Exhibit 10.17

 

OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS

SECURITY AGREEMENT AND FIXTURE FILING STATEMENT

 

by

 

ALGONQUIN PHASE I ASSOCIATES LLC,

 

and

 

ALGONQUIN COMMONS, LLC

 

as Borrower

 

for the benefit of

 

TEACHERS INSURANCE AND ANNUITY ASSOCIATION

OF AMERICA,

as Lender

 

Property Known As

 

Algonquin Commons

1520 Randall Road

Algonquin, Illinois 60102

 

This Mortgage Was Prepared By

And After Recordation This Mortgage Should Be Returned To:

 

Oscar A. Zamora, Esquire

c/o Teachers Insurance and Annuity

Association of America

730 Third Avenue

New York, New York 10017

 

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RECITALS

 

1

 

 

 

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

2

 

 

 

 

Section 1.1.

Definitions

2

 

Section 1.2.

Rules of Construction

2

 

 

 

 

ARTICLE II

GRANTING CLAUSES

3

 

 

 

 

Section 2.1.

Encumbered Property

3

 

Section 2.2.

Habendum Clause

3

 

Section 2.3.

Security Agreement

9

 

Section 2.4.

Conditions to Grant

9

 

 

 

 

ARTICLE III

OBLIGATIONS SECURED

9

 

 

 

 

Section 3.1.

The Obligations

9

 

 

 

 

ARTICLE IV

TITLE AND AUTHORITY

10

 

 

 

 

Section 4.1.

Title to the Property

10

 

Section 4.2.

Authority

11

 

Section 4.3.

No Foreign Person

11

 

Section 4.4.

Litigation

11

 

 

 

 

ARTICLE V

PROPERTY STATUS, MAINTENANCE AND LEASES

11

 

 

 

 

Section 5.1.

Status of the Property

11

 

Section 5.2.

Maintenance of the Property

12

 

Section 5.3.

Change in Use

12

 

Section 5.4.

Waste

12

 

Section 5.5.

Inspection of the Property

12

 

Section 5.6.

Leases and Rents

13

 

Section 5.7.

Parking

14

 

Section 5.8.

Separate Tax Lot

14

 

Section 5.9.

Changes in Zoning or Restrictive Covenants

14

 

Section 5.10.

Lender’s Right to Appear

15

 

 

 

 

ARTICLE VI

IMPOSITIONS AND ACCUMULATIONS

15

 

 

 

 

Section 6.1.

Impositions

15

 

Section 6.2.

Accumulations

16

 

Section 6.3.

Changes in Tax Laws

17

 

Section 6.4.

Reserves

18

 

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ARTICLE VII

INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION

18

 

 

 

 

Section 7.1.

Insurance Coverages

18

 

Section 7.2

Casualty and Condemnation

19

 

Section 7.3.

Application of Proceeds

20

 

Section 7.4.

Conditions to Availability of Proceeds for Restoration

20

 

Section 7.5.

Restoration

23

 

 

 

 

ARTICLE VIII

COMPLIANCE WITH LAWS AND AGREEMENTS

24

 

 

 

 

Section 8.1.

Compliance with Laws

24

 

Section 8.2.

Compliance with Agreements

25

 

Section 8.3.

ERISA Compliance

25

 

Section 8.4.

Section 6045(e) Filing

25

 

 

 

 

ARTICLE IX

ENVIRONMENTAL

28

 

 

 

 

Section 9.1.

Environmental Representations and Warranties

28

 

Section 9.2.

Environmental Covenants

29

 

 

 

 

ARTICLE X

FINANCIAL REPORTING

30

 

 

 

 

Section 10.1.

Financial Reporting

30

 

Section 10.2.

Annual Budget

30

 

 

 

 

ARTICLE XI

EXPENSES AND DUTY TO DEFEND

36

 

 

 

 

Section 11.1.

Payment of Expenses

36

 

Section 11.2.

Duty to Defend

36

 

 

 

 

ARTICLE XII

TRANSFERS, LIENS AND ENCUMBRANCES

36

 

 

 

 

Section 12.1.

Prohibitions on Transfers, Liens and Encumbrances

36

 

Section 12.2.

Permitted Transfers

40

 

Section 12.3.

Right to Contest Liens

44

 

 

 

 

ARTICLE XIII

ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS

49

 

 

 

 

 

Section 13.1.

Further Assurances

49

 

Section 13.2.

Estoppel Certificates

50

 

Section 13.3.

Right of Future Financing

51

 

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ARTICLE XIV

DEFAULTS AND REMEDIES

52

 

 

 

 

Section 14.1.

Events of Default

52

 

Section 14.2.

Remedies

54

 

Section 14.3.

General Provisions Pertaining to Remedies

55

 

Section 14.4.

Foreclosure by Power of Sale

56

 

Section 14.5.

General Provisions Pertaining to Receiver and Other Remedies

56

 

Section 14.6.

General Provisions Pertaining to Foreclosures and the Power of Sale

57

 

Section 14.7.

Application of Proceeds

58

 

Section 14.8.

Power of Attorney

58

 

Section 14.9.

Tenant at Sufferance

58

 

Section 14.10.

Compliance With Illinois Mortgage Foreclosure Law

58

 

 

 

 

ARTICLE XV

LIMITATION OF LIABILITY

59

 

 

 

 

Section 15.1.

Limitation of Liability

59

 

 

 

 

ARTICLE XVI

WAIVERS

61

 

 

 

 

Section 16.1.

WAIVER OF STATUTE OF LIMITATIONS

61

 

Section 16.2.

WAIVER OF NOTICE

61

 

Section 16.3.

WAIVER OF MARSHALLING AND OTHER MATTERS

61

 

Section 16.4.

WAIVER OF TRIAL BY JURY

61

 

Section 16.5.

WAIVER OF COUNTERCLAIM

61

 

Section 16.6.

WAIVER OF JUDICIAL NOTICE AND HEARING

61

 

Section 16.7.

WAIVER OF SUBROGATION

61

 

Section 16.8.

GENERAL WAIVER

62

 

Section 16.9

ILLINOIS STATUTORY WAIVERS

 

 

 

 

 

ARTICLE XVII

NOTICES

62

 

 

 

 

Section 17.1.

Notices

62

 

Section 17.2.

Change in Borrower’s Name or Place of Business

62

 

 

 

 

ARTICLE XVIII

MISCELLANEOUS

63

 

 

 

 

Section 18.1.

Applicable Law

63

 

Section 18.2.

Usury Limitations

63

 

Section 18.3.

Lender’s Discretion

64

 

Section 18.4.

Unenforceable Provisions

64

 

Section 18.5.

Survival of Borrower’s Obligations

64

 

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Section 18.6.

Relationship Between Borrower and Lender; No Third Party Beneficiaries

64

 

Section 18.7.

Partial Releases; Extensions; Waivers

65

 

Section 18.8.

Service of Process

65

 

Section 18.9.

Entire Agreement

66

 

Section 18.10.

No Oral Amendment

66

 

Section 18.11.

Severability

66

 

Section 18.12.

Covenants Run With The Land

66

 

Section 18.13.

Time of the Essence

66

 

Section 18.14.

Subrogation

66

 

Section 18.15.

Joint and Several Liability

67

 

Section 18.16.

Successors and Assigns

67

 

Section 18.17.

Duplicates and Counterparts

67

 

 

 

 

ARTICLE XIX

ADDITIONAL PROVISIONS PERTAINING TO STATE LAWS

67

 

 

 

EXHIBIT A

Legal Description

 

EXHIBIT B

Definitions

 

EXHIBIT C

Rules of Construction

 

EXHIBIT D

Property Documents

 

 

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OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING STATEMENT

 

THIS OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING STATEMENT made this 29th day of October, 2004, by ALGONQUIN PHASE
I ASSOCIATES LLC and ALGONQUIN COMMONS, LLC (collectively, “Borrower”), each an
Illinois limited liability company, having its principal place of business c/o
Rookwood Tower, 3805 Edwards Road, Suite 700, Cincinnati, Ohio 45209, Attn:
Jeffrey R. Anderson, for the benefit of TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA (“Lender”), a New York corporation, having an address at
730 Third Avenue, New York, New York 10017.

 

RECITALS:

 

A. Lender agreed to make and Borrower agreed to accept a loan (the “Loan”) in
the maximum principal amount of SEVENTY-SEVEN MILLION THREE HUNDRED THOUSAND AND
00/100THS DOLLARS ($77,300,000.00).

 

B. To evidence the Loan, Borrower executed and delivered to Lender a promissory
note (the “Note”), dated the date of this Mortgage, in the principal amount of
SEVENTY-SEVEN MILLION THREE HUNDRED THOUSAND AND 00/100THS DOLLARS
($77,300,000.00) (that amount or so much as is outstanding from time to time is
referred to as the “Principal”), promising to pay the Principal with interest
thereon to the order of Lender as set forth in the Note and with the balance, if
any, of the Debt being due and payable on November 1, 2014 (the “Maturity
Date”).

 

C. To secure the Note, this Mortgage encumbers, among other things, Borrower’s
fee interest in the real property located in the City of Algonquin, County of
Kane, State of Illinois, more particularly described in Exhibit A (the “Land”).

 

ARTICLE I

 

DEFINITIONS AND RULES OF CONSTRUCTION

 

Section 1.1.                                   Definitions. Capitalized terms
used in this Mortgage are defined in Exhibit B or in the text with a
cross-reference in Exhibit B.

 

Section 1.2.                                   Rules of Construction. This
Mortgage will be interpreted in accordance with the rules of construction set
forth in Exhibit C.

 

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ARTICLE II

 

GRANTING CLAUSES

 

Section 2.1. Encumbered Property. Borrower irrevocably grants, mortgages,
warrants, conveys, assigns and pledges to Lender, and grants to Lender a
security interest in, the following property, rights, interests and estates now
or in the future owned or held by Borrower (the “Property”) for the uses and
purposes set forth in this Mortgage forever hereby releasing and waiving all
rights under and by virtue of the homestead exemption laws of the State of
Illinois (capitalized terms used in this Section 2.1 and not defined in this
Mortgage have the meanings ascribed to them in the Uniform Commercial Code).

 

(i)                                     the Land;

 

(ii)                                  all buildings and improvements located on
the Land (the “Improvements”);

 

(iii)                               all easements; rights of way or use,
including any rights of ingress and egress; streets, roads, ways, sidewalks,
alleys and passages; strips and gores; sewer rights; water, water rights, water
courses, riparian rights and drainage rights; air rights and development rights;
oil and mineral rights; and tenements, hereditaments and appurtenances, in each
instance adjoining or otherwise appurtenant to or benefitting the Land or the
Improvements;

 

(iv)                              all General Intangibles (including Software)
and Goods, including Fixtures, Equipment and Consumer Goods attached to,
contained in or used in connection with the Land or the Improvements (excluding
personal property owned by tenants) (the “Fixtures and Personal Property”)

 

(v)                                 all agreements, ground leases, grants of
easements or rights-of-way, permits, declarations of covenants, conditions and
restrictions, disposition and development agreements, planned unit development
agreements, cooperative, condominium or similar ownership or conversion plans,
management, leasing, brokerage or parking agreements or other material documents
affecting Borrower or the Land, the Improvements or the Fixtures and Personal
Property, including the documents described on Exhibit D but expressly excluding
the Leases (the “Property Documents”);

 

(vi)                              all Inventory held for sale, lease or resale
or furnished or to be furnished under contracts of service, or used or consumed
in the ownership, use or operation of the Land, the Improvements or the Fixtures
and Personal Property, and all Documents of title evidencing any part of any of
the foregoing;

 

(vii)                           all Accounts, Documents, Goods, Instruments,
money, Deposit Accounts, Chattel Paper, Letter-of-Credit Rights, Investment
Property, General Intangibles and Supporting

 

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Obligations relating to the Property, including all deposits held from time to
time by the Accumulations Depositary to provide reserves for Taxes and
Assessments together with interest thereon, if any (the “Accumulations”) and all
deposits for reserves held from time to time by Lender’s pledge agent in
accordance with the Leasing Reserve and Security Agreement and the Outstanding
Tenant Improvement Pledge and Security Agreement described in the
Section entitled “Reserves” and all accounts established to maintain the
deposits together with investments thereof and interest thereon,

 

(viii) all awards and other compensation paid after the date of this Mortgage
for any Condemnation (the “Condemnation Awards”);

 

(ix) all proceeds of and all unearned premiums on the Policies (the “Insurance
Proceeds”);

 

(x) all licenses, certificates of occupancy, contracts, management agreements,
operating agreements, operating covenants, franchise agreements, permits and
variances relating to the Land, the Improvements or the Fixtures and Personal
Property;

 

(xi) all books, records and other information, wherever located, which are in
Borrower’s possession, custody or control or to which Borrower is entitled at
law or in equity and which are related to the Property, including all computer
hardware and software or other equipment used to record, store, manage,
manipulate or access the information;

 

(xii) all after-acquired title to or remainder or reversion in any of the
property described in this Section; all Proceeds (excluding, however, sales or
other dispositions of Inventory in the ordinary course of the business of
operating the Land or the Improvements), replacements, substitutions, products,
accessions and increases within any one or more of the following types of
collateral: Goods, Equipment, Inventory, Instruments, Investment Property,
Chattel Paper, Letter-of-Credit Rights, Documents, Accounts or General
Intangibles, all additions, accessions and extensions to, improvements of and
substitutions or replacements for any of the Property described in this Section;
and all additional lands, estates, interests, rights or other property acquired
by Borrower after the date of this Mortgage for use in connection with the Land
or the Improvements, all without the need for any additional mortgage,
assignment, pledge or conveyance to Lender but Borrower will execute and deliver
to Lender, upon Lender’s request, any documents reasonably requested by Lender
to further evidence the foregoing.

 

Section 2.2.                                   Intentionally Deleted.

 

Section 2.3.                                   Security Agreement.

 

(a) The Property includes both real and personal property and this Mortgage is a
real property mortgage and also a “security agreement” and a “financing
statement” within the meaning of the Uniform Commercial Code as in effect in the
State of Illinois. By executing and

 

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delivering this Mortgage, Borrower grants to Lender, as security for the
Obligations, a security interest in the Property to the full extent that any of
the Property may be subject to the Uniform Commercial Code as in effect in the
State of Illinois.

 

(b) This Mortgage constitutes a fixture financing statement under the Laws of
the state or commonwealth in which the Property is located and for such purpose,
Borrower represents, as of the date hereof, that the following information set
forth in clauses (i), (v) and (vi), is true and correct:

 

(i)                                     The Exact Legal Name and address of
Debtor is:

 

Algonquin Phase I Associates LLC and Algonquin Commons, LLC

c/o Rookwood Tower

3805 Edwards Road, Suite 700

Cincinnati, Ohio 45209

Attn: Jeffrey R. Anderson

 

(ii)                                  Name and address of Secured Party:

 

Teachers Insurance and Annuity Association of America

730 Third Avenue

New York, New York 10017

 

(iii)                               Description of the types (or items) of
property covered by this Financing Statement:

 

all of the property described in section ii-xii of the Section entitled
“Encumbered Property” described or referred to herein and included as part of
the Property.

 

(iv)                              Description of real estate to which collateral
is attached or upon which it is located: Described in Exhibit A.

 

(v)                                 Federal Identification Number of Debtor:
Algonquin Phase I Associates LLC - 20-147727 and Algonquin Commons, LLC -
20-0253145.

 

(vi)                              Debtor’s chief executive office is located in
the State Illinois, and Debtor’s state of formation is the State of Illinois.

 

Lender may file this Mortgage, or a reproduction thereof, in the real estate
records or other appropriate index, as a financing statement for any of the
items specified above as part of the Property. Any reproduction of this Mortgage
or of any other security agreement or financing statement is sufficient as a
financing statement.

 

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Section 2.4. Conditions to Grant. This Mortgage is made on the express condition
that if Borrower pays and performs the Obligations in full in accordance with
the Loan Documents, then, unless expressly provided otherwise in the Loan
Documents, the Loan Documents will be released at Borrower’s expense.

 

ARTICLE III

 

OBLIGATIONS SECURED

 

Section 3.1. The Obligations. This Mortgage secures the Principal, the Interest,
the Late Charges, the Prepayment Premiums, the Expenses, any additional advances
made by Lender in connection with the Property or the Loan and all other amounts
payable under the Loan Documents (the “Debt”) and also secures both the timely
payment of the Debt as and when required and the timely performance of all other
obligations and covenants to be performed under the Loan Documents (the
“Obligations”).

 

(b) Borrower and Lender intend that, in addition to any other debt or obligation
secured, this Mortgage will secure (and the same will be considered part of the
Debt) unpaid balances of Loan advances made after this Mortgage is delivered to
the Recorder for recording and all accrued and unpaid interest thereon. The
maximum amount of unpaid Loan indebtedness secured hereby, exclusive of interest
and the advances described in the next paragraph, will be SEVENTY-SEVEN MILLION
THREE HUNDRED THOUSAND AND 00/100THS DOLLARS ($77,300,000.00).

 

(c) In addition to any other debt or obligation secured, this Mortgage will also
secure (and the same will be considered part of the Debt) unpaid balances of
advances made for the payment of real property taxes, assessments, insurance
premiums or costs incurred for the protection of the Property.

 

ARTICLE IV

 

TITLE AND AUTHORITY

 

Section 4.1. Title to the Property.

 

(a) Borrower has and will continue to have good and marketable title in fee
simple absolute to the Land and the Improvements and good and marketable title
to the Fixtures and Personal Property, all free and clear of liens, encumbrances
and charges except the Permitted Exceptions. To Borrower’s knowledge, there are
no facts or circumstances that might give rise to a lien, encumbrance or charge
on the Property.

 

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(b) Borrower owns and will continue to own all of the other Property free and
clear of all liens, encumbrances and charges except the Permitted Exceptions.

 

(c) This Mortgage is and will remain a valid and enforceable first lien on and
security interest in the Property, subject only to the Permitted Exceptions.

 

Section 4.2. Authority.

 

(a) Borrower is and will continue to be (i) duly organized, validly existing and
in good standing under the Laws of the state or commonwealth in which it was
formed, organized or incorporated as set forth in Section 2.3 and (ii) duly
qualified to conduct business, in good standing, in the state or commonwealth
where the Property is located.

 

(b) Borrower has and will continue to have all approvals required by Law or
otherwise and full right, power and authority to (i) own and operate the
Property and carry on Borrower’s business as now conducted or as proposed to be
conducted; (ii) execute and deliver the Loan Documents; (iii) grant, mortgage,
warrant the title to, convey, assign, pledge and grant a security interest in
the Property to Lender pursuant to the provisions of this Mortgage; and
(iv) perform the Obligations.

 

(c) The execution and delivery of the Loan Documents and the performance of the
Obligations do not and will not conflict with or result in a default under any
Laws or any Leases or Property Documents and do not and will not conflict with
or result in a default under any agreement binding upon any party to the Loan
Documents.

 

(d) The Loan Documents constitute and will continue to constitute legal, valid
and binding obligations of all parties to the Loan Documents enforceable in
accordance with their respective terms.

 

(e) Borrower has not changed its legal name or its state or commonwealth of
formation, as set forth in Section 2.3, in the four months prior to the date
hereof, except as Borrower has disclosed any such change to Lender in writing
and delivered to Lender appropriate Uniform Commercial Code search reports in
connection therewith.

 

(f) Borrower has not (i) merged with or into any other entity or otherwise been
involved in any reorganization or (ii) acquired substantially all of the assets
of any other entity where Borrower became subject to the obligations of such
entity, for a period of one year ending on the date hereof, except as Borrower
has disclosed any such change, merger, reorganization or acquisition to Lender
in writing and delivered to Lender appropriate Uniform Commercial Code search
reports in connection therewith.

 

Section 4.3.  No Foreign Person. Borrower is not a “foreign person” within the
meaning of Section 1445(f)(3) of the Code.

 

6

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Section 4.4. Litigation. There are no Proceedings or, to Borrower’s knowledge,
investigations against or affecting Borrower or the Property and, to Borrower’s
knowledge, there are no facts or circumstances that might give rise to a
Proceeding or an investigation against or affecting Borrower or the Property.
Borrower will give Lender prompt notice of the commencement of any Proceeding or
investigation against or affecting the Property or Borrower which could have a
material adverse effect on the Property or on Lender’s interests in the Property
or under the Loan Documents and, at Borrower’s expense, will appear in and
defend any such Proceeding or investigation. Borrower also will deliver to
Lender such additional information relating to the Proceeding or investigation
as Lender may request from time to time.

 

ARTICLE V

 

PROPERTY STATUS, MAINTENANCE AND LEASES

 

Section 5.1. Status of the Property.

 

(a) Borrower has obtained and will maintain in full force and effect all
certificates, licenses, permits and approvals that are issued or required by Law
or by any entity having jurisdiction over the Property or over Borrower or that
are necessary for the Permitted Use, for occupancy and operation of the
Property, for the granting of this Mortgage or for the conduct of Borrower’s
business on the Property in accordance with the Permitted Use.

 

(b) The Property is and will continue to be serviced by all public utilities
required for the Permitted Use of the Property.

 

(c) All roads and streets necessary for service of and access to the Property
for the current or contemplated use of the Property have been completed and are
and will continue to be serviceable, physically open and dedicated to and
accepted by the Government for use by the public.

 

(d) The Property is free from damage caused by a Casualty.

 

(e) All costs and expenses of labor, materials, supplies and equipment used in
the construction of the Improvements have been paid in full.

 

Section 5.2. Maintenance of the Property. Borrower will maintain the Property in
thorough repair and good and safe condition, suitable for the Permitted Use,
including, to the extent necessary, replacing the Fixtures and Personal Property
with property at least equal in quality and condition to that being replaced and
free of liens. Borrower will not erect any new buildings, building additions or
other structures on the Land or otherwise materially alter the Improvements
without Lender’s prior consent which may be withheld in Lender’s sole

 

7

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discretion. The Property will be managed by a property manager satisfactory to
Lender pursuant to a management agreement satisfactory to Lender and terminable
by Borrower upon 30 days notice to the property manager.

 

Section 5.3. Change in Use. Borrower will use and permit the use of the Property
for the Permitted Use and for no other purpose.

 

Section 5.4. Waste. Borrower will not commit or permit any waste (including
economic and non-physical waste), impairment or deterioration of the Property or
any (other than non structural alterations permitted herein) alteration,
demolition or removal of any of the Property without Lender’s prior consent,
which may be withheld in Lender’s sole discretion.

 

Section 5.5. Inspection of the Property. Subject to the rights of tenants under
the Leases, Lender has the right to enter and inspect the Property on reasonable
prior notice, except in the case of an emergency, when no prior notice is
necessary. Lender has the right to engage an independent expert to review and
report on Borrower’s compliance with Borrower’s obligations under this Mortgage
to maintain the Property, comply with Law and refrain from waste, impairment or
deterioration of the Property and the alteration, demolition or removal of any
of the Property except as may be permitted by the provisions of this Mortgage.
If the independent expert’s report discloses material failure to comply with
such obligations or if Lender engages the independent expert after the
occurrence of an Event of Default, then the independent expert’s review and
report will be at Borrower’s expense, payable on demand.

 

Section 5.6. Leases and Rents.

 

(a) Borrower assigns the Leases and the Rents to Lender absolutely and not
merely as additional collateral or security for the payment and performance of
the Obligations, but subject to a license back to Borrower of the right to
collect the Rents unless and until an Event of Default occurs (until such Event
of Default is cured) at which time the license will terminate automatically, all
as more particularly set forth in the Assignment, the provisions of which are
incorporated in this Mortgage by reference.

 

(b) Borrower appoints Lender as Borrower’s attorney-in-fact at Lender’s election
to execute and record unilaterally, a document subordinating this Mortgage to
the Leases, except with respect to the priority of entitlement to Insurance
Proceeds or Condemnation Awards and the priority of this Mortgage to intervening
liens or to liens arising under the Leases.

 

Section 5.7. Parking. Borrower will provide, maintain, police and light parking
areas within the Property, including any sidewalks, aisles, streets, driveways,
sidewalk cuts and rights- of-way to and from the adjacent public streets, in a
manner consistent with the Permitted Use and sufficient to accommodate the
greatest of: (i) the number of parking spaces required by Law; (ii) the number
of parking spaces required by the Leases and the Property Documents; or
(iii) 2,132 (2,087 regular and 45 handicapped) parking spaces. The parking areas
will be reserved and used exclusively for ingress, egress and parking for
Borrower and the tenants under the Leases and

 

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their respective employees, customers and invitees and in accordance with the
Leases and the Property Documents.

 

Section 5.8.                                   Separate Tax Lot. The Property is
and will remain assessed for real estate tax purposes as one or more wholly
independent tax lots, separate from any property that is not part of the
Property.

 

Section 5.9.                                   Changes in Zoning or Restrictive
Covenants.  Borrower will not (i) initiate, join in or consent to any change in
any Laws pertaining to zoning, any restrictive covenant or other restriction
which would restrict the Permitted Uses for the Property; (ii) permit the
Property to be used to fulfill any requirements of Law for the construction or
maintenance of any improvements on property that is not part of the Property;
(iii) permit the Property to be used for any purpose not included in the
Permitted Use; or (iv) impair the integrity of the Property as a single, legally
subdivided zoning lot separate from all other property.

 

Section 5.10.                             Lender’s Right to Appear. Lender has
the right to appear in and defend any Proceeding brought regarding the Property
and to bring any Proceeding, in the name and on behalf of Borrower or in
Lender’s name, which Lender, in its sole discretion, determines should be
brought to protect Lender’s interest in the Property.

 

ARTICLE VI

 

IMPOSITIONS AND ACCUMULATIONS

 

Section 6.1. Impositions.

 

(a) Borrower will pay each Imposition at least 15 days before the date (the
“Imposition Penalty Date”) that is the earlier of (i) the date on which the
Imposition becomes delinquent and (ii) the date on which any penalty, interest
or charge for non-payment of the Imposition accrues.

 

(b) At least 10 days before each Imposition Penalty Date, Borrower will deliver
to Lender a receipted bill or other evidence of payment.

 

(c) Borrower, at its own expense, may contest any Taxes or Assessments, provided
that the following conditions are met:

 

(i) not less than 30 days prior to the Imposition Penalty Date, Borrower
delivers to Lender notice of the proposed contest;

 

(ii) the contest is by a Proceeding promptly initiated and conducted diligently
and in good faith;

 

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(iii) there is no Event of Default;

 

(iv) the Proceeding suspends the collection of the contested Taxes or
Assessments;

 

(v) the Proceeding is permitted under and is conducted in accordance with the
Leases and the Property Documents;

 

(vi) the Proceeding precludes imposition of criminal or civil penalties and sale
or forfeiture of the Property and Lender will not be subject to any civil suit;
and

 

(vii) Borrower either deposits with the Accumulations Depositary reserves or
furnishes a bond or other security satisfactory to Lender, in either case in an
amount sufficient to pay the contested Taxes or Assessments, together with all
interest and penalties or Borrower pays all of the contested Taxes or
Assessments under protest.

 

(d) Installment Payments. So long as no Event of Default has occurred, if any
Assessment is payable in installments by its terms, Borrower may pay the
Assessment in its entirety or pay the Assessment in installments.

 

Section 6.2. Accumulations.

 

(a) Borrower made an initial deposit with either Lender or a mortgage servicer
or financial institution designated or approved by Lender from time to time,
acting on behalf of Lender as Lender’s agent or otherwise such that Lender is
the “customer”, as defined in the Uniform Commercial Code, of the depository
bank with respect to the deposit account into which the Accumulations are
deposited, to receive, hold and disburse the Accumulations in accordance with
this Section (the “Accumulations Depositary”). On the first day of each calendar
month during the Term Borrower will deposit with the Accumulations Depositary an
amount equal to 1/12 of the annual Taxes and Assessments as determined by Lender
or its designee. At least 20 days before each Imposition Penalty Date, Borrower
will deliver to the Accumulations Depositary any bills and other documents that
are necessary to pay the Taxes and Assessments.

 

(b) The Accumulations will be applied to the payment of Taxes and Assessments.
Any excess Accumulations after payment of Taxes and Assessments will be returned
to Borrower or credited against future payments of the Accumulations, at
Lender’s election or as required by Law. If the Accumulations are not sufficient
to pay Taxes and Assessments, Borrower will pay Lender’s estimate of the
deficiency to the Accumulations Depositary within 10 days of demand. At any time
after an Event of Default occurs, the Accumulations may be applied as a credit
against any portion of the Debt selected by Lender in its sole discretion.

 

(c) The Accumulations Depositary will hold the Accumulations as security for the
Obligations until applied in accordance with the provisions of this Mortgage and
any agreement among Borrower, Lender and the Accumulations Depositary. If Lender
is not the Accumulations

 

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Depositary, the Accumulations Depositary will deliver the Accumulations to
Lender upon Lender’s demand at any time after an Event of Default.

 

(d) If the Property is sold or conveyed other than by foreclosure or transfer in
lieu of foreclosure, all right, title and interest of Borrower to the
Accumulations will automatically, and without necessity of further assignment,
be held for the account of the new owner, subject to the provisions of this
Section and Borrower will have no further interest in the Accumulations.

 

(e) The Accumulations Depositary has deposited the initial deposit and will
deposit the monthly deposits into a separate interest bearing account with
Lender denominated as secured party, all in accordance with an agreement among
Borrower, Lender and the Accumulations Depositary dated the date of this
Mortgage.

 

(f) Lender has the right to pay, or to direct the Accumulations Depositary to
pay, any Taxes or Assessments unless Borrower is contesting the Taxes or
Assessments in accordance with the provisions of this Mortgage, in which event
any payment of the contested Taxes or Assessments will be made under protest in
the manner prescribed by Law or, at Lender’s election, will be withheld.

 

(g) If Lender assigns this Mortgage, Lender will pay, or cause the Accumulations
Depositary to pay, the unapplied balance of the Accumulations to or at the
direction of the assignee. Simultaneously with the payment, Lender and the
Accumulations Depositary will be released from all liability with respect to the
Accumulations and Borrower will look solely to the assignee with respect to the
Accumulations. When the Obligations have been fully satisfied, any unapplied
balance of the Accumulations will be returned to Borrower. At any time after an
Event of Default occurs, Lender may apply the Accumulations as a credit against
any portion of the Debt selected by Lender in its sole discretion.

 

Section 6.3.  Changes in Tax Laws. If a Law deducts the Debt from the value of
the Property for the purpose of taxation or imposes a tax, either directly or
indirectly, on the Debt, any Loan Document or Lender’s interest in the Property,
Borrower will pay the tax with interest and penalties, if any. If Lender
determines that Borrower’s payment of the tax may be unlawful, unenforceable,
usurious or taxable to Lender, Lender may accelerate the Loan on 120 days’ prior
notice unless the tax must be paid within the 120-day period, in which case,
Lender may accelerate the Loan within the lesser period.

 

Section 6.4.  Reserves. Borrower made initial deposits into two accounts
established as security for the payment and performance of the Obligations, to
be held and disbursed in accordance with a Leasing Reserve and Security
Agreement and an Outstanding Tenant Improvement Pledge and Security Agreement
dated the date of this Mortgage among Borrower, Lender and Lender’s pledge
agent.

 

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ARTICLE VII

 

INSURANCE. CASUALTY, CONDEMNATION

AND RESTORATION

 

Section 7.1. Insurance Coverages.

 

(a) Borrower will maintain such insurance coverages and endorsements in form and
substance and in amounts as Lender may require in its sole discretion, from time
to time. Until Lender notifies Borrower of changes in Lender’s requirements,
Borrower will maintain not less than the insurance coverages and endorsements
Lender required for closing of the Loan.

 

(b) The insurance, including renewals, required under this Section will be
issued on valid and enforceable policies and endorsements satisfactory to Lender
(the “Policies”). Each Policy will contain a standard waiver of subrogation and
a replacement cost endorsement and will provide that Lender will receive not
less than 30 days’ prior written notice of any cancellation, termination or
non-renewal of a Policy or any material change other than an increase in
coverage and that Lender will be named under a standard mortgage endorsement as
loss payee.

 

(c) The insurance companies issuing the Policies (the “Insurers”) must be
authorized to do business in the State or Commonwealth where the Property is
located, must have been in business for at least 5 years, must carry an A.M.
Best Company, Inc. policy holder rating of A or better and an A.M. Best
Company, Inc. financial category rating of Class X or better and must be
otherwise satisfactory to Lender. Lender may select an alternative credit rating
agency and may impose different credit rating standards for the Insurers.
Notwithstanding Lender’s right to approve the Insurers and to establish credit
rating standards for the Insurers, Lender will not be responsible for the
solvency of any Insurer. Lender hereby approves the insurance that Borrower is
maintaining on the date of this Mortgage.

 

(d) Notwithstanding Lender’s rights under this Article, Lender will not be
liable for any loss, damage or injury resulting from the inadequacy or lack of
any insurance coverage.

 

(e) Borrower will comply with the provisions of the Policies and with the
requirements, notices and demands imposed by the Insurers and applicable to
Borrower or the Property.

 

(f) Borrower will pay the Insurance Premiums for each Policy not less than 30
days before the expiration date of the Policy being replaced or renewed and will
deliver to Lender an original or, if a blanket policy, a certified copy of each
Policy marked “Paid” not less than 15 days prior to the expiration date of the
Policy being replaced or renewed.

 

(g) Borrower will not carry separate insurance concurrent in kind or form or
contributing in the event of loss with any other insurance carried by Borrower.

 

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(h) Borrower will not carry any of the insurance required under this Section on
a blanket or umbrella policy without in each instance Lender’s prior approval
which may be withheld in Lender’s sole discretion. If Lender approves, Borrower
will deliver to Lender a certified copy of the blanket policy which will
allocate to the Property the amount of coverage required under this Section and
otherwise will provide the same coverage and protection as would a separate
policy insuring only the Property.

 

(i) Borrower will give the Insurers prompt notice of any change in ownership or
occupancy of the Property. This subsection does not abrogate the prohibitions on
transfers set forth in this Mortgage.

 

(j) If the Property is sold at a foreclosure sale or otherwise is transferred so
as to extinguish the Obligations, all of Borrower’s right, title and interest in
and to the Policies then in force will be transferred automatically to the
purchaser or transferee.

 

Section 7.2. Casualty and Condemnation.

 

(a) Borrower will give Lender notice of any Casualty immediately after it occurs
and will give Lender notice of any Condemnation Proceeding immediately after
Borrower receives notice of commencement or notice that such a Condemnation
Proceeding will be commencing. Borrower immediately will deliver to Lender
copies of all documents Borrower delivers or receives relating to the Casualty
or the Condemnation Proceeding, as the case may be.

 

(b) Borrower authorizes Lender, at Lender’s option, to act on Borrower’s behalf
to collect, adjust and compromise any claims for loss, damage or destruction
under the Policies on such terms as Lender determines in Lender’s sole
discretion. Borrower authorizes Lender to act, at Lender’s option, on Borrower’s
behalf in connection with any Condemnation Proceeding. Borrower will execute and
deliver to Lender all documents requested by Lender and all documents as may be
required by Law to confirm such authorizations. Nothing in this Section will be
construed to limit or prevent Lender from joining with Borrower either as a
co-defendant or as a co-plaintiff in any Condemnation Proceeding.

 

(c) If Lender elects not to act on Borrower’s behalf as provided in this
Section, then Borrower promptly will file and prosecute all claims (including
Lender’s claims) relating to the Casualty and will prosecute or defend
(including defense of Lender’s interest) any Condemnation Proceeding. Borrower
will have the authority to settle or compromise the claims or Condemnation
Proceeding, as the case may be, provided that Lender has approved in Lender’s
sole discretion any compromise or settlement that exceeds $350,000.00. Any check
for Insurance Proceeds or Condemnation Awards, as the case may be (the
“Proceeds”) will be made payable to Lender and Borrower. Borrower will endorse
the check to Lender immediately upon Lender presenting the check to Borrower for
endorsement or if Borrower receives the check first, will endorse the check
immediately upon receipt and forward it to Lender. If any Proceeds are paid to
Borrower, Borrower immediately will deposit the Proceeds with Lender, to be
applied or

 

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disbursed in accordance with the provisions of this Mortgage. Lender will be
responsible for only the Proceeds actually received by Lender.

 

Section 7.3. Application of Proceeds. After deducting the costs incurred by
Lender in collecting the Proceeds, Lender may, in its sole discretion, (i) apply
the Proceeds as a credit against any portion of the Debt selected by Lender in
its sole discretion; (ii) apply the Proceeds to restore the Improvements,
provided that Lender will not be obligated to see to the proper application of
the Proceeds and provided further that any amounts released for Restoration will
not be deemed a payment on the Debt; or (iii) deliver the Proceeds to Borrower.
If there is an application by Lender of Insurance Proceed to reduce the Debt,
there will be no Prepayment Premium or Evasion Premium payable as a result of
that application of Insurance Proceeds.

 

Section 7.4. Conditions to Availability of Proceeds for
Restoration. Notwithstanding the preceding Section, after a Casualty or a
Condemnation (a “Destruction Event”), Lender will make the Proceeds (less any
costs incurred by Lender in collecting the Proceeds) available for Restoration
in accordance with the conditions for disbursements set forth in the
Section entitled “Restoration”, provided that the following conditions are met:

 

(i) Algonquin Phase I Associates LLC and Algonquin Commons, LLC or the
transferee under a Permitted Transfer, if any, continues to be Borrower at the
time of the Destruction Event and at all times thereafter until the Proceeds
have been fully disbursed;

 

(ii) no Event of Default under the Loan Documents exists at the time of the
Destruction Event and no Event of Default has occurred during the 12 months
prior to the Destruction Event;

 

(iii) all Leases in effect immediately prior to the Destruction Event and all
Property Documents in effect immediately prior to the Destruction Event that are
essential to the use and operation of the Property continue in full force and
effect notwithstanding the Destruction Event;

 

(iv) if the Destruction Event is a Condemnation, Borrower delivers to Lender
evidence satisfactory to Lender that the Improvements can be restored to an
economically and architecturally viable unit;

 

(v) Borrower delivers to Lender evidence satisfactory to Lender that the
Proceeds are sufficient to complete Restoration or if the Proceeds are
insufficient to complete Restoration, Borrower first deposits with Lender funds
(“Additional Funds”) that when added to the Proceeds will be sufficient to
complete Restoration;

 

(vi) if the Destruction Event is a Casualty, Borrower delivers to Lender
evidence satisfactory to Lender that the Insurer under each affected Policy has
not denied liability under the Policy as to Borrower or the insured under the
Policy;

 

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(vii) Lender is satisfied that the proceeds of any business interruption
insurance in effect together with other available gross revenues from the
Property are sufficient to pay Debt Service Payments after paying the
Impositions, Insurance Premiums, reasonable and customary operating expenses and
capital expenditures until Restoration is complete;

 

(viii) Lender is satisfied that Restoration will be completed on or before the
date (the “Restoration Completion Date”) that is the earliest of: (A) 12 months
prior to the Maturity Date; (B) 12 months after Borrower obtains all permits,
approvals and licenses required by law in order to commence the Restoration
subject to force majeure; (C) the earliest date required for completion of
Restoration under any Lease or any Property Document; or (D) any date required
by Law; and

 

(ix) the annual Rents (excluding security deposits) under Leases in effect on
the date of the Destruction Event are providing debt service coverage for the
annual Debt Service Payments of 1.15 after payment of annual Insurance
Premiums, Impositions and operating expenses of the Property (including ground
rent, if any), provided that, if the Rents do not provide such debt service
coverage, then Borrower expressly authorizes and directs Lender to apply an
amount from the Proceeds to reduction of Principal in order to reduce the annual
Debt Service Payments sufficiently for such debt service coverage to be
achieved. The reduced debt service payments will be calculated using the Fixed
Interest Rate and an amortization schedule that will achieve the same
proportionate amortization of the reduced Principal over the then remaining Term
as would have been achieved if the Principal and the originally scheduled Debt
Service Payments had not been reduced. Borrower will execute any documentation
that Lender deems reasonably necessary to evidence the reduced Principal and
debt service payments.

 

Section 7.5. Restoration.

 

(a) If the total Proceeds for any Destruction Event are $500,000.00 or less and
there is no Event of Default in effect, Lender will disburse to Borrower the
entire amount received by Lender and Borrower will commence and complete
Restoration promptly.

 

(b) If the Proceeds for any Destruction Event exceed $500,000.00 and Lender
elects or is obligated by Law or under this Article to make the Proceeds
available for Restoration, Lender will disburse the Proceeds and any Additional
Funds (the “Restoration Funds”) upon Borrower’s request as Restoration
progresses, generally in accordance with normal construction lending practices
for disbursing funds for construction costs, provided that the following
conditions are met:

 

(i)                                     Borrower commences Restoration promptly
after the Destruction Event and completes Restoration on or before the
Restoration Completion Date in each case subject to force majeure;

 

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(ii)                                  if Lender requests, Borrower delivers to
Lender prior to commencing Restoration, for Lender’s approval, plans and
specifications and a detailed budget for the Restoration;

 

(iii)                               Borrower delivers to Lender satisfactory
evidence of the costs of Restoration incurred prior to the date of the request,
and such other documents as Lender may request including mechanics’ lien waivers
and title insurance endorsements;

 

(iv)                              Borrower pays all costs of Restoration whether
or not the Restoration Funds are sufficient and, if at any time during
Restoration, Lender determines that the undisbursed balance of the Restoration
Funds is insufficient to complete Restoration, Borrower deposits with Lender, as
part of the Restoration Funds, an amount equal to the deficiency within 30 days
of receiving notice of the deficiency from Lender; and

 

(v)                                 there is no Event of Default at the time
Borrower requests funds or at the time Lender disburses funds.

 

(c) If an Event of Default occurs at any time after the Destruction Event, then
Lender will have no further obligation to make any remaining Proceeds available
for Restoration and may apply any remaining Proceeds as a credit against any
portion of the Debt selected by Lender in its sole discretion.

 

(d) Lender may elect at any time prior to commencement of Restoration or while
work is in progress to retain, at Borrower’s expense, an independent engineer or
other consultant to review the plans and specifications, to inspect the work as
it progresses and to provide reports. If any matter included in a report by the
engineer or consultant is unsatisfactory to Lender, Lender may suspend
disbursement of the Restoration Funds until the unsatisfactory matters contained
in the report are resolved to Lender’s satisfaction.

 

(e) If Borrower fails to commence and complete Restoration in accordance with
the terms of this Article, then in addition to the Remedies, Lender may elect to
restore the Improvements on Borrower’s behalf and reimburse itself out of the
Restoration Funds for costs and expenses incurred by Lender in restoring the
Improvements, or Lender may apply the Restoration Funds as a credit against any
portion of the Debt selected by Lender in its sole discretion.

 

(f) Lender may commingle the Restoration Funds with its general assets and will
not be liable to pay any interest or other return on the Restoration Funds
unless otherwise required by Law. Lender will not hold any Restoration Funds in
trust. Lender may elect to deposit the Restoration Funds with a depositary
satisfactory to Lender under a disbursement and security agreement satisfactory
to Lender.

 

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(g) Borrower will pay all of Lender’s expenses incurred in connection with a
Destruction Event or Restoration. If Borrower fails to do so, then in addition
to the Remedies, Lender may from time to time reimburse itself out of the
Restoration Funds.

 

(h) If any excess Proceeds remains after Restoration, Lender may elect, in its
sole discretion either to apply the excess as a credit against any portion of
the Debt as selected by Lender in its sole discretion or to deliver the excess
to Borrower.

 

Section 7.6. Prepayment Premium. With regard to the provision regarding the
Prepayment Premium that appears in the Note, notwithstanding Lender’s rights
regarding proceeds from a taking by Condemnation, the Prepayment Premium shall
be reduced to the extent the total proceeds from an award or settlement arising
from a Condemnation are not sufficient to pay such Prepayment Premium after
deducting (i) all repayment of principal and accrued interest under the Loan,
and (ii) the Borrower’s cash equity investment (as calculated from time to
time). Such calculation would be pro rated in the event of a partial
condemnation following which the Loan continues in full force and effect. The
preceding shall not apply during such time that the shortfall of proceeds to
cover the Prepayment Premium can be insured against under a reasonably available
commercial insurance policy for such occurrences.

 

ARTICLE VIII

 

COMPLIANCE WITH LAW AND AGREEMENTS

 

Section 8.1. Compliance with Law. Borrower, the Property and the use of the
Property comply and will continue to comply with Law and with all agreements and
conditions necessary to preserve and extend all rights, licenses, permits,
privileges, franchises and concessions (including zoning variances, special
exceptions and non-conforming uses) relating to the Property or Borrower.
Borrower will notify Lender of the commencement of any investigation or
Proceeding relating to a possible violation of Law immediately after Borrower
receives notice thereof and will deliver promptly to Lender copies of all
documents Borrower receives or delivers in connection with the investigation or
Proceeding. Borrower will not alter the Property in any manner that would
increase Borrower’s responsibilities for compliance with Law except with respect
to non structural tenant improvements.

 

Section 8.2. Compliance with Agreements. There are no defaults, events of
defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Property Documents. Borrower will
pay and perform all of its obligations under the Property Documents as and when
required by the Property Documents. Borrower will cause all other parties to the
Property Documents to pay and perform their obligations under the Property
Documents as and when required by the Property Documents. Borrower will not
amend or waive any provisions of the Property Documents; exercise any options
under the Property Documents; give any approval required or permitted under the
Property Documents that

 

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would adversely affect the Property or Lender’s rights and interests under the
Loan Documents; cancel or surrender any of the Property Documents; or release or
discharge or permit the release or discharge of any party to or entity bound by
any of the Property Documents, without, in each instance, Lender’s prior
approval (excepting therefrom all service contracts or other agreements entered
into in the normal course of business that are cancelable upon not more than 30
days notice). Borrower promptly will deliver to Lender copies of any notices of
default or of termination that Borrower receives or delivers relating to any
Property Document.

 

Section 8.3. ERISA Compliance.

 

(a) Neither Borrower nor any of Borrower’s constituent entities is or will be an
“employee benefit plan” as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 (“ERISA”) that is subject to Title I of ERISA or a
“plan” as defined in Section 4975(e)(1) of the Code that is subject to
Section 4975 of the Code, and neither the assets of Borrower or of Borrower’s
constituent entities are or will constitute “plan assets” of one or more such
plans for purposes of Title I of ERISA or Section 4975 of the Code.

 

(b) Borrower is not and will continue not to be a “governmental plan” within the
meaning of Section 3(32) of ERISA and transactions by or with Borrower are not
and will not be subject to any Laws regulating investments of and fiduciary
obligations with respect to governmental plans.

 

(c) Borrower will not engage in any transaction which would cause any obligation
or any action under the Loan Documents, including Lender’s exercise of the
Remedies, to be a non-exempt prohibited transaction under ERISA.

 

Section 8.4. Anti-Terrorism.

 

(a) None of Borrower, Indemnitor or its respective constituents or affiliates
are in violation of any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
(the “Executive Order”) and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Public Law 107-56, the “Patriot Act”).

 

(b) None of Borrower, Indemnitor, any of their respective constituents or
affiliates, any of their respective brokers or other agents acting or benefiting
in any capacity in connection with the Loan or, to Borrower’s knowledge as of
the date hereof, the Seller of the Property (if any portion of the Property is
being acquired with proceeds of the Loan) is a “Prohibited Person” which is
defined as follows:

 

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(i)                                     a person or entity that is listed in the
Annex to, or is otherwise subject to the provisions of, the Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to
the Executive Order;

 

(ii)                                  a person or entity owned or controlled by,
or acting for or on behalf of, any person or entity that is listed in the Annex
to, or is otherwise subject to the provisions of, the Executive Order;

 

(iii)                               a person or entity with whom Lender is
prohibited from dealing or otherwise engaging in any transaction by any
terrorism or money laundering Law, including the Executive Order and the Patriot
Act;

 

(iv)                              a person or entity who commits, threatens or
conspires to commit or supports “terrorism” as defined in the Executive Order;

 

(v)                                 a person or entity that is named as a
“specially designated national and blocked person” on the most current list
published by the U.S. Treasury Department Office of Foreign Assets Control at
its official website, http://www.treas.gov/ofac/t11sdn.pdf or at any replacement
website or other replacement official publication of such list;

 

(vi)                              a person or entity who is affiliated with a
person or entity listed above.

 

(c) None of Borrower, Indemnitor, any of their respective affiliates or
constituents, any of their respective brokers or other agents acting in any
capacity in connection with the Loan or to Borrower’s knowledge as of the date
hereof the seller of the Property (if any portion of the Property is being
acquired with proceeds of the Loan), is or will (i) conduct any business or
engage in any transaction or dealing with any Prohibited Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Prohibited Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order; or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in the Executive Order or
the Patriot Act.

 

(d) Borrower covenants and agree to deliver to Lender any certification or other
evidence requested from time to time by Lender in its sole discretion,
confirming Borrower’s compliance with this section.

 

Section 8.5. Section 6045(e) Filing. Borrower will supply or cause to be
supplied to Lender either (i) a copy of a completed Form 1099-B, Statement for
Recipients of Proceeds from Real Estate, Broker and Barter Exchange Proceeds
prepared by Borrower’s attorney or other person responsible for the preparation
of the form, together with a certificate from the person who prepared the form
to the effect that the form has, to the best of the preparer’s knowledge, been
accurately prepared and that the preparer will timely file the form; or (ii) a
certification

 

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from Borrower that the Loan is a refinancing of the Property or is otherwise not
required to be reported to the Internal Revenue Service pursuant to
Section 6045(e) of the Code. Under no circumstances will Lender or Lender’s
counsel be obligated to file the reports or returns.

 

ARTICLE IX

 

ENVIRONMENTAL

 

Section 9.1. Environmental Representations and Warranties.

 

(a) Except as disclosed in the Environmental Report and to Borrower’s knowledge
as of the date of this Mortgage:

 

(i)                                     no Environmental Activity has occurred
or is occurring on the Property other than the use, storage, and disposal of
Hazardous Materials which (A) is in the ordinary course of business consistent
with the Permitted Use; (B) is in compliance with all Environmental Laws and
(C) has not resulted in Material Environmental Contamination of the Property;
and

 

(ii)                                  no Environmental Activity has occurred or
is occurring on any property in the vicinity of the Property which has resulted
in Material Environmental Contamination of the Property.

 

(b) If Borrower does not provide Lender at the closing of the Loan with a copy
of the “disclosure document” required by the Illinois Responsible Property
Transfer Act of 1988 (765 ILCS 90/1 eq seq.) as amended (“IRPTA”), Borrower
represents and warrants that the disclosure and other requirements of IRPTA do
not apply to this transaction.

 

Section 9.2. Environmental Covenants.

 

(a) Borrower will not cause or permit any Material Environmental Contamination
of the Property.

 

(b) No Environmental Activity will occur on the Property other than the use,
storage and disposal of Hazardous Materials which (A) is in the ordinary course
of business consistent with the Permitted Use; (B) is in compliance with all
Environmental Laws; and (C) does not create a risk of Material Environmental
Contamination of the Property.

 

(c) Borrower will notify Lender immediately upon Borrower becoming aware of
(i) any Material Environmental Contamination of the Property or (ii) any
Environmental Activity with respect to the Property that is not in accordance
with the preceding subsection (b). Borrower promptly will deliver to Lender
copies of all documents delivered to or received by Borrower regarding the
matters set forth in this subsection, including notices of Proceedings or

 

20

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investigations concerning any Material Environmental Contamination of the
Property or Environmental Activity or concerning Borrower’s status as a
potentially responsible party (as defined in the Environmental Laws). Borrower’s
notification of Lender in accordance with the provisions of this subsection will
not be deemed to excuse any default under the Loan Documents resulting from the
violation of Environmental Laws or the Material Environmental Contamination of
the Property or Environmental Activity that is the subject of the notice. If
Borrower receives notice of a suspected violation of Environmental Laws in the
vicinity of the Property that poses a risk of Material Environmental
Contamination of the Property, Borrower will give Lender notice and copies of
any documents received relating to such suspected violation.

 

(d) From time to time at Lender’s request, Borrower will deliver to Lender any
information known and documents available to Borrower relating to the
environmental condition of the Property.

 

(e) Lender may perform or engage an independent consultant to perform an
assessment of the environmental condition of the Property and of Borrower’s
compliance with this Section on an annual basis, or at any other time for
reasonable cause, or after an Event of Default. In connection with the
assessment: (i) Lender or consultant may enter and inspect the Property and
perform tests of the air, soil, ground water and building materials;
(ii) Borrower will cooperate and use best efforts to cause tenants and other
occupants of the Property to cooperate with Lender or consultant; (iii) Borrower
will receive a copy of any final report prepared after the assessment, to be
delivered to Borrower not more than 10 days after Borrower requests a copy and
executes Lender’s standard confidentiality and waiver of liability letter;
(iv) Borrower will accept custody of and arrange for lawful disposal of any
Hazardous Materials required to be disposed of as a result of the tests;
(v) Lender will not have liability to Borrower with respect to the results of
the assessment; and (vi) Lender will not be responsible for any damage to the
Property resulting from the tests described in this subsection and Borrower will
look solely to the consultants to reimburse Borrower for any such damage. The
consultant’s assessment and reports will be at Borrower’s expense (i) if the
reports disclose any material adverse change in the environmental condition of
the Property from that disclosed in the Environmental Report; (ii) if Lender
engaged the consultant when Lender had reasonable cause to believe Borrower was
not in compliance with the terms of this Article and, after written notice from
Lender, Borrower failed to provide promptly reasonable evidence that Borrower is
in compliance; or (iii) if Lender engaged the consultant after the occurrence of
an Event of Default.

 

(f) If Lender has reasonable cause to believe that there is Environmental
Activity at the Property, Lender may elect in its sole discretion to release
from the lien of this Mortgage any portion of the Property affected by the
Environmental Activity and Borrower will accept the release.

 

21

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ARTICLE X

 

FINANCIAL REPORTING

 

Section 10.1. Financial Reporting.

 

(a) Borrower will deliver to Lender within 90 days after the close of each
Fiscal Year an annual financial statement (the “Annual Financial Statement”) for
the Property for the Fiscal Year prepared on an accrual basis (and for Borrower
upon the request of Lender), which will include a comparative balance sheet, a
cash flow statement, an income and expense statement, a detailed breakdown of
all receipts and expenses and all supporting schedules. The Annual Financial
Statement will be:

 

(i) certified by the chief financial officer of Borrower; and

 

(ii) separate and distinct from any consolidated statement or report for
Borrower or any other entity or which includes any other property.

 

Upon the occurrence of an Event of Default, at Lender’s option, the Annual
Financial Statement will be:

 

(i) audited by a CPA;

 

(ii) accompanied by an opinion of the CPA that, in all material respects, the
Annual Financial Statement fairly presents the financial position of the
Property;

 

(iii) separate and distinct from any consolidated statement or report for
Borrower or any other entity or which includes any other property.

 

(b) Borrower will keep full and accurate Financial Books and Records for each
Fiscal Year. Borrower will permit Lender or Lender’s accountants or auditors to
inspect or audit the Financial Books and Records from time to time and upon one
(1) day notice. Borrower will maintain the Financial Books and Records for each
Fiscal Year for not less than 3 years after the date Borrower delivers to Lender
the Annual Financial Statement and the other financial certificates, statements
and information to be delivered to Lender for the Fiscal Year. Financial Books
and Records will be maintained at Borrower’s address set forth in the section
entitled “Notices” or at any other location as may be approved by Lender.

 

(c) Borrower will deliver to Lender promptly any other information with respect
to the operation and management of Borrower and the Property as Lender may
request from time to time.

 

Section 10.2. Certificate. Borrower will cause to be delivered to Lender,
together with the annual financial statement required to be delivered
thereunder, or as otherwise requested by

 

22

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Lender from time to time, a certificate from its state of formation, stating
that Borrower is an entity that is in full force and effect.

 

ARTICLE XI

 

EXPENSES AND DUTY TO DEFEND

 

Section 11.1. Payment of Expenses.

 

(a) Borrower is obligated to pay all fees and expenses (the “Expenses”) incurred
by Lender to any third party or that are otherwise payable in connection with
the Loan, the Property or Borrower, including reasonable attorneys’ fees and
expenses and any fees and expenses relating to (i) the preparation, execution,
acknowledgment, delivery and recording or filing of the Loan Documents; (ii) any
Proceeding or other claim asserted against Lender or any Proceeding described in
the Section entitled “Lender’s Right to Appear”; (iii) any inspection,
assessment, survey and test permitted under the Loan Documents; (iv) any
Destruction Event; (v) the preservation of Lender’s security and the exercise of
any rights or remedies available at Law, in equity or otherwise;
(vi) administration of the Loan; (vii) the Leases and the Property Documents;
and (viii) any Proceeding in or for bankruptcy, insolvency, reorganization or
other debtor relief or similar Proceeding relating to Borrower, the Property or
any person liable under any guarantee, indemnity or other credit enhancement
delivered in connection with the Loan.

 

(b) Borrower will pay the Expenses immediately on demand, together with any
applicable interest, premiums or penalties. If Lender pays any of the Expenses,
Borrower will reimburse Lender the amount paid by Lender immediately upon
demand, together with interest on such amount at the Default Interest Rate from
the date Lender paid the Expenses through and including the date Borrower
reimburses Lender. The Expenses together with any applicable interest, premiums
or penalties constitute a portion of the Debt secured by this Mortgage.

 

Section 11.2. Duty to Defend. If Lender or any of its trustees, officers,
participants, employees or affiliates is a party in any Proceeding relating to
the Property, Borrower or the Loan, Borrower will indemnify and hold harmless
the party and will defend the party with attorneys and other professionals
retained by Borrower and approved by Lender. Lender may elect to engage its own
attorneys and other professionals, at Borrower’s expense, to defend or to assist
in the defense of the party. In all events, case strategy will be determined by
Lender if Lender so elects and no Proceeding will be settled without Lender’s
prior approval which may be withheld in its sole discretion.

 

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ARTICLE XII

 

TRANSFERS, LIENS AND ENCUMBRANCES

 

Section 12.1.  Prohibitions on Transfers, Liens and Encumbrances.

 

(a)  Borrower acknowledges that in making the Loan, Lender is relying to a
material extent on the business expertise and net worth of Borrower and
Borrower’s general partners, members or principals and on the continuing
interest that each of them has, directly or indirectly, in the Property.
Accordingly, except as specifically set forth in this Mortgage, Borrower
(i) will not, and will not permit its partners, members or principals to, effect
a Transfer without Lender’s prior approval, which may be withheld in Lender’s
sole discretion and (ii) will keep the Property free from all liens and
encumbrances other than the lien of this Mortgage and the Permitted Exceptions.
A “Transfer” is defined as any sale, grant, lease (other than bona fide
third-party space leases with tenants), conveyance, assignment or other transfer
of, or any encumbrance or pledge against, or grant of a security interest in,
the Property, any interest in the Property, any interest of Borrower’s partners,
members or principals in the Property, or any change in Borrower’s composition,
in each instance whether voluntary or involuntary, direct or indirect, by
operation of law or otherwise and including the grant of an option or the
execution of an agreement relating to any of the foregoing matters.

 

(b)  Borrower represents, warrants and covenants that:

 

(i)  Each entity comprising Borrower is an Illinois limited liability company.
The manager and authorized agent for each of the entities comprising Borrower is
Jeffrey R. Anderson Real Estate, Inc., an Ohio corporation controlled by Jeffrey
R. Anderson. Algonquin Phase I Associates LLC has an 80% tenancy in common
interest in the Property. Algonquin Commons, LLC has a 20% tenancy in common
interest in the Property.

 

(ii)  If Borrower’s members are in turn partnerships, corporations or limited
liability companies, the general partners, principals or members thereof and the
percentage of partnership interest, stock or membership interest held by each
(and so on at each level) are as follows:

 

(a)          Algonquin Phase I Associates LLC is 100% owned by Lansing Pavilion,
LLC, a Michigan limited liability company. The membership interests in Lansing
Pavilion, LLC are as follows:

 

JRA Family Limited Liability Company

 

72.766

%

Richard D. Hannan, Trustee of the Richard D. Hannan Trust dated 3/4/1993 as
amended

 

2.440

%

Matthew Joyce

 

1.617

%

 

24

--------------------------------------------------------------------------------

 

Matthew Joyce

 

1.617

%

Thomas Isgrig

 

2.021

%

Henry Schneider

 

.674

%

Donald Burkhardt

 

.674

%

Thomas G. Hoffman

 

9.096

%

Mark F. Fallon

 

9.096

%

 

JRA Family Limited liability company is an Ohio limited liability company whose
members and their interests are as follows:

 

Jeffrey R. Anderson

 

20.44

%

JR Anderson

 

39.78

%

Anders Anderson

 

39.78

%

 

(b)         Algonquin Commons, LLC is 100% owned by Algonquin Business Park,
LLC, an Illinois limited liability company. The membership interests in
Algonquin Business Park, LLC are as follows:

 

Tim Opfer

 

25.0

%

Jim Stuckman

 

25.0

%

Rick Milne

 

25.0

%

John Milne

 

25.0

%

 

The members described above are referred to as the “Existing Members”.

 

Section 12.2.  Permitted Transfers.

 

(a)  Notwithstanding the prohibitions regarding Transfers, a Permitted Transfer
may occur without Lender’s prior consent, provided that the following conditions
are met:

 

(i)  at least 30 days prior to the proposed Permitted Transfer, Borrower
delivers to Lender a notice that is sufficiently detailed to enable Lender to
determine that the proposed Permitted Transfer complies with the terms of this
Section;

 

(ii)  there is no Event of Default under the Loan Documents either when Lender
receives the notice or when the proposed Permitted Transfer occurs;

 

(iii)  the proposed Permitted Transfer will not result in a violation of any of
the covenants contained in the Sections entitled, “ERISA Compliance” and
“Anti-Terrorism” and Borrower will deliver to Lender such documentation of
compliance as Lender requests in its sole discretion;

 

(iv)  At the time Lender receives the notice and at the time when the proposed
Transfer occurs, Lender and the transferee are not opposing and have not opposed
each other in a

 

25

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pending or threatened action, claim or litigation before a legal, equitable or
administrative tribunal;

 

(v)  Borrower pays all of Lender’s expenses relating to the Transfer, including
Lender’s reasonable attorneys’ fees;

 

(vi)  Lender is satisfied that the Property will continue to be managed by a
property manager satisfactory to Lender; and

 

(vii)  On the date of the proposed Permitted Transfer, if so requested by
Lender, a Uniform Commercial Code search report is delivered to Lender relating
to (i) the transferee, (ii) any predecessor entity that transferee merged with
or into, and (iii) any entity where transferee acquired substantially all of its
assets, in each case satisfactory to Lender and indicating that Lender’s
security interest in such portion of the Property as is perfected by filing a
financing statement is prior to all other security interests reflected in the
report.

 

(b)  Upon compliance with the conditions set forth in the preceding subsection,
the following Transfers (the “Permitted Transfers”) may occur without Lender’s
prior consent:

 

(i)  transfers of direct or indirect interests in Borrower, provided, that
subsequent to the Transfer, Jeffrey R. Anderson controls (directly or
indirectly) the Property and retains directly or indirectly not less than a 15%
equity interest in the Property; and

 

(ii)  transfers of direct or indirect interests in Borrower, provided, that
subsequent to the transfer following the death of Jeffrey R. Anderson, Jeffrey
R. Anderson, Jr. controls (directly or indirectly) the Property and retains
directly or indirectly not less than a 15% equity interest in the Property.

 

Section 12.3.  Loan Assumability. Notwithstanding the prohibition on transfers
contained in Paragraph 12.1 hereof, if at any time after January 1, 2007,
Borrower decides to sell the Property, there will be a one-time right for the
Loan to be assumed by a bona fide third party (“Permitted Loan Assumption”), so
long as the following conditions are satisfied:

 

(i)                                     Lender receives not less than 60 days
prior written notice of the proposed transfer.

 

(ii)                                  There is no Event of Default when notice
of the proposed transfer is received or when the transfer occurs.

 

(iii)                               Borrower pays or causes to pay to Lender a
transfer fee of one percent (1%) of the outstanding principal balance on the
Loan.

 

26

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(iv)                              A substitute indemnitor and/or guarantor
satisfactory to Lender in its sole discretion executes and delivers an
environmental indemnity and non-recourse carve-out guaranty in favor of Lender
on Lender’s standard form. In such event the current indemnitor and/or guarantor
shall be released from its obligations from and after the date of the transfer
(it being understood that such event shall under no circumstances affect Jeffrey
R. Anderson’s liability hereunder for any liability arising prior to such date,
even if first determined after such date).

 

(v)                                 At the time Lender receives the notice and
at the time when the Permitted Transfer occurs, Lender and the transferee are
not opposing and have not opposed each other in a pending or threatened action,
claim or litigation before a legal, equitable or administrative tribunal.

 

(vi)                              The new borrower is an Institutional Investor
or developer or manager of first-class, commercial real estate comparable to the
Property and has a reputation in the industry as an owner of not less than 3
million square feet of commercial property of similar quality to the Property.

 

(vii)                           The buyer or its constituent entities has a net
worth of at least ninety-seven million ($97,000,000.00) dollars.

 

(viii)                        The buyer delivers to Lender a title insurance
policy or endorsements to the existing title insurance policy as Lender may
reasonably request.

 

(ix)                                The transferee has expressly assumed
Borrower’s obligations under the Loan Documents and under any other documents,
as of the date of the loan assumption, encumbering the Property that are
essential to the on-going use, operation and management of the Property.

 

(x)                                   Borrower delivers to Lender evidence
satisfactory to Lender that the transferee is not an “employee benefit plan” as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
(“ERISA”) that is subject to Title I of ERISA or a “plan” as defined in
Section 4975 (e) (I) of the Internal Revenue Code of 1986 (the “Code”) that is
subject to Section 4975 of the Code, and the transferee’s assets do not
constitute “plan assets” of one or more such plans for purposes of Title I of
ERISA or Section 4975 of the Code.

 

(xi)                                Borrower has delivered to Lender evidence
satisfactory to Lender that subsequent to the Transfer the Subject Property will
be managed by a property manager of first-class commercial real estate
comparable to the Property for not less than 10 years and having a reputation in
the industry at least equivalent to that of Borrower or the existing property
manager as of the Closing and otherwise satisfactory to Lender.

 

27

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(xii)                             Borrower delivers to Lender such opinions of
counsel as are reasonably requested by Lender.

 

(xiii)                          All other terms of the Loan Documents shall
remain in full force and effect.

 

Section 12.4.  Right to Contest Liens. Borrower, at its own expense, may contest
the amount, validity or application, in whole or in part, of any mechanic’s,
materialmen’s or environmental liens in which event Lender will refrain from
exercising any of the Remedies, provided that the following conditions are met:

 

(i)  Borrower delivers to Lender notice of the proposed contest not more than 30
days after the lien is filed;

 

(ii)  the contest is by a Proceeding promptly initiated and conducted in good
faith and with due diligence;

 

(iii)  there is no Event of Default other than the Event of Default arising from
the filing of the lien;

 

(iv)  the Proceeding suspends enforcement or collection of the lien, imposition
of criminal or civil penalties and sale or forfeiture of the Property and Lender
will not be subject to any civil suit;

 

(v)  the Proceeding is permitted under and is conducted in accordance with the
Leases and the Property Documents;

 

(vi)  Borrower sets aside reserves or furnishes a bond or other security
satisfactory to Lender, in either case in an amount sufficient to pay the claim
giving rise to the lien, together with all interest and penalties or Borrower
pays the contested lien under protest; and

 

(vii)  with respect to an environmental lien, Borrower is using best efforts to
mitigate or prevent any deterioration of the Property resulting from the alleged
violation of any Environmental Laws or the alleged Environmental Activity.

 

28

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ARTICLE XIII

 

ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 13.1.  Further Assurances.

 

(a)  Borrower will execute, acknowledge and deliver to Lender, or to any other
entity Lender designates, any additional or replacement documents and perform
any additional actions that Lender determines are reasonably necessary to
evidence, perfect or protect Lender’s first lien on and prior security interest
in the Property or to carry out the intent or facilitate the performance of the
provisions of the Loan Documents.

 

(b)  Borrower appoints Lender as Borrower’s attorney-in-fact to perform, at
Lender’s election, any actions and to execute and record any of the additional
or replacement documents referred to in this Section, in each instance only at
Lender’s election and only to the extent Borrower has failed to comply with the
terms of this Section after Lender provides Borrower notice of such failure to
so comply.

 

Section 13.2.  Estoppel Certificates.

 

(a)  Within 10 days of Lender’s request, Borrower will deliver to Lender, or to
any entity Lender designates, a certificate certifying (i) the original
principal amount of the Note; (ii) the unpaid principal amount of the Note;
(iii) the Fixed Interest Rate; (iv) the amount of the then current Debt Service
Payments; (v) the Maturity Date; (vi) the date a Debt Service Payment was last
made; (vii) that, except as may be disclosed in the statement, there are no
defaults or events which, with the passage of time or the giving of notice,
would constitute an Event of Default; and (viii) to Borrower’s knowledge, there
are no offsets or defenses against any portion of the Obligations except as may
be disclosed in the statement.

 

(b)  If Lender requests, Borrower promptly will use diligent, good faith efforts
to deliver to Lender or to any entity Lender designates a certificate from each
party to any Property Document, certifying that the Property Document is in full
force and effect with no defaults or events which, with the passage of time or
the giving of notice, would constitute an event of default under the Property
Document by any party and that to such party’s knowledge, the party claims no
defense or offset against the performance of its obligations under the Property
Document.

 

(c)  If Lender requests, Borrower promptly will use diligent, good faith efforts
to deliver to Lender, or to any entity Lender designates, a certificate from
each tenant under a Lease then affecting the Property, certifying to any facts
regarding the Lease as Lender may require, including that the Lease is in full
force and effect; to tenant’s knowledge, with no defaults or events which, with
the passage of time or the giving of notice, would constitute an event of
default under the Lease by any party, that the rent has not been paid more than
one month in

 

29

--------------------------------------------------------------------------------

 

advance and that the tenant claims no defense or offset against the performance
of its obligations under the Lease.

 

Section 13.3.  Right of Future Financing. If at any time during the term of the
Loan, Borrower (including for purposes of this Section any affiliate of
Borrower) develops all or any portion of the parcel of land (the “Development
Parcel”) north of the Galyan’s store to County Line Road and Randall Road,
Borrower will submit to Lender an application on Lender’s form for the permanent
financing of the Development Parcel as improved before seeking permanent (as
opposed to construction) financing of the Development Parcel as improved from
any other lender. The application will propose terms comparable to terms for
permanent financing then generally available from Institutional Investors for
properties similar in kind, quality and location to the Development Parcel as
improved. Lender will have 30 days after receipt of the application to accept or
decline, in its sole discretion, the application or the application will be
deemed declined. If the application is declined or deemed declined, then
Borrower will have 60 days from the date the application is declined or deemed
declined to obtain a bona fide offer for permanent financing from another lender
on substantially the same terms set forth in the application to Lender and to
deliver to Lender a copy of the offer. If Borrower fails to obtain such an
offer, fails to deliver a copy of the offer to Lender within the 60-day period
or fails to close the loan from another lender, then Borrower will submit a
written application again to Lender in accordance with the procedures set forth
above before seeking permanent financing of the Development Parcel as improved
from another lender. Lender’s right of future financing is evidenced by a
memorandum of future financing agreement between Borrower and Lender, dated the
date of this Mortgage and recorded against the Development Parcel. If Lender
accepts an application in accordance with the foregoing, then Borrower will
accept the loan, which will be closed in accordance with Lender’s then
prevailing practices, procedures and requirements for closing similar loans.
Subject to Borrower’s compliance with the foregoing, Borrower may obtain
permanent financing from another Lender. This provision becomes null and void in
the event Borrower obtains permanent financing with a third party (subject to
the above procedure) in which case Lender agrees to release of record the
Memorandum of Agreement filed against the Property.

 

Section 13.4.  Credit Enhancements. Borrower will maintain in good standing all
credit enhancement documents delivered to Lender in connection with the Loan
throughout the Term or such shorter period as Borrower and Lender may have
agreed to in writing. Credit enhancement documents include any letters of
credit, cash deposits, pledges, guarantees or indemnities delivered to Lender in
connection with the Loan but excluding any letters of credit, promissory notes
or cash deposits delivered to Lender as good faith or standby fees in connection
with Lender’s agreement to make the Loan. If the provider of any credit
enhancement document becomes insolvent, commences or is the target of a
Proceeding in bankruptcy or ceases to exist or if Lender determines that the
provider’s insolvency is imminent, Borrower will deliver to Lender a replacement
credit enhancement document within 15 Business Days of the date insolvency is
known, the Proceeding in bankruptcy is filed, the cessation occurs or Lender
gives Borrower notice that Lender has determined the provider’s insolvency is
imminent. The replacement credit enhancement document will be satisfactory to
Lender from an alternate

 

30

--------------------------------------------------------------------------------

 

provider satisfactory to Lender. Upon receipt of the replacement, Lender will
deliver promptly to Borrower the credit enhancement document being replaced.

 

ARTICLE XIV

 

DEFAULTS AND REMEDIES

 

Section 14.1.  Events of Default. The term “Event of Default” means the
occurrence of any of the following events:

 

(i)  if Borrower fails to pay any amount due, as and when required, under any
Loan Document and the failure continues for a period of 5 days;

 

(ii)  if Borrower makes a general assignment for the benefit of creditors or
generally is not paying, or is unable to pay, or admits in writing its inability
to pay, its debts as they become due; or if Borrower or any other party
commences any Proceeding (A) relating to bankruptcy, insolvency, reorganization,
conservatorship or relief of debtors, in each instance with respect to Borrower;
(B) seeking to have an order for relief entered with respect to Borrower;
(C) seeking attachment, distraint or execution of a judgment with respect to
Borrower; (D) seeking to adjudicate Borrower as bankrupt or insolvent;
(E) seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to Borrower or Borrower’s
debts; or (F) seeking appointment of a Receiver, trustee, custodian, conservator
or other similar official for Borrower or for all or any substantial part of
Borrower’s assets, provided that if the Proceeding is commenced by a party other
than Borrower or any of Borrower’s general partners or members, Borrower will
have 120 days to have the Proceeding dismissed or discharged before an Event of
Default occurs;

 

(iii)  if Borrower is in default beyond any applicable grace and cure period
under any other mortgage, deed of trust, deed to secure debt or other security
agreement encumbering the Property whether junior or senior to the lien of this
mortgage;

 

(iv)  if there is a default beyond any applicable grace and cure period under
any indemnity or guaranty in favor of Lender delivered to Lender in connection
with the Loan or in connection with any loan cross-collateralized with the Loan;

 

(v)  if a default occurs under Lender’s right of future financing agreement as
more particularly described in the Section entitled “Right of Future Financing”

 

(vi)  if a Transfer occurs except in accordance with the provisions of this
Mortgage and after Lender delivers Borrower notice of such non permitted
transfer, such default is not cured within 20 days;

 

31

--------------------------------------------------------------------------------

 

(vii)  if Borrower abandons the Property or ceases to conduct its business at
the Property; or

 

(viii)  if there is a default in the performance of any other provision of any
Loan Document or if there is any inaccuracy or falsehood in any representation
or warranty contained in any Loan Document which is not remedied within 30 days
after Borrower receives notice thereof, provided that if the default, inaccuracy
or falsehood is of a nature that it cannot be cured within the 30-day period and
during that period Borrower commences to cure, and thereafter diligently
continues to cure, the default, inaccuracy or falsehood, then the 30-day period
will be extended for a reasonable period not to exceed 120 days after the notice
to Borrower.

 

Section 14.2.  Remedies.

 

(a)  If an Event of Default occurs, Lender may take any of the following actions
(the “Remedies”):

 

(i)  declare all or any portion of the Debt immediately due and payable
(“Acceleration”);

 

(ii)  pay or perform any Obligation upon five (5) business days prior notice to
Borrower unless there is an emergency or Lender’s collateral or security or its
priority is endangered;

 

(iii)  institute a Proceeding for the specific performance of any Obligation;

 

(iv)  apply for and obtain the appointment of a Receiver to be vested with the
fullest powers permitted by Law, without bond being required, which appointment
may be made ex parte, as a matter of right and without regard to the value of
the Property, the amount of the Debt or the solvency of Borrower or any other
person liable for the payment or performance of any portion of the Obligations;

 

(v)  directly, by its agents or representatives or through a Receiver appointed
by a court of competent jurisdiction, enter on the Land and Improvements, take
possession of the Property, dispossess Borrower and exercise Borrower’s rights
with respect to the Property, either in Borrower’s name or otherwise;

 

(vi)  institute a Proceeding for the foreclosure of this Mortgage or, if
applicable, sell by power of sale, all or any portion of the Property;

 

(vii)  institute proceedings for the partial foreclosure of this Mortgage for
the portion of the Debt then due and payable, subject to the continuing lien of
this Mortgage for the balance of the Debt not then due;

 

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(viii)  exercise any and all rights and remedies granted to a secured party
under the Uniform Commercial Code; and

 

(ix)  pursue any other right or remedy available to Lender at Law, in equity or
otherwise.

 

(b)  If an Event of Default occurs, the license granted to Borrower in the Loan
Documents to collect Rents will terminate automatically without any action
required of Lender. Pursuant to the provisions of 765 ILCS 5/31.5, the mere
recordation of the Assignment entitles Lender immediately to collect and receive
Rents upon the occurrence of an Event of Default, as defined in Section 14.1,
without first taking any acts of enforcement under applicable law, including
providing notice to Borrower, filing foreclosure proceedings, or seeking the
appointment of a receiver. Further, Lender’s right to the Rents does not depend
on whether or not Lender takes possession of the Property as permitted under
Section 14.2(v). In Lender’s sole discretion, Lender may choose to collect Rents
either with or without taking possession of the Property.

 

Section 14.3.  General Provisions Pertaining to Remedies.

 

(a)  The Remedies are cumulative and may be pursued concurrently or otherwise,
at such time and in such order as Lender may determine in its sole discretion
and without presentment, demand, protest or further notice of any kind, all of
which are expressly waived by Borrower.

 

(b)  The enumeration in the Loan Documents of specific rights or powers will not
be construed to limit any general rights or powers or impair Lender’s rights
with respect to the Remedies.

 

(c)  If Lender exercises any of the Remedies, Lender will not be deemed a
mortgagee-in-possession unless Lender has elected affirmatively to be a
mortgagee-in-possession.

 

(d)  Lender will not be liable for any act or omission of Lender in connection
with the exercise of the Remedies.

 

(e)  Lender’s right to exercise any Remedy will not be impaired by any delay in
exercising or failure to exercise the Remedy and the delay or failure will not
be construed as extending any cure period or constitute a waiver of the default
or Event of Default.

 

(f)  If an Event of Default occurs, Lender’s payment or performance or
acceptance of payment or performance will not be deemed a waiver or cure of the
Event of Default.

 

(g)  Lender’s acceptance of partial payment or receipt of Rents will not extend
or affect any grace period, constitute a waiver of a default or Event of Default
or constitute a recision of Acceleration.

 

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Section 14.4.  INTENTIONALLY OMITTED

 

Section 14.5.  General Provisions Pertaining to Receiver and other Remedies.

 

(a)  If an Event of Default occurs, any court of competent jurisdiction will,
upon application by Lender, appoint a Receiver as designated in the application
and issue an injunction prohibiting Borrower from interfering with the Receiver,
collecting Rents, disposing of any Rents or any part of the Property, committing
waste or doing any other act that will tend to affect the preservation of the
Leases, the Rents and the Property and Borrower approves the appointment of the
designated Receiver or any other Receiver appointed by the court. Borrower
agrees that the appointment may be made ex parte and as a matter of right to
Lender, either before or after sale of the Property, without further notice, and
without regard to the solvency or insolvency, at the time of application for the
Receiver, of the person or persons, if any, liable for the payment of any
portion of the Debt and the performance of any portion of the Obligations and
without regard to the value of the Property or whether the Property is occupied
as a homestead and without bond being required of the applicant.

 

(b)  The Receiver will be vested with the fullest powers permitted by Law
including all powers necessary or usual in similar cases for the protection,
possession and operation of the Property and all the powers and duties of Lender
as a mortgagee-in-possession as provided in this Mortgage and may continue to
exercise all the usual powers and duties until the Receiver is discharged by the
court. The powers of a receiver listed in 735 ILCS 5/15-1704 shall be added to
all the powers of a receiver listed in the Mortgage subject to any express
limitations on such powers in the Mortgage.

 

(c)  In addition to the Remedies and all other available rights, Lender or the
Receiver may take any of the following actions during the continuance of an
Event of Default:

 

(i)  take exclusive possession, custody and control of the Property and manage
the Property so as to prevent waste;

 

(ii)  require Borrower to deliver to Lender or the Receiver all keys, security
deposits, operating accounts, prepaid Rents, past due Rents, the Books and
Records and all original counterparts of the Leases and the Property Documents;

 

(iii)  collect, sue for and give receipts for the Rents and, after paying all
expenses of collection, including reasonable receiver’s, broker’s and attorney’s
fees, apply the net collections to any portion of the Debt selected by Lender in
its sole discretion;

 

(iv)  enter into, modify, extend, enforce, terminate, renew or accept surrender
of Leases and evict tenants except that in the case of a Receiver, such actions
may be taken only with the written consent of Lender as provided in this
Mortgage and in the Assignment;

 

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(v)  enter into, modify, extend, enforce, terminate or renew Property Documents
except that in the case of a Receiver, such actions may be taken only with the
written consent of Lender as provided in this Mortgage and in the Assignment;

 

(vi)  appear in and defend any Proceeding brought in connection with the
Property and bring any Proceeding to protect the Property as well as Borrower’s
and Lender’s respective interests in the Property (unless any such Proceeding
has been assigned previously to Lender in the Assignment, or if so assigned,
Lender has not expressly assigned such Proceeding to the Receiver and consented
to such appearance or defense by the Receiver); and

 

(vii)  perform any act in the place of Borrower that Lender or the Receiver
deems necessary (A) to preserve the value, marketability or rentability of the
Property, (B) to increase the gross receipts from the Property; or (C) otherwise
to protect Borrower’s and Lender’s respective interests in the Property.

 

(d)                                 Borrower appoints Lender as Borrower’s
attorney-in-fact, at Lender’s election, to perform any actions and to execute
and record any instruments necessary to effectuate the actions described in this
Section, in each instance only at Lender’s election and only to the extent
Borrower has failed to comply with the provisions of this Section.

 

Section 14.6.  General Provisions Pertaining to Foreclosures and the Power of
Sale. The following provisions will apply to any Proceeding to foreclose and to
any sale of the Property by power of sale or pursuant to a judgment of
foreclosure and sale:

 

(i)  Lender’s right to institute a Proceeding to foreclose or to sell by power
of sale will not be exhausted by a Proceeding or a sale that is defective or not
completed;

 

(ii)  any sale may be postponed or adjourned by Lender by public announcement at
the time and place appointed for the sale without further notice;

 

(iii)  with respect to sale pursuant to a judgment of foreclosure and sale, the
Property may be sold as an entirety or in parcels, at one or more sales, at the
time and place, on terms and in the order that Lender deems expedient in its
sole discretion;

 

(iv)  if a portion of the Property is sold pursuant to this Article, the Loan
Documents will remain in full force and effect with respect to any unmatured
portion of the Debt and this Mortgage will continue as a valid and enforceable
first lien on and security interest in the remaining portion of the Property,
subject only to the Permitted Exceptions, without loss of priority and without
impairment of any of Lender’s rights and remedies with respect to the unmatured
portion of the Debt;

 

(v)  Lender may bid for and acquire the Property at a sale and, in lieu of
paying cash, may credit the amount of Lender’s bid against any portion of the
Debt selected by Lender in

 

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its sole discretion after deducting from the amount of Lender’s bid the expenses
of the sale, costs of enforcement and other amounts that Lender is authorized to
deduct at Law, in equity or otherwise; and

 

(vi)  Lender’s receipt of the proceeds of a sale will be sufficient
consideration for the portion of the Property sold and Lender will apply the
proceeds as set forth in this Mortgage.

 

Section 14.7.  Application of Proceeds. Lender may apply the proceeds of any
sale of the Property by power of sale or pursuant to a judgment of foreclosure
and sale and any other amounts collected by Lender in connection with the
exercise of the Remedies to payment of the Debt in such priority and proportions
as Lender may determine in its sole discretion or in such priority and
proportions as required by Law.

 

Section 14.8.  Power of Attorney. Borrower appoints Lender as Borrower’s
attorney-in-fact to perform any actions necessary and incidental to exercising
the Remedies.

 

Section 14.9.  Tenant at Sufferance. If Lender or a Receiver enters the Property
in the exercise of the Remedies and Borrower is allowed to remain in occupancy
of the Property, Borrower will pay to Lender or the Receiver, as the case may
be, in advance, a reasonable rent for the Property occupied by Borrower. If
Borrower fails to pay the rent, Borrower may be dispossessed by the usual
Proceedings available against defaulting tenants.

 

Section 14.10.  Compliance with Illinois Mortgage Foreclosure Law.

 

(a)                                  If any provision of this Mortgage is
inconsistent with any applicable provision of the Illinois Mortgage Foreclosure
Law, 735 ILCS 5/15-1101, et seq. (the “Act”), the provisions of the Act shall
take precedence over the provisions of this Mortgage, but shall not invalidate
or render unenforceable any other provision of this Mortgage that can fairly be
construed in a manner consistent with the Act.

 

(b)                                 Without in any way limiting any of Lender’s
rights, remedies, powers and authorities under this Mortgage, and in addition to
all of such rights, remedies, powers, and authorities, the Lender shall also
have all rights, remedies, powers and authorities permitted to the holder of a
mortgage under the Act, as the same may be amended from time to time. If any
provision of this Mortgage shall grant to Lender any rights, remedies, powers or
authorities upon default of the Borrower, which are more limited than what would
be vested in Lender under the Act in the absence of said provision, Lender shall
have what would be vested under the Act.

 

(c)                                  Without limitation, all expenses (including
attorneys’ fees and expenses) incurred by Lender, to the extent reimbursable
under 735 ILCS 5/15-1510, 5/15-1512, or any other provision of the Act, whether
incurred before or after any judgment of foreclosure, shall be added to the
indebtedness secured by this Mortgage and included in the judgment of
foreclosure.

 

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ARTICLE XV

 

LIMITATION OF LIABILITY

 

Section 15.1.  Limitation of Liability.

 

(a)  Notwithstanding any provision in the Loan Documents to the contrary, except
as set forth in subsections (b) and (c), if Lender seeks to enforce the
collection of the Debt, Lender will foreclose this Mortgage instead of
instituting suit on the Note. If a lesser sum is realized from a foreclosure of
this Mortgage and sale of the Property than the then outstanding Debt, Lender
will not institute any Proceeding against Borrower or Borrower’s members, if
any, for or on account of the deficiency, except as set forth in subsections
(b) and (c).

 

(b)  The limitation of liability in subsection (a) will not affect or impair
(i) the lien of this Mortgage or Lender’s other rights and Remedies under the
Loan Documents, including Lender’s right as mortgagee or secured party to
commence an action to foreclose any lien or security interest Lender has under
the Loan Documents; (ii) the validity of the Loan Documents or the Obligations;
(iii) Lender’s rights under any Loan Document that are not expressly
non-recourse; or (iv) Lender’s right to present and collect on any letter of
credit or other credit enhancement document held by Lender in connection with
the Obligations.

 

(c)  The following are excluded and excepted from the limitation of liability in
subsection (a) and Lender may recover personally against Borrower for the
following:

 

(i)  all losses suffered and liabilities and expenses incurred by Lender
relating to any fraud or intentional misrepresentation or omission by Borrower
or any of Borrower’s partners, members, officers, directors, shareholders or
principals in connection with (A) the performance of any of the conditions to
Lender making the Loan; (B) any inducements to Lender to make the Loan; (C) the
execution and delivery of the Loan Documents; (D) any certificates,
representations or warranties given in connection with the Loan; or
(E) Borrower’s performance of the Obligations;

 

(ii)  all Rents derived from the Property after a default under the Loan
Documents which default is a basis of a Proceeding by Lender to enforce
collection of the Debt and all moneys that, on the date such a default occurs,
are on deposit in one or more accounts used by or on behalf of Borrower relating
to the operation of the Property, except to the extent properly applied to
payment of Debt Service Payments, Impositions, Insurance Premiums and any
reasonable and customary expenses incurred by Borrower in the operation,
maintenance and leasing of the Property or delivered to Lender;

 

(iii)  the cost of remediation of any Environmental Activity affecting the
Property, any diminution in the value of the Property arising from any
Environmental Activity affecting

 

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the Property and any other losses suffered and liabilities and expenses incurred
by Lender relating to a default under the Article entitled “Environmental”;

 

(iv)  all security deposits collected by Borrower or any of Borrower’s
predecessors and not refunded to Tenants in accordance with their respective
Leases, applied in accordance with the Leases or Law or delivered to Lender, and
all advance rents collected by Borrower or any of Borrower’s predecessors and
not applied in accordance with the Leases or delivered to Lender;

 

(v)  the replacement cost of any Fixtures or Personal Property removed from the
Property after a default occurs;

 

(vi)  all losses suffered and liabilities and expenses incurred by Lender
relating to any acts or omissions by Borrower that result in waste (including
economic and non-physical waste) on the Property;

 

(vii)  all protective advances and other payments made by Lender pursuant to
express provisions of the Loan Documents to protect Lender’s security interest
in the Property or to protect the assignment of the property described in and
effected by the Assignment, but only to the extent that the Rents would have
been sufficient to permit Borrower to make the payment and Borrower failed to do
so;

 

(viii)  all mechanics’ or similar liens relating to work performed on or
materials delivered to the Property prior to Lender exercising its Remedies, but
only to the extent Lender had advanced funds to pay for the work or materials;

 

(ix)  all Proceeds that are not applied in accordance with this Mortgage or not
paid to Lender as required under this Mortgage;

 

(x)  all losses suffered and liabilities and expenses incurred by Lender
relating to a Transfer that is not permitted under the Section entitled
“Permitted Transfers” including the prohibition on any Transfer that results in
a violation of ERISA or any anti-terrorism or money laundering laws.

 

(xi)  all losses suffered and liabilities and expenses incurred by Lender
relating to forfeiture or threatened forfeiture of the Property to the
Government, which is occasioned by the intentional, wrongful action of Borrower;

 

(xii)  all losses suffered and liabilities and expenses incurred by Lender
relating to any default by Borrower under any of the provisions of this Mortgage
relating to ERISA, including the prohibition on any Transfer that results in a
violation of ERISA;

 

(xiii)  all losses suffered and liabilities and expenses incurred by Lender
relating to any default by Borrower, Indemnitor or Guarantor under any of the
provisions of this

 

38

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Mortgage relating to Anti-Terrorism Laws, including the prohibition on any
Transfer that results in a violation of Anti-Terrorism Laws; and

 

(xiv)  all losses suffered and liabilities and expenses incurred by Lender
relating to any default by Borrower under Section 17.2 of this Mortgage.

 

(d)  Nothing under subparagraph (a) above will be deemed to be a waiver of any
right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code or under any other Law relating to bankruptcy
or insolvency to file a claim for the full amount of the Debt or to require that
all collateral will continue to secure all of the Obligations in accordance with
the Loan Documents.

 

ARTICLE XVI

 

WAIVERS

 

SECTION 16.1.                              WAIVER OF STATUTE OF LIMITATIONS. TO
THE EXTENT PERMITTED BY LAW, BORROWER WAIVES THE RIGHT TO CLAIM ANY STATUTE OF
LIMITATIONS AS A DEFENSE TO BORROWER’S PAYMENT AND PERFORMANCE OF THE
OBLIGATIONS.

 

SECTION 16.2.                              WAIVER OF NOTICE. TO THE EXTENT
PERMITTED BY LAW, BORROWER WAIVES THE RIGHT TO RECEIVE ANY NOTICE FROM LENDER
WITH RESPECT TO THE LOAN DOCUMENTS EXCEPT FOR THOSE NOTICES THAT LENDER IS
EXPRESSLY REQUIRED TO DELIVER PURSUANT TO THE LOAN DOCUMENTS.

 

SECTION 16.3.                              WAIVER OF MARSHALLING AND OTHER
MATTERS. TO THE EXTENT PERMITTED BY LAW, BORROWER WAIVES THE BENEFIT OF ANY
RIGHTS OF MARSHALLING OR ANY OTHER RIGHT TO DIRECT THE ORDER IN WHICH ANY OF THE
PROPERTY WILL BE (i) SOLD; OR (ii) MADE AVAILABLE TO ANY ENTITY IF THE PROPERTY
IS SOLD BY POWER OF SALE OR PURSUANT TO A JUDGMENT OF FORECLOSURE AND SALE.
BORROWER ALSO WAIVES THE BENEFIT OF ANY LAWS RELATING TO APPRAISEMENT,
VALUATION, STAY, EXTENSION, REINSTATEMENT, MORATORIUM, HOMESTEAD AND EXEMPTION
RIGHTS OR A SALE IN INVERSE ORDER OF ALIENATION.

 

SECTION 16.4.                              WAIVER OF TRIAL BY JURY. TO THE
EXTENT PERMITTED BY LAW, BORROWER WAIVES TRIAL BY JURY IN ANY PROCEEDING BROUGHT
BY OR AGAINST, OR COUNTERCLAIM OR CROSS-

 

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COMPLAINT ASSERTED BY OR AGAINST, LENDER RELATING TO THE LOAN, THE PROPERTY
DOCUMENTS OR THE LEASES.

 

SECTION 16.5.                              WAIVER OF COUNTERCLAIM. TO THE EXTENT
PERMITTED BY LAW, BORROWER WAIVES THE RIGHT TO ASSERT A COUNTERCLAIM OR
CROSS-COMPLAINT, OTHER THAN COMPULSORY OR MANDATORY COUNTERCLAIMS OR
CROSS-COMPLAINTS, IN ANY PROCEEDING LENDER BRINGS AGAINST BORROWER RELATING TO
THE LOAN, INCLUDING ANY PROCEEDING TO ENFORCE REMEDIES.

 

SECTION 16.6.                              WAIVER OF JUDICIAL NOTICE AND
HEARING. TO THE EXTENT PERMITTED BY LAW, BORROWER WAIVES ANY RIGHT BORROWER
MAY HAVE UNDER LAW TO NOTICE OR TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OF
ANY RIGHT OR REMEDY PROVIDED BY THE LOAN DOCUMENTS TO LENDER AND BORROWER WAIVES
THE RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE DULY CONSUMMATED IN
ACCORDANCE WITH THE PROVISIONS OF THE LOAN DOCUMENTS ON THE GROUND (IF SUCH BE
THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR JUDICIAL HEARING.

 

SECTION 16.7.                              WAIVER OF SUBROGATION. TO THE EXTENT
PERMITTED BY LAW, BORROWER WAIVES ALL RIGHTS OF SUBROGATION TO LENDER’S RIGHTS
OR CLAIMS RELATED TO OR AFFECTING THE PROPERTY OR ANY OTHER SECURITY FOR THE
LOAN UNTIL THE LOAN IS PAID IN FULL AND ALL FUNDING OBLIGATIONS UNDER THE LOAN
DOCUMENTS HAVE BEEN TERMINATED.

 

SECTION 16.8.                              GENERAL WAIVER. TO THE EXTENT
PERMITTED BY LAW, BORROWER ACKNOWLEDGES THAT (A) BORROWER AND BORROWER’S
PARTNERS, MEMBERS OR PRINCIPALS, AS THE CASE MAY BE, ARE KNOWLEDGEABLE BORROWERS
OF COMMERCIAL FUNDS AND EXPERIENCED REAL ESTATE DEVELOPERS OR INVESTORS WHO
UNDERSTAND FULLY THE EFFECT OF THE ABOVE PROVISIONS; (B) LENDER WOULD NOT MAKE
THE LOAN WITHOUT THE PROVISIONS OF THIS ARTICLE; (C) THE LOAN IS A COMMERCIAL OR
BUSINESS LOAN UNDER THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED,
NEGOTIATED BY LENDER AND BORROWER AND THEIR RESPECTIVE ATTORNEYS AT ARMS LENGTH,
AND THE LOAN IS SECURED BY A MORTGAGE ON REAL ESTATE UNDER 815 ILCS 205/4(1) AND
(D) ALL WAIVERS BY BORROWER IN THIS ARTICLE HAVE BEEN MADE
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER BORROWER FIRST HAS BEEN INFORMED
BY COUNSEL OF BORROWER’S OWN CHOOSING AS TO POSSIBLE ALTERNATIVE RIGHTS, AND
HAVE BEEN MADE AS AN INTENTIONAL RELINQUISHMENT AND ABANDONMENT OF A KNOWN RIGHT
AND PRIVILEGE. THE FOREGOING ACKNOWLEDGEMENT IS MADE

 

40

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WITH THE INTENT THAT LENDER AND ANY SUBSEQUENT HOLDER OF THE NOTE WILL RELY ON
THE ACKNOWLEDGMENT.

 

SECTION 16.9.                              ILLINOIS STATUTORY WAIVERS. THE
BORROWER, ON BEHALF OF ITSELF AND ALL PERSONS NOW OR HEREAFTER INTERESTED IN THE
PROPERTY, VOLUNTARILY AND KNOWINGLY HEREBY ACKNOWLEDGES THAT THE TRANSACTION OF
WHICH THIS MORTGAGE IS A PART IS A TRANSACTION WHICH DOES NOT INCLUDE EITHER
AGRICULTURAL REAL ESTATE (AS DEFINED IN THE ACT), OR RESIDENTIAL REAL ESTATE (AS
DEFINED IN THE ACT). THE BORROWER, ON ITS OWN BEHALF AND ON BEHALF OF EACH AND
EVERY PERSON ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO
THE DATE OF THIS MORTGAGE, HEREBY IRREVOCABLY WAIVES PURSUANT TO 735 ILCS
5/15-1601 OF THE ACT ANY AND ALL RIGHTS OF REINSTATEMENT (INCLUDING, WITHOUT
LIMITATION, ALL RIGHTS OF REINSTATEMENT PROVIDED FOR IN 735 ILCS 5/15-1602) OR
REDEMPTION FROM SALE OR FROM OR UNDER ANY ORDER, JUDGMENT OR DECREE OF
FORECLOSURE OF THIS MORTGAGE (INCLUDING, WITHOUT LIMITATION, ALL RIGHTS OF
REDEMPTION PROVIDED FOR IN 735 ILCS 5/15-1603) OR UNDER ANY POWER CONTAINED
HEREIN OR UNDER ANY SALE PURSUANT TO ANY STATUTE, ORDER, DECREE OR JUDGMENT OF
ANY COURT.

 

ARTICLE XVII

 

NOTICES

 

Section 17.1.  Notices. All acceptances, approvals, consents, demands, notices,
requests, waivers and other communications (the “Notices”) required or permitted
to be given under the Loan Documents must be in writing and (a) delivered
personally by a process server providing a sworn declaration evidencing the date
of service, the individual served, and the address where the service was made;
(b) sent by certified mail, return receipt requested; or (c) delivered by
nationally recognized overnight delivery service that provides evidence of the
date of delivery (for next morning delivery if sent by overnight delivery
service), in all cases with charges prepaid, addressed to the appropriate party
at its address listed below:

 

If to Lender:

Teachers Insurance and Annuity Association of America

 

730 Third Avenue

 

New York, New York 10017

 

Attention:

Director Portfolio Management — Midwest/Southwest

 

 

Mortgage and Real Estate

 

TIAA Appl. #AAA-3831

 

Authorization #000576200

 

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with a courtesy

 

copy to:

Teachers Insurance and Annuity Association of America

 

730 Third Avenue

 

New York, New York 10017

 

Attention:

Managing Counsel — NY

 

 

Investment Management Law

 

TIAA Appl. #AAA-3831

 

Authorization #000576200

 

 

If to Borrower:

Algonquin Phase I Associates LLC

 

and Algonquin Commons, LLC

 

c/o Rookwood Tower

 

3805 Edwards Road, Suite 700

 

Cincinnati, Ohio 45209

 

Attn: Jeffrey R. Anderson

 

 

with a courtesy

 

copy to:

Dinsmore & Shohl LLP

 

1900 Chemed Center

 

255 East Fifth Street

 

Cincinnati, Ohio 45202

 

Attention: Thomas J. Sherman, Esq.

 

Lender and Borrower each may change from time to time the address to which
Notices must be sent, by notice given in accordance with the provisions of this
Section. All Notices given in accordance with the provisions of this
Section will be deemed to have been received on the earliest of (i) actual
receipt; (ii) Borrower’s rejection of delivery; or (iii) 3 Business Days after
having been deposited in any mail depository regularly maintained by the United
States postal service, if sent by certified mail, or 1 Business Day after having
been deposited with a nationally recognized overnight delivery service, if sent
by overnight delivery or on the date of personal service, if served by a process
server.

 

Section 17.2.  Change in Borrower’s Legal Name. Place of Business or State of
Formation. Borrower will notify Lender in writing prior to any change in
Borrower’s legal name, place of business or state formation, including as a
result of, or in connection with, any Transfer, including any Permitted
Transfer.

 

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ARTICLE XVIII

 

MISCELLANEOUS

 

Section 18.1.  Applicable Law. The Loan Documents are governed by and will be
construed in accordance with the Laws of the State of Illinois without regard to
conflict of law provisions, except to the extent that the Uniform Commercial
Code requires otherwise.

 

Section 18.2.  Usury Limitations. Borrower and Lender intend to comply with all
Laws with respect to the charging and receiving of interest. Any amounts charged
or received by Lender for the use or forbearance of the Principal to the extent
permitted by Law, will be amortized and spread throughout the Term until payment
in full so that the rate or amount of interest charged or received by Lender on
account of the Principal does not exceed the Maximum Interest Rate. If any
amount charged or received under the Loan Documents that is deemed to be
interest is determined to be in excess of the amount permitted to be charged or
received at the Maximum Interest Rate, the excess will be deemed to be a
prepayment of Principal when paid, without premium, and any portion of the
excess not capable of being so applied will be refunded to Borrower. If during
the Term the Maximum Interest Rate, if any, is eliminated, then for the purposes
of the Loan, there will be no Maximum Interest Rate.

 

Section 18.3.  Lender’s Discretion. Wherever under the Loan Documents any matter
is required to be satisfactory to Lender, Lender has the right to approve or
determine any matter or Lender has an election, Lender’s approval, determination
or election will be made in Lender’s reasonable discretion unless expressly
provided to the contrary.

 

Section 18.4.  Unenforceable Provisions. If any provision in the Loan Documents
is found to be illegal or unenforceable or would operate to invalidate any of
the Loan Documents, then the provision will be deemed expunged and the Loan
Documents will be construed as though the provision was not contained in the
Loan Documents and the remainder of the Loan Documents will remain in full force
and effect.

 

Section 18.5.  Survival of Borrower’s Obligations. Borrower’s representations,
warranties and covenants contained in the Loan Documents will continue in full
force and effect and survive (i) satisfaction of the Obligations; (ii) release
of the lien of this Mortgage; (iii) assignment or other transfer of all or any
portion of Lender’s interest in the Loan Documents or the Property;
(iv) Lender’s exercise of any of the Remedies or any of Lender’s other rights
under the Loan Documents; (v) a Transfer; (vi) amendments to the Loan Documents;
and (vii) any other act or omission that might otherwise be construed as a
release or discharge of Borrower.

 

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Section 18.6.  Relationship Between Borrower and Lender; No Third Party
Beneficiaries.

 

(a)  Lender is not a partner of or joint venturer with Borrower or any other
entity as a result of the Loan or Lender’s rights under the Loan Documents; the
relationship between Lender and Borrower is strictly that of creditor and
debtor. Each Loan Document is an agreement between the parties to that Loan
Document for the mutual benefit of the parties and no entities other than the
parties to that Loan Document will be a third party beneficiary or will have any
claim against Lender or Borrower by virtue of the Loan Document. As between
Lender and Borrower, any actions taken by Lender under the Loan Documents will
be taken for Lender’s protection only, and Lender has not and will not be deemed
to have assumed any responsibility to Borrower or to any other entity by virtue
of Lender’s actions.

 

(b)  All conditions to Lender’s performance of its obligations under the Loan
Documents are imposed solely for the benefit of Lender. No entity other than
Lender will have standing to require satisfaction of the conditions in
accordance with their provisions or will be entitled to assume that Lender will
refuse to perform its obligations in the absence of strict compliance with any
of the conditions.

 

Section 18.7.  Partial Releases; Extensions; Waivers. Lender may: (i) release
any part of the Property or any entity obligated for any of the Obligations;
(ii) extend the time for payment or performance of any of the Obligations or
otherwise amend the provisions for payment or performance by agreement with any
entity that is obligated for the Obligations or that has an interest in the
Property; (iii) accept additional security for the payment and performance of
the Obligations; and (iv) waive any entity’s performance of an Obligation,
release any entity or individual now or in the future liable for the performance
of the Obligation or waive the exercise of any Remedy or option. Lender may
exercise any of the foregoing rights without notice, without regard to the
amount of any consideration given, without affecting the priority of the Loan
Documents, without releasing any entity not specifically released from its
obligations under the Loan Documents, without releasing any guarantor(s) or
surety(ies) of any of the Obligations, without effecting a novation of the Loan
Documents and, with respect to a waiver, without waiving future performance of
the Obligation or exercise of the Remedy waived.

 

Section 18.8.  Service of Process. Borrower irrevocably consents to service of
process by registered or certified mail, postage prepaid, return receipt
requested, to Borrower at its address set forth in the Article entitled
“Notices”.

 

Section 18.9.  Entire Agreement. Oral agreements or commitments between Borrower
and Lender to lend money, to extend credit or to forbear from enforcing
repayment of a debt, including promises to extend or renew the debt, are not
enforceable. Any agreements between Borrower and Lender relating to the Loan are
contained in the Loan Documents, which contain the complete and exclusive
statement of the agreements between Borrower and Lender, except as Borrower and
Lender may later agree in writing to amend the Loan Documents. The language of

 

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each Loan Document will be construed as a whole according to its fair meaning
and will not be construed against the party by or for whom it was drafted.

 

Section 18.10.  No Oral Amendment. The Loan Documents may not be amended, waived
or terminated orally or by any act or omission made individually by Borrower or
Lender but may be amended, waived or terminated only by a written document
signed by the party against which enforcement of the amendment, waiver or
termination is sought.

 

Section 18.11.  Lost or Destroyed Note. If the Note is lost, mutilated,
destroyed or stolen, Borrower will deliver to Lender a new, substitute note
containing the same provisions as the Note, provided that Borrower is furnished
with reasonably satisfactory evidence of the loss, mutilation, destruction or
theft of the Note.

 

Section 18.12.  Severability. The invalidity, illegality or unenforceability of
any provision of any of the Loan Documents will not affect any other provisions
of the Loan Documents, which will be construed as if the invalid, illegal or
unenforceable provision never had been included.

 

Section 18.13.  Covenants Run with the Land. Subject to the restrictions on
transfer contained in the Article entitled “TRANSFERS, LIENS AND ENCUMBRANCES”,
all of the covenants of this Mortgage and the Assignment run with the Land, will
bind all parties hereto and all tenants and subtenants of the Land or the
Improvements and their respective heirs, executors, administrators, successors
and assigns, and all occupants and subsequent owners of the Property, and will
inure to the benefit of Lender and all subsequent holders of the Note and this
Mortgage.

 

Section 18.14.  Time of the Essence. Time is of the essence with respect to
Borrower’s payment and performance of the Obligations.

 

Section 18.15.  Subrogation. If the Principal or any other amount advanced by
Lender is used directly or indirectly to pay off, discharge or satisfy all or
any part of an encumbrance affecting the Property, then Lender is subrogated to
the encumbrance and to any security held by the holder of the encumbrance, all
of which will continue in full force and effect in favor of Lender as additional
security for the Obligations.

 

Section 18.16.  Joint and Several Liability. If Borrower consists of more than
one person or entity, the obligations and liabilities of each such person or
entity under this Mortgage are joint and several.

 

Section 18.17.  Successors and Assigns. The Loan Documents bind the parties to
the Loan Documents and their respective successors, assigns, heirs,
administrators, executors, agents and representatives and inure to the benefit
of Lender and its successors, assigns, heirs, administrators, executors, agents
and representatives.

 

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Section 18.18.  Duplicates and Counterparts. Duplicate counterparts of any of
the Loan Documents, other than the Note, may be executed and together will
constitute a single original document.

 

[SIGNATURES ON NEXT PAGE]

 

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IN WITNESS WHEREOF, Borrower has executed and delivered this Mortgage as of the
date first set forth above.

 

 

ALGONQUIN PHASE I ASSOCIATES LLC, an Illinois limited liability company

 

 

 

By:

Jeffrey R. Anderson Real Estate, Inc. an Ohio corporation and its authorized
agent

 

 

 

 

 

 

By:

/s/ Jeffrey R. Anderson

 

 

Printed Name: Jeffrey R. Anderson

 

 

 

Title: President

 

 

 

 

 

ALGONQUIN COMMONS, LLC, an Illinois limited liability company

 

 

 

By:

Jeffrey R. Anderson Real Estate, Inc. an Ohio corporation and its authorized
agent

 

 

 

 

 

 

By:

/s/ Jeffrey R. Anderson

 

 

Printed Name: Jeffrey R. Anderson

 

 

 

Title: President

 

[ACKNOWLEDGMENTS ON NEXT PAGE]

 

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ACKNOWLEDGMENTS

 

STATE OF OHIO

)

 

) ss:

COUNTY OF HAMILTON

)

 

Before me, the undersigned authority, a Notary in and for said State, on this
day personally appeared Jeffrey R. Anderson, known to me to be the person whose
name is subscribed to the foregoing instrument and known to me to be the
president of Jeffrey R. Anderson Real Estate, Inc., authorized agent for
Algonquin Phase I Associates LLC, an Illinois limited liability company, and
that said instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors, and acknowledged that he/she executed the
said instrument for the uses, purposes and consideration therein expressed on
behalf of said Algonquin Phase I Associates, LLC.

 

Given under my hand and seal of office this 26 day of October, 2004.

 

 

/s/ Kimberlea Ramsey

[g129491ne11i001.jpg]

KIMBERLEA RAMSEY

Notary Public

In and for the State of Ohio

My Commission Expires

November 11, 2007

 

 

Notary Public in and for the State of Ohio

My commission expires: 11-11-2007

 

 

STATE OF OHIO

)

 

) ss:

COUNTY OF HAMILTON

)

 

Before me, the undersigned authority, a Notary in and for said State, on this
day personally appeared Jeffrey R. Anderson, known to me to be the person whose
name is subscribed to the foregoing instrument and known to me to be the
president of Jeffrey R. Anderson Real Estate, Inc., authorized agent for
Algonquin Commons, LLC, an Illinois limited liability company, and that said
instrument was signed and sealed in behalf of said corporation by authority of
its Board of Directors, and acknowledged that he/she executed the said
instrument for the uses, purposes and consideration therein expressed on behalf
of said Algonquin Commons, LLC.

 

Given under my hand and seal of office this 26 day of October, 2004.

 

 

/s/ Kimberlea Ramsey

[g129491ne11i002.jpg]

KIMBERLEA RAMSEY

Notary Public

In and for the State of Ohio

My Commission Expires

November 11, 2007

 

 

Notary Public in and for the State of Ohio

My commission expires: 11-11-2007

 

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EXHIBIT A

 

LEGAL DESCRIPTION

 

PARCEL 1:

 

THAT PART OF FRACTIONAL SECTION 6, TOWNSHIP 42 NORTH, RANGE 8 EAST OF THE THIRD
PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

 

COMMENCING AT THE SOUTHWEST CORNER OF THE EAST HALF OF THE NORTHEAST QUARTER OF
SAID SECTION 6; THENCE NORTH 00° 27’ 16” WEST ALONG THE WEST LINE OF THE EAST
HALF OF SAID NORTHEAST QUARTER, 152.90 FEET FOR THE POINT OF BEGINNING; THENCE
CONTINUING NORTH 00° 27’ 16” WEST ALONG SAID WEST LINE, 1596.19 FEET; THENCE
NORTH 89° 39’ 00” EAST PARALLEL WITH THE NORTH LINE OF SAID NORTHEAST QUARTER,
335.00 FEET; THENCE NORTH 00° 27’ 16” WEST PARALLEL WITH THE WEST LINE OF THE
EAST HALF OF SAID NORTHEAST QUARTER, 30.00 FEET; THENCE NORTH 89° 39’ 00” EAST
PARALLEL WITH THE NORTH LINE OF SAID NORTHEAST QUARTER, 495.00 FEET; THENCE
SOUTH 00° 17’ 50” WEST PARALLEL WITH THE WEST LINE OF RANDALL ROAD (ACCORDING TO
DOCUMENT NO. 97KO73506, RECORDED OCTOBER 28, 1997), 209.70 FEET; THENCE NORTH
89° 57’ 05” EAST PARALLEL WITH THE SOUTH LINE OF THE NORTH HALF OF THE NORTHEAST
QUARTER OF SAID NORTHEAST QUARTER, 353.00 FEET; THENCE NORTH 00° 17’ 50” EAST
PARALLEL WITH SAID WEST LINE OF RANDALL ROAD, 62.61 FEET; THENCE NORTH 89° 57’
05” EAST PARALLEL WITH THE SOUTH LINE OF SAID NORTH HALF, 100.59 FEET TO SAID
WEST LINE OF RANDALL ROAD; THENCE SOUTH 00° 17’ 50” WEST ALONG SAID WEST LINE,
1179.75 FEET; THENCE SOUTH 89° 42’ 10” WEST, 145.76 FEET; THENCE SOUTH 45° 17’
50” WEST, 54.95 FEET; THENCE SOUTH 00° 17’ 50” WEST PARALLEL WITH SAID WEST LINE
OF RANDALL ROAD, 162.16 FEET; THENCE SOUTH 05° 55’ 32” WEST, 225.19 FEET; THENCE
SOUTH 26° 46’ 48” WEST, 113.07 FEET; THENCE SOUTH 88° 36’ 15” WEST, 569.09 FEET
TO A POINT OF CURVATURE; THENCE WESTERLY AND NORTHWESTERLY, BEING A CURVE
CONCAVE NORTHERLY HAVING A RADIUS OF 445.00 FEET, AN ARC LENGTH OF 348.99 FEET,
A CHORD BEARING OF NORTH 68° 55’ 44” WEST AND A CHORD DISTANCE OF 340.11 FEET;
THENCE NORTH 46° 27’ 42” WEST, 162.30 FEET TO THE POINT OF BEGINNING, IN THE
VILLAGE OF ALGONQUIN, DUNDEE TOWNSHIP, KANE COUNTY, ILLINOIS

 

PARCEL 2:

 

EASEMENTS FOR ROADWAYS, WATERMAIN, SANITARY SEWER, STORM SEWER AND DETENTION
FACILITY FOR THE BENEFIT OF PARCEL ONE AS SET FORTH AND DEFINED IN DECLARATION
OF EASEMENTS, RESTRICTIONS AND MAINTENANCE AGREEMENT DATED OCTOBER 08, 2003 AND
RECORDED NOVEMBER 04, 2003 AS DOCUMENT 2003K194483.

 

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Exhibit B

 

DEFINITIONS

 

“Acceleration” is defined in Section 14.2(a)(i).

 

“Accumulations” is defined in Section 2.1(xii).

 

“Accumulations Depositary” is defined in Section 6.2(a).

 

“Additional Funds” is defined in Section 7.4(v).

 

“Annual Financial Statement” is defined in Section 10.1(a).

 

“Assessments” is defined as all assessments now or hereafter levied, assessed or
imposed against the Property.

 

“Assignment” is defined as the Assignment of Leases and Rents dated of even date
with this Mortgage made by Borrower for the benefit of Lender.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Borrower” is defined in the introductory paragraph.

 

“Budget” is defined in Section 10.2.

 

“Business Days” is defined as any day on which commercial banks are not
authorized or required by Law to close in New York, New York.

 

“Casualty” is defined as damage to or destruction of the Property by fire or
other casualty.

 

“Code” is defined as the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.

 

“Condemnation” is defined as the permanent or temporary taking of all or any
portion of the Property, or any interest therein or right accruing thereto, by
the exercise of the right of eminent domain (including any transfer in lieu of
or in anticipation of the exercise of the right) or any similar injury or damage
to or decrease in the value of the Property, including severance and change in
the grade of any streets and a Condemnation will be deemed to have occurred on
the date title to the Property taken passes or if the Condemnation is temporary,
on the date Borrower no longer has use of the affected property.

 

“Condemnation Awards” is defined in Section 2.1(viii).

 

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“Condemnation Proceeding” is defined as a Proceeding that could result in a
Condemnation.

 

“CPA” is defined as an independent certified public accountant satisfactory to
Lender.

 

“Debt” is defined in Section 3.1.

 

“Debt Service Payments” is defined as the monthly installments of principal and
interest payable by Borrower to Lender as set forth in the Note.

 

“Default Interest Rate” is defined as the lower of 5% per annum or the Maximum
Interest Rate, if any.

 

“Destruction Event” is defined in Section 7.4.

 

“Development Parcel” is defined in Section 13.3.

 

“Environmental Activity” is defined as any actual, suspected or threatened
abatement, cleanup, disposal, generation, handling, manufacture, possession,
release, remediation, removal, storage, transportation, treatment or use of any
Hazardous Material. The actual, suspected or threatened presence of any
Hazardous Material or the actual, suspected or threatened noncompliance with any
Environmental Laws, will be deemed Environmental Activity.

 

“Environmental Laws” is defined as all Laws pertaining to health, safety,
protection of the environment, natural resources, conservation, wildlife, waste
management, Environmental Activities and pollution.

 

“Environmental Report” is defined as the report prepared by John Paul Buglisi,
dated April, 2004, as amended.

 

“ERISA” is defined in Section 8.3(a).

 

“Event of Default” is defined in Section 14.1.

 

“Executive Order” is defined in Section 8.4.

 

“Existing Members” is defined in Section 12.1(b).

 

“Expenses” is defined in Section 11.1(a).

 

“Financial Books and Records” is defined as detailed accounts of the income and
expenses of the Property and of Borrower and all other data, records and
information that either are specifically referred to in the Article entitled
“FINANCIAL REPORTING” or are necessary to the preparation of any of the
statements, reports or certificates required under such Article and

 

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includes all supporting schedules prepared or used by the CPA in auditing the
Annual Financial Statement or in issuing its opinion.

 

“Fiscal Year” is defined as any calendar year or partial calendar year during
the Term.

 

“Fixed Interest Rate” is defined as 5.45% per annum.

 

“Fixtures and Personal Property” is defined in Section 2.1(iv).

 

“Government” is defined as any federal, state or municipal governmental or
quasi-governmental authority including any executive, legislative or judicial
branch and any division, subdivision or agency of any of them and any entity to
which any of them has delegated authority.

 

“Hazardous Materials” is defined as any by-product, chemical, compound,
contaminant, pollutant, product, substance, waste or other material (i) that is
hazardous or toxic or (ii) the abatement, cleanup, discharge, disposal,
emission, exposure to, generation, handling, manufacture, possession, presence,
release, removal, remediation, storage, transportation, treatment or use of
which is controlled, prohibited or regulated by any Environmental Laws,
including asbestos, petroleum and petroleum products and polychlorinated
biphenyls.

 

“Imposition Penalty Date” is defined in Section 6.1(a).

 

“Impositions” is defined as all Taxes, Assessments, ground rent, if any, water
and sewer rents, fees and charges, levies, permit, inspection and license fees
and other dues, charges or impositions, including all charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, maintenance
and similar charges and charges for utility services, in each instance whether
now or in the future, directly or indirectly, levied, assessed or imposed on the
Property or Borrower and whether levied, assessed or imposed as excise,
privilege or property taxes.

 

“Improvements” is defined in Section 2.1(ii).

 

“Insurance Premiums” is defined as all present and future premiums and other
charges due and payable on policies of fire, rental value and other insurance
covering the Property and required pursuant to the provisions of this Mortgage.

 

“Insurance Proceeds” is defined in Section 2.1(ix).

 

“Insurers” is defined in Section 7.1(c).

 

“Institutional Investor” is defined as any bank, savings institution, charitable
foundation, insurance company, real estate investment trust, pension fund or
investment advisor registered under the Investment Advisors Act of 1940, as
amended, and acting as trustee or agent.

 

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“Interest” is defined as the fixed interest payable under the Note at the Fixed
Interest Rate and any other sums which are deemed to be interest under Law.

 

“Land” is defined in the Recitals.

 

“Late Charge” is defined in the Note.

 

“Law” is defined as all present and future codes, constitutions, cases,
opinions, rules, manuals, regulations, determinations, laws, orders, ordinances,
requirements and statutes, as amended, of any Government that affect or that may
be interpreted to affect the Property, Borrower or the Loan, including
amendments and all guidance documents and publications promulgated thereunder.

 

“Leases” is defined as all present and future leases, subleases, licenses and
other agreements for the use and occupancy of the Land and Improvements, any
related guarantees and any use and occupancy arrangements created pursuant to
Section 365(h) of the Bankruptcy Code or otherwise in connection with the
commencement or continuation of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar Proceedings, or any assignment
for the benefit of creditors, in respect of any tenant or other occupant of the
Land and Improvements.

 

“Lender” is defined in the introductory paragraph.

 

“Loan” is defined in the Recitals.

 

“Loan Documents” is defined as the Note, this Mortgage, the Assignment and all
documents now or hereafter executed by Borrower or held by Lender relating to
the Loan, including all amendments but excluding any indemnities or guaranties
delivered in connection with the Loan.

 

“Material Environmental Contamination” is defined as contamination of the
Property with Hazardous Materials (i) that constitutes a violation of one or
more Environmental Laws; (ii) for which there is a significant possibility that
remediation will be required under Environmental Laws; (iii) that results in a
material risk of liability or expense to Lender, or (iv) that diminishes the
value of the Property.

 

“Maturity Date” is defined in the Recitals.

 

“Maximum Interest Rate” is defined as the maximum rate of interest, if any,
permitted by Law as of the date of this Mortgage to be charged with respect to
the Loan.

 

“Mortgage” is defined as this Open-End Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Filing Statement.

 

“Note” is defined in the Recitals.

 

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“Note Payments” is defined in the Note.

 

“Notices” is defined in Section 17.1.

 

“Obligations” is defined in Section 3.1.

 

“Permitted Exceptions” is defined as the matters shown in Schedule B, Part 1 and
2 of the title insurance policy insuring the lien of this Mortgage.

 

“Permitted Transfers” is defined in Section 12.2(b).

 

“Permitted Use” is defined as use as a first-class commercial/retail
shopping/lifestyle center and uses incidentally and directly related to such
use.

 

“Personal Property” is defined as the Property, other than Fixtures, the Land or
the Improvements.

 

“Policies” is defined in Section 7.1(b).

 

“Prepayment Premium” is defined in the Note.

 

“Principal” is defined in the Recitals.

 

“Proceeding” is defined as a pending or threatened action, claim or litigation
before a legal, equitable or administrative tribunal having proper jurisdiction.

 

“Proceeds” is defined in Section 7.2(c).

 

“Prohibited Person” is defined in Section 8.4.

 

“Property” is defined in Section 2.1.

 

“Property Documents” is defined in Section 2.1(v).

 

“Receiver” is defined as a receiver, custodian, trustee, liquidator or
conservator of the Property.

 

“Remedies” is defined in Section 14.2(a).

 

“Rents” is defined as all present and future rents, prepaid rents, percentage,
participation or contingent rents, issues, profits, proceeds, parking fees,
revenues and other consideration accruing under or in connection with the Leases
or otherwise derived from the use and occupancy of the Land or the Improvements,
including tenant contributions to expenses, security deposits and royalties, if
any, all other fees or payments paid to or for the benefit of Borrower,
including liquidated damages after a default under a Lease, any termination,
cancellation,

 

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modification or other fee or premium payable by a tenant for any reason, the
proceeds of any rental insurance and any payments received pursuant to Sections
502(b) or 365 of the Bankruptcy Code or otherwise in connection with the
commencement or continuance of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any assignment
for the benefit of creditors, in respect of any tenant or other occupant of the
Land or the Improvements and all claims as a creditor in connection with any of
the foregoing.

 

“Restoration” is defined as the restoration of the Property after a Destruction
Event as nearly as possible to its condition immediately prior to the
Destruction Event, in accordance with the plans and specifications, in a
first-class workmanlike manner using materials substantially equivalent in
quality and character to those used for the original improvements, in accordance
with Law and free and clear of all liens, encumbrances or other charges other
than this Mortgage and the Permitted Exceptions.

 

“Restoration Completion Date” is defined in Section 7.4(viii).

 

“Restoration Funds” is defined in Section 7.5(b).

 

“Taxes” is defined as all present and future real estate taxes or personal
property taxes, if any, levied, assessed or imposed against the Property.

 

“Term” is defined as the scheduled term of this Mortgage commencing on the date
Lender makes the first disbursement of the Loan and terminating on the Maturity
Date.

 

“Transfer” is defined in Section 12.1(a).

 

“Uniform Commercial Code” is defined as the Uniform Commercial Code as in effect
from time to time in the jurisdiction where the Land is located or, to the
extent required by the Uniform Commercial Code, where the Borrower is located,
as applicable.

 

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Exhibit C

 

RULES OF CONSTRUCTION

 

(a) References in any Loan Document to numbered Articles or Sections are
references to the Articles and Sections of that Loan Document References in any
Loan Document to any numbered or lettered Exhibits or Schedules are references
to the Exhibits or Schedules attached to that Loan Document, all of which are
incorporated in and constitute a part of that Loan Document. Article, Section,
Exhibit and Schedule captions used in any Loan Document are for reference only
and do not describe or limit the substance, scope or intent of that Loan
Document or the individual Articles, Sections, Exhibits or Schedules of that
Loan Document.

 

(b) The terms “include”, “including” and similar terms are construed as if
followed by the phrase “without limitation”.

 

(c) The terms “Land”, “Improvements”, “Fixtures and Personal Property”,
“Condemnation Awards”, “Insurance Proceeds” and “Property” are construed as if
followed by the phrase “or any part thereof”.

 

(d) Any agreement by or duty imposed on Borrower in any Loan Document to perform
any obligation or to refrain from any act or omission constitutes a covenant
running with the ownership or occupancy of the Land and the Improvements, which
will bind all parties hereto and their respective successors and assigns, and
all lessees, subtenants and assigns of same, and all occupants and subsequent
owners of the Property, and will inure to the benefit of Lender and all
subsequent holders of the Note and this Mortgage and includes a covenant by
Borrower to cause its partners, members, principals, agents, representatives and
employees to perform the obligation or to refrain from the act or omission in
accordance with the Loan Documents. Any statement or disclosure contained in any
Loan Document about facts or circumstances relating to the Property, Borrower or
the Loan constitutes a representation and warranty by Borrower made as of the
date of the Loan Document in which the statement or disclosure is contained.

 

(e) The term “to Borrower’s knowledge” is construed as meaning to the best of
Borrower’s knowledge after diligent inquiry.

 

(f) The singular of any word includes the plural and the plural includes the
singular. The use of any gender includes all genders.

 

(g) The terms “person”, “party” and “entity” include natural persons, firms,
partnerships, limited liability companies and partnerships, corporations and any
other public or private legal entity.

 

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(h) The term “provisions” includes terms, covenants, conditions, agreements and
requirements.

 

(i) The term “amend” includes modify, supplement, renew, extend, replace or
substitute and the term “amendment” includes modification, supplement, renewal,
extension, replacement and substitution.

 

(j) Reference to any specific Law or to any document or agreement, including the
Note, this Mortgage, any of the other Loan Documents, the Leases, and the
Property Documents and includes any future amendments to the Law, document or
agreement, as the case may be.

 

(k) No inference in favor of or against a party with respect to any provision in
any Loan Document may be drawn from the fact that the party drafted the Loan
Document.

 

(l) The term “certificate” means the sworn, notarized statement of the entity
giving the certificate, made by a duly authorized person satisfactory to Lender
affirming the truth and accuracy of every statement in the certificate. Any
document that is “certified” means the document has been appended to a
certificate of the entity certifying the document that affirms the truth and
accuracy of everything in the document being certified. In all instances the
entity issuing a certificate must be satisfactory to Lender.

 

(m) Any appointment of Lender as Borrower’s attorney-in-fact is irrevocable and
coupled with an interest. Lender may appoint a substitute attorney-in-fact.
Borrower ratifies all actions taken by the attorney-in-fact but, nevertheless,
if Lender requests, Borrower will specifically ratify any action taken by the
attorney-in-fact by executing and delivering to the attorney-in-fact or to any
entity designated by the attorney-in-fact all documents necessary to effect the
ratification.

 

(n) Any document, instrument or agreement to be delivered by Borrower will be in
form and content satisfactory to Lender.

 

(o) All obligations, rights, remedies and waivers contained in the Loan
Documents will be construed as being limited only to the extent required to be
enforceable under the Law.

 

(p) The unmodified word “days” means calendar days.

 

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Exhibit D

 

PROPERTY DOCUMENTS

 

Amended and Restated Declaration of Easements, Restrictions and Maintenance
Agreement for Algonquin Commons Lifestyle Center and The Exchange at Algonquin
Commons by Algonquin Phase II Associates LLC, an Illinois limited liability
company, JRA Family Limited Liability Company, an Ohio limited liability
company, MFF Associates, LLC, an Ohio limited liability company, TGH Associates,
LLC, an Ohio limited liability company, Algonquin Commons, LLC, an Illinois
limited liability company, JRA Beechmont Twins, LLC, an Ohio limited liability
company, JRA Anderson Office Park, LLC and Algonquin Commons, LLC, an Illinois
limited liability company, dated November 4, 2003.

 

58

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