, prospectus or other disclosure documents (the “Disclosure
Documents”). Borrower agrees that each of Borrower, Principal, Guarantor, and
their respective officers and representatives, shall, at Lender’s request, at
its sole cost and expense, cooperate with Lender’s efforts to arrange for a
Securitization in accordance with the market standards to which Lender
customarily adheres and/or which may be required by prospective investors and/or
the Rating Agencies in connection with any such Securitization. Borrower,
Principal, Guarantor and mezzanine borrower, if any,

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agree to review, at Lender’s request in connection with the Securitization, the
Disclosure Documents as such Disclosure Documents relate to Borrower, Principal,
Guarantor, the mezzanine borrower, if any, the Property and the Loan, including
without limitation, the sections entitled “Risk Factors,” “Special
Considerations,” “Description of the Mortgage,” “Description of the Mortgage
Loan and Mortgaged Property,” “The Manager,” “The Borrower,” and “Certain Legal
Aspects of the Mortgage Loan,” and at Lender’s request shall confirm that the
factual statements and representations contained in such sections and such other
information in the Disclosure Documents (to the extent such information relates
to, or is based on, or includes any information regarding the Property,
Borrower, Guarantor, the mezzanine borrower, if any, Manager and/or the Loan) do
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.

(c)                Borrower agrees to make upon Lender’s written request,
without limitation, all structural or other changes to the Loan (including
delivery of one or more new component notes to replace the original note or
modify the original note to reflect multiple components of the Loan and such new
notes or modified note may have different interest rates and amortization
schedules), modifications to any documents evidencing or securing the Loan,
creation of one or more mezzanine loans (including amending Borrower’s
organizational structure to provide for one or more mezzanine borrowers),
delivery of opinions of counsel acceptable to the Rating Agencies or potential
investors and addressing such matters as the Rating Agencies or potential
investors may require, and/or (prior to Securitization of the Loan) to
cross-default and/or cross-collateralize the Loan with an Affiliate Loan;
provided, however, that in creating such new notes or modified notes or
mezzanine notes Borrower shall not be required to modify (i) the overall
interest rate of the Note at the time of the creation of such new notes or
modified notes or mezzanine notes (i.e. the initial weighted average interest
rate payable under such new notes or modified notes or mezzanine notes shall
equal the Applicable Interest Rate), (ii) the stated maturity of the Note, (iii)
the aggregate amortization of principal of the Note, (iv) any other material
economic term of the Loan, or (v) decrease the time periods during which
Borrower is permitted to perform its obligations under the Loan Documents.
Notwithstanding Lender’s agreement that the initial weighted average interest
rate payable under the Note shall not change, Borrower acknowledges (1) that
such new notes or modified notes or mezzanine notes may, in connection with the
application of principal to such new notes or modified note, subsequently cause
the weighted average coupon of such new notes or modified notes or mezzanine
notes to change, and (2) that Lender may apply principal, interest rates and
amortization of the Loan between such new components in a manner specified by
Lender in its sole discretion such that the pricing and marketability of the
Securities and the size of each class of Securities and the rating assigned to
each such class by the Rating Agencies shall provide the most favorable rating
levels and achieve the optimum bond execution for the Loan. In connection with
the foregoing, Borrower covenants and agrees to modify the Cash Management
Agreement to reflect the newly created components and/or mezzanine loans.

(d)               Intentionally omitted.

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(e)                If requested by Lender, Borrower shall provide Lender,
promptly upon request, with any financial statements, or financial, statistical
or operating information, as Lender shall determine to be required pursuant to
Regulation AB under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or any amendment,
modification or replacement thereto or other legal requirements in connection
with any private placement memorandum, prospectus or other disclosure documents
or any filing pursuant to the Exchange Act in connection with the Securitization
or as shall otherwise be reasonably requested by Lender.

9.1.2        Securitization Costs.

All costs and expenses incurred by Borrower and Guarantor in connection with
this Section 9.1 will be paid by Borrower or Guarantor, respectively.
Notwithstanding the foregoing, all reasonable third-party out-of-pocket costs
and expenses incurred by Borrower and Guarantor in connection with requests made
under Section 9.1.1(b) or (c) (including, without limitation, the fees and
expenses of the Rating Agencies) shall be paid by Lender. For sake of clarity,
the parties hereto acknowledge and agree that the Existing Mezzanine Loan is not
a mezzanine loan required by Lender pursuant to this Section 9.1, but rather, is
a loan being made at Borrower’s request, and therefore, all costs and expenses
incurred by Borrower, Guarantor or Lender in connection with the Existing
Mezzanine Loan shall be paid by Borrower.

Section 9.2            Uncross of Properties

. Each Individual Each Individual Borrower agrees that Lender shall have the
right, at any time and from time to time, to release any Individual Property
(the “Affected Property”) or Individual Borrower from the cross-defaulting
and/or the cross-collateralization effected pursuant to the grant of the
applicable Mortgage from such Individual Borrower and secured by the lien of the
applicable Mortgage. In furtherance thereof, Lender shall have the right to (i)
sever or divide the Note and the other Loan Documents in order to allocate to
such Affected Property the portion of the Loan allocable to such Individual
Property (the “Release Amount”) evidenced by a new note and secured by such
other loan documents (collectively, the “New Note”) having a principal amount
equal to the Release Amount applicable to such Affected Property, (ii) segregate
the applicable portion of each of the Reserve Funds relating to the Affected
Property, (iii) release any cross-default and/or cross-collateralization
provisions applicable to such Affected Property and (iv) take such additional
action consistent therewith; provided, that such New Note secured by such
Affected Property, together with the Loan Documents secured by the remaining
Properties, shall not increase in the aggregate (A) any monetary obligation of
Borrower under the Loan Documents (provided, however, it being acknowledged and
agreed that such New Note shall immediately after the dividing of the Note have
the same initial weighted average coupon as the original Note prior to such
dividing, notwithstanding that such New Note may, in connection with the
application of principal to such New Note, subsequently cause the weighted
average coupon of such New Note to change (but not increase, except that the
weighted average coupon may subsequently increase due to prepayments or if an
Event of Default shall occur)), or (B) any other obligation of Borrower

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under the Loan Documents in any material respect. In connection with the
transfer of any such Affected Property as provided for in this Section 9.2, the
Loan shall be reduced by an amount equal to the amount of the New Note
applicable to such Affected Property and the new loan secured by such Affected
Property and the New Note shall be in an amount equal to such Release Amount.
Subsequent to the release of the Affected Property from the lien of the Loan
pursuant to this Section 9.2, the balances of the components of the Loan shall
be the same as they would have been had a prepayment occurred in an amount equal
to the Release Amount of the Affected Property. At the request of Lender, each
Individual Borrower shall otherwise cooperate with Lender in its attempt to
satisfy all requirements necessary in order for Lender to obtain written
confirmation from the Rating Agencies that such transfer of the Affected
Property from the Securitization and splitting of the Loan shall not cause a
downgrade, withdrawal or qualification of the then current ratings of the
Securities or any class thereof, which requirements shall include, without
limitation: (A) delivery of evidence that the single purpose nature and
bankruptcy remoteness of each Individual Borrower owning an Individual Property
other than the Affected Property following such release have not been adversely
affected and are in accordance with the terms and provisions of this Agreement
(which evidence may include a “bring-down” of a bankruptcy non-consolidation
opinion from counsel acceptable to the Rating Agencies); and (B) the execution
of such documents and instruments and delivery by Lender of such opinions of
counsel as are typical for similar transactions, including, an opinion of
counsel that the release of the Affected Property will not be a “significant
modification” of this Loan within the meaning of Section 1.860G-2(b) of the
regulations of the United States Department of the Treasury and that all other
requirements applicable, if any, to the REMIC Trust the holds the Note (if
applicable), have been satisfied or have not otherwise been violated. All
reasonable third party costs and expenses incurred by Borrower and Guarantor in
connection with Borrower’s complying with this Section 9.2 (including, without
limitation, the fees and expenses of the Rating Agencies) shall be paid by
Lender.

Section 9.3            Exculpation.

Subject to the qualifications below, Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in the
Note, this Agreement, the Mortgages or the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower, except
that Lender may bring a foreclosure action, an action for specific performance
or any other appropriate action or proceeding to enable Lender to enforce and
realize upon its interest under the Note, this Agreement, the Mortgages and the
other Loan Documents, or in the Properties, the Rents, or any other collateral
given to Lender pursuant to the Loan Documents; provided, however, that, except
as specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Borrower only to the extent of Borrower’s interest
in the Properties, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Mortgages and the other Loan
Documents, agrees that it shall not sue for, seek or demand any deficiency
judgment against Borrower in any such action or proceeding under or by reason of
or under or in connection with the Note, this Agreement, the Mortgages or the
other Loan Documents. The provisions of this Section shall not, however, (a)
constitute a waiver, release or impairment of any obligation evidenced or
secured by any of the Loan Documents; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for foreclosure and sale
under any of the Mortgages; (c) affect the validity or enforceability of or any
guaranty made in connection with the Loan or any of the rights and remedies of
Lender

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thereunder; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of any assignment of leases contained in
each of the Mortgages; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower (but not Guarantor) in order to fully
realize the security granted by each of the Mortgages or to commence any other
appropriate action or proceeding in order for Lender to exercise its remedies
against all of the Properties; or (g) constitute a waiver of the right of Lender
to enforce the liability and obligation of Borrower, by money judgment or
otherwise, to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including attorneys’ fees and expenses
reasonably incurred) arising out of or in connection with the following:

(i)                 fraud or intentional misrepresentation by any Individual
Borrower, Principal or Guarantor in connection with the Loan;

(ii)               the gross negligence or willful misconduct of any Individual
Borrower, Principal or Guarantor;

(iii)             material physical waste of any Individual Property;

(iv)             the removal or disposal of any portion of any Individual
Property after an Event of Default;

(v)               the misapplication or conversion by any Individual Borrower,
Principal or Guarantor of (A) any Insurance Proceeds paid by reason of any loss,
damage or destruction to any Individual Property which are not applied by
Borrower in accordance with this Agreement, (B) any Awards received in
connection with a Condemnation of all or a portion of any Individual Property
which are not applied by Borrower in accordance with this Agreement, (C) any
Rents following an Event of Default, or (D) any Rents paid more than one month
in advance;

(vi)             failure to pay charges for labor or materials or other charges
or judgments that can create Liens on any portion of any Individual Property
(other than resulting from Lender’s failure to pay Taxes from the Tax and
Insurance Escrow Fund provided that (A) no other Event of Default shall then
exist, (B) each of Borrower has performed all of its respective obligations
under Sections 5.1.2 and 7.2 hereof, and (C) sufficient funds are then on
deposit therein and such funds are allocated for the payment of such Taxes),
provided, that, if (i) such Lien is fully bonded to the satisfaction of Lender
(which bond shall create no obligations on the part of Borrower), and (ii) such
Lien is discharged of record, Borrower shall not have any liability to Lender
for such Lien under this Section 9.3;

(vii)           failure to appoint a new property manager upon the request of
Lender as permitted under this Agreement;

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(viii)         any security deposits, advance deposits or any other deposits
collected with respect to any Individual Property which are not delivered to
Lender upon a foreclosure of such Individual Property or action in lieu thereof,
except to the extent any such security deposits were applied in accordance with
the terms and conditions of any of the Leases prior to the occurrence of the
Event of Default that gave rise to such foreclosure or action in lieu thereof;

(ix)             the Individual Property located at 5475 Moffett Road, Mobile,
Alabama failing to be in compliance with applicable zoning or land use laws,
regulations or ordinances; provided, however, that upon Borrower providing to
Lender the Mobile Zoning Report and otherwise satisfying its obligations under
Section 10.26(b) of this Agreement (if any) with respect to such Individual
Property, Borrower shall not have any further liabilities or obligations to
Lender under this Section 9.3(g)(ix);

(x)               the Individual Property located at 109 Sam Houston School
Road, Maryville, Tennessee failing to be in compliance with applicable zoning or
land use laws, regulations or ordinances; provided, however, that upon Borrower
providing to Lender the Maryville Zoning Report and otherwise satisfying its
obligations under Section 10.26(b) of this Agreement (if any) with respect to
such Individual Property, Borrower shall not have any further liabilities or
obligations to Lender under this Section 9.3(g)(x); or

(xi)             the Individual Property located at 2956 Hamilton Road,
LaGrange, Georgia failing to be in compliance with applicable zoning or land use
laws, regulations or ordinances; provided, however, that upon Borrower providing
to Lender the Hamilton Zoning Report and otherwise satisfying its obligations
under Section 10.26(b) of this Agreement (if any) with respect to such
Individual Property, Borrower shall not have any further liabilities or
obligations to Lender under this Section 9.3(g)(xi).

Notwithstanding anything to the contrary in this Agreement, the Note or any of
the Loan Documents, (A) Lender shall not be deemed to have waived any right
which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the
Debt secured by the Mortgages or to require that all collateral shall continue
to secure all of the Debt owing to Lender in accordance with the Loan Documents,
and (B) the Debt shall be fully recourse to Borrower (i) in the event of: (a)
Borrower or Principal filing a voluntary petition under the Bankruptcy Code or
any other Federal or state bankruptcy or insolvency law; (b) the filing of an
involuntary petition against any Individual Borrower or Principal under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in
which any Individual Borrower, Principal or Guarantor colludes with, or
otherwise assists such Person, or solicits or causes to be solicited petitioning
creditors for any involuntary petition against any Individual Borrower or
Principal from any Person; (c) any Individual Borrower or Principal filing an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other Person under the Bankruptcy Code or any
other Federal or state bankruptcy or insolvency law; (d) any Individual Borrower
or Principal consenting to or

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acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for any Individual Borrower or Principal or any
Individual Property (or any portion thereof); (e) any Individual Borrower or
Principal making an assignment for the benefit of creditors, or admitting in
writing in any insolvency or bankruptcy proceeding, its insolvency or inability
to pay its debts as they become due; (ii) if the first full monthly payment
under the Note not being paid within five (5) days of notice that such payment
is late (provided, however, that such grace period relates only to the recourse
trigger described in this paragraph); (iii) if any Individual Borrower fails to
permit on-site inspections of any Individual Property (subject to the rights of
tenants), or fails to provide financial information subject to any applicable
cure period (except for financial information required to be delivered by a
tenant pursuant to the applicable Lease that has not been delivered to any
Individual Borrower, provided such Individual Borrower has requested such
financial information from such tenant); (iv) if any Individual Borrower fails
to maintain its status as a Special Purpose Entity, breaches any representation
or fails to comply with any warranty or covenant set forth in Section 4.1.30
hereof; (v) if any Individual Borrower or any Principal fails to obtain Lender’s
prior written consent (to extent such consent is required) to any Indebtedness
or other voluntary Lien; or (vi) the failure of any Individual Borrower to
obtain Lender’s prior written consent (to extent such consent is required) to
any Transfer as required by this Agreement or the Mortgages. Notwithstanding the
provision set forth in clause (v) of this paragraph, a voluntary Lien other than
a Lien securing an extension of credit filed against any Individual Property
shall not constitute a full recourse trigger for purposes of this paragraph
provided such Lien (A) is fully bonded to the satisfaction of Lender and
discharged of record within ninety (90) days of filing, or (B) within such
ninety (90) day period, Lender receives affirmative title insurance from the
title insurance company insuring the lien of the applicable Mortgage that such
Lien is subject and subordinate to the lien of such Mortgage and no enforcement
action is commenced by the applicable Lien holder. Upon the satisfaction of the
conditions set forth in the preceding sentence with respect to the recourse
trigger described in clause (v) above, or the acceptance by Lender of any cure
by Borrower of a recourse trigger described in clauses (ii), (iii) or (vi) above
(which Lender is not obligated to accept and may reject or accept in its sole
and absolute discretion), the Debt shall no longer be fully recourse to Borrower
solely as a result of such trigger, provided, however, Borrower shall remain
liable to the extent of any loss, damage, cost, expense, liability, claim or
other obligation incurred by Lender (including attorneys’ fees and costs
reasonably incurred) arising out of or in connection with such trigger.

Section 9.4            Matters Concerning Manager.

If (a) an Event of Default hereunder has occurred and remains uncured,
(b) Manager shall become subject to a Bankruptcy Action, or (c) a default occurs
under the Management Agreement (beyond any applicable cure period), Borrower
shall, at the request of Lender, terminate the Management Agreement and replace
the Manager with a Qualified Manager pursuant to a Replacement Management
Agreement, it being understood and agreed that the management fee for such
Qualified Manager shall not exceed then prevailing market rates. In addition and
without limiting the rights of Lender hereunder or under any of the other Loan
Documents, in the event that (i) the Management Agreement is terminated, (ii)
the Manager no longer manages the related Individual Property, or (iii) a
receiver, liquidator or trustee shall be appointed for Manager or if Manager
shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against,

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consented to, or acquiesced in by, Manager, or if any proceeding for the
dissolution or liquidation of Manager shall be instituted, then Borrower (at
Borrower’s sole cost and expense) shall immediately, in its name, establish new
deposit accounts separate from any other Person with a depository satisfactory
to Lender into which all Rents and other income from the related Individual
Property shall be deposited and shall grant Lender a first priority security
interest in such account pursuant to documentation satisfactory in form and
substance to Lender.

Section 9.5            Servicer.

At the option of Lender, the Loan may be serviced by a master servicer, primary
servicer, special servicer and/or trustee (any such master servicer, primary
servicer, special servicer, and trustee, together with its agents, nominees or
designees, are collectively referred to as “Servicer”) selected by Lender and
Lender may delegate all or any portion of its responsibilities under this
Agreement and the other Loan Documents to Servicer pursuant to a pooling and
servicing agreement, servicing agreement, special servicing agreement or other
agreement providing for the servicing of one or more mortgage loans
(collectively, the “Servicing Agreement”) between Lender and Servicer.
Notwithstanding the foregoing, Borrower shall promptly reimburse Lender on
demand for the following costs and expenses payable by Lender to Servicer as a
result of the Loan becoming specially serviced: (i) any liquidation fees that
are due and payable to Servicer under the Servicing Agreement in connection with
the exercise of any or all remedies permitted under this Agreement, (ii) any
workout fees and special servicing fees that are due and payable to Servicer
under the Servicing Agreement, which fees may be due and payable under the
Servicing Agreement on a periodic or continuing basis, and (iii) the costs of
all property inspections and/or appraisals of the Properties (or any updates to
any existing inspection or appraisal) that Servicer may be required to obtain
(other than the cost of regular annual inspections required to be borne by
Servicer under the Servicing Agreement). Provided no Event of Default shall
exist, if Servicer proposes to transfer the servicing of the Loan to a Servicer
that is a special servicer based on Servicer’s judgment that a Default in the
payment of Debt Service is reasonably foreseeable, Servicer shall use good faith
efforts to consult with Borrower before transferring the servicing of the Loan,
except in those instances in which Servicer determines in its sole discretion
that the failure to so transfer the servicing of the Loan would materially and
adversely affect the holders of the Securities, and Borrower acknowledges and
agrees that any such consultation shall be conducted on a non-binding basis and
any decision by Servicer to transfer the Loan to a special servicer shall be
final and binding on, and shall not be subject to challenge by, Borrower.

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ARTICLE X - MISCELLANEOUS

Section 10.1        Survival.

This Agreement and all covenants, agreements, representations and warranties
made herein and in the certificates delivered pursuant hereto shall survive the
making by Lender of the Loan and the execution and delivery to Lender of the
Note, and shall continue in full force and effect so long as all or any of the
Debt is outstanding and unpaid unless a longer period is expressly set forth
herein or in the other Loan Documents. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
legal representatives, successors and assigns of such party. All covenants,
promises and agreements in this Agreement, by or on behalf of Borrower, shall
inure to the benefit of the legal representatives, successors and assigns of
Lender.

Section 10.2        Lender’s Discretion.

Whenever pursuant to this Agreement, Lender exercises any right given to it to
approve or disapprove, or any arrangement or term is to be satisfactory to
Lender, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory shall (except as is
otherwise specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.

Section 10.3        Governing Law.

 

(a)                THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE
LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE
OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER
LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE

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OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY
LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE
OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

(b)               ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW
OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY DESIGNATE AND APPOINT:

The Corporation Trust Company

Corporation Trust Center

1209 Orange Street

Wilmington, Delaware 19801

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND
ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

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Section 10.4        Modification, Waiver in Writing.

No modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

Section 10.5        Delay Not a Waiver.

Neither any failure nor any delay on the part of Lender in insisting upon strict
performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder, or under the Note or under any
other Loan Document, or any other instrument given as security therefor, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other amount.

Section 10.6        Notices.

All notices, consents, approvals and requests required or permitted hereunder or
under any other Loan Document shall be given in writing and shall be effective
for all purposes if hand delivered or sent by (a) certified or registered United
States mail, postage prepaid, return receipt requested or (b) expedited prepaid
delivery service, either commercial or United States Postal Service, with proof
of attempted delivery, and by telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be designated
from time to time by any party hereto, as the case may be, in a written notice
to the other parties hereto in the manner provided for in this Section):

If to Lender: JPMorgan Chase Bank, National Association
383 Madison Avenue
New York, New York 10179
Attention: Joseph E. Geoghan
Facsimile No.: (212) 834-6029

with a copy to: JPMorgan Chase Bank, National Association
Four New York Plaza, 20th Floor
New York, NY 10004
Attention: Nancy Alto
Facsimile No.: (212) 623-4779

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with an additional copy to: Katten Muchin Rosenman LLP
550 South Tryon Street, Ste. 2900
Charlotte, North Carolina 28202-4213
Attention: Daniel S. Huffenus, Esq.
Facsimile No.: (704) 344-3056

If to Borrower: c/o Inland Real Estate Income Trust, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: JoAnn McGuinness
Facsimile No.: (630) 368-2218

With a copy to: The Inland Real Estate Group, Inc./Law Department.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: General Counsel
Facsimile No.: (630) 218-4900

A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day; or in the case of telecopy, upon sender’s receipt of a
machine-generated confirmation of successful transmission after advice by
telephone to recipient that a telecopy notice is forthcoming.

Section 10.7        Trial by Jury.

EACH OF BORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY EACH OF BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH OF BORROWER AND LENDER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY THE OTHER PARTY.

Section 10.8        Headings.

The Article and/or Section headings and the Table of Contents in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

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Section 10.9        Severability.

Wherever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

Section 10.10    Preferences.

Lender shall have the continuing and exclusive right to apply or reverse and
reapply any and all payments by Borrower to any portion of the obligations of
Borrower hereunder. To the extent Borrower makes a payment or payments to
Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied shall be revived and continue in full force and effect, as if
such payment or proceeds had not been received by Lender.

Section 10.11    Waiver of Notice.

Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or the other Loan
Documents specifically and expressly provide for the giving of notice by Lender
to Borrower and except with respect to matters for which Borrower is not,
pursuant to applicable Legal Requirements, permitted to waive the giving of
notice. Borrower hereby expressly waives the right to receive any notice from
Lender with respect to any matter for which this Agreement or the other Loan
Documents do not specifically and expressly provide for the giving of notice by
Lender to Borrower.

Section 10.12    Remedies of Borrower.

To the extent permitted by applicable law, in the event that a claim or
adjudication is made that Lender or its agents have acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement or
the other Loan Documents, Lender or such agent, as the case may be, has an
obligation to act reasonably or promptly, Borrower agrees that neither Lender
nor its agents shall be liable for any monetary damages, and Borrower’s sole
remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. To the extent permitted by applicable law, the parties
hereto agree that any action or proceeding to determine whether Lender has acted
reasonably shall be determined by an action seeking declaratory judgment.

Section 10.13    Expenses; Indemnity.

 

(a)                Borrower covenants and agrees to pay or, if Borrower fails to
pay, to reimburse, Lender upon receipt of written notice from Lender for all
reasonable costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any

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opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Properties);
(ii) Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (iii) Lender’s ongoing performance and compliance with
all agreements and conditions contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date
(except for those costs and expenses expressly assumed herein or in the other
Loan Documents by Lender); (iv) except as otherwise provided in this Agreement,
the negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documents and any other documents or matters reasonably requested by
Lender; (v) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and
expenses, title insurance and fees and expenses of counsel for providing to
Lender all required legal opinions, and other similar expenses incurred in
creating and perfecting the Lien in favor of Lender pursuant to this Agreement
and the other Loan Documents; (vii) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, any Individual Property, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Properties (including, without limitation,
any reasonable and customary fees incurred by Servicer that is a master servicer
or Servicer in connection with the transfer of the Loan to a Servicer that is a
special servicer prior to or following a Default or an Event of Default) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a “work-out” or of any insolvency
or bankruptcy proceedings; provided, however, that Borrower shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Lender. Any cost and expenses due and payable to Lender may be paid from any
amounts in the Lockbox Account or Cash Management Account, as applicable.

(b)               BORROWER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS THE
INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL OTHER LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES
AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR THE INDEMNIFIED
PARTY IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING COMMENCED OR THREATENED, WHETHER OR NOT THE INDEMNIFIED PARTY SHALL
BE DESIGNATED A PARTY THERETO), THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THE INDEMNIFIED PARTY IN ANY MANNER RELATING TO OR ARISING OUT OF
(I) ANY BREACH BY BORROWER OF ITS OBLIGATIONS UNDER, OR ANY MATERIAL
MISREPRESENTATION BY BORROWER CONTAINED IN, THIS AGREEMENT OR THE OTHER LOAN

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DOCUMENTS, OR (II) THE USE OR INTENDED USE OF THE PROCEEDS OF THE LOAN
(COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED, HOWEVER, THAT BORROWER
SHALL NOT HAVE ANY OBLIGATION TO THE INDEMNIFIED PARTY HEREUNDER TO THE EXTENT
THAT SUCH INDEMNIFIED LIABILITIES ARISE FROM THE GROSS NEGLIGENCE, ILLEGAL ACTS,
FRAUD OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY. TO THE EXTENT THAT THE
UNDERTAKING TO INDEMNIFY, DEFEND AND HOLD HARMLESS SET FORTH IN THE PRECEDING
SENTENCE MAY BE UNENFORCEABLE BECAUSE IT VIOLATES ANY LAW OR PUBLIC POLICY,
BORROWER SHALL PAY THE MAXIMUM PORTION THAT IT IS PERMITTED TO PAY AND SATISFY
UNDER APPLICABLE LAW TO THE PAYMENT AND SATISFACTION OF ALL INDEMNIFIED
LIABILITIES INCURRED BY THE INDEMNIFIED PARTY.

(c)                Borrower covenants and agrees to pay for or, if Borrower
fails to pay, to reimburse Lender for, any fees and expenses incurred by any
Rating Agency in connection with any Rating Agency review of the Loan, the Loan
Documents or any transaction contemplated thereby or any consent, approval,
waiver or confirmation obtained from such Rating Agency pursuant to the terms
and conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.

Section 10.14    Schedules Incorporated.

The Schedules annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.

Section 10.15    Offsets, Counterclaims and Defenses.

Any assignee of Lender’s interest in and to this Agreement, the Note and the
other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.

Section 10.16    No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a)                Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Properties other than that of
mortgagee, beneficiary or lender.

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(b)               This Agreement and the other Loan Documents are solely for the
benefit of Lender and Borrower and nothing contained in this Agreement or the
other Loan Documents shall be deemed to confer upon anyone other than Lender and
Borrower any right to insist upon or to enforce the performance or observance of
any of the obligations contained herein or therein. All conditions to the
obligations of Lender to make the Loan hereunder are imposed solely and
exclusively for the benefit of Lender and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make the Loan in the absence of
strict compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole
discretion, Lender deems it advisable or desirable to do so.

Section 10.17    Publicity.

All news releases, publicity or advertising by Borrower or its Affiliates
through any media intended to reach the general public which refers to the Loan
Documents or the financing evidenced by the Loan Documents, to Lender, JPMorgan
Chase Bank, National Association or any of their Affiliates shall be subject to
the prior written approval of Lender and JPMorgan Chase Bank, National
Association in their sole discretion. All news releases, publicity or
advertising by Lender through any media intended to reach the general public
which refers solely to the Borrower or to the Loan made by the Lender to the
Borrower shall be subject to the prior written approval of Borrower, provided
however, the foregoing shall not apply to Provided Information included in
disclosure documents in connection with a Securitization.

Section 10.18    Cross-Default; Cross-Collateralization; Waiver of Marshalling
of Assets.

 

(a) Each Individual Borrower acknowledges that Lender has made the Loan to
Borrower upon the security of its collective interest in the Properties and in
reliance upon the aggregate of the Properties taken together being of greater
value as collateral security than the sum of each Individual Property taken
separately. Each Individual Borrower agrees that the Mortgages are and will be
cross-collateralized and cross-defaulted with each other so that (i) an Event of
Default under any of the Mortgages shall constitute an Event of Default under
each of the other Mortgages which secure the Note; (ii) an Event of Default
under the Note or this Agreement shall constitute an Event of Default under each
Mortgage; (iii) each Mortgage shall constitute security for the Note as if a
single blanket lien were placed on all of the Properties as security for the
Note; and (iv) such cross-collateralization shall in no event be deemed to
constitute a fraudulent conveyance

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(b) To the fullest extent permitted by law, Borrower, for itself and its
successors and assigns, waives all rights to a marshalling of the assets of
Borrower, Borrower’s partners and others with interests in Borrower, and of the
Properties, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Properties for the collection of the Debt without any
prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, each Individual Borrower, for
itself and its successors and assigns, waives in the event of foreclosure of any
or all of the Mortgages, any equitable right otherwise available to an
Individual Borrower which would require the separate sale of the Properties or
require Lender to exhaust its remedies against any Individual Property or any
combination of the Properties before proceeding against any other Individual
Property or combination of Properties; and further in the event of such
foreclosure each Individual Borrower does hereby expressly consents to and
authorizes, at the option of Lender, the foreclosure and sale either separately
or together of any combination of the Properties.

Section 10.19    Waiver of Counterclaim.

Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.

Section 10.20    Conflict; Construction of Documents; Reliance.

In the event of any conflict between the provisions of this Agreement and any of
the other Loan Documents, the provisions of this Agreement shall control. The
parties hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower, and, to the
extent permitted by applicable law, Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.

111

 

 

Section 10.21    Brokers and Financial Advisors.

Borrower hereby represents that it has dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement other than Inland Mortgage
Brokerage Corporation, Borrower shall pay all amounts owed to Inland Mortgage
Brokerage Corporation with respect to such transaction, and Borrower hereby
agrees to indemnify, defend and hold Lender harmless from and against any and
all claims, liabilities, costs and expenses of any kind (including Lender’s
attorneys’ fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in connection
with the transactions contemplated herein. The provisions of this Section 10.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.

Section 10.22    Prior Agreements.

This Agreement and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements among or between such parties, whether
oral or written, between Borrower and Lender are superseded by the terms of this
Agreement and the other Loan Documents.

Section 10.23    Joint and Several Liability.

If Borrower consists of more than one (1) Person the obligations and liabilities
of each Person shall be joint and several. The parties hereto acknowledge that
the defined term “Borrower” (as well as the defined term defining each other
Collective Group) has been defined to collectively include each Individual
Borrower (and in the case of each Collective Group, defined to collectively
include each member of the same). It is the intent of the parties hereto in
determining whether (a) a breach of a representation or a covenant has occurred,
(b) there has occurred a Default or Event of Default, or (c) an event has
occurred which would create recourse obligations under Section 9.3 of this
Agreement, that any such breach, occurrence or event with respect to any
Individual Borrower (or with respect to any single member of a Collective Group)
shall be deemed to be such a breach, occurrence or event with respect to every
Individual Borrower (and in the case of each Collective Group, each member of
the same) and that every Individual Borrower need not have been involved with
such breach, occurrence or event in order for the same to be deemed such a
breach, occurrence or event with respect to every Individual Borrower (and
likewise that each member of a Collective Group need not have been involved with
such breach, occurrence or event in order for the same to be sdeemed such a
breach, occurrence or event with respect to such Collective Group). The term
“Collective Group” as used in this Agreement shall refer to each of the groups
of entities represented in this Agreement by the following defined terms:
Borrower and Principal. The obligations and liabilities of each Individual
Borrower shall be joint and several.

112

 

 

Section 10.24    Certain Additional Rights of Lender (VCOC).

Notwithstanding anything to the contrary contained in this Agreement, Lender
shall have:

(a)                the right to routinely consult with and advise Borrower’s
management regarding the significant business activities and business and
financial developments of Borrower; provided, however, that such consultations
shall not include discussions of environmental compliance programs or disposal
of hazardous substances. Consultation meetings should occur on a regular basis
(no less frequently than quarterly) with Lender having the right to call special
meetings at any reasonable times and upon reasonable advance notice;

(b)               the right, in accordance with the terms of this Agreement, to
examine the books and records of Borrower at any reasonable times upon
reasonable notice;

(c)                the right, in accordance with the terms of this Agreement,
including, without limitation, Section 5.1.11 hereof, to receive monthly,
quarterly and year end financial reports, including balance sheets, statements
of income, shareholder’s equity and cash flow, a management report and schedules
of outstanding indebtedness; and

(d)               the right, without restricting any other rights of Lender
under this Agreement (including any similar right), to approve any acquisition
by Borrower of any other significant property (other than personal property
required for the day to day operation of any Individual Property).

The rights described above in this Section 10.24 may be exercised by any entity
which owns and controls, directly or indirectly, substantially all of the
interests in Lender.

Section 10.25    Release of IREIC.

Upon satisfaction of all of the conditions set forth in Section 5.16 of the
Guaranty and Section 25 of the Environmental Indemnity and the release of IREIC
in accordance therewith, IREIC shall be deemed automatically released from all
liability under the Guaranty, the Environmental Indemnity and the Joinder
Agreement first accruing after such release and all references in this Agreement
and the other Loan Documents to “Guarantor” shall be solely a reference to
IREIT.

Section 10.26    Post Closing Matters.

(a) Borrower shall use commercially reasonable efforts to (i) within ten (10)
Business Days of the date hereof, deliver to Lender a fully-executed Lease
Commencement Agreement with respect to the Individual Properties located at (x)
4919 Lee Road 270, Valley Alabama and (y) 5474 Moffett Road, Mobile Alabama, and
(ii) within thirty (30) days of the date hereof, deliver to Lender an executed
Estoppel Certificate from Five Strand Development, LLC, a Georgia limited
liability company (or its successors and/or assigns), in form and substance
reasonably acceptable to Lender, relating to that certain Easement Agreement
with Covenants and Restrictions, dated August 8, 2012, recorded in the Public
Registry for Fayette County, Georgia in Book 3654, Page 99 and re-recorded in
the Public Registry for Fayette County, Georgia at Book 3665, Page 269, dated
September 25, 2012.

113

 

 

(b) Borrower shall use commercially reasonable efforts to, within thirty (30)
days of the date hereof, deliver to Lender a final Zoning and Site Requirements
Summary from The Planning & Zoning Resource Corporation, in form and substance
reasonably acceptable to Lender, covering the Individual Properties located at
(i) 5475 Moffett Road, Mobile, Alabama (the “Mobile Zoning Report”), (ii) 109
Sam Houston School Road, Maryville, Tennessee (the “Maryville Zoning Report”),
and (iii) 2956 Hamilton Road, LaGrange, Georgia (the “Hamilton Zoning Report”;
together with the Mobile Zoning Report and the Hamilton Zoning Report,
individually and collectively, the “Zoning Report”). If the conformance status
of the applicable Individual Property is legal nonconforming pursuant to the
applicable Zoning Report, Borrower shall provide such additional insurance
coverage, such as law and ordinance coverage, as may be reasonably necessary in
Lender’s discretion. If the conformance status of the applicable Individual
Property is nonconforming pursuant to the related Zoning Report, Borrower shall
promptly remediate the existing municipal code violations at such Individual
Property in order to render the conformance status of such Individual Property
legal conforming or legal nonconforming.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

114

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the day and year
first above written.

BORROWER:

IREIT Mobile Moffett DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

IREIT Daleville DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

115

 

IREIT Valley DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

IREIT Maryville DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

 

 

 

 

 

 

 

 

116

 

 

IREIT LaGrange Hamilton DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

IREIT LaGrange Wares Cross DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

 

 

 

 

 

 

 

 

117

 

 

IREIT Brooks DG, L.L.C., a Delaware limited liability company

By:IREIT DG SPE II Member, L.L.C., a Delaware limited liability company, its
sole member

By:Inland Real Estate Income Trust, Inc., a Maryland corporation, its sole
member

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

118

 

LENDER:

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under
the laws of the United States of America

By: /s Jennifer Lewin

Name: Jennifer Lewin

Title: Vice President

 

 

119

 

JOINDER AGREEMENT

The undersigned (“Joinder Party”) hereby acknowledges and agrees that it has
read and reviewed the foregoing Loan Agreement to which this Joinder Agreement
has been attached. Capitalized terms used but not defined herein shall have the
meaning set forth in the Loan Agreement.

Joinder Party hereby covenants, represents, warrants, acknowledges and agrees as
follows:

(a) Joinder Party has read and reviewed the Loan Agreement and is familiar with
the terms and provisions thereof.

(b) Joinder Party covenants and agrees to observe and perform all of the
covenants and agreements of Joinder Party contained in Section 9.1 of the Loan
Agreement and in subsection (f) of the definition of “Cash Sweep Event Cure” of
the Loan Agreement.

(c) The obligations of Joinder Party under this Joinder Agreement are
enforceable against Joinder Party and are not subject to any defenses, offsets
or counterclaims.

(d) The provisions of this Joinder Agreement are for the benefit of Lender.

(e) THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

(f) Without limiting any of the rights and remedies of Existing Mezzanine Lender
under the Existing Mezzanine Loan Documents, in the event of a Cash Sweep Period
related solely to an Existing Mezzanine Loan Trigger and no other Cash Sweep
Event then exists, all Excess Cash Flow in the Cash Management Account shall be
delivered to Existing Mezzanine Lender and applied in accordance with the
Existing Mezzanine Loan Documents.

 

[remainder of page intentionally left blank]

 

120

 

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

JOINDER PARTY:

INLAND real estate investment corporation, a Delaware corporation

By:/s Catherine L. Lynch
Name: Catherine L. Lynch
Title: CFO

 

INLAND real estate INCOME TRUST, INC., a Maryland corporation

 

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

121

 

SOLE MEMBER JOINDER AGREEMENT

The undersigned (“Sole Member Joinder Party”) hereby acknowledges and agrees
that it has read and reviewed the foregoing Loan Agreement to which this Sole
Member Joinder Agreement has been attached. Capitalized terms used but not
defined herein shall have the meaning set forth in the Loan Agreement.

Sole Member Joinder Party hereby covenants, represents, warrants, acknowledges
and agrees as follows:

(a) Sole Member Joinder Party has read and reviewed the Loan Agreement and is
familiar with the terms and provisions thereof.

(b) Without limiting any of the rights and remedies of Existing Mezzanine Lender
under the Existing Mezzanine Loan Documents, in the event of a Cash Sweep Period
related solely to an Existing Mezzanine Loan Trigger and no other Cash Sweep
Event then exists, all Excess Cash Flow in the Cash Management Account shall be
delivered to Existing Mezzanine Lender and applied in accordance with the
Existing Mezzanine Loan Documents.

(c) The obligations of Sole Member Joinder Party under this Sole Member Joinder
Agreement are enforceable against Sole Member Joinder Party and are not subject
to any defenses, offsets or counterclaims.

(d) The provisions of this Sole Member Joinder Agreement are for the benefit of
Lender.

(e) THIS SOLE MEMBER JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

[remainder of page intentionally left blank]

 

122

 

IN WITNESS WHEREOF, the undersigned has caused this Sole Member Joinder
Agreement to be duly executed and delivered as of the date first above written.

SOLE MEMBER JOINDER PARTY:

IREIT DG SPE II Member, L.L.C., a Delaware limited liability company

By:/s David Z. Lichterman
Name: David Z. Lichterman
Title: Treasurer/Chief Accounting Officer

 

123

 

SCHEDULE I

LIST OF BORROWERS

 

Borrower’s Name State Organizational ID Number (If Appl.) IREIT Mobile Moffett
DG, L.L.C., a Delaware limited liability company 5255622 IREIT Daleville DG,
L.L.C., a Delaware limited liability company 5255620 IREIT Valley DG, L.L.C., a
Delaware limited liability company 5255624 IREIT Maryville DG, L.L.C., a
Delaware limited liability company 5255634 IREIT LaGrange Hamilton DG, L.L.C., a
Delaware limited liability company 5255627 IREIT LaGrange Wares Cross DG,
L.L.C., a Delaware limited liability company 5255630 IREIT Brooks DG, L.L.C., a
Delaware limited liability company 5255626

 

 

124

 

SCHEDULE II

ALTERATION CONDITIONS

Prior to commencement of such Alterations, Borrower shall provide to Lender:

1. Plans and specifications for such Alterations;

2. Evidence that Borrower has obtained all necessary municipal approvals;

3. A budget for such Alterations;

4. A completion guaranty from Guarantor;

5.The identity of the contractor(s) engaged in the Alterations, as well as
copies of the contracts under which they have been engaged; and

6.An affidavit certifying that the Alterations comply with all Applicable Laws,
and do not violate the terms of any Leases.

Upon commencement of such Alterations, Borrower shall diligently prosecute same
to completion, or if Borrower elects, to promptly remove such Alterations and
restore the Property.

Upon completion (or removal) of such Alterations, Borrower shall provide to
Lender:

1.A certification from a licensed architect or engineer that the Alterations
were completed (or removed) in accordance with all applicable approvals and
Applicable Laws;

2.A copy of a final certificate of occupancy with respect to the Alterations
(unless certificates of occupancy are not available in the applicable
jurisdiction);

3.Lien waivers or other evidence that all sums due to others as a result of such
Alterations have been paid in full;

4.A revised survey reflecting such Alterations; and

5. Either (a) a date down endorsement to the title policy issued to Lender in
connection with the closing of the Loan, without new exceptions and confirming
that no subordinate liens exist related to such Alterations, or (b) a so-called
“comfort letter” from an independent attorney or title company confirming the
foregoing.

 

125

 

SCHEDULE III

(Organizational Chart of Borrower)

 

IREIT Mobile Moffett DG, L.L.C.

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

Sole Member

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

Sole Member

 

 

 

 

 

 

IREIT Mobile Moffett DG, L.L.C.,

a Delaware limited liability company

 

 

 

 

 

126

 

IREIT Daleville DG, L.L.C.

 

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT Daleville DG, L.L.C.,

a Delaware limited liability company

 

 

127

 

IREIT Maryville DG, L.L.C.

 

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT Maryville DG, L.L.C.,

a Delaware limited liability company

 

 

 

 

128

 

IREIT LaGrange Hamilton DG, L.L.C.

 

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT LaGrange Hamilton DG, L.L.C.,

a Delaware limited liability company

 

 

129

 

IREIT LaGrange Wares Cross DG, L.L.C.

 

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT LaGrange Wares Cross DG, L.L.C.,

a Delaware limited liability company

 

 

 

 

 

130

 

IREIT Brooks DG, L.L.C.

 

 

 

 

 

Inland Real Estate Income Trust, Inc.,

a Maryland corporation

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT DG SPE II Member, L.L.C.,

a Delaware limited liability company

 

 

 

Sole Member

 

 

 

 

 

 

 

IREIT Brooks DG, L.L.C.,

a Delaware limited liability company

 

 

 

 

 

131

 

 

SCHEDULE IV

FORM OF CASH MANAGEMENT AGREEMENT

132

 

SCHEDULE V

LEASING CONDITIONS

Such proposed Lease:

1.Complies with restrictions of record, restrictions/exclusives in other Leases
and Applicable Law (including zoning laws, regulations and ordinances);

2.Contains base rent, allowance and other concessions consistent with local
market terms;

3.Contains commercially reasonable terms;

4.Is subordinate to the Mortgage, and the tenant thereunder agrees to attorn to
Lender or any purchaser at a sale by foreclosure or power of sale;

5.Does not contain any right of first refusal to purchase the Property (or any
part thereof) or purchase option for all or part of the Property;

6.Does not contain any early termination rights (other than termination rights
vesting upon a violation of a co-tenancy, casualty or condemnation provision)
vesting prior to five (5) years after the commencement date of the proposed
Lease;

7.Does not contain any terms that would materially adversely affect Lender’s
rights under the Loan Documents;

8.Contains a no merger of estates provision; and

9.Provides that subleases and assignments do not affect tenant’s primary
obligations, except that the proposed Lease may provide that the tenant may be
released from its primary obligations thereunder in connection with an
assignment of such Lease so long as the applicable Lease provision requires that
(i) the tenant is not released from its obligations or liabilities under the
Lease first arising or incurred prior to the assignment, (ii) the assignee
assume all of the obligations of the tenant under the Lease, (iii) the assignee
has a net worth reasonably acceptable to Lender, and (iv) the assignee has a
creditworthiness reasonably acceptable to Lender.

133

 

SCHEDULE VI

Purchase Options / Rights of First Refusal

 

None

134

 

SCHEDULE VII

Required Repairs

Property Amount
(125% of estimated cost to repair) Life and Safety Repair Description of
Required Repair

 

 

109 Sam Houston School Road, Maryville, TN

$3,125

 

No Confirm that water well closure documentation has been accepted by Tennessee
regulatory officials $0 No Install grass sod where damaged or removed $0 No
Install dumpster gate latch $0 No Bury AT&T communications cable $0 No Removed
isolated roof debris

 

 

 

4919 Lee Road 270, Valley Alabama

$0 No Removed remaining construction debris from the property $0 No Clean and
seal concrete pavement joints and repair small concrete pavement joint spall $0
No Confirm completion of telephone cable installation prior to acquisition $0 No
Repair bent upper storefront wall panel on east side $0 No Remove roof debris
and provide clamp at flexible roof penetration flashings

 

 

 

 

 

5474 Moffett Road, Mobile Alabama

$0 No Repair damaged sod and disturbed landscaping on the property $0 No Clean
and seal concrete pavement joints. Repair surface distress caused by
construction equipment. $0 No Confirm proper installation of property and
building mounted signage $0 No Remove roof debris, provide clamps at flexible
roof penetration flashings, seal open conduit penetration at front parapet wall
$0 No Adjust fit, or apply caulking or weather-stripping at west elevation
loading doors where gaps at the base of the door were observed $0 No Confirm
proper installation of storefront security roll-up door $0 No Repair and/or
adjust poorly fitting and improperly closing interior double doors

 

 

2956 Hamilton Road, LaGrange GA

$0 No Provide splash blocks at north downspouts where lacking and repair eroding
landscaping $0 No Clean and seal concrete pavement and sidewalk construction
joints $0 No Remove isolated roof debris; provide clamps at flexible boot
flashings

 

 

 

 

 

 

 

501 E. Main Street, Daleville AL

$0 No   $0 No Repair damaged sod and disturbed landscaping on east side of
property $0 No Review of “Caution” taped area north of Property by Inland legal
team $0 No Clean and seal concrete pavement joints and repair small concrete
pavement joint spall $0 No Repair or adjust storefront roof parapet wall-mounted
light fixture $0 No Confirm completion of telephone infrastructure installation
including sealing of open wall penetration for telephone cable conduit on the
north elevation of building $0 No Remove roof debris and provide clamp at
flexible roof penetration flashing $0 No Adjust fit, or apply caulking or
weather-stripping at east elevation auxiliary door $0 No Confirm proper
functioning of building EMS system $0 No Repair and/or adjust poorly fitting
interior double-doors

 

 

 

 

7768 Georgia Highway 16 West, Brooks GA

$0 No Repair storm drain connection at west elevation downspout $0 No Repair
landscaping damaged by vehicle overrun of curbs; re-sod or hydro-seed poorly
established turf areas; adjust landscape irrigation system sprinkler head
resulting in landscape erosion; repair erosion $0 No Review drainage easements
and access drive / pavement encroachments along west border of property $0 No
Clean and seal concrete pavement and sidewalk joints; seal concrete pavement
cracks wider than hairline width $0 No Remove temporary barrier or provide
appropriate permanent barrier at south side septic system access cover $0 No
Monitor floor slab area with high incidence of low severity cracks for evidence
of increasing extent or severity; contact contractor for remedial warranty
repair $0 No Seal open pipe penetration in south building elevation wall $0 No
Remove isolated roof debris; provide clamps at flexible boot flashings $0 No
Adjust interior double doors leading to back stock room

 

 

 

 

 

112 Ware Cross Road, LaGrange, GA

$0 No Provide additional sod or hydro-seeding at landscape areas with marginal
coverage $0 No Remove construction debris $0 No Repairs of high east earthen
berm that prohibits visibility of building and property sign for southbound US
Highway 27  traffic; $0 No Repair entry drive slope for anticipated heavy
recreational towing vehicles’ use in summer months $0 No Clean and seal concrete
pavement and sidewalk construction joints; seal sidewalk cracks wider than
hairline width $0 No Adjust double loading doors, or provide caulking or
weather-stripping  at base $0 No Review access or easement requirements for
residential structure to north with respect to overgrown “woods road” $0 No
Remove isolated roof debris; provide clamps at flexible boot flashings

135

 

SCHEDULE VIII

Individual Properties

 

 1. 5475 Moffett Road, Mobile, Alabama 36618
 2. 501 East Main Street, Daleville, Alabama 36322
 3. 4919 Lee Road 270, Valley, Alabama 36854
 4. 109 Sam Houston School Road, Maryville, Tennessee 37804
 5. 2956 Hamilton Road, Lagrange, Georgia 30240
 6. 112 Wares Cross Road, Lagrange, Georgia 30240
 7. 7768 Georgia Highway 16 West, Brooks, Georgia 30205

 

 

 

136

 

SCHEDULE IX

 

Release Amounts

 

 

Individual Property Release Amount 5475 Moffett Road, Mobile, Alabama 36618
$601,429 501 East Main Street, Daleville, Alabama 36322 $481,429 4919 Lee Road
270, Valley, Alabama 36854 $531,429 109 Sam Houston School Road, Maryville,
Tennessee 37804 $631,428 2956 Hamilton Road, LaGrange, Georgia 30240 $621,428
112 Wares Cross Road, LaGrange, Georgia 30240 $681,429 7768 Georgia Highway 16
West, Brooks, Georgia 30205 $591,428

 

 

137