Exhibit 10.439

 

LOAN AGREEMENT

 

 

Dated as of December 21, 2004

 

 

Between

 

 

INLAND WESTERN PLACENTIA, L.L.C.,

as Borrower

 

 

and

 

 

BEAR STEARNS COMMERCIAL MORTGAGE, INC.,

as Lender

 

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

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1 Definitions

 

Section 1.2 Principles of Construction

 

ARTICLE II GENERAL TERMS

 

Section 2.1 Loan Commitment; Disbursement to Borrower

 

Section 2.2 Interest; Loan Payments; Late Payment Charge

 

Section 2.3 Prepayments

 

Section 2.4 Intentionally Omitted

 

Section 2.5 Release of Property

 

Section 2.6 Manner of Making Payments

 

Section 2.7 Intentionally Omitted

 

ARTICLE III CONDITIONS PRECEDENT

 

Section 3.1 Conditions Precedent to Closing

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES

 

Section 4.1 Borrower Representations

 

Section 4.2 Survival of Representations
[a05-3686_1ex10d439.htm#Section4_2SurvivalOfRepresentatio_144325]

 

ARTICLE V BORROWER COVENANTS
[a05-3686_1ex10d439.htm#ArticleVBorrowerCovenants_144327]

 

Section 5.1 Affirmative Covenants
[a05-3686_1ex10d439.htm#Section5_1AffirmativeCovenants_144333]

 

Section 5.2 Negative Covenants
[a05-3686_1ex10d439.htm#Section5_2NegativeCovenants_164657]

 

ARTICLE VI INSURANCE; CASUALTY; CONDEMNATION
[a05-3686_1ex10d439.htm#ArticleviInsuranceCasualtyCondemn_164710]

 

Section 6.1 Insurance [a05-3686_1ex10d439.htm#Section6_1Insurance_164713]

 

Section 6.2 Casualty [a05-3686_1ex10d439.htm#Section6_2Casualty_164720]

 

Section 6.3 Condemnation [a05-3686_1ex10d439.htm#Section6_3Condemnation_164722]

 

Section 6.4 Restoration [a05-3686_1ex10d439.htm#Section6_4Restoration_164725]

 

ARTICLE VII RESERVE FUNDS [a05-3686_1ex10d439.htm#ArticleviiReserveFunds_164733]

 

Section 7.1 Required Repair Funds
[a05-3686_1ex10d439.htm#Section7_1RequiredRepairFunds_164739]

 

Section 7.2 Tax and Insurance Escrow Fund
[a05-3686_1ex10d439.htm#Section7_2TaxAndInsuranceEscrowFu_164747]

 

Section 7.3 Replacements and Replacement Reserve
[a05-3686_1ex10d439.htm#Section7_3ReplacementsAndReplacem_164751]

 

Section 7.4 Intentionally Omitted
[a05-3686_1ex10d439.htm#Section7_4IntentionallyOmitted_164802]

 

Section 7.5 Intentionally Omitted
[a05-3686_1ex10d439.htm#Section7_5IntentionallyOmitted_164804]

 

Section 7.6 Intentionally Omitted
[a05-3686_1ex10d439.htm#Section7_6IntentionallyOmitted_164807]

 

Section 7.7 Reserve Funds, Generally
[a05-3686_1ex10d439.htm#Section7_7ReserveFundsGenerally_164809]

 

ARTICLE VIII DEFAULTS [a05-3686_1ex10d439.htm#ArticleviiiDefaults_164816]

 

Section 8.1 Event of Default
[a05-3686_1ex10d439.htm#Section8_1EventOfDefault_164819]

 

Section 8.2 Remedies [a05-3686_1ex10d439.htm#Section8_2Remedies_164825]

 

Section 8.3 Remedies Cumulative; Waivers
[a05-3686_1ex10d439.htm#Section8_3RemediesCumulativeWaive_164829]

 

ARTICLE IX SPECIAL PROVISIONS
[a05-3686_1ex10d439.htm#ArticleixSpecialProvisions_164834]

 

Section 9.1 Sale of Notes and Securitization
[a05-3686_1ex10d439.htm#Section9_1SaleOfNotesAndSecuritiz_164836]

 

Section 9.2 Securitization
[a05-3686_1ex10d439.htm#Section9_2Securitization_164841]

 

Section 9.3 Rating Surveillance
[a05-3686_1ex10d439.htm#Section9_3RatingSurveillance_164843]

 

Section 9.4 Exculpation [a05-3686_1ex10d439.htm#Section9_4Exculpation_164847]

 

 

i

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Section 9.5 Termination of Manager
[a05-3686_1ex10d439.htm#Section9_5TerminationOfManager_164857]

 

Section 9.6 Servicer [a05-3686_1ex10d439.htm#Section9_6Servicer_164900]

 

Section 9.7 Splitting the Loan
[a05-3686_1ex10d439.htm#Section9_7SplittingTheLoan_164902]

 

ARTICLE X MISCELLANEOUS [a05-3686_1ex10d439.htm#ArticlexMiscellaneous_164907]

 

Section 10.1 Survival [a05-3686_1ex10d439.htm#Section10_1Survival_164909]

 

Section l0.2 Lender’s Discretion
[a05-3686_1ex10d439.htm#Section10_2LendersDiscretion_164912]

 

Section 10.3 Governing Law
[a05-3686_1ex10d439.htm#Section10_3GoverningLaw_164914]

 

Section 10.4 Modification, Waiver in Writing
[a05-3686_1ex10d439.htm#Section10_4ModificationWaiverInWr_164917]

 

Section 10.5 Delay Not a Waiver
[a05-3686_1ex10d439.htm#Section10_5DelayNotAWaiver_164919]

 

Section 10.6 Notices [a05-3686_1ex10d439.htm#Section10_6Notices_164922]

 

Section l0.7 Trial by Jury
[a05-3686_1ex10d439.htm#Section10_7TrialByJury_164926]

 

Section l0.8 Headings [a05-3686_1ex10d439.htm#Section10_8Headings_164928]

 

Section 10.9 Severability
[a05-3686_1ex10d439.htm#Section10_9Severability_164931]

 

Section 10.10 Preferences
[a05-3686_1ex10d439.htm#Section10_10Preferences_164934]

 

Section 10.11 Waiver of Notice
[a05-3686_1ex10d439.htm#Section10_11WaiverOfNotice_164937]

 

Section 10.12 Remedies of Borrower
[a05-3686_1ex10d439.htm#Section10_12RemediesOfBorrower_164940]

 

Section 10.13 Expenses; Indemnity
[a05-3686_1ex10d439.htm#Section10_13ExpensesIndemnity_164949]

 

Section 10.14 Schedules Incorporated
[a05-3686_1ex10d439.htm#Section10_14SchedulesIncorporated_164955]

 

Section 10.15 Offsets, Counterclaims and Defenses
[a05-3686_1ex10d439.htm#Section1015OffsetsCounterclaimsAn_164958]

 

Section 10.16 No Joint Venture or Partnership; No Third Party Beneficiaries
[a05-3686_1ex10d439.htm#Section10_16NoJointVentureOrPartn_165005]

 

Section 10.17 Publicity [a05-3686_1ex10d439.htm#Section10_17Publicity_165008]

 

Section 10.18 Waiver of Marshalling of Assets
[a05-3686_1ex10d439.htm#Section10_18WaiverOfMarshallingOf_165010]

 

Section 10.19 Waiver of Counterclaim
[a05-3686_1ex10d439.htm#Section10_19WaiverOfCounterclaim_165014]

 

Section 10.20 Conflict; Construction of Documents; Reliance
[a05-3686_1ex10d439.htm#Section10_20ConflictConstructionO_165016]

 

Section 10.21 Brokers and Financial Advisors
[a05-3686_1ex10d439.htm#Section10_21BrokersAndFinancialAd_165020]

 

Section 10.22 Prior Agreements
[a05-3686_1ex10d439.htm#Section10_22PriorAgreements_165022]

 

Section 10.23 Transfer of Loan
[a05-3686_1ex10d439.htm#Section10_23TransferOfLoan_165024]

 

Section 10.24 Joint and Several Liability
[a05-3686_1ex10d439.htm#Section10_24JointAndSeveralLiabil_165027]

 

 

SCHEDULES

 

Schedule I [a05-3686_1ex10d439.htm#Schedulei_165040]

-

Intentionally Omitted [a05-3686_1ex10d439.htm#Schedulei_165040]

Schedule II [a05-3686_1ex10d439.htm#Scheduleii_165042]

-

Intentionally Omitted [a05-3686_1ex10d439.htm#Scheduleii_165042]

Schedule III

-

Required Repairs

Schedule IV

-

Rent Roll

Schedule V

-

Intentionally Omitted

Schedule VI

-

Intentionally Omitted

Schedule VII

-

Intentionally Omitted

Schedule VIII

-

Intentionally Omitted

Schedule IX

-

Intentionally Omitted

Schedule X

-

Other Contract Funds Agreements

 

ii

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LOAN AGREEMENT

 

THIS LOAN AGREEMENT, dated as of this 21 day of December, 2004 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
“Agreement”), between BEAR STEARNS COMMERCIAL MORTGAGE, INC., a New York
corporation, having an address at 383 Madison Avenue, New York, New York 10179
(“Lender”), and INLAND WESTERN PLACENTIA, L.L.C., a Delaware limited liability
company, having an address at 2901 Butterfield Road, Oak Brook, Illinois 60523
(“Borrower”).

 

W I T N E S S E T H:

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1                                      Definitions. For all purposes
of this Agreement, except as otherwise expressly required or unless the context
clearly indicates a contrary intent:

 

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

 

“ALTA” shall mean American Land Title Association, or any successor thereto.

 

“Anchor Tenant” shall mean, collectively, (a) Office Max North America, Inc.,
f.k.a. Office Max, Inc. and (b) Ross Stores, Inc., pursuant to the Anchor Tenant
Lease.

 

“Anchor Tenant Lease” shall mean:

 

(i)                                     with respect to Office Max North
America, Inc., f.k.a. Office Max, Inc. that certain Lease Agreement, dated
August 27, 1996, by and between Donahue Schriber, as original landlord and
predecessor-in-interest to Borrower, as landlord, and Anchor Tenant (or its
predecessor-in-interest) as tenant as the same has previously been amended and
may be further amended, restated, renewed, substituted or replaced (but only to
the extent permitted under this Agreement); and

 

(ii)                                  with respect to Ross Stores, Inc. that
certain Lease, dated August 16, 1993, by and between Diversified Shopping
Center, as original landlord and predecessor-in-interest

 

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

 

to Borrower, as landlord, and Anchor Tenant (or its predecessor-in-interest) as
tenant as the same has previously been amended and may be further amended,
restated, renewed, substituted or replaced (but only to the extent permitted
under this Agreement).

 

“Annual Budget” shall mean the operating budget, including all planned capital
expenditures, for the Property prepared by Borrower for the applicable Fiscal
Year or other period.

 

“Assignment of Leases” shall mean, with respect to the Property, that certain
first priority Assignment of Leases and Rents, dated as of the Closing Date,
from Borrower, as assignor, to Lender, as assignee, assigning to Lender all of
Borrower’s interest in and to the Leases and Rents of the Property as security
for the Loan, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

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

 

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

 

“Basic Carrying Costs” shall mean, with respect to the Property, the sum of the
following costs associated with the Property for the relevant Fiscal Year or
payment period: (i) Taxes and (ii) Insurance Premiums.

 

“Borrower” shall mean Inland Western Placentia, L.L.C., together with its
permitted successors and assigns.

 

“Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which national banks in New York, New York are not open for business.

 

“Capital Expenditures” shall mean, for any period, the amount expended for items
capitalized under accounting principles reasonably acceptable to Lender,
consistently applied (including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements).

 

“Cash Expenses” shall mean, for any period, the operating expenses for the
operation of the Property as set forth in an Approved Annual Budget to the
extent that such expenses are actually incurred by Borrower minus any payments
into the Tax and Insurance Escrow Fund.

 

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

 

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

 

2

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

 

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

 

“Closing Date” shall mean the date hereof.

 

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

 

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

 

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

 

“Debt Service” shall mean, with respect to any particular period of time,
scheduled interest payments under the Note.

 

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

 

(b)                                 the numerator is the Net Operating Income
(excluding interest on credit accounts) for such period as set forth in the
statements required hereunder, without deduction for (i) actual management fees
incurred in connection with the operation of the Property, (ii) amounts paid to
the Reserve Funds, less (A) management fees equal to the greater of (1) assumed
management fees of four percent (4.0%) of Gross Income from Operations or (2)
the actual management fees incurred, (B) assumed Replacement Reserve Fund
contributions equal to $0.15 per square foot of gross leaseable area at the
Property; and (C) assumed reserves for tenant improvements and leasing
commissions equal to $0.28 per square foot of gross leaseable area at the
Property; and

 

(c)                                  the denominator is the aggregate amount of
interest due and payable on the Note for such applicable period.

 

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

 

3

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

 

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to
the lesser of (a) the maximum rate permitted by applicable law, or (b) five
percent (5%) above the Interest Rate.

 

“Disclosure Document” shall have the meaning set forth in Section 9.2 hereof.

 

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

 

“Eligible Institution” shall mean a depository institution or trust company
insured by the Federal Deposit Insurance Corporation the short term unsecured
debt obligations or commercial paper of which are rated at least A-l by Standard
& Poor’s Ratings Services, P-l by Moody’s Investors Service, Inc., and F-1+ by
Fitch, Inc. in the case of accounts in which funds are held for 30 days or less
(or, in the case of accounts in which funds are held for more than 30 days, the
long term unsecured debt obligations of which are rated at least “AA” by Fitch
and S&P and “Aa” by Moody’s).

 

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

 

“Environmental Report” shall have the meaning as defined in the Environmental
Indemnity executed by the Borrower.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

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

 

“Exchange Act” shall have the meaning set forth in Section 9.2 hereof.

 

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

 

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

 

4

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

 

“Gross Income from Operations” shall mean all sustainable income as reported on
the financial statements delivered by the Borrower in accordance with this
Agreement, computed in accordance with accounting principles reasonably
acceptable to Lender, consistently applied, derived from the ownership and
operation of the Property from whatever source, including, but not limited to,
(i) Rents from Tenants that are in occupancy, open for business and paying
unabated Rent, (ii) utility charges, (iii) escalations, (iv) intentionally
omitted; (v) service fees or charges, (vi) license fees, (vii) parking fees, and
(viii) other required pass-throughs but excluding (i) Rents from Tenants that
are subject to any bankruptcy proceeding (unless such Tenant has affirmed its
Lease or Inland Western Retail Real Estate Trust, Inc. has master leased such
Tenant’s premises for full contract rent for a period not less than three years,
and the net worth of Inland Western Retail Real Estate Trust, Inc. (as
determined by Lender) is not less than such entity’s net worth as of September
30, 2003), or are not in occupancy, open for business or paying unabated Rent,
(ii) sales, use and occupancy or other taxes on receipts required to be
accounted for by Borrower to any Governmental Authority, (iii) refunds and
uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v)
Insurance Proceeds (other than business interruption or other loss of income
insurance), (vi) Awards, (vii) unforfeited security deposits, (viii) utility and
other similar deposits and (ix) any disbursements to Borrower from the Reserve
Funds. Gross income shall not be diminished as a result of the Mortgage or the
creation of any intervening estate or interest in the Property or any part
thereof.

 

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

 

“Indebtedness” of a Person, at a particular date, means the sum (without
duplication) at such date of (a) indebtedness or liability for borrowed money;
(b) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (c) obligations for the deferred purchase price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance facilities; (f) all guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds, to invest in any Person or entity, or otherwise to assure a
creditor against loss; and (g) obligations secured by any Liens, whether or not
the obligations have been assumed.

 

“Indemnitor” shall mean Inland Western Retail Real Estate Trust, Inc., a
Maryland corporation.

 

“Indemnity Agreement” shall mean that certain Indemnity Agreement dated as of
the Closing Date by Borrower and Indemnitor in favor of Lender.

 

“Inland Western Retail Real Estate Trust, Inc.” shall mean Inland Western Retail
Real Estate Trust, Inc., a Maryland corporation.

 

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

 

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

 

“Interest Rate” shall mean four and 597/1000 percent (4.597%) per annum.

 

5

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

 

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

 

“Lender” shall mean Bear Stearns Commercial Mortgage, Inc., together with its
successors and assigns.

 

“Licenses” shall have the meaning set forth in Section 4.1.22 hereof.

 

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

 

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

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Mortgage, the Assignment of Leases and Rents, the Environmental Indemnity, the
Assignment of Management Agreement, the Indemnity Agreement and all other
documents executed and/or delivered in connection with the Loan.

 

“Management Agreement” shall mean, with respect to the Property, the management
agreement entered into by and between Borrower and the Manager, pursuant to
which the Manager is to provide management and other services with respect to
the Property.

 

“Manager” shall mean Inland Pacific Management LLC.

 

6

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“Maturity Date” shall mean January 1, 2010, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

 

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

 

“Monthly Debt Service Payment Amount” shall mean an amount equal to $52,463.26.

 

“Mortgage” shall mean, with respect to the Property, that certain first priority
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing, dated the Closing Date, executed and delivered by Borrower as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

 

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

 

“Net Cash Flow After Debt Service” shall mean, with respect to the Property for
any period, the amount obtained by subtracting Debt Service for such period from
Net Cash Flow for such period.

 

“Net Cash Flow Schedule” shall have the meaning set forth in Section 5.1.1l (b)
hereof.

 

“Net Operating Income” shall mean the amount obtained by subtracting from Gross
Income from Operations (i) Operating Expenses, and (ii) a vacancy allowance
equal to the greater of (x) market vacancy (as reasonably determined by Lender),
less actual vacancy, and (y) underwritten vacancy of 4.36%, less actual vacancy.
Notwithstanding the foregoing, if actual vacancy exceeds market vacancy and
underwritten vacancy, then there shall be no adjustment for a vacancy allowance.

 

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

 

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

 

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

 

“Note” shall mean that certain Promissory Note of even date herewith in the
principal amount of Thirteen Million Six Hundred Ninety Five Thousand and NO/100
Dollars

 

7

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($13,695,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Officers’ Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by the Sole Member.

 

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

 

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

 

“Other Contract Funds” shall mean any payment due to Borrower under any of the
agreements described on Schedule X.

 

“Payment Date” shall mean the first (1st) day of each calendar month during the
term of the Loan or, if such day is not a Business Day, the immediately
succeeding Business Day.

 

“Permitted Encumbrances” shall mean, with respect to the Property, collectively,
(a) the Liens and security interests created by the Loan Documents, (b) all
Liens, encumbrances and other matters disclosed in the Title Insurance Policy
relating to the Property or any part thereof, (c) Liens, if any, for Taxes
imposed by any Governmental Authority not yet due or delinquent, and (d) such
other title and survey exceptions as Lender has approved or may approve in
writing in Lender’s reasonable discretion, which Permitted Encumbrances in the
aggregate do not materially adversely affect the value or use of the Property or
Borrower’s ability to repay the Loan.

 

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

 

(i)                                     obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
agency or instrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully

 

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

 

(ii)                                  Federal Housing Administration debentures;

 

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

 

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

 

(v)                                 fully Federal Deposit Insurance
Corporation-insured demand and time deposits in, or certificates of deposit of,
or bankers’ acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating

 

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

 

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

 

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

 

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

 

10

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result in a downgrade, qualification or withdrawal of the initial, or, if
higher, then current ratings assigned to the Securities) for money market funds;
and

 

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

 

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

 

“Permitted Prepayment Date” shall mean the date that is three (3) years from the
first day of the calendar month immediately following the Closing Date.

 

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

 

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

 

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

 

“Policies” shall have the meaning specified in Section 6.l(b) hereof.

 

“Prepayment Consideration” shall have the meaning set forth in Section 2.3.1.

 

“Prepayment Rate” shall mean the bond equivalent yield (in the secondary market)
on the United States Treasury Security that as of the Prepayment Rate
Determination Date has a remaining term to maturity closest to, but not
exceeding, the remaining term to the Maturity Date, as most recently published
in the “Treasury Bonds, Notes and Bills” section in The Wall Street Journal as
of the date of the related tender of the payment. If more than one issue of
United States Treasury Securities has the remaining term to the Maturity Date
referred to above, the “Prepayment Rate” shall be the yield on the United States
Treasury Security most recently issued as of such date. If the publication of
the Prepayment Rate in The Wall Street Journal is discontinued, Lender shall
determine the Prepayment Rate on the basis of “Statistical

 

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Release H.I5(519), Selected Interest Rates,” or any successor publication,
published by the Board of Governors of the Federal Reserve System, or on the
basis of such other publication or statistical guide as Lender may reasonably
select.

 

“Prepayment Rate Determination Date” shall mean the date which is five (5)
Business Days prior to the prepayment date.

 

“Property” shall mean the parcel of real property, the Improvements thereon and
all personal property owned by Borrower and encumbered by the Mortgage, together
with all rights pertaining to such property and Improvements, as more
particularly described in the Granting Clauses of the Mortgage and referred to
therein as the “Property”.

 

“Provided Information” shall have the meaning set forth in Section 9.1(a)
hereof.

 

“Qualifying Entity” shall have the meaning set forth in Section 5.2.13(b)
hereof.

 

“Qualifying Manager” shall mean either (a) a reputable and experienced
management organization reasonably satisfactory to Lender, which organization or
its principals possess at least ten (10) years experience in managing properties
similar in size, scope and value of the Property and which, on the date Lender
determines whether such management organization is a Qualifying Manager, manages
at least one million square feet of retail space, provided that Borrower shall
have obtained prior written confirmation from the Rating Agency that management
of the Property by such entity will not cause a downgrading, withdrawal or
qualification of the then current rating of the securities issued pursuant to
the Securitization, or (b) the fee owner of the Property, provided that such
owner possesses experience in managing and operating properties similar in size,
scope and value of the Property. Lender acknowledges that on the Closing Date,
Manager shall be deemed to be a Qualifying Manager.

 

“Rating Agencies” shall mean each of Standard & Poor’s Ratings Services, a
division of McGraw-Hill, Inc., Moody’s Investors Service, Inc. and Fitch, Inc.,
or any other nationally-recognized statistical rating agency which has been
approved by Lender.

 

“Rating Surveillance Charge” shall have the meaning set forth in Section 9.3
hereof.

 

“Relevant Leasing Threshold” shall mean, any Lease for an amount of leaseable
square footage equal to or greater than 10,000 square feet.

 

“Relevant Restoration Threshold” shall mean Three Hundred Fifty Thousand and
No/100 dollars ($350,000.00).

 

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

 

“Rents” shall mean, with respect to the Property, all rents, rent equivalents,
moneys payable as damages or in lieu of rent or rent equivalents, royalties
(including, without limitation, all oil and gas or other mineral royalties and
bonuses), income, receivables, receipts,

 

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revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the Property, and proceeds, if any, from
business interruption or other loss of income insurance, including the Other
Contract Funds.

 

“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1
hereof.

 

“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1
hereof.

 

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in
Section 7.3.1 hereof.

 

“Replacements” shall have the meaning set forth in Section 7.3.1 (a) hereof.

 

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

 

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

 

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

 

“Reserve Funds” shall mean the Tax and Insurance Escrow Fund, the Replacement
Reserve Fund, the Required Repair Fund (if any), or any other escrow fund
established by the Loan Documents.

 

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

 

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

 

“Securities Act” shall have the meaning set forth in Section 9.2 hereof.

 

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

 

“Servicer” shall have the meaning set forth in Section 9.6 hereof.

 

“Servicing Agreement” shall have the meaning set forth in Section 9.6 hereof.

 

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

 

“Severing Documentation” shall have the meaning set forth in Section 9.7 hereof.

 

“Sole Member” shall mean Inland Western Retail Real Estate Trust, Inc.

 

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“Special Purpose Entity” means a corporation, limited partnership, limited
liability company, or Delaware statutory trust which at all times on and after
the Closing Date:

 

(i)                                     is organized solely for the purpose of
(A) acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Property, entering into this Agreement
with the Lender, refinancing the Property in connection with a permitted
repayment of the Loan, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing; or (B) acting as a
general partner of the limited partnership that owns the Property, a member of
the limited liability company that owns the Property or the beneficiary or
trustee of a Delaware statutory trust that owns the Property;

 

(ii)                                  is not engaged and will not engage in any
business unrelated to (A) the acquisition, development, ownership, management or
operation of the Property, (B) acting as general partner of the limited
partnership that owns the Property, (C) acting as a member of the limited
liability company that owns the Property, or (D) acting as the beneficiary or
trustee of a Delaware statutory trust that owns the Property, as applicable;

 

(iii)                               does not have and will not have any assets
other than those related to the Property or its partnership interest in the
limited partnership, the member interest in the limited liability company or the
beneficial interest in the Delaware statutory trust that owns the Property or
acts as the general partner, managing member or beneficiary or trustee thereof,
as applicable;

 

(iv)                              has not engaged, sought or consented to and
will not engage in, seek or consent to any dissolution, winding up, liquidation,
consolidation, merger, sale of all or substantially all of its assets, transfer
of partnership, membership or beneficial or trustee interests (if such entity is
a general partner in a limited partnership, a member in a limited liability
company or a beneficiary of a Delaware trust) or amendment of its limited
partnership agreement, articles of incorporation, articles of organization,
certificate of formation, operating agreement or trust formation and governance
documents (as applicable) with respect to the matters set forth in this
definition;

 

(v)                                 if such entity is a limited partnership, has
as its only general partners, Special Purpose Entities that are corporations,
limited partnerships or limited liability companies;

 

(vi)                              intentionally omitted;

 

(vii)                           if such entity is a limited liability company
and such limited liability company has more than one member, such limited
liability company has as its manager a Special Purpose Entity that is a
corporation and that owns at least 1.0% (one percent) of the equity of the
limited liability company;

 

(viii)                        if such entity is a limited liability company and
such limited liability company has only one member, such limited liability
company (a) has been formed under Delaware law, and (b) has either a corporation
or other person or entity that shall become

 

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a member of the limited liability company upon the dissolution or disassociation
of the member;

 

(ix)                                if such entity is (a) a limited liability
company, has articles of organization, a certificate of formation and/or an
operating agreement, as applicable, (b) a limited partnership, has a limited
partnership agreement, (c) a corporation, has a certificate or articles of
incorporation and bylaws, as applicable, or (d) a Delaware statutory trust, has
organizational documents that, in each case, provide that such entity will not:
(1) dissolve, merge, liquidate, consolidate; (2) except as permitted herein,
sell all or substantially all of its assets or the assets of the Borrower (as
applicable) except as permitted herein; (3) engage in any other business
activity, or amend its organizational documents with respect to the matters set
forth in this definition without the consent of the Lender; or (4) without the
affirmative vote of all directors of the corporation (that is such entity or the
general partner or managing or co-managing member or manager of such entity),
file a bankruptcy or insolvency petition or otherwise institute insolvency
proceedings with respect to itself or to any other entity in which it has a
direct or indirect legal or beneficial ownership interest;

 

(x)                                   has not entered into or been a party to,
and will not enter into or be a party to, any transaction with its partners,
members, beneficiaries, shareholders or Affiliates except (A) in the ordinary
course of its business and on terms which are intrinsically fair, commercially
reasonable and are no less favorable to it than would be obtained in a
comparable arm’s-length transaction with an unrelated third party and (B) in
connection with this Agreement;

 

(xi)                                is solvent and pays its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same become due, and is maintaining adequate capital for
the normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations;

 

(xii)                             has not failed and will not fail to correct
any known misunderstanding regarding the separate identity of such entity;

 

(xiii)                          will file its own tax returns; provided,
however, that Borrower’s assets and income may be included in a consolidated tax
return of its parent companies if inclusion on such consolidated tax return is
in compliance with applicable law;

 

(xiv)                         has maintained and will maintain its own
resolutions and agreements;

 

(xv)                            (a) has not commingled and will not commingle
its funds or assets with those of any other Person and (b) has not participated
and will not participate in any cash management system with any other Person,
except with respect to a custodial account maintained by the Manager on behalf
of Affiliates of Borrower and, with respect to funds in such custodial account,
has separately accounted, and will continue to separately account for, each item
of income and expense applicable to the Property and Borrower;

 

(xvi)                         has held and will hold its assets in its own name;

 

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(xvii)                      has conducted and will conduct its business in its
name or in a name franchised or licensed to it by an entity other than an
Affiliate of Borrower;

 

(xviii)                   has maintained and will maintain its balance sheets,
operating statements and other entity documents separate from any other Person
and has not permitted and will not permit its assets to be listed as assets on
the financial statement of any other entity except as required or permitted by
applicable accounting principles acceptable to Lender, consistently applied;
provided, however, that (i) any such consolidated financial statement shall
contain a note indicating that it maintains separate balance sheets and
operating statements for the Borrower and the Property, or (ii) if such Person
is controlled by Inland Western Retail Real Estate Trust, Inc., then such Person
may be included in the consolidated financial statement of Inland Western Retail
Real Estate Trust, Inc. provided such consolidated financial statement contains
a note indicating that it maintains separate financial records for each Person
controlled by Inland Western Retail Real Estate Trust, Inc.;

 

(xix)                           has a sufficient number of employees in light of
its contemplated business operations, which may be none;

 

(xx)                              has observed and will observe all partnership,
corporate, limited liability company or Delaware statutory trust formalities, as
applicable;

 

(xxi)                           has and will have no Indebtedness (including
loans (whether or not such loans are evidenced by a written agreement) between
Borrower and any Affiliates of Borrower and relating to the management of funds
in the custodial account maintained by the Manager) other than (i) the Loan,
(ii) liabilities incurred in the ordinary course of business relating to the
ownership and operation of the Property and the routine administration of
Borrower, which liabilities are not more than sixty (60) days past the date
incurred (unless disputed in accordance with applicable law), are not evidenced
by a note and are paid when due, and which amounts are normal and reasonable
under the circumstances, and (iii) such other liabilities that are permitted
pursuant to this Agreement;

 

(xxii)                        has not and will not assume or guarantee or become
obligated for the debts of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person except as otherwise
permitted pursuant to this Agreement;

 

(xxiii)                     has not and will not acquire obligations or
securities of its partners, members, beneficiaries or shareholders or any other
Affiliate;

 

(xxiv)                    has allocated and will allocate fairly and reasonably
any overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any
employee of an affiliate;

 

(xxv)                       has not maintained or used, and will not maintain or
use, invoices and checks bearing the name of any other Person, provided,
however, that Manager, on behalf of such Person, may maintain and use invoices
and checks bearing Manager’s name;

 

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(xxvi)                    has not pledged and will not pledge its assets for the
benefit of any other Person except as permitted or required pursuant to this
Agreement;

 

(xxvii)                 has held itself out and identified itself and will hold
itself out and identify itself as a separate and distinct entity under its own
name or in a name franchised or licensed to it by an entity other than an
Affiliate of Borrower and not as a division or part of any other Person, except
for services rendered by Manager under the Management Agreement, so long as
Manager holds itself out as an agent of the Borrower;

 

(xxviii)              has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;

 

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

 

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

 

(xxxi)                      does not and will not have any of its obligations
guaranteed by any Affiliate except as otherwise required in the Loan Documents;

 

(xxxii)                   has not entered into or been a party to, and will not
enter into or be a party to, any transaction with its partners, members,
beneficiaries, shareholders or Affiliates except (A) in the ordinary course of
its business and on terms which are intrinsically fair, commercially reasonable
and are no less favorable to it than would be obtained in a comparable
arm’s-length transaction with an unrelated third party and (B) in connection
with this Agreement; and

 

(xxxiii)                has complied and will comply with all of the terms and
provisions contained in its organizational documents. The statement of facts
contained in its organizational documents are true and correct and will remain
true and correct.

 

“State” shall mean, with respect to the Property, the State or Commonwealth in
which the Property or any part thereof is located.

 

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

 

“Tax and insurance Escrow Fund” shall have the meaning set forth In Section 7.2
hereof regardless of whether the funds held therein are held by Lender for the
payment of Taxes or Insurance Premiums or both.

 

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“Taxes” shall mean all real estate and personal property taxes, assessments,
water rates or sewer rents, now or hereafter levied or assessed or imposed
against the Property or any part thereof.

 

“Tenant” shall mean any person or entity with a possessory right to all or any
part of the Property pursuant to a Lease or other written agreement.

 

“Terrorism Insurance Guarantor” shall have the meaning set forth in Section 6.1
hereof.

 

“Title Insurance Policy” shall mean, with respect to the Property, an ALTA
mortgagee title insurance policy in the form (acceptable to Lender) (or, if the
Property is in a State which does not permit the issuance of such ALTA policy,
such form as shall be permitted in such State and acceptable to Lender) issued
with respect to the Property and insuring the lien of the Mortgage encumbering
the Property.

 

“Transferee” shall have the meaning set forth in Section 5.2.13 hereof.

 

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

 

“U.S. Obligations” shall mean direct non-callable obligations of the United
States of America as defined in Section 2(a)(16) of the Investment Company Act
as amended (15 USC 80a-l) stated in REMIC Section 1.86 OG-2(a)(8).

 

Section 1.2                                      Principles of Construction. 
All references to sections and schedules are to sections and schedules in or to
this Agreement unless otherwise specified. All uses of the word “including”
shall mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined.

 

ARTICLE II

GENERAL TERMS

 

Section 2.1                                      Loan Commitment; Disbursement
to Borrower.

 

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

 

2.1.2                        Disbursement to Borrower.  Borrower may request and
receive only one borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.

 

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2.1.3                        The Note, Mortgage and Loan Documents.  The Loan
shall be evidenced by the Note and secured by the Mortgage, the Assignment of
Leases and the other Loan Documents.

 

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

 

Section 2.2                                      Interest; Loan Payments; Late
Payment Charge.

 

2.2.1                        Interest Generally.  Interest on the outstanding
principal balance of the Loan shall accrue from the Closing Date to but
excluding the Maturity Date at the Interest Rate.

 

2.2.2                        Interest Calculation.  Interest on the outstanding
principal balance of the Loan shall be calculated on the basis of a three
hundred sixty (360) day year comprised of twelve (12) months of thirty (30) days
each, except that interest due and payable for a period of less than a full
month shall be calculated by multiplying the actual number of days elapsed in
the period for which the calculation is being made by a daily rate based on a
three hundred sixty (360) day year.

 

2.2.3                        Payments Generally.  Borrower shall pay to Lender
(a) on the Closing Date, an amount equal to interest only on the outstanding
principal balance of the Loan from the Closing Date up to but not including the
first Payment Date following the Closing Date, and (b) on February 1, 2005 and
each Payment Date thereafter up to but not including the Maturity Date, an
amount equal to the Monthly Debt Service Payment Amount, which shall be applied
to interest on the outstanding principal amount of the Loan for the prior
calendar month at the Interest Rate.

 

2.2.4                        Intentionally Omitted.

 

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

 

2.2.6                        Payments after Default.  Upon the occurrence and
during the continuance of an Event of Default, interest on the outstanding
principal balance of the Loan and, to the extent permitted by law, overdue
interest and other amounts due in respect of the Loan, shall accrue at the
Default Rate, calculated from the date such payment was due without regard to
any grace or cure periods contained herein. Interest at the Default Rate shall
be computed from the occurrence of the Event of Default until the earlier of (i)
in the event of a non-monetary default, the cure of such Event of Default by
Borrower and acceptance of such cure by Lender, and (ii) in the event of a
monetary default, the actual receipt and collection of the Debt (or that portion
thereof that is then due). To the extent permitted by applicable law, interest
at the Default Rate shall be added to the Debt, shall itself accrue interest at
the same rate as the Loan and shall be secured by the Mortgage. This paragraph
shall not be construed as an agreement or privilege to

 

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extend the date of the payment of the Debt, nor as a waiver of any other right
or remedy accruing to Lender by reason of the occurrence of any Event of Default
and Lender retains its lights under the Note and this Agreement to accelerate
and to continue to demand payment of the Debt upon the happening and continuance
of any Event of Default.

 

2.2.7                        Late Payment Charge.  If any principal, interest or
any other sums due under the Loan Documents is not paid by Borrower on or prior
to the date which is five (5) days after the date on which it is due, Borrower
shall pay to Lender upon demand an amount equal to the lesser of five percent
(5%) of such unpaid sum or the maximum amount permitted by applicable law in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Mortgage and the
other Loan Documents to the extent permitted by applicable law. The foregoing
late payment charge shall not apply to the payment of all outstanding principal,
interest and other sums due on the Maturity Date.

 

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

 

Section 2.3                                      Prepayments.

 

2.3.1                        Voluntary Prepayments.

 

(a)                                  Except as otherwise provided herein,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Permitted Prepayment Date. On or after the Permitted Prepayment Date,
Borrower may, provided it has given Lender prior written notice in accordance
with the terms of this Agreement, prepay the unpaid principal balance of the
Loan in whole, but not in part, by paying, together with the amount to be
prepaid, (i) interest accrued and unpaid on the outstanding principal balance of
the Loan being prepaid to and including the date of prepayment, (ii) unless
prepayment is tendered on a Payment Date, an amount equal to the interest that
would have accrued on the amount being prepaid after the date of prepayment
through and including the next Payment Date had the prepayment not been made
(which amount shall constitute additional consideration for the prepayment),
(iii) all other sums then due under this Agreement, the Note, the Mortgage and
the other Loan Documents, and (iv) if prepayment occurs prior to the Payment
Date which is one month prior to the Maturity Date, a prepayment

 

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consideration (the “Prepayment Consideration”) equal to the greater of (A) one
percent (1%) of the outstanding principal balance of the Loan being prepaid or
(B) the excess, if any, of (1) the sum of the present values of all
then-scheduled payments of principal and interest under this Agreement
including, but not limited to, principal and interest on the Maturity Date (with
each such payment discounted to its present value at the date of prepayment at
the rate which, when compounded monthly, is equivalent to the Prepayment Rate),
over (2) the outstanding principal amount of the Loan. Lender shall notify
Borrower of the amount and the basis of determination of the required prepayment
consideration.

 

(b)                                 On the Payment Date that is one month prior
to the Maturity Date, and on each day thereafter through the Maturity Date,
Borrower may, at its option, prepay the Debt without payment of any Prepayment
Consideration or other penalty or premium; provided, however, if such prepayment
is not paid on a regularly scheduled Payment Date, the Debt shall include
interest that would have accrued on such prepayment through and including the
day immediately preceding the Maturity Date. Borrower’s right to prepay any
portion of the principal balance of the Loan shall be subject to (i) Borrower’s
submission of a notice to Lender setting forth the amount to be prepaid and the
projected date of prepayment, which date shall be no less than thirty (30) days
from the date of such notice, and (ii) Borrower’s actual payment to Lender of
the amount to be prepaid as set forth in such notice on the projected date set
forth in such notice or any day following such projected date occurring in the
same calendar month as such projected date.

 

2.3.2                        Mandatory Prepayments. 
(a)                                     On the next occurring Payment Date
following the date on which Borrower actually receives any Net Proceeds, if
Lender is not obligated to make such Net Proceeds available to Borrower pursuant
to this Agreement for the restoration of the Property, Borrower shall, at
Lender’s option, prepay the outstanding principal balance of the Note in an
amount equal to one hundred percent (100%) of such Net Proceeds. No Prepayment
Consideration or other penalty or premium shall be due in connection with any
prepayment made pursuant to this Section 2.3.2. Any partial prepayment under
this Section shall be applied to the last payments of principal due under the
Loan.

 

(b)                                 On the date on which Borrower tenders a
Casualty/Condemnation Prepayment pursuant to Section 6.4(e) below, such tender
shall include (a) all accrued and unpaid interest and the principal indebtedness
being prepaid, including interest on the outstanding principal amount of the
applicable Note through the last day of the month within which such tender
occurs, and (b) any other sums due hereunder relating to the applicable Note.
Except as set forth in this Section 2.3.2(b), other than following an Event of
Default, no Prepayment Consideration or other penalty or premium shall be due in
connection with any Casualty/Condemnation Prepayment.

 

2.3.3                        Prepayments after Default.  Following an Event of
Default, if Borrower or anyone on Borrower’s behalf makes a tender of payment of
all or any portion of the Debt at any time prior to a foreclosure sale
(including a sale under the power of sale under the Mortgage), or during any
redemption period after foreclosure, (i) the tender of payment shall constitute
an evasion of Borrower’s obligation to pay any Prepayment Consideration due
under this Agreement and such payment shall, therefore, to the maximum extent
permitted by law, include a premium equal to the Prepayment Consideration that
would have been payable on the date of

 

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such tender had the Loan not been so accelerated, or (ii) if at the time of such
tender a prepayment of the principal amount of the Loan would have been
prohibited under this Agreement had the principal amount of the Loan not been so
accelerated, the tender of payment shall constitute an evasion of such
prepayment prohibition and shall, therefore, to the maximum extent permitted by
law, include an amount equal to the greater of (i) 1% of the then principal
amount of the Loan (or the relevant portion thereof being prepaid) and (ii) an
amount equal to the excess of (A) the sum of the present values of a series of
payments payable at the times and in the amounts equal to the payments of
principal and interest (including, but not limited to the principal and interest
payable on the Maturity Date) which would have been scheduled to be payable
after the date of such tender under this Agreement had the Loan (or the relevant
portion thereof) not been accelerated, with each such payment discounted to its
present value at the date of such tender at the rate which when compounded
monthly is equivalent to the Prepayment Rate, over (B) the then principal amount
of the Loan.

 

Section 2.4                                      Intentionally Omitted.

 

Section 2.5                                      Release of Property.  Except as
set forth in this Section 2.5, no repayment or prepayment of all or any portion
of the Loan shall cause, give rise to a right to require, or otherwise result
in, the release of any Lien of the Mortgage on the Property. If Borrower has
elected to prepay the entire amount of the Loan pursuant to Section 2.3.1 and
the requirements of this Section 2.5 have been satisfied, the Property shall be
released from the Lien of the Mortgage.

 

2.5.1                        Release on Payment in Full.  Lender shall, upon the
written request and at the expense of Borrower, upon payment in full of all
principal and interest on the Loan and all other amounts due and payable under
the Loan Documents in accordance with the terms and provisions of Section 2.3.1
of this Loan Agreement, release the Lien of the Mortgage on the Property not
theretofore released.

 

2.5.2                        Intentionally Omitted.

 

Section 2.6                                      Manner of Making Payments.

 

2.6.1                        Making of Payments.  Each payment by Borrower
hereunder or under the Note shall be made in funds settled through the New York
Clearing House Interbank Payments System or other funds immediately available to
Lender by 1:00 p.m., New York City time, on the date such payment is due, to
Lender by deposit to such account as Lender may designate by written notice to
Borrower. Whenever any payment hereunder or under the Note shall be stated to be
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day.

 

2.6.2                        No Deductions Etc.  All payments made by Borrower
hereunder or under the Note or the other Loan Documents shall be made
irrespective of, and without any deduction for, any setoff, defense or
counterclaims.

 

2.6.3                        Intentionally Omitted.

 

Section 2.7                                      Intentionally Omitted.

 

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ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.1                                      Conditions Precedent to
Closing.  The obligation of Lender to make the Loan hereunder is subject to the
fulfillment by Borrower or waiver by Lender of the following conditions
precedent no later than the Closing Date:

 

3.1.1                        Representations and Warranties; Compliance with
Conditions.  The representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of such date, and no Default or an Event of Default shall have occurred and be
continuing; and Borrower shall be in compliance in all material respects with
all terms and conditions set forth in this Agreement and in each other Loan
Document on its part to be observed or performed.

 

3.1.2                        Loan Agreement and Note.  Lender shall have
received a copy of this Agreement and the Note, in each case, duly executed and
delivered on behalf of Borrower.

 

3.1.3                        Delivery of Loan Documents; Title Insurance;
Reports; Leases; Etc.

 

(a)                                  Mortgage, Assignment of Leases and other
Loan Documents.  Lender shall have received from Borrower fully executed and
acknowledged counterparts of the Mortgage and the Assignment of Leases and
evidence that counterparts of the Mortgage and Assignment of Leases have been
delivered to the title company for recording, in the reasonable judgment of
Lender, so as to effectively create upon such recording valid and enforceable
first priority Liens upon the Property in favor of Lender (or such trustee as
may be required under local law), subject only to the Permitted Encumbrances and
such other Liens as are permitted pursuant to the Loan Documents. Lender shall
have also received from Borrower fully executed counterparts of the Assignment
of Management Agreement and the other Loan Documents.

 

(b)                                 Title Insurance.  Lender shall have received
a Title Insurance Policy issued by a title company acceptable to Lender and
dated as of the Closing Date.  Such Title Insurance Policy shall (i) provide
coverage in an amount equal to the principal amount of the Loan together with,
if applicable, a “tie-in” or similar endorsement, (ii) insure Lender that the
Mortgage creates a valid first priority lien on the Property encumbered thereby,
free and clear of all exceptions from coverage other than Permitted Encumbrances
and standard exceptions and exclusions from coverage (as modified by the terms
of any endorsements), (iii) contain such endorsements and affirmative coverages
as Lender may reasonably request, and (iv) name Lender, its successors and
assigns, as the insured. The Title Insurance Policy shall be assignable without
cost to Lender. Lender also shall have received evidence that all premiums in
respect of such Title Insurance Policy have been paid.

 

(c)                                  Survey.  Lender shall have received a title
survey for the Property, certified to the title company and Lender and their
successors and assigns, in form and content satisfactory to Lender and prepared
by a professional and properly licensed land surveyor satisfactory to Lender in
accordance with the most recent Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys.  The following additional items from the

 

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list of “Optional Survey Responsibilities and Specifications” (Table A) should
be added to each survey: 2, 3, 4, 6, 8, 9, 10, 11 and 13. The survey shall
reflect the same legal description contained in the Title Insurance Policy
relating to the Property referred to in clause (ii) above and shall include,
among other things, a legal description of the real property comprising part of
such Property reasonably satisfactory to Lender. The surveyor’s seal shall be
affixed to each survey and the surveyor shall provide a certification for each
survey in form and substance acceptable to Lender.

 

(d)                                 Insurance.  Lender shall have received valid
certificates of insurance for the policies of insurance required hereunder,
satisfactory to Lender in its sole discretion, and evidence of the payment of
all premiums payable for the existing policy period.

 

(e)                                  Environmental Reports.  Lender shall have
received an environmental report in respect of the Property, in each case
reasonably satisfactory to Lender.

 

(f)                                    Zoning.  With respect to the Property,
Lender shall have received, at Lender’s option, (i) letters or other evidence
with respect to the Property from the appropriate municipal authorities (or
other Persons) concerning applicable zoning and building laws, (ii) an ALTA 3.1
zoning endorsement to the Title Insurance Policy or (iii) other evidence of
zoning compliance, in each case in substance reasonably satisfactory to Lender.

 

(g)                                 Encumbrances.  Borrower shall have taken or
caused to be taken such actions in such a manner so that Lender has a valid and
perfected first Lien on the Property as of the Closing Date with respect to the
Mortgage, subject only to applicable Permitted Encumbrances and such other Liens
as are permitted pursuant to the Loan Documents, and Lender shall have received
satisfactory evidence thereof.

 

3.1.4                        Related Documents.  Each additional document not
specifically referenced herein, but relating to the transactions contemplated
herein, shall have been duly authorized, executed and delivered by all parties
thereto and Lender shall have received and approved certified copies thereof.

 

3.1.5                        Delivery of Organizational Documents.  On or before
the Closing Date, Borrower shall deliver or cause to be delivered to Lender
copies certified by Borrower of all organizational documentation related to
Borrower and/or the formation, structure, existence, good standing and/or
qualification to do business, as Lender may request in its sole discretion,
including, without limitation, good standing certificates, qualifications to do
business in the appropriate jurisdictions, resolutions authorizing the entering
into of the Loan and incumbency certificates as may be requested by Lender.

 

3.1.6                        Opinions of Borrower’s Counsel.  Lender shall have
received opinions of Borrower’s counsel (and if applicable, Borrower’s local
counsel) with respect to due execution, authority, enforceability of the Loan
Documents and such other matters as Lender may reasonably require, all such
opinions in form, scope and substance reasonably satisfactory to Lender and
Lender’s counsel in their reasonable discretion.

 

3.1.7                        Budgets.  Borrower shall have delivered, and Lender
shall have approved, the Annual Budget for the current Fiscal Year.

 

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3.1.8                        Basic Carrying Costs.  Borrower shall have paid all
Basic Carrying Costs relating to the Property which are in arrears, including
without limitation, (a) accrued but unpaid insurance premiums relating to the
Property, (b) currently due and payable Taxes (including any in arrears)
relating to the Property, and (c) currently due Other Charges relating to the
Property, which amounts shall be funded with proceeds of the Loan.

 

3.1.9                        Completion of Proceedings.  All organizational
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be reasonably satisfactory in form and substance to
Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably request.

 

3.1.10                  Payments.  All payments, deposits or escrows required to
be made or established by Borrower under this Agreement, the Note and the other
Loan Documents on or before the Closing Date shall have been paid.

 

3.1.11                  Tenant Estoppels.  Borrower shall exercise reasonable
commercial efforts to deliver estoppel letters from Tenants occupying not less
than eighty percent (80%) of the gross leasable area of the Property; provided,
however, that, in the event that Borrower is unable to deliver some or all of
the estoppels described above in this Section 3.1.11, Lender agrees that the
requirement to deliver such letters to Lender shall be waived by Lender as a
condition precedent to the closing of the Loan so long as Borrower delivers on
or before the Closing Date, a certificate executed by Borrower with respect to
all applicable leases which shall be in substantially the same form and contain
the same terms as set forth in Lender’s standard form of estoppel certificate. 
Borrower shall deliver to Lender an estoppel letter executed by Anchor Tenant in
form reasonably acceptable to Lender.

 

3.1.12                  Transaction Costs.  Borrower shall have paid or
reimbursed Lender for all title insurance premiums, recording and filing fees or
taxes, costs of environmental reports, Physical Conditions Reports, appraisals
and other reports, the fees and costs of Lender’s counsel and all other third
party out-of-pocket expenses incurred in connection with the origination of the
Loan.

 

3.1.13                  Material Adverse Change.  There shall have been no
material adverse change in the financial condition or business condition of
Borrower or the Property since the date of the most recent financial statements
delivered to Lender.  The income and expenses of the Property, the occupancy
leases thereof, and all other features of the transaction shall be as
represented to Lender without material adverse change. Neither Borrower, any of
its constituent Persons, shall be the subject of any bankruptcy, reorganization,
or insolvency proceeding.

 

3.1.14                  Leases and Rent Roll.  Lender shall have received copies
of all tenant leases, certified copies of any tenant leases as requested by
Lender and certified copies of all ground leases affecting the Property.  Lender
shall have received a current certified rent roll of the Property, reasonably
satisfactory in form and substance to Lender.

 

3.1.15                  Subordination and Attornment.  Lender shall have
received appropriate instruments acceptable to Lender in its commercially
reasonable discretion subordinating any

 

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Leases of record prior to the Mortgage and including an agreement by such
Tenants to attorn to Lender in the event of a foreclosure or delivery of a deed
in lieu thereof.

 

3.1.16                  Tax Lot.  Lender shall have received evidence that the
Property constitutes one (1) or more separate tax lots, which evidence shall be
reasonably satisfactory in form and substance to Lender.

 

3.1.17                  Physical Conditions Reports.  Lender shall have received
Physical Conditions Reports with respect to the Property, which reports shall be
reasonably satisfactory in form and substance to Lender.

 

3.1.18                  Management Agreement.  Lender shall have received a
certified copy of the Management Agreement with respect to the Property which
shall be satisfactory in form and substance to Lender. Lender acknowledges that
it has reviewed the Management Agreement, and as drafted, such Management
Agreement does not violate Borrower’s covenant that affiliated agreements be on
terms which are intrinsically fair, commercially reasonable and are no less
favorable to it than would be obtained in a comparable arm’s length transaction
with an unrelated third party.

 

3.1.19                  Appraisal.  Lender shall have received an appraisal of
the Property, which shall be satisfactory in form and substance to Lender.

 

3.1.20                  Financial Statements.  Lender shall have received (a) a
balance sheet with respect to the Property for the two most recent Fiscal Years
and statements of income and statements of cash flows with respect to the
Property for the three most recent Fiscal Years, each in form and substance
reasonably satisfactory to Lender or (b) such other financial statements
relating to the ownership and operation of the Property, in form and substance
reasonably satisfactory to Lender.

 

3.1.21                  Further Documents.  Lender or its counsel shall have
received such other and further approvals, opinions, documents and information
as Lender or its counsel may have reasonably requested including the Loan
Documents in form and substance reasonably satisfactory to Lender and its
counsel.

 

3.1.22                  Environmental Insurance.  If required by Lender,
Borrower shall have obtained a secured creditor environmental insurance policy
with respect to the Property, which shall be in form and substance satisfactory
to Lender. Any such policy shall have a term not less than the term of the Loan.
Borrower shall have provided to Lender evidence that the premiums for such
policy has been paid in full.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

Section 4.1                                      Borrower Representations. 
Borrower represents and warrants as of the date hereof and as of the Closing
Date that:

 

4.1.1                        Organization.  Borrower has been duly organized and
is validly existing and in good standing with requisite power and authority to
own the Property and to transact the

 

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businesses in which it is now engaged. Borrower is duly qualified to do business
and is in good standing in each jurisdiction where it is required to be so
qualified in connection with the Property, businesses and operations. Borrower
possesses all rights, licenses, permits and authorizations, governmental or
otherwise, necessary to entitle it to own the Property and to transact the
businesses in which it is now engaged, and the sole business of Borrower is the
ownership, management and operation of the Property.

 

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

 

4.1.3                        No Conflicts.  The execution, delivery and
performance of this Agreement and the other Loan Documents by Borrower will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than pursuant to the Loan Documents) upon any of
the property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement or other
agreement or instrument to which Borrower is a party or by which any of
Borrower’s property or assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over Borrower or
any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.

 

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

 

4.1.5                        Agreements.  Except such instruments and agreements
set forth as Permitted Exceptions in the Title Insurance Policy, Borrower is not
a party to any agreement or instrument or subject to any restriction which might
materially and adversely affect Borrower or the Property, or Borrower’s
business, properties or assets, operations or condition, financial or
otherwise.  To Borrower’s knowledge, Borrower is not in default in any material
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which Borrower or the Property are bound.  Borrower has no
material financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Borrower is a party or by
which Borrower or the Property is otherwise bound, other than (a) obligations

 

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incurred in the ordinary course of the operation of the Property and (b)
obligations under the Loan Documents.

 

4.1.6                        Title.  Borrower has good and indefeasible fee
simple title to the real property comprising part of the Property and good title
to the balance of the Property, free and clear of all Liens whatsoever except
the Permitted Encumbrances, such other Liens as are permitted pursuant to the
Loan Documents and the Liens created by the Loan Documents. The Mortgage, when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected lien on the Property, subject only
to Permitted Encumbrances and the Liens created by the Loan Documents and (b)
perfected security interests in and to, and perfected collateral assignment of,
all personalty (including the Leases), all in accordance with the terms thereof,
in each case subject only to any applicable Permitted Encumbrances, such other
Liens as are permitted pursuant to the Loan Documents and the Liens created by
the Loan Documents. There are no claims for payment for work, labor or materials
affecting the Property which are due and unpaid under the contracts pursuant to
which such work or labor was performed or materials provided which are or may
become a lien prior to, or of equal priority with, the Liens created by the Loan
Documents.

 

4.1.7                        Solvency; No Bankrupcy Filing.  Borrower (a) has
not entered into the transaction or executed the Note, this Agreement or any
other Loan Documents with the actual intent to hinder, delay or defraud any
creditor and (b) received reasonably equivalent value in exchange for its
obligations under such Loan Documents. Giving effect to the Loan, the fair
saleable value of Borrower’s assets exceeds and will, immediately following the
making of the Loan, exceed Borrower’s total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower’s assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur debt and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such debt and liabilities as they mature (taking into account the timing and
amounts of cash to be received by Borrower and the amounts to be payable on or
in respect of obligations of Borrower). Except as expressly disclosed to Lender
in writing, no petition in bankruptcy has been filed against Borrower, or to the
best of Borrower’s knowledge, any constituent Person in the last seven (7)
years, and neither Borrower, nor to the best of Borrower’s knowledge, any
constituent Person in the last seven (7) years has ever made an assignment for
the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. Neither Borrower nor any of its constituent Persons are
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
Borrower’s assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it or such constituent
Persons.

 

4.1.8                        Full and Accurate Disclosure.  To Borrower’s
knowledge, no statement of fact made by Borrower in this Agreement or in any of
the other Loan Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make

 

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statements contained herein or therein not misleading.  There is no material
fact presently known to Borrower which has not been disclosed to Lender which
adversely affects, nor as far as Borrower can foresee, might adversely affect,
the Property or the business, operations or condition (financial or otherwise)
of Borrower.

 

4.1.9                        No Plan Assets.  Borrower is not an “employee
benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA,
and none of the assets of Borrower constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. 
In addition, (a) Borrower is not a “governmental plan” within the meaning of
Section 3(32) of ERISA and (b) transactions by or with Borrower are not subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or otherwise
restrict the transactions contemplated by this Loan Agreement.

 

4.1.10                  Compliance.  To Borrower’s knowledge, Borrower and the
Property and the use thereof comply in all material respects with all applicable
Legal Requirements, including, without limitation, building and zoning
ordinances and codes.  Borrower is not in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority. There has not
been committed by Borrower or, to Borrower’s knowledge, any other Person in
occupancy of or involved with the operation or use of the Property any act or
omission affording the federal government or any other Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents.

 

4.1.11                  Financial Information.  All financial data, including,
without limitation, the statements of cash flow and income and operating
expense, that have been delivered to Lender in respect of the Property (i) are,
to the best of Borrower’s knowledge, true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the Property as
of the date of such reports, and (iii) to the extent prepared or audited by an
independent certified public accounting firm, have been prepared in accordance
with accounting principles reasonably acceptable to Lender, consistently applied
throughout the periods covered, except as disclosed therein; provided, however,
that if any financial data is delivered to Lender by any Person other than
Borrower, Indemnitor or any of their Affiliates, or if such financial data has
been prepared by or at the direction of any Person other than Borrower,
Indemnitor or any of their Affiliates, then the foregoing representations with
respect to such financial data shall be to the best of Borrower’s knowledge,
after due inquiry.  Borrower does not have any contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments that are known to Borrower
and reasonably likely to have a materially adverse effect on the Property or the
operation thereof as a retail shopping center, except as referred to or
reflected in said financial statements.  Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.

 

4.1.12                  Condemnation.  No Condemnation or other proceeding has
been commenced or, to Borrower’s knowledge, is contemplated with respect to all
or any portion of the Property or for the relocation of roadways providing
access to the Property.

 

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

 

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

 

4.1.15                  Not a Foreign Person.  Borrower is not a “foreign
person” within the meaning of §1445(f)(3) of the Code.

 

4.1.16                  Separate Lots.  The Property is comprised of one (1) or
more parcels which constitute a separate tax lot or lots and does not constitute
a portion of any other tax lot not a part of the Property.

 

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

 

4.1.18                  Enforceability.  The Loan Documents are not subject to
any right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.

 

4.1.19                  No Prior Assignment.  There is no prior assignment of
the Leases or any portion of the Rents by Borrower or any of its predecessors in
interest, given as collateral security which are presently outstanding.

 

4.1.20                  Insurance.  Borrower has obtained and has delivered to
Lender certified copies of all insurance policies reflecting the insurance
coverages, amounts and other requirements set forth in this Agreement. To the
best of Borrower’s knowledge, no claims have been made under any such policy,
and no Person, including Borrower, has done, by act or omission, anything which
would impair the coverage of any such policy.

 

4.1.21                  Use of Property.  The Property is used exclusively for
retail purposes and other appurtenant and related uses.

 

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4.1.22                  Certificate of Occupancy; Licenses.  All certifications,
permits, licenses and approvals, including without limitation, certificates of
completion and occupancy permits required to be obtained by Borrower for the
legal use, occupancy and operation of the Property as a retail shopping center
have been obtained and are in full force and effect, and to the best of
Borrower’s knowledge, after due inquiry, all certifications, permits, licenses
and approvals, including without limitation, certificates of completion and
occupancy permits required to be obtained by any Person other than Borrower for
the legal use, occupancy and operation of the Property as a retail shopping
center, have been obtained and are in full force and effect (all of the
foregoing certifications, permits, licenses and approvals are collectively
referred to as the “Licenses”). Borrower shall and shall cause all other Persons
to, keep and maintain all licenses necessary for the operation of the Property
as a retail shopping center. To Borrower’s knowledge, the use being made of the
Property is in conformity with all certificates of occupancy issued for the
Property.

 

4.1.23                  Flood Zone.  To the best of Borrower’s knowledge, after
due inquiry, no Improvements on the Property are located in an area identified
by the Federal Emergency Management Agency as an area having special flood
hazards.

 

4.1.24                  Physical Condition.  Except as disclosed in the Physical
Conditions Reports delivered to Lender in connecting with this Loan, to
Borrower’s knowledge, the Property, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping,
irrigation systems and all structural components, are in good condition, order
and repair in all material respects; there exists no structural or other
material defects or damages in the Property, whether latent or otherwise, and
Borrower has not received notice from any insurance company or bonding company
of any defects or inadequacies in the Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.

 

4.1.25                  Boundaries.  To the best of Borrower’s knowledge, after
due inquiry, all of the improvements which were included in determining the
appraised value of the Property lie wholly within the boundaries and building
restriction lines of the Property, and no improvements on adjoining properties
encroach upon the Property, and no easements or other encumbrances upon the
Property encroach upon any of the improvements, so as to affect the value or
marketability of the Property except those which are insured against by title
insurance.

 

4.1.26                  Leases.  The Property is not subject to any Leases other
than the Leases described on the Rent Roll attached as Schedule IV hereto and
made a part hereof (and subleases permitted under the Anchor Lease).  No Person
has any possessory interest in the Property or right to occupy the same except
under and pursuant to the provisions of the Leases. The current Leases are in
full force and effect and to Borrower’s knowledge after inquiry, there are no
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder. No Rent (including security deposits) has been paid more than one
(1) month in advance of its due date.  All work to be performed by Borrower
under each Lease has been performed as required and has been accepted

 

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by the applicable tenant, and any payments, free rent, partial rent, rebate of
rent or other payments, credits, allowances or abatements required to be given
by Borrower to any tenant has already been received by such tenant. There has
been no prior sale, transfer or assignment, hypothecation or pledge of any Lease
or of the Rents received therein which is outstanding. To Borrower’s knowledge
after inquiry, except as set forth on Schedule IV, no tenant listed on Schedule
IV has assigned its Lease or sublet all or any portion of the premises demised
thereby, no such tenant holds its leased premises under assignment or sublease,
nor does anyone except such tenant and its employees occupy such leased
premises. No tenant under any Lease has a right or option pursuant to such Lease
or otherwise to purchase all or any part of the leased premises or the building
of which the leased premises are a part. Except as set forth in Schedule IV, no
tenant under any Lease has any right or option for additional space in the
Improvements except as set forth in Schedule IV. To Borrower’s actual knowledge
based on the Environmental Report delivered to Lender in connection herewith, no
hazardous wastes or toxic substances, as defined by applicable federal, state or
local statutes, rules and regulations, have been disposed, stored or treated by
any tenant under any Lease on or about the leased premises nor does Borrower
have any knowledge of any tenant’s intention to use its leased premises for any
activity which, directly or indirectly, involves the use, generation, treatment,
storage, disposal or transportation of any petroleum product or any toxic or
hazardous chemical, material, substance or waste, except in either event, in
compliance with applicable federal, state or local statues, rules and
regulations.

 

4.1.27                  Survey.  The Survey for the Property delivered to Lender
in connection with this Agreement has been prepared in accordance with the
provisions of Section 3.1.3(c) hereof, and does not fail to reflect any material
matter affecting the Property or the title thereto.

 

4.1.28                  Loan to Value.  The maximum principal amount of the Note
does not exceed one hundred twenty-five percent (125%) of the fair market value
of the Property as set forth on the appraisal of the Property delivered to
Lender.

 

4.1.29                  Filing and Recording Taxes.  All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the acquisition of the Property by Borrower have
been paid or are simultaneously being paid. All mortgage, mortgage recording,
stamp, intangible or other similar tax required to be paid by any Person under
applicable Legal Requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including,  without limitation, the
Mortgage,  have been paid, and, under current Legal Requirements, the Mortgage
is enforceable in accordance with its terms by Lender (or any subsequent holder
thereof).

 

4.1.30                  Special Purpose Entity/Separateness.  (a)  Until the
Debt has been paid in full, Borrower hereby represents, warrants and covenants
that the Borrower is, shall be and shall continue to be a Special Purpose
Entity.  If Borrower consists of more than one Person, each such Person shall be
a Special Purpose Entity.

 

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(b)                                 The representations,  warranties and
covenants set forth in Section 4.1.30(a) shall survive for so long as any amount
remains payable to Lender under this Agreement or any other Loan Document.

 

(c)                                  Intentionally omitted

 

4.1.31                  Management Agreement.  The Management Agreement is in
full force and effect and, to Borrower’s knowledge, there is no default
thereunder by any party thereto and no event has occurred that, with the passage
of time and/or the giving of notice would constitute a default thereunder.

 

4.1.32                  Illegal Activity.  To Borrower’s knowledge, no portion
of the Property has been or will be purchased with proceeds of any illegal
activity.

 

4.1.33                  No Change in Facts or Circumstances; Disclosure.  All
information submitted by Borrower to Lender and in all financial statements,
rent rolls, reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms thereof and all statements of fact
made by Borrower in this Agreement or in any other Loan Document, are accurate,
complete and correct in all material respects, provided, however, that if such
information was provided to Borrower by non-affiliated third parties, Borrower
represents that such information is, to the best of its knowledge after due
inquiry, accurate, complete and correct in all material respects.  There has
been no material adverse change in any condition, fact, circumstance or event
that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely
affects or might materially and adversely affect the Property or the business
operations or the financial condition of Borrower. Borrower has disclosed to
Lender all material facts and has not failed to disclose any material fact that
could cause any representation or warranty made herein to be materially
misleading.

 

4.1.34                  Investment Company Act.  Borrower is not (a) an
“investment company” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended; (b) a
“holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.

 

4.1.35                  Principal Place of Business and Organization.  Borrower
shall not change its principal place of business set forth in the introductory
paragraph of this Agreement without first giving Lender thirty (30) days prior
written notice. Borrower shall not change the place of its organization as set
forth in the introductory paragraph of this Agreement without the consent of
Lender, which consent shall not be unreasonably withheld, conditioned or
delayed.  Upon Lender’s request, Borrower shall execute and deliver additional
financing statements, security agreements and other instruments which may be
necessary to effectively evidence or perfect Lender’s security interest in the
Property as a result of such change of principal place of business or place of
organization.

 

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Section 4.2                                      Survival of Representations. 
Borrower agrees that all of the representations and warranties of Borrower set
forth in Section 4.1 and elsewhere in this Agreement and in the other Loan
Documents shall survive for so long as any amount remains owing to Lender under
this Agreement or any of the other Loan Documents by Borrower.  All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied upon
by Lender notwithstanding any investigation heretofore or hereafter made by
Lender or on its behalf.

 

ARTICLE V

BORROWER COVENANTS

 

Section 5.1                                      Affirmative Covenants.  From
the Closing Date and until payment and performance in full of all obligations of
Borrower under the Loan Documents or the earlier release of the Lien of the
Mortgage encumbering the Property (and all related obligations) in accordance
with the terms of this Agreement and the other Loan Documents, Borrower hereby
covenants and agrees with Lender that:

 

5.1.1                        Existence; Compliance with Legal Requirements;
Insurance.  Borrower shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence, rights,
licenses, permits and franchises and comply with all Legal Requirements
applicable to it and the Property.  Borrower shall not commit, nor shall
Borrower permit any other Person in occupancy of or involved with the operation
or use of the Property to commit, any act or omission affording the federal
government or any state or local government the right of forfeiture as against
the Property or any part thereof or any monies paid in performance of Borrower’s
obligations under any of the Loan Documents. Borrower hereby covenants and
agrees not to commit, permit or suffer to exist any act or omission affording
such right of forfeiture. Borrower shall at all times maintain, preserve and
protect all its franchises and trade names and preserve all the remainder of its
property used or useful in the conduct of its business and shall keep the
Property in good working order and repair, and from time to time make, or cause
to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully provided in the
Mortgage. Borrower shall keep the Property insured at all times by financially
sound and reputable insurers, to such extent and against such risks, and
maintain liability and such other insurance, as is more fully provided in this
Agreement. Borrower shall operate, or cause the tenant to operate, any Property
that is the subject of an O&M Agreement (if any) in accordance with the terms
and provisions thereof in all material respects. After prior written notice to
Lender, Borrower, at its own expense, may contest by appropriate legal
proceeding promptly initiated and conducted in good faith and with due
diligence, the validity of any Legal Requirement, the applicability of any Legal
Requirement to Borrower or the Property or any alleged violation of any Legal
Requirement, provided that (i) no Event of Default has occurred and remains
uncured; (ii) intentionally omitted; (iii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any instrument to
which Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (iv) the Property or any part thereof or interest therein will
not be in danger of being sold, forfeited, terminated, cancelled or lost; (v)
Borrower shall promptly upon final determination thereof comply with any such
Legal Requirement determined to be valid or applicable or cure any violation of
any Legal Requirement; (vi) such proceeding shall suspend the enforcement of

 

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the contested Legal Requirement against Borrower or the Property; and (vii)
Borrower shall furnish such security as may be required in the proceeding, or as
may be requested by Lender, to insure compliance with such Legal Requirement,
together with all interest and penalties payable in connection therewith. Lender
may apply any such security, as necessary to cause compliance with such Legal
Requirement at any time when, in the reasonable judgment of Lender, the
validity, applicability or violation of such Legal Requirement is finally
established or the Property (or any part thereof or interest therein) shall be
in danger of being sold, forfeited, terminated, cancelled or lost.

 

5.1.2                        Taxes and Other Charges.  Borrower shall pay or
cause to be paid all Taxes and Other Charges now or hereafter levied or assessed
or imposed against the Property or any part thereof as the same become due and
payable; provided, however, Borrower’s obligation to directly pay to the
appropriate taxing authority Taxes shall be suspended for so long as Borrower
complies with the terms and provisions of Section 7.2 hereof. Borrower will
deliver to Lender receipts for payment or other evidence satisfactory to Lender
that the Taxes and Other Charges have been so paid or are not then delinquent no
later than ten (10) days prior to the date on which the Taxes and/or Other
Charges would otherwise be delinquent if not paid (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 7.2 hereof).
If Borrower pays or causes to be paid all Taxes and Other Charges and provides a
copy of the receipt evidencing the payment thereof to Lender, then Lender shall
reimburse Borrower, provided that there are then sufficient proceeds in the Tax
and Insurance Escrow Fund and provided that the Taxes are being paid pursuant to
Section 7.2. Upon written request of Borrower, if Lender has paid such Taxes
pursuant to Section 7.2 hereof, Lender shall provide Borrower with evidence that
such Taxes have been paid.  Borrower shall not suffer and shall promptly cause
to be paid and discharged any Lien or charge whatsoever which may be or become a
Lien or charge against the Property, and shall promptly pay for all utility
services provided to the Property. After prior written notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any Taxes or Other
Charges, provided that (i) Borrower is permitted to do so under the provisions
of any mortgage or deed of trust superior in lien to the Mortgage; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable statutes, laws and ordinances; (iii) the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, cancelled or lost; (iv) Borrower shall promptly upon
final determination thereof pay the amount of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (v) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (vi) Borrower shall
furnish such security as may be required in the proceeding, or as may be
reasonably requested by Lender, to insure the payment of any such Taxes or Other
Charges, together with all interest and penalties thereon. Lender may pay over
any such cash deposit or part thereof held by Lender to the claimant entitled
thereto at any time when, in the reasonable judgment of Lender, the entitlement
of such claimant is established.

 

5.1.3                        Litigation.  Borrower shall give prompt written
notice to Lender of any litigation or governmental proceedings pending or
threatened against Borrower which might

 

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materially adversely affect Borrower’s condition (financial or otherwise) or
business or the Property.

 

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

 

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

 

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

 

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

 

5.1.8                        Insurance Benefits.  Borrower shall cooperate with
Lender in obtaining for Lender the benefits of any Insurance Proceeds lawfully
or equitably payable in connection with the Property, and Lender shall be
reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys’ fees and disbursements, and the payment by Borrower of the
expense of an appraisal on behalf of Lender in case of a fire or other casualty
affecting the Property or any part thereof) out of such Insurance Proceeds.

 

5.1.9                        Further Assurances.  Borrower shall, at Borrower’s
sole cost and expense:

 

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

 

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

 

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

 

5.1.10                  Intentionally Omitted.

 

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

 

(b)                                 Borrower will furnish to Lender annually, 
within ninety (90) days following the end of each Fiscal Year of Borrower,
either (i) a complete copy of Borrower’s annual financial statements audited by
an accounting firm or other independent certified public accountant reasonably
acceptable to Lender in accordance with the requirements for a Special Purpose
Entity set forth above, or (ii) a consolidated and annotated financial statement
of Borrower and Sole Member (as applicable), audited by an accounting firm or
other independent certified public accountant reasonably acceptable to Lender in
accordance with the requirements for a Special Purpose Entity set forth above,
together with unaudited financial statements relating to the Borrower and the
Property.  Such financial statements for the Property for such Fiscal Year and
shall contain statements of profit and loss for Borrower and the Property and a
balance sheet for Borrower.  Such statements shall set forth the financial
condition and the results of operations for the Property for such Fiscal Year,
and shall include, but not be limited to, amounts representing annual Net Cash
Flow, Net Operating Income, Gross Income from Operations and Operating
Expenses.  Borrower’s annual financial statements shall be accompanied by (i) a
comparison of the budgeted income and expenses and the actual income and
expenses for the prior Fiscal Year, (ii) a certificate executed by the chief
financial officer of Borrower or Sole Member, as applicable, stating that each
such annual financial statement presents fairly the financial condition and the
results of operations of Borrower and the Property being reported upon and has
been prepared in accordance with accounting principles reasonably acceptable to
Lender, consistently applied, (iii) an unqualified opinion of an accounting firm
or other independent certified public accountant reasonably acceptable to
Lender, (iv) a certified rent roll containing current rent, lease expiration
dates and the square footage occupied by each tenant; (v) a schedule audited by
such independent certified public accountant reconciling Net Operating Income to
Net Cash Flow (the “Net Cash Flow Schedule”), which shall itemize all
adjustments made to Net Operating Income to arrive at Net Cash Flow deemed
material by such independent certified public accountant.  Together with
Borrower’s annual financial statements, Borrower shall furnish to Lender an
Officer’s Certificate certifying as of the date thereof whether there exists an
event or circumstance which constitutes a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Default or Event of Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy the same.

 

(c)                                  Borrower will furnish, or cause to be
furnished, to Lender on or before forty five (45) days after the end of each
calendar quarter the following items, accompanied by a

 

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certificate of the chief financial officer of Borrower or Sole Member, as
applicable, stating that such items are true, correct, accurate, and complete
and fairly present the financial condition and results of the operations of
Borrower and the Property (subject to normal year-end adjustments) as
applicable: (i) a rent roll for the subject month accompanied by an Officer’s
Certificate with respect thereto; (ii) quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund, and
other information necessary and sufficient to fairly represent the financial
position and results of operation of the Property during such calendar month,
and containing a comparison of budgeted income and expenses and the actual
income and expenses together with a detailed explanation of any variances of
five percent (5%) or more between budgeted and actual amounts for such periods,
all in form satisfactory to Lender; (iii) a calculation reflecting the annual
Debt Service Coverage Ratio for the immediately preceding twelve (12) month
period as of the last day of such month accompanied by an Officer’s Certificate
with respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash Flow for
the Borrower may be unaudited if it is certified by an officer of the Borrower).
In addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Borrower or Sole Member stating that the
representations and warranties of Borrower set forth in Section 4.1.30(a) are
true and correct as of the date of such certificate.

 

(d)                                 For the partial year period commencing on
the Closing Date, and for each Fiscal Year thereafter, Borrower shall submit to
Lender an Annual Budget not later than thirty (30) days after the commencement
of such period or Fiscal Year in form reasonably satisfactory to Lender.

 

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

 

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

 

(g)                                 Borrower will cause Indemnitor to furnish to
Lender annually, within one hundred twenty (120) days following the end of each
Fiscal Year of Indemnitor, financial statements audited by an independent
certified public accountant, which shall include an annual balance sheet and
profit and loss statement of Indemnitor, in the form reasonably required by
Lender.

 

(h)                                 Any reports, statements or other information
required to be delivered under this Agreement shall be delivered (i) in paper
form, (ii) on a diskette, and (iii) if requested by Lender and within the
capabilities of Borrower’s data systems without change or modification thereto,
in electronic form and prepared using a Microsoft Word for Windows or
WordPerfect

 

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for Windows files (which files may be prepared using a spreadsheet program and
saved as word processing files).

 

5.1.12                  Business and Operations.  Borrower will continue to
engage in the businesses presently conducted by it as and to the extent the same
are necessary for the ownership, maintenance, management and operation of the
Property.  Borrower will qualify to do business and will remain in good standing
under the laws of each jurisdiction as and to the extent the same are required
for the ownership, maintenance, management and operation of the Property.

 

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

 

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

 

5.1.15                  Estoppel Statement.  (a)  After request by Lender,
Borrower shall within ten (10) days furnish Lender with a statement, duly
acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the applicable interest rate of the Note, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Debt, if any, and (vi) that the Note, this Agreement, the
Mortgage and the other Loan Documents are valid, legal and binding obligations
and have not been modified or if modified, giving particulars of such
modification.

 

(b)                                 Borrower shall use commercially reasonable
efforts to deliver to Lender upon request, tenant estoppel certificates from
each commercial tenant leasing space at the Property in form and substance
reasonably satisfactory to Lender provided that Borrower shall not be required
to deliver such certificates more frequently than one (1) time in any calendar
year.

 

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(c)                                  Within thirty (30) days of request by
Borrower, Lender shall deliver to Borrower a statement setting forth the items
described at (a)(i), (ii), (iii) and (iv) of this Section 5.1.15.

 

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

 

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

 

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

 

5.1.19                  No Joint Assessment.  Borrower shall not suffer, permit
or initiate the joint assessment of the Property (a) with any other real
property constituting a tax lot separate from the Property, and (b) which
constitutes real property with any portion of the Property which may be deemed
to constitute personal property, or any other procedure whereby the lien of any
taxes which may be levied against such personal property shall be assessed or
levied or charged to such real property portion of the Property.

 

5.1.20                  Leasing Matters.  Any Leases with respect to the
Property written after the Closing Date for more than the Relevant Leasing
Threshold square footage shall be subject to the prior written approval of
Lender, which approval may be given or withheld in the sole discretion of
Lender. Lender shall approve or disapprove any such Lease within ten (10)
Business Days of Lender’s receipt of a final execution draft of such Lease
(including all exhibits, schedules, supplements, addenda or other agreements
relating thereto) and a written notice from Borrower requesting Lender’s
approval to such Lease, and such Lease shall be deemed approved, if Lender does
not disapprove such Lease within said ten (10) Business Day period provided such
written notice conspicuously states, in large bold type, that “PURSUANT TO
SECTION 5.1.20 OF THE LOAN AGREEMENT, THE LEASE SHALL BE DEEMED APPROVED IF
LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10) BUSINESS DAYS OF
LENDER’S RECEIPT OF SUCH LEASE AND WRITTEN NOTICE”.  Borrower shall furnish
Lender with executed copies of all Leases. All renewals of Leases and all
proposed Leases shall provide for rental rates comparable to existing local
market rates (unless such rental rates are otherwise set forth in the Leases
executed prior to the Closing Date).  All proposed Leases shall be on
commercially reasonable terms and shall not contain any terms which would
materially affect Lender’s rights under the Loan Documents. All Leases executed
after the Closing Date shall provide that they are subordinate to the Mortgage
encumbering the Property and that the tenant thereunder agrees to attorn to
Lender or any purchaser at a sale by

 

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

 

5.1.21                  Alterations.  Subject to the rights of tenants to make
alterations pursuant to the terms of their respective Leases, Borrower shall
obtain Lender’s prior written consent to any alterations to any Improvements,
which consent shall not be unreasonably withheld or delayed except with respect
to alterations that may have a material adverse effect on Borrower’s financial
condition, the value of the Property or the Net Operating Income.
Notwithstanding the foregoing, Lender’s consent shall not be required in
connection with any alterations that will not have a material adverse effect on
Borrower’s financial condition, the value of the Property or the Net Operating
Income, provided that such alterations are made in connection with (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the Closing Date, (b) tenant improvement work performed pursuant to the
terms and provisions of a Lease and not adversely affecting any structural
component of any Improvements, any utility or HVAC system contained in any
Improvements or the exterior of any building constituting a part of any
Improvements, (c) alterations performed in connection with the restoration of
the Property after the occurrence of a casualty in accordance with the terms and
provisions of this Agreement or (d) any structural alteration which costs less
than $50,000.00 in the aggregate for all components thereof which constitute
such alteration or any non-structural alteration which costs less than
$100,000.00 in the aggregate for all components thereof which constitute such
alteration. If the total unpaid amounts due and payable with respect to
alterations to the Improvements at the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) shall at any time equal or
exceed $350,000.00 (the “Threshold Amount”),

 

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Borrower, upon Lender’s request, shall promptly deliver to Lender as security
for the payment of such amounts and as additional security for Borrower’s
obligations under the Loan Documents any of the following: (A) cash, (B) U.S.
Obligations, (C) other securities having a rating acceptable to Lender and that
the applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade, withdrawal or qualification of the initial, or,
if higher, then current ratings assigned in connection with any Securitization,
or (D) a completion bond or letter of credit issued by a financial institution
having a rating by Standard & Poor’s Ratings Group of not less than A-1+ if the
term of such bond or letter of credit is no longer than three (3) months or, if
such term is in excess of three (3) months, issued by a financial institution
having a rating that is acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization. Such security
shall be in an amount equal to the excess of the total unpaid amounts with
respect to alterations to the Improvements on the Property (other than such
amounts to be paid or reimbursed by tenants under the Leases) over the Threshold
Amount and, if cash, may be applied from time to time, at the option of
Borrower, to pay for such alterations. At the option of Lender, following the
occurrence and during the continuance of an Event of Default, Lender may
terminate any of the alterations and use the deposit to restore the Property to
the extent necessary to prevent any material adverse effect on the value of the
Property.

 

5.1.22                  Intentionally Omitted.

 

5.1.23                  Intentionally Omitted.

 

Section 5.2                                      Negative Covenants.  From the
Closing Date until payment and performance in full of all obligations of
Borrower under the Loan Documents or the earlier release of the Lien of the
Mortgage encumbering the Property in accordance with the terms of this Agreement
and the other Loan Documents, Borrower covenants and agrees with Lender that it
will not do, directly or indirectly, any of the following:

 

5.2.1                        Operation of Property.  Borrower shall not, without
the prior consent of Lender, terminate the Management Agreement or otherwise
replace the Manager or enter into any other management agreement with respect to
the Property unless the Manager is in default thereunder beyond any applicable
grace or cure period, in which event no consent by Lender shall be required. 
Lender agrees that its consent will not be unreasonably withheld, delayed or
conditioned provided that the Person chosen by Borrower as the replacement
Manager is a Qualifying Manager and provided further that Borrower shall deliver
an acceptable non-consolidation opinion covering such replacement Manager if
such Person was not covered by such opinion delivered at the closing of the
Loan.

 

5.2.2                        Liens.  Borrower shall not, without the prior
written consent of Lender, create, incur, assume or suffer to exist any Lien on
any portion of the Property or permit any such action to be taken, except:

 

(i)                                     Permitted Encumbrances;

 

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(ii)                                  Liens created by or related to
Indebtedness permitted pursuant to the Loan Documents; and

 

(iii)                                Liens for Taxes or Other Charges not yet
due (or that Borrower is contesting in accordance with the terms of
Section 5.1.2 hereof).

 

5.2.3                        Dissolution.  Borrower shall not (a) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (b) engage in any business activity not related to the
ownership and operation of the Property, (c) transfer, lease or sell, in one
transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of Borrower except to the extent
permitted by the Loan Documents, (d) modify, amend, waive or terminate its
organizational documents or its qualification and good standing in any
jurisdiction or (e) cause the Sole Member to (i) dissolve, wind up or liquidate
or take any action, or omit to take an action, as a result of which the Sole
Member would be dissolved, wound up or liquidated in whole or in part, or (ii)
amend, modify, waive or terminate the certificate of limited partnership or
partnership agreement of the Sole Member, in each case, without obtaining the
prior written consent of Lender or Lender’s designee.

 

5.2.4                        Change in Business.  Borrower shall not enter into
any line of business other than the ownership and operation of the Property, or
make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the
continuance of its present business.

 

5.2.5                        Debt Cancellation.  Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business.

 

5.2.6                        Affiliate Transactions.  Borrower shall not enter
into, or be a party to, any transaction with an Affiliate of Borrower or any of
the partners of Borrower except in the ordinary course of business and on terms
which are fully disclosed to Lender in advance and are no less favorable to
Borrower or such Affiliate than would be obtained in a comparable arm’s-length
transaction with an unrelated third party.

 

5.2.7                        Zoning.  Borrower shall not initiate or consent to
any zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other applicable land use
law, rule or regulation, without the prior consent of Lender.

 

5.2.8                        Assets.  Borrower shall not purchase or own any
properties other than the Property owned by Borrower as of the Closing Date as
reflected in the applicable Title Insurance Policy.

 

5.2.9                        Debt.  Borrower shall not create, incur or assume
any Indebtedness other than the Debt except to the extent expressly permitted
hereby.

 

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5.2.10                  No Joint Assessment.  Borrower shall not suffer, permit
or initiate the joint assessment of the Property with (a) any other real
property constituting a tax lot separate from the Property, or (b) any portion
of the Property which may be deemed to constitute personal property, or any
other procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.

 

5.2.11                  Intentionally Omitted.

 

5.2.12                  ERISA.  (a)  Borrower shall not engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under the Note, this
Agreement or the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under ERISA.

 

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

 

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

 

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

 

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

 

5.2.13                  Transfers.  Unless such action is permitted by the
provisions of this Section 5.2.13, Borrower agrees that it will not (i) sell,
assign, convey, transfer or otherwise dispose of its interests in the Property
or any part thereof, (ii) permit any owner, directly or indirectly, of an
ownership interest in the Property, to transfer such interest, whether by
transfer of stock or other interest in Borrower or any entity, or otherwise,
(iii) incur indebtedness (other than the Indebtedness permitted pursuant to the
terms of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or
grant a security interest in the Property or any part thereof, (v) sell, assign,
convey, transfer, mortgage, encumber, grant a security interest in, or otherwise
dispose of any direct or indirect ownership interest in Borrower, or permit any
owner of an interest in Borrower to do the same, or (vi) file a declaration of
condominium with respect to the Property (any of the foregoing transactions, a
“Transfer”). For purposes hereof, a “Transfer” shall not include (A) any
issuance, sale or transfer of interests in Inland Western Retail Real Estate
Trust, Inc., (B) transfer by devise or descent or by operation of law upon the
death of a member of Borrower, and (C) a sale, transfer or hypothecation of a
membership interest in Borrower, whichever the case may be, by the current
member(s), as applicable, to an

 

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immediate family member (i.e., parents, spouses, siblings, children or
grandchildren) of such member (or a trust for the benefit of any such persons).

 

(a)                                  On and after the date that is twelve (12)
months following the Closing Date, Lender shall not withhold its consent to a
Transfer of the Property, provided that the following conditions are satisfied:

 

(1)                                the transferee of the Property shall be a
Special Purpose Entity (the “Transferee”) which at the time of such transfer
will be in compliance with the covenants contained in Section 5.1.1 and the
representations contained in 4.1.30 hereof and which shall have assumed in
writing (subject to the terms of Section 9.4 hereof) and agreed to comply with
all the terms, covenants and conditions set forth in this Loan Agreement and the
other Loan Documents, expressly including the covenants contained in
Section 5.1.1 and the representations contained in 4.1.30 hereof;

 

(2)                                if requested by Lender, Borrower shall
deliver confirmation in writing from the Rating Agencies that such proposed
Transfer will not cause a downgrading, withdrawal or qualification of the then
current rating of any securities issued pursuant to such Securitization;

 

(3)                                if Manager does not act as manager of the
transferred Property then the manager of the Property must be a Qualifying
Manager;

 

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

 

(5)                                if required or requested by any of the Rating
Agencies, Borrower shall have caused counsel to render a substantive
non-consolidation opinion which may be relied upon by the holder of the Note,
the Ratings Agencies and their respective counsel, agents and representatives
with respect to the proposed transaction, including the Transferee, which
opinion shall be acceptable to Lender in its reasonable discretion;

 

(6)                                Borrower shall have paid (A) an assumption
fee equal to one percent (1.0%) of the then outstanding principal balance of the
Loan, and (B) the reasonable and customary third-party expenses (including
reasonable attorneys’ fees and disbursements) actually incurred by Lender in
connection with such Transfer; provided, however, no assumption fee shall be
required for a Transfer of the Property to a Transferee acceptable to Lender in
connection with a joint venture between Inland Western Retail Real Estate Trust,
Inc. and an institution acceptable to Lender provided Inland Western Retail Real
Estate Trust, Inc., or an Affiliate wholly-owned (directly or indirectly) by
Inland Western Retail Real Estate Trust, Inc., owns at least twenty percent
(20%) of the ownership interests in such Transferee and for which Inland Western
Retail Real Estate Trust, Inc., or an Affiliate wholly-owned (directly or
indirectly) by Inland Western Retail Real Estate Trust,  Inc., is the managing
entity and

 

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otherwise maintains operational and managerial control of such Transferee,
provided that Borrower shall pay all of Lender’s reasonable and customary
third-party expenses (including reasonable attorneys’ fees and disbursements)
actually incurred by Lender in connection with such Transfer and a processing
fee of $5,000.

 

Lender shall approve or disapprove any proposed Transfer governed by this
Section 5.2.13(a) within thirty (30) days of Lender’s receipt of a written
notice from Borrower requesting Lender’s approval, provided such notice includes
all information necessary to make such decision, and further provided that such
written notice from Borrower shall conspicuously state, in large bold type, that
“PURSUANT TO SECTION 5.2.13 OF THE LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN
THIRTY (30) DAYS OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. If Lender fails to
disapprove any such matter within such period, Borrower shall provide a second
written notice requesting approval, which written notice shall conspicuously
state, in large bold type, that “PURSUANT TO SECTION 5.2.13 OF THE LOAN
AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES
NOT RESPOND TO THE CONTRARY WITHIN TEN (10) DAYS OF LENDER’S RECEIPT OF THIS
WRITTEN NOTICE”. Thereafter, if Lender does not disapprove such matter within
said ten (10) day period such matter shall be deemed approved.

 

(b)                                 On and after the date that is twelve (12)
months following the Closing Date, Lender shall not withhold its consent to, and
shall not charge an assumption fee in connection with, (1) a Transfer of up to,
in the aggregate, forty-nine percent (49%) of the direct or indirect ownership
interests in Borrower, or (2) a Transfer of greater than forty-nine percent
(49%) of the direct or indirect ownership interest in Borrower, provided that
(A) such transfer is to a Qualified Entity (as defined below), and (B) Borrower
shall pay all of Lender’s reasonable and customary third-party expenses
(including reasonable attorneys’ fees and disbursements) actually incurred by
Lender in connection with such Transfer and a processing fee of $5,000. For
purposes of this Agreement, a “Qualified Entity” shall mean an entity (x) with a
net worth of $200,000,000 or more, (y) with sufficient experience (determined by
Lender in its reasonable discretion) in the ownership and management of
properties similar to the Property, and (z) which owns or manages retail
properties containing at least 1,000,000 square feet of gross leasable area. If
required or requested by any of the Rating Agencies, Borrower shall deliver a
substantive non-consolidation opinion with respect to any party not now owning
more than 49% of the ownership interests in Borrower acquiring more than 49% of
the ownership interests in Borrower.

 

(c)                                  Notwithstanding anything in this
Section 5.2.13 to the contrary, on or after the date that is twelve (12) months
after the Closing Date, Borrower shall be permitted to Transfer the entire
Property in a single transaction to one newly-formed Special Purpose Entity
which shall be wholly-owned subsidiary of Inland Western Retail Real Estate
Trust, Inc. (“Permitted Affiliate Transferee”) which shall be approved by Lender
in its reasonable discretion (“Permitted Affiliate Transfer”) provided (1) no
Event of Default shall have occurred and be continuing, (2) the creditworthiness
of Inland Western Retail Real Estate Trust, Inc., as applicable, has not
deteriorated, in the sole discretion of Lender, from the Closing Date to the
date of the proposed Transfer, and (3) Borrower shall have paid all reasonable
and

 

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customary third party expenses (including reasonable attorneys’ fees and
disbursements) actually incurred by Lender in connection with such Transfer (but
not any assumption or processing fee).

 

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

 

ARTICLE VI
INSURANCE; CASUALTY; CONDEMNATION

 

Section 6.1                                     Insurance.  (a) Borrower shall
obtain and maintain, or shall cause Anchor Tenant to maintain, insurance for
Borrower and the Property providing at least the following coverages:

 

(i)                                    comprehensive all risk insurance on the
Improvements and the Personal Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent (100%)
of the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Ten Thousand and No/100 Dollars ($10,000) for all such
insurance coverage; and (D) containing an “Ordinance or Law Coverage” or
“Enforcement” endorsement if any of the Improvements or the use of the Property
shall at any time constitute legal non-conforming structures or uses. In
addition, Borrower shall obtain: (y) if any portion of the Improvements is
currently or at any time in the future located in a federally designated
“special flood hazard area”, flood hazard insurance in an amount equal to the
lesser of (1) the outstanding principal balance of the Note or (2) the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended or such greater amount as Lender
shall require; and (z) earthquake insurance in amounts and in form and substance
satisfactory to Lender in the event the Property is located in an area with a
high degree of seismic activity, provided that the

 

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insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent
with the comprehensive all risk insurance policy required under this
subsection (i).

 

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

 

(iii)                                  business income insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in subsection (i) above; (C) covering rental losses or
business interruption, as may be applicable, for a period of at least twelve
(12) months after the date of the casualty; and (D) in an annual amount equal to
(100%) of the rents or estimated gross revenues from the operation of the
Property (as reduced to reflect expenses not incurred during a period of
Restoration). The amount of such business income insurance shall be determined
prior to the date hereof and at least once each year thereafter based on
Borrower’s reasonable estimate of the gross income from the Property for the
succeeding twelve (12) month period. All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained shall be deemed
to relieve Borrower of its obligations to pay the obligations secured by the
Loan Documents on the respective dates of payment provided for in the Note and
the other Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such business income insurance;

 

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

 

(v)                                    workers’ compensation, subject to the
statutory limits of the State;

 

(vi)                                comprehensive boiler and machinery
insurance, if applicable, in amounts as shall be reasonably required by Lender
on terms consistent with the commercial property insurance policy required under
subsection (i) above;

 

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(vii)                              umbrella liability insurance in an amount not
less than Five Million and No/100 Dollars ($5,000,000.00) per occurrence on
terms consistent with the commercial general liability insurance policy required
under subsection (ii) above;

 

(viii)                           if any of the policies of insurance covering
the risks required to be covered under subsections (i) through (vii) above
contains an exclusion from coverage for acts of terrorism, Borrower shall obtain
and maintain a separate policy providing such coverages in the event of any act
of terrorism, provided such coverage is commercially available for properties
similar to the Property and located in or around the region in which the
Property is located. Notwithstanding the foregoing, Borrower shall not be
required to obtain such a policy, provided (I) Borrower confirms to Lender, in
writing, that it shall protect and hold Lender harmless from any losses
associated with such risks by, among other things, either (A) depositing with
Lender sums sufficient to pay for all uninsured costs related to a Restoration
of the Property following any act of terrorism (which sum shall be treated as a
Net Proceeds Deficiency), or (B) provided such act of terrorism occurs on or
after the Permitted Prepayment Date, prepaying the Loan in accordance with the
terms hereof; (II) Inland Western Retail Real Estate Trust, Inc. (“Terrorism
Insurance Guarantor”) executes a guaranty, in form and substance satisfactory to
Lender, guaranteeing in the event of any act of terrorism, payment to Lender of
any sums that Borrower is obligated to pay to Lender under clause (I) above
(which shall be applied in accordance with Section 6.4 hereof) and (III)
Terrorism Insurance Guarantor maintains a net worth of at least $300,000,000 (as
determined by such entity’s most recent audited financial statements), such
entity maintains a direct or indirect ownership interest in Borrower, and the
aggregate loan-to-value ratio (as determined by Lender) (“LTV”) for all
properties on which such entity has a direct or indirect ownership interest
shall not exceed 55%, however, Terrorism Insurance Guarantor may exceed the 55%
LTV for a period not to exceed six (6) months out of any twelve (12) month
period either 1) during the time period when Terrorism Insurance Guarantor is
offering securities to the public, or 2) when in the business judgement of
Terrorism Insurance Guarantor, exceeding an LTV of 55% is necessary given
existing circumstances of the credit environment, but in no event shall the LTV
exceed 65% if Terrorism Insurance Guarantor maintains a net worth greater than
or equal to $300,000,000, but less than $400,000,000, or 70% if Terrorism
Insurance Guarantor maintains a net worth of at least $400,000,000.

 

(ix)                                upon sixty (60) days’ written notice, such
other reasonable insurance and in such reasonable amounts as Lender from time to
time may reasonably request against such other insurable hazards which at the
time are commonly insured against for property similar to the Property located
in or around the region in which the Property is located.

 

(b)                                 All insurance provided for in Section 6.1(a)
shall be obtained under valid and enforceable policies (collectively, the
“Policies” or in the singular, the “Policy”), and shall be subject to the
approval of Lender as to insurance companies, amounts, deductibles, loss payees
and insureds. The Policies shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and having a rating
of “A:X” or better in the current Best’s Insurance Reports and a claims paying
ability rating of “AA” or better by at least two (2) of the Rating Agencies
including, (i) Standard & Poor’s Ratings Group, and (ii) Moody’s Investors
Services, Inc. if Moody’s Investors Service, Inc. is rating the Securities. The
Policies

 

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described in Section 6.1 (other than those strictly limited to liability
protection) shall designate Lender as loss payee. Not less than thirty (30) days
prior to the expiration dates of the Policies theretofore furnished to Lender,
certificates of insurance evidencing the Policies accompanied by evidence
satisfactory to Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.

 

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

 

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

 

(e)                                  All Policies of insurance provided for in
Section 6.1(a) shall contain clauses or endorsements to the effect that:

 

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

 

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

 

(iii)                              the issuers thereof shall give written notice
to Lender if the Policy has not been renewed fifteen (15) days prior to its
expiration; and

 

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

 

(f)                                    If at any time Lender is not in receipt
of written evidence that all insurance required hereunder is in full force and
effect, Lender shall have the right, after ten (10) Business Days written notice
to Borrower, to take such action as Lender deems necessary to protect its
interest in the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate.  All
premiums incurred by Lender in connection with such action or in obtaining such
insurance and keeping it in effect shall be paid by Borrower to Lender upon
demand and, until paid, shall be secured by the Mortgage and shall bear interest
at the Default Rate. If Borrower fails in so insuring the Property or in so
assigning and delivering the Policies, Lender may, at its option, obtain such
insurance using such carriers and agencies as Lender shall elect from year to
year and pay the premiums therefor, and Borrower will reimburse Lender for any
premium so paid, with interest thereon as stated in the

 

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Note from the time of payment, on demand, and the amount so owning to Lender
shall be secured by the Mortgage. The insurance obtained by Lender may, but need
not, protect Borrower’s interest and the coverage that Lender purchases may not
pay any claim that Borrower makes or any claim that is made against Borrower in
connection with the Property.

 

Section 6.2                                     Casualty.  If the Property shall
be damaged or destroyed, in whole or in part, by fire or other casualty (a
“Casualty”), Borrower (a) shall give to Lender prompt notice of such damage
reasonably estimated by Borrower to cost more than One Hundred Thousand Dollars
($100,000.00) to repair, and (b) shall promptly commence and diligently
prosecute the completion of the repair and restoration of the Property as nearly
as possible to the condition the Property was in immediately prior to such fire
or other casualty, with such alterations as may be reasonably approved by Lender
(a “Restoration”) and otherwise in accordance with Section 6.4. Borrower shall
pay all costs of such Restoration whether or not such costs are covered by
insurance. Lender may, but shall not be obligated to make proof of loss if not
made promptly by Borrower.

 

Section 6.3                                      Condemnation.

 

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

 

Section 6.4                                     Restoration.

 

(a)                                  If the Net Proceeds shall be less than
Relevant Restoration Threshold and the costs of completing the Restoration shall
be less than the Relevant Restoration Threshold, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that all of the
conditions set forth in clauses (A), (E), (F), (G), (H), (J) and (L) of
Section 6.4(b)(i) below are met and Borrower delivers to Lender a written
undertaking to expeditiously commence and to

 

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satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Agreement.

 

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

 

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

 

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

 

(B)                                (1) in the event the Net Proceeds are
Insurance Proceeds, and (x) less than twenty-five percent (25%) of the total
floor area of the Improvements on the Property has been damaged, destroyed or
rendered unusable as a result of such fire or other casualty, or (y) Borrower is
required under a Lease exceeding the Relevant Leasing Threshold to use the Net
Proceeds for the restoration of the Property, or (2) in the event the Net
Proceeds are Condemnation Proceeds, and (x) less than ten percent (10%) of the
land constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements is
located on such land, or (y) Borrower is required under a Lease exceeding the
Relevant Leasing Threshold to use the Net Proceeds for the restoration of the
Property;

 

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

 

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

 

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

 

(F)                                 Lender shall be satisfied that the
Restoration will be completed on or before the earliest to occur of (1) the
Maturity Date, (2) the earliest date required for such completion under the
terms of any Leases, (3) such time as may be required under applicable zoning
law, ordinance, rule or regulation in order to repair and restore the Property
to the condition it was in immediately prior to such fire or other casualty or
to as nearly as possible the condition it was in immediately prior to such
taking, as applicable or (4) the expiration of the insurance coverage referred
to in Section 6.1(a)(iii);

 

(G)                                the Property and the use thereof after the
Restoration will be in compliance with and permitted under all applicable zoning
laws, ordinances, rules and regulations provided, however, that compliance with
such zoning laws, ordinances, rules and regulations (including, without
limitation, parking requirements)  will not require restoration of the
Improvements or the Property to a size, condition, or configuration materially
different than that which existed immediately prior to such Casualty or taking;

 

(H)                               the Restoration shall be done and completed by
Borrower in an expeditious and diligent fashion and in compliance with all
applicable governmental laws, rules and regulations (including, without
limitation, all applicable environmental laws);

 

(I)                                    such fire or other casualty or taking, as
applicable, does not result in the loss of access to the Property or the related
Improvements;

 

(J)                                   the Debt Service Coverage Ratio, after
giving effect to the Restoration, shall be equal to or greater than 2.50:1.0;

 

(K)                               Borrower shall deliver or cause to be
delivered to Lender a signed detailed budget approved in writing by Borrower’s
architect or engineer stating the entire cost of completing the Restoration,
which budget should be consistent with restoration budgets of similar retail

 

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properties then owned and operated by nationally recognized owners and operators
of retail properties located in the areas in which the Property is located; and

 

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

 

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

 

(iii)                               All plans and specifications required in
connection with the Restoration shall be subject to prior review and acceptance
in all respects by Lender and by an independent consulting engineer selected by
Lender (the “Casualty Consultant”), such review and acceptance not to be
unreasonably withheld or delayed. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained in
connection with the Restoration. The identity of the contractors, subcontractors
and materialmen engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior review and acceptance by
Lender and the Casualty Consultant, such review and acceptance not to be
unreasonably withheld or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration including,
without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s fees, shall be paid by Borrower.

 

(iv)                              In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term “Casualty Retainage” shall mean an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the Restoration has
been completed. The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 6.4(b), be less than
the amount actually held back by Borrower from contractors, subcontractors and
materialmen engaged in the Restoration. The Casualty Retainage shall not be
released until the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the

 

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provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in full
or will be paid in full out of the Casualty Retainage; provided, however, that
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor’s, subcontractor’s or materialman’s contract, the
contractor, subcontractor or materialman delivers the lien waivers and evidence
of payment in full of all sums due to the contractor, subcontractor or
materialman as may be reasonably requested by Lender or by the title company
issuing the Title Insurance Policy, and Lender receives an endorsement to the
Title Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

 

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

 

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

 

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

 

(c)                                  All Net Proceeds not required (i) to be
made available for the Restoration or (ii) to be returned to Borrower as excess
Net Proceeds pursuant to Section 6.4(b)(vii) may be retained and applied by
Lender toward the payment of the Debt whether or not then due and payable in
such order, priority and proportions as Lender in its sole discretion shall deem
proper

 

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(provided no Event of Default exists, such Borrower shall not be required to pay
any Prepayment Consideration in connection with such payment), or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion.

 

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

 

(e)                                  Lender shall with reasonable promptness
following any Casualty or Condemnation notify Borrower whether or not Net
Proceeds are required to be made available to Borrower for restoration pursuant
to this Section 6.4.  All Net Proceeds not required to be made available for
Restoration shall be retained and applied by Lender in accordance with
Section 2.3.2(a) hereof (a “Net Proceeds Prepayment”).  If such Net Proceeds
Prepayment shall be equal to or greater than Eight Million and 00/100 Dollars
($8,000,000.00), Borrower shall have the right to elect to prepay the remaining
outstanding principal balance of the Note (a “Casualty/Condemnation Prepayment”)
in accordance with Section 2.3.2(b) hereof upon satisfaction of the following
conditions: (i) within thirty (30) days following the date of the Net Proceeds
Prepayment, Borrower shall provide Lender with written notice of Borrower’s
intention to pay the Note in full, (ii) Borrower shall prepay the Note in
accordance with Section 2.3.2(b) hereof on or before the second Payment Date
occurring following the date of the Net Proceeds Prepayment, and (iii) no Event
of Default shall exist on the date of such Casualty/Condemnation Prepayment.
Notwithstanding anything in Section 6.2 or Section 6.3 to the contrary, Borrower
shall have no obligation to commence Restoration of the Property upon delivery
of the written notice set forth in clause (i) of the preceding sentence (unless
Borrower subsequently shall fail to satisfy the requirement of clause (ii) of
the preceding sentence).

 

ARTICLE VII
RESERVE FUNDS

 

Section 7.1                                      Required Repair Funds.

 

7.1.1                        Deposits.  Borrower shall perform the repairs at
the Property, if any, as more particularly set forth on Schedule III hereto
(such repairs hereinafter referred to as “Required Repairs”) within six (6)
months from the Closing Date, or such earlier time as specified on Schedule III.
If Borrower has not delivered to Lender evidence reasonably satisfactory to
Lender that it has completed all Required Repairs on or before the date that is
six (6) months from the Closing Date, or such earlier time as specified on
Schedule III, Borrower shall deposit with Lender the amount for the Property set
forth on such Schedule III hereto, if any (less the amount allocated to the
performance of Required Repairs for which evidence of completion has been
delivered to Lender), to perform the Required Repairs for the Property.  Amounts
so deposited with Lender, if any, shall be held by Lender in an interest bearing
account. Amounts so deposited, if any, shall hereinafter be referred to as
Borrower’s “Required Repair Fund” and the account, if any, in which such amounts
are held shall hereinafter be referred to as

 

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Borrower’s “Required Repair Account”. It shall be an Event of Default under this
Agreement if Borrower does not either (i) does not deposit with Lender the
Required Repair Fund as set forth above, or (ii) complete the Required Repairs
at the Property within nine (9) months from the Closing Date. Upon the
occurrence of such an Event of Default, Lender, at its option, may withdraw all
Required Repair Funds from the Required Repair Account and Lender may apply such
funds either to completion of the Required Repairs at the Property or toward
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender’s right to withdraw and apply Required
Repair Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents.

 

7.1.2                        Release of Required Repair Funds.  Lender shall
disburse to Borrower the Required Repair Funds from the Required Repair Account
from time to time upon satisfaction by Borrower of each of the following
conditions: (i) Borrower shall submit a written request for payment to Lender at
least fifteen (15) days prior to the date on which Borrower requests such
payment be made and specifies the Required Repairs to be paid, (ii) on the date
such request is received by Lender and on the date such payment is to be made,
no Default or Event of Default shall exist and remain uncured, (iii) Lender
shall have received a certificate from Borrower (A) stating that all Required
Repairs at the Property to be funded by the requested disbursement have been
completed in good and workmanlike manner and in accordance with all applicable
federal, state and local laws, rules and regulations, such certificate to be
accompanied by a copy of any license, permit or other approval by any
Governmental Authority required to commence and/or complete the Required
Repairs, (B) identifying each Person that supplied materials or labor in
connection with the Required Repairs performed at the Property to be funded by
the requested disbursement under a contract in excess of $50,000, and (C)
stating that each Person who has supplied materials or labor in connection with
the Required Repairs to be funded by the requested disbursement has been paid in
full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender,
(iv) at Lender’s option, a title search for the Property indicating that the
Property is free from all liens, claims and other encumbrances not previously
approved by Lender, and (v) Lender shall have received such other evidence as
Lender shall reasonably request that the Required Repairs at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower. Lender shall not be required to
make disbursements from the Required Repair Account with respect to the Property
more than once each calendar month and such disbursement shall be made only upon
satisfaction of each condition contained in this Section 7.1.2.

 

Section 7.2                                      Tax and Insurance Escrow Fund.

 

Borrower shall pay to Lender on each Payment Date (a) one-twelfth of the Taxes
that Lender estimates will be payable during the next ensuing twelve (12) months
in order to accumulate with Lender sufficient funds to pay all such Taxes at
least thirty (30) days prior to their respective due dates and (b) one-twelfth
of the Insurance Premiums that Lender estimates will be payable for the renewal
of the coverage afforded by the Policies upon the expiration thereof in order to
accumulate with Lender sufficient funds to pay all such Insurance Premiums at
least thirty (30) days prior to the expiration of the Policies, (said amounts in
(a) and (b) above are hereinafter called the “Tax and Insurance Escrow Fund”).
The Tax and Insurance Escrow Fund and the payments of interest or principal or
both, payable pursuant to the Note, shall be

 

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added together and shall be paid as an aggregate sum by Borrower to Lender.
Lender will apply the Tax and Insurance Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to this Agreement
and under the Mortgage. In making any payment relating to the Tax and Insurance
Escrow Fund, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office (with respect to Taxes) or insurer
or agent (with respect to Insurance Premiums) or from Borrower without inquiry
into the accuracy of such bill, statement or estimate or into the validity of
any tax, assessment, sale, forfeiture, tax lien or title or claim thereof,
provided, however, Lender shall use reasonable efforts to pay such real property
taxes sufficiently early to obtain the benefit of any available discounts of
which it has knowledge. If the amount of the Tax and Insurance Escrow Fund shall
exceed the amounts due for Taxes and Insurance Premiums, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Escrow Fund. The Tax and
Insurance Escrow Fund shall be held by Lender in an interest-bearing account and
shall at Lender’s option be held in Eligible Account at an Eligible Institution.
Any interest earned on said account shall accrue in said account for the benefit
of Borrower, but shall remain in and constitute part of the Tax and Insurance
Escrow Fund, and shall be disbursed in accordance with the terms hereof. Any
amount remaining in the Tax and Insurance Escrow Fund after the Debt has been
paid in full shall be returned to Borrower. In allocating such excess, Lender
may deal with the Person shown on the records of Lender to be the owner of the
Property. If at any time Lender reasonably determines that the Tax and Insurance
Escrow Fund is not or will not be sufficient to pay Taxes or Insurance Premiums
by the dates set forth above, Lender shall notify Borrower of such determination
and Borrower shall increase its monthly payments to Lender by the amount that
Lender estimates is sufficient to make up the deficiency at least thirty (30)
days prior to delinquency of the Taxes or Insurance Premiums.

 

Notwithstanding anything to the contrary hereinbefore contained, in the event
that Borrower provides (1) evidence satisfactory to Lender that the Property is
insured in accordance with Section 6.1 of this Agreement and (2) evidence
satisfactory to Lender that the Taxes for the Property have been paid in
accordance with the requirements set forth in this Agreement, Lender will waive
the requirement set forth herein for Borrower to make deposits into the Tax and
Insurance Escrow Fund for the payment of Insurance Premiums and for payment of
such Taxes, provided, however, Lender expressly reserves the right to require
Borrower to make deposits to the Tax and Insurance Escrow Fund for the payment
of Insurance Premiums if at any time the Property is not insured in accordance
with Section 6.1 of this Agreement or Taxes are not paid in accordance with the
requirements of this Agreement.

 

Section 7.3                                      Replacements and Replacement
Reserve.

 

Section 7.3.1                             Replacement Reserve Fund.  Borrower
shall pay to Lender on the Closing Date and on each Payment Date one twelfth of
the amount (the “Replacement Reserve Monthly Deposit”) reasonably estimated by
Lender in its sole discretion to be due for replacements and repairs required to
be made to the Property during the calendar year (collectively, the
“Replacements”), which Replacement Reserve Monthly Deposit shall be in an amount
equal to no less than $0.15 per year per square foot of gross leasable area.
Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement
Reserve Fund” and the account in which such amounts are held shall hereinafter
be referred to as Borrower’s

 

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“Replacement Reserve Account”. Lender may reassess its estimate of the amount
necessary for the Replacement Reserve Fund from time to time, and may increase
the monthly amounts required to be deposited into the Replacement Reserve Fund
upon thirty (30) days notice to Borrower if Lender determines in its reasonable
discretion that an increase is necessary to maintain the proper maintenance and
operation of the Property.  Any amount held in the Replacement Reserve Account
and allocated for the Property shall be retained by Lender in an interest
bearing account, or, at the option of Lender, in an Eligible Account at an
Eligible Institution; provided, however, that, any interest earned on said
account shall accrue in said account for the benefit of Borrower, but shall
remain in and constitute part of the Replacement Reserve Fund, and shall be
disbursed in accordance with the terms hereof.

 

Notwithstanding anything to the contrary in this Section 7.3, Borrower shall not
be required to make Replacement Reserve Monthly Deposits, provided that: (i) no
Event of Default shall have occurred; and (ii) Borrower makes all necessary
Replacements and otherwise maintains the Property to Lender’s satisfaction. Upon
notice from Lender following: (a) an Event of Default; or (b) the failure of
Borrower to make necessary Replacements or otherwise maintain the Property to
Lender’s satisfaction, Borrower shall begin to deposit the Replacement Reserve
Monthly Deposit into the Replacement Reserve Fund beginning on the Payment Date
(as defined herein) immediately following the date of such notice.

 

Section 7.3.2                             Disbursements from Replacement Reserve
Account.

 

(a)                                  Lender shall make disbursements from the
Replacement Reserve Account to pay Borrower only for the costs of the
Replacements.  Lender shall not be obligated to make disbursements from the
Replacement Reserve Account to reimburse Borrower for the costs of routine
maintenance to the Property or for costs which are to be reimbursed from the
Required Repair Fund (if any).

 

(b)                                 Lender shall, upon written request from
Borrower and satisfaction of the requirements set forth in this Section 7.3.2,
disburse to Borrower amounts from the Replacement Reserve Account necessary to
pay for the actual approved costs of Replacements or to reimburse Borrower
therefor, upon completion of such Replacements (or, upon partial completion in
the case of Replacements made pursuant to Section 7.3.2(f)) as determined by
Lender. In no event shall Lender be obligated to disburse funds from the
Replacement Reserve Account if a Default or an Event of Default exists.

 

(c)                                  Each request for disbursement from the
Replacement Reserve Account shall be in a form specified or approved by Lender
and shall specify (i) the specific Replacements for which the disbursement is
requested, (ii) the quantity and price of each item purchased, if the
Replacement includes the purchase or replacement of specific items, (iii) the
price of all materials (grouped by type or category) used in any Replacement
other than the purchase or replacement of specific items, and (iv) the cost of
all contracted labor or other services applicable to each Replacement for which
such request for disbursement is made. With each request Borrower shall certify
that all Replacements have been made in accordance with all applicable Legal
Requirements of any Governmental Authority having jurisdiction over the Property
to which the Replacements are being provided and, unless Lender has agreed to
issue joint checks as described below, each request shall include evidence of
payment of all such

 

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amounts. Each request for disbursement shall include copies of invoices for all
items or materials purchased and all contracted labor or services provided.
Except as provided in Section 7.3.2(e), each request for disbursement from the
Replacement Reserve Account shall be made only after completion of the
Replacement for which disbursement is requested. Borrower shall provide Lender
evidence of completion satisfactory to Lender in its reasonable judgment.

 

(d)                                 Borrower shall pay all invoices in
connection with the Replacements with respect to which a disbursement is
requested prior to submitting such request for disbursement from the Replacement
Reserve Account or, at the request of Borrower, Lender will issue joint checks,
payable to Borrower and the contractor, supplier, materialman, mechanic,
subcontractor or other party to whom payment is due in connection with a
Replacement.  In the case of payments made by joint check, Lender may require a
waiver of lien from each Person receiving payment prior to Lender’s disbursement
from the Replacement Reserve Account. In addition, as a condition to any
disbursement, Lender may require Borrower to obtain lien waivers from each
contractor, supplier, materialman, mechanic or subcontractor who receives
payment in an amount equal to or greater than $100,000 for completion of its
work or delivery of its materials. Any lien waiver delivered hereunder shall
conform to the requirements of applicable law and shall cover all work performed
and materials supplied (including equipment and fixtures) for the Property by
that contractor, supplier, subcontractor, mechanic or materialman through the
date covered by the current reimbursement request (or, in the event that payment
to such contractor, supplier, subcontractor, mechanic or materialmen is to be
made by a joint check, the release of lien shall be effective through the date
covered by the previous release of funds request).

 

(e)                                  If (i) the cost of a Replacement exceeds
$100,000, (ii) the contractor performing such Replacement requires periodic
payments pursuant to terms of a written contract, and (iii) Lender has approved
in writing in advance such periodic payments, a request for reimbursement from
the Replacement Reserve Account may be made after completion of a portion of the
work under such contract, provided (A) such contract requires payment upon
completion of such portion of the work, (B) the materials for which the request
is made are on site at the Property and are properly secured or have been
installed in the Property, (C) all other conditions in this Agreement for
disbursement have been satisfied, (D) funds remaining in the Replacement Reserve
Account are, in Lender’s judgment, sufficient to complete such Replacement and
other Replacements when required, and (E) if required by Lender, each contractor
or subcontractor receiving payments under such contract shall provide a waiver
of lien with respect to amounts which have been paid to that contractor or
subcontractor.

 

(f)                                    Borrower shall not make a request for
disbursement from the Replacement Reserve Account more frequently than once in
any calendar month and (except in connection with the final disbursement) the
total cost of all Replacements in any request shall not be less than $5,000,00.

 

Section 7.3.3                             Performance of Replacements.

 

(a)                                  Borrower shall make Replacements when
required in order to keep the Property in condition and repair consistent with
other first class, full service retail properties in the same market segment in
the metropolitan area in which the Property is located, and to keep the Property
or any portion thereof from deteriorating. Borrower shall complete all

 

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Replacements in a good and workmanlike manner as soon as practicable following
the commencement of making each such Replacement.

 

(b)                                 Lender reserves the right, at its option, to
approve all contracts or work orders with materialmen, mechanics, suppliers,
subcontractors, contractors or other parties providing labor or materials under
contracts for an amount in excess of $100,000 in connection with the
Replacements performed by Borrower.  Upon Lender’s request, Borrower shall
assign any contract or subcontract to Lender.

 

(c)                                  In the event Lender determines in its
reasonable discretion that any Replacement is not being performed in a
workmanlike or timely manner or that any Replacement has not been completed in a
workmanlike or timely manner, and such failure continues to exist for more than
thirty (30) days after notice from Lender to Borrower, Lender shall have the
option to withhold disbursement for such unsatisfactory Replacement and to
proceed under existing contracts or to contract with third parties to complete
such Replacement and to apply the Replacement Reserve Fund toward the labor and
materials necessary to complete such Replacement, without providing any prior
notice to Borrower and to exercise any and all other remedies available to
Lender upon an Event of Default hereunder.

 

(d)                                 In order to facilitate Lender’s completion
or making of the Replacements pursuant to Section 7.3.3(c) above, Borrower
grants Lender the right to enter onto the Property and perform any and all work
and labor necessary to complete or make the Replacements and/or employ watchmen
to protect the Property from damage, subject to the rights of Tenants.  All sums
so expended by Lender, to the extent not from the Replacement Reserve Fund,
shall be deemed to have been advanced under the Loan to Borrower and secured by
the Mortgage.  For this purpose Borrower constitutes and appoints Lender its
true and lawful attorney-in-fact with full power of substitution to complete or
undertake the Replacements in the name of Borrower. Such power of attorney shall
be deemed to be a power coupled with an interest and cannot be revoked but shall
only be effective following an Event of Default.  Borrower empowers said
attorney-in-fact as follows:   (i) to use any funds in the Replacement Reserve
Account for the purpose of making or completing the Replacements; (ii) to make
such additions, changes and corrections to the Replacements as shall be
necessary or desirable to complete the Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing bills
and claims which are or may become Liens against the Property, or as may be
necessary or desirable for the completion of the Replacements, or for clearance
of title; (v) to execute all applications and certificates in the name of
Borrower which may be required by any of the contract documents; (vi) to
prosecute and defend all actions or proceedings in connection with the Property
or the rehabilitation and repair of the Property; and (vii) to do any and every
act which Borrower might do in its own behalf to fulfill the terms of this
Agreement.

 

(e)                                  Nothing in this Section 7.3.3 shall:  (i)
make Lender responsible for making or completing the Replacements; (ii) require
Lender to expend funds in addition to the Replacement Reserve Fund to make or
complete any Replacement; (iii) obligate Lender to proceed with the
Replacements; or (iv) obligate Lender to demand from Borrower additional sums to
make or complete any Replacement.

 

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(f)                                    Borrower shall permit Lender and Lender’s
agents and representatives (including, without limitation, Lender’s engineer,
architect, or inspector) or third parties making Replacements pursuant to this
Section 7.3.3 to enter onto the Property during normal business hours (subject
to the rights of tenants under their Leases) to inspect the progress of any
Replacements and all materials being used in connection therewith, to examine
all plans and shop drawings relating to such Replacements which are or may be
kept at the Property, and to complete any Replacements made pursuant to this
Section 7.3.3.  Borrower shall cause all contractors and subcontractors to
cooperate with Lender or Lender’s representatives or such other persons
described above in connection with inspections described in this
Section 7.3.3(f) or the completion of Replacements pursuant to this
Section 7.3.3.

 

(g)                                 Lender may require an inspection of the
Property at Borrower’s expense prior to making a monthly disbursement in excess
of $10,000 from the Replacement Reserve Account in order to verify completion of
the Replacements for which reimbursement is sought. Lender may require that such
inspection be conducted by an appropriate independent qualified professional
selected by Lender and/or may require a copy of a certificate of completion by
an independent qualified professional acceptable to Lender prior to the
disbursement of any amounts from the Replacement Reserve Account. Borrower shall
pay the expense of the inspection as required hereunder, whether such inspection
is conducted by Lender or by an independent qualified professional.

 

(h)                                 The Replacements and all materials,
equipment, fixtures, or any other item comprising a part of any Replacement
shall be constructed, installed or completed, as applicable, free and clear of
all mechanic’s, materialman’s or other liens (except for those Liens existing on
the date of this Agreement which have been approved in writing by Lender).

 

(i)                                     Before each disbursement from the
Replacement Reserve Account, Lender may require Borrower to provide Lender with
a search of title to the Property effective to the date of the disbursement,
which search shows that no mechanic’s or materialmen’s liens or other liens of
any nature have been placed against the Property since the date of recordation
of the Mortgage and that title to the Property is free and clear of all Liens
(other than the lien of the Mortgage and any other Liens previously approved in
writing by Lender, if any).

 

(j)                                     All Replacements shall comply with all
applicable Legal Requirements of all Governmental Authorities having
jurisdiction over the Property and applicable insurance requirements including,
without limitation, applicable building codes, special use permits,
environmental regulations, and requirements of insurance underwriters.

 

(k)                                  In addition to any insurance required under
the Loan Documents, Borrower shall provide or cause to be provided workmen’s
compensation insurance, builder’s risk, and public liability insurance and other
insurance to the extent required under applicable law in connection with a
particular Replacement. All such policies shall be in form and amount reasonably
satisfactory to Lender. All such policies which can be endorsed with standard
mortgagee clauses making loss payable to Lender or its assigns shall be so
endorsed. Certified copies of such policies shall be delivered to Lender.

 

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Section 7.3.4                             Failure to Make Replacements.  (a)  It
shall be an Event of Default under this Agreement if Borrower fails to comply
with any provision of this Section 7.3 and such failure is not cured within
thirty (30) days after notice from Lender; provided, however, if such failure is
not capable of being cured within said thirty (30) day period, then provided
that Borrower commences action to complete such cure and thereafter diligently
proceeds to complete such cure, such thirty (30) day period shall be extended
for such time as is reasonably necessary for Borrower, in the exercise of due
diligence, to cure such failure, but such additional period of time shall not
exceed sixty (60) days. Upon the occurrence of such an Event of Default, Lender
may use the Replacement Reserve Fund (or any portion thereof) for any purpose,
including but not limited to completion of the Replacements as provided in
Section 7.3.3, or for any other repair or replacement to the Property or toward
payment of the Debt in such order, proportion and priority as Lender may
determine in its sole discretion. Lender’s right to withdraw and apply the
Replacement Reserve Funds shall be in addition to all other rights and remedies
provided to Lender under this Agreement and the other Loan Documents.

 

(b)                                 Nothing in this Agreement shall obligate
Lender to apply all or any portion of the Replacement Reserve Fund on account of
an Event of Default to payment of the Debt or in any specific order or priority.

 

Section 7.3.5                             Balance in the Replacement Reserve
Account.  The insufficiency of any balance in the Replacement Reserve Account
shall not relieve Borrower from its obligation to fulfill all preservation and
maintenance covenants in the Loan Documents.

 

Section 7.3.6                             Indemnification.  Borrower shall
indemnify Lender and hold Lender harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys fees and expenses)
arising from or in any way connected with the performance of the Replacements
unless the same are solely due to gross negligence or willful misconduct of
Lender.  Borrower shall assign to Lender all rights and claims Borrower may have
against all persons or entities supplying labor or materials in connection with
the Replacements; provided, however, that Lender may not pursue any such right
or claim unless an Event of Default has occurred and remains uncured.

 

Section 7.4                                      Intentionally Omitted.

 

Section 7.5                                      Intentionally Omitted.

 

Section 7.6                                      Intentionally Omitted.

 

Section 7.7                                      Reserve Funds, Generally.

 

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

 

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7.7.2                        Upon the occurrence of an Event of Default, Lender
may, in addition to any and all other rights and remedies available to Lender,
apply any sums then present in any or all of the Reserve Funds to the payment of
the Debt in any order in its sole discretion.

 

7.7.3                        The Reserve Funds shall not constitute trust funds
and may be commingled with other monies held by Lender.

 

7.7.4                        Intentionally omitted.

 

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

 

7.7.6                        Lender shall not be liable for any loss sustained
on the investment of any funds constituting the Reserve Funds unless occasioned
by the gross negligence or willful misconduct of Lender.

 

7.7.7                        Upon payment in full of the Debt and performance of
all other obligations under this Agreement and the other Loan Documents, Lender
shall disburse to Borrower all remaining Reserve Funds.

 

ARTICLE VIII
DEFAULTS

 

Section 8.1                                      Event of Default.  (a)  Each of
the following events shall constitute an event of default hereunder (an “Event
of Default”):

 

(i)                                     if any portion of the Debt is not paid
within five (5) days of the applicable due date;

 

(ii)                                  if any of the Taxes or Other Charges are
not paid prior to the date when the same become delinquent, except to the extent
that Borrower is contesting same in accordance with the terms of Section 5.1.2
hereof, or there are sufficient funds in the Tax and Insurance Escrow Fund to
pay such Taxes or Other Charges and Lender fails to or refuses to release the
same from the Tax and Insurance Escrow Fund;

 

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

 

(iv)                              if Borrower transfers or encumbers any portion
of the Property without Lender’s prior written consent (to extent such consent
is required) or otherwise violates the provisions of Section 5.2.13 of this Loan
Agreement;

 

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

 

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misleading in any material respect as of the date the representation or warranty
was made;

 

(vi)                              if Borrower or indemnitor or any guarantor
under any guaranty or indemnity issued in connection with the Loan shall make an
assignment for the benefit of creditors;

 

(vii)                           if a receiver, liquidator or trustee shall be
appointed for Borrower or any guarantor or indemnitor under any guarantee or
indemnity issued in connection with the Loan or if Borrower or such guarantor or
indemnitor shall be adjudicated a bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower or such guarantor or indemnitor, or if any proceeding
for the dissolution or liquidation of Borrower or such guarantor or indemnitor
shall be instituted; provided, however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by Borrower or such
guarantor or indemnitor, upon the same not being discharged, stayed or dismissed
within one hundred eighty (180) days;

 

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

 

(ix)                                if Borrower breaches any of its respective
negative covenants contained in Section 5.2 or any covenant contained in
Section 4.1.30 hereof;

 

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

 

(xi)                                if any of the assumptions contained in any
substantive non-consolidation opinion delivered in connection herewith are or
shall become untrue in any material respect;

 

(xii)                             if Borrower shall continue to be in Default
under any of the other terms, covenants or conditions of this Agreement not
specified in subsections (i) to (xi) above, for ten (10) days after notice to
Borrower from Lender, in the case of any Default which can be cured by the
payment of a sum of money, or for thirty (30) days after notice from Lender in
the case of any other Default; provided, however, that if such non-monetary
Default is susceptible of cure but cannot reasonably be cured within such 30-day
period and provided further that Borrower shall have commenced to cure such
Default within such 30-day period and thereafter diligently and expeditiously
proceeds to cure the same, such 30-day period shall be extended for such time as
is reasonably necessary for Borrower in the exercise of due diligence to cure
such Default, such additional period not to exceed one hundred eighty (180)
days; or

 

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

 

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

 

Section 8.2                                      Remedies.  (a) Upon the
occurrence of an Event of Default, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender at any
time and from time to time, whether or not all or any of the Debt shall be
declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to the Property. Any such
actions taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender
is not subject to any “one action” or “election of remedies” law or rule, and
(ii) all liens and other rights, remedies or privileges provided to Lender shall
remain in full force and effect until Lender has exhausted all of its remedies
against the Property and the Mortgage has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt or the Debt has been paid in full.

 

(b)                                 Lender shall have the right from time to
time to partially foreclose the Mortgage in any manner and for any amounts
secured by the Mortgage then due and payable as determined by Lender in its sole
discretion including, without limitation, the following circumstances: (i) in
the event Borrower defaults beyond any applicable grace period in the payment of
one or more scheduled payments of principal and interest, Lender may foreclose
the Mortgage to recover such delinquent payments, or (ii) in the event Lender
elects to accelerate less than the entire outstanding principal balance of the
Loan, Lender may foreclose the Mortgage to recover so much of the principal
balance of the Loan as Lender may accelerate and

 

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such other sums secured by the Mortgage as Lender may elect. Notwithstanding one
or more partial foreclosures, the Property shall remain subject to the Mortgage
to secure payment of sums secured by the Mortgage and not previously recovered.

 

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

 

(d)                                 As used in this Section 8.2, a “foreclosure”
shall include any sale by power of sale.

 

Section 8.3                                      Remedies Cumulative; Waivers.
 The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender
may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender’s rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender’s sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.

 

ARTICLE IX
SPECIAL PROVISIONS

 

Section 9.1                                      Sale of Notes and
Securitization.  At the request of the holder of the Note and, to the extent not
already required to be provided by Borrower under this Agreement, Borrower shall
cooperate with Lender to allow Lender to satisfy the market standards to which
the holder of the Note customarily adheres or which may be reasonably

 

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required in the marketplace or by the Rating Agencies in connection with the
sale of the Note or participations therein or the first successful
securitization (such sale and/or securitization, the “Securitization”) of rated
single or multi-class securities (the “Securities”) secured by or evidencing
ownership interests in the Note and the Mortgage. In this regard Borrower shall:

 

(a)                                  (i)  provide such financial and other
information with respect to the Property, Borrower and the Manager, (ii) provide
budgets relating to the Property and (iii) to perform or permit or cause to be
performed or permitted such site inspection, appraisals, market studies,
environmental reviews and reports (Phase I’s and, if appropriate, Phase II’s),
engineering reports and other due diligence investigations of the Property, as
may be reasonably requested by the holder of the Note or the Rating Agencies or
as may be necessary or appropriate in connection with the Securitization (the
“Provided Information”), together, if customary, with appropriate verification
and/or consents of the Provided Information through letters of auditors or
opinions of counsel of independent attorneys acceptable to Lender and the Rating
Agencies;

 

(b)                                 cause counsel to render opinions, which may
be relied upon by the holder of the Note, the Rating Agencies and their
respective counsel, agents and representatives, as to non-consolidation,
fraudulent conveyance, and true sale and/or lease or any other opinion customary
in securitization transactions, which counsel and opinions shall be reasonably
satisfactory to the holder of the Note and the Rating Agencies;

 

(c)                                  make such representations and warranties as
of the closing date of the Securitization with respect to the Property,
Borrower, and the Loan Documents as are consistent with the representations and
warranties made in the Loan Documents; and

 

(d)                              execute such amendments to the Loan Documents
and organizational documents as may be reasonably requested by the holder of the
Note or the Rating Agencies or otherwise to effect the Securitization; provided,
however, that Borrower shall not be required to modify or amend any Loan
Document if such modification or amendment would (i) change the interest rate,
the stated maturity or the amortization of principal set forth in the Note, or
(ii) modify or amend any other material economic term of the Loan.

 

All material out-of-pocket third party costs and expenses incurred by Borrower
in connection with complying with requests made under this Section 9.1 shall be
paid by Lender.

 

Section 9.2                                      Securitization.  Borrower
understands that certain of the Provided Information may be included in
disclosure documents in connection with the Securitization, including, without
limitation, a prospectus, prospectus supplement or private placement memorandum
(each, a “Disclosure Document”) and may also be included in filings with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the “Securities Act”), or the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”), or provided or made available to investors or
prospective investors in the Securities, the Rating Agencies, and service
providers relating to the Securitization. In the event that the Disclosure
Document is required to be revised prior to the sale of all Securities, Borrower
will cooperate with the holder of the Note in updating the Disclosure Document
by providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.

 

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Section 9.3                                      Rating Surveillance.  Lender,
at its option, may retain the Rating Agencies to provide rating surveillance
services on any certificates issued in a Securitization. Such rating
surveillance will be at the expense of Lender (the “Rating Surveillance
Charge”).

 

Section 9.4                                      Exculpation.  Subject to the
qualifications below, Lender shall not enforce the liability and obligation of
Borrower to perform and observe the obligations contained in the Note, this
Agreement, the Mortgage or the other Loan Documents by any action or proceeding
wherein a money judgment shall be sought against Borrower, except that Lender
may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender to enforce and realize upon
its interest under the Note, this Agreement, the Mortgage and the other Loan
Documents, or in the Property, the Rents following an Event of Default, or any
other collateral given to Lender pursuant to the Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower’s interest in the Property, in the Rents following an Event of Default
and in any other collateral given to Lender, and Lender, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, agrees that it shall
not sue for, seek or demand any deficiency judgment against Borrower in any such
action or proceeding under or by reason of or under or in connection with the
Note, this Agreement, the Mortgage or the other Loan Documents. The provisions
of this section shall not, however, (a) constitute a waiver, release or
impairment of any obligation evidenced or secured by any of the Loan Documents;
(b) impair the right of Lender to name Borrower as a party defendant in any
action or suit for foreclosure and sale under any of the Mortgage; (c) affect
the validity or enforceability of or any guaranty made in connection with the
Loan or any of the rights and remedies of Lender thereunder; (d) impair the
right of Lender to obtain the appointment of a receiver; (e) impair the
enforcement of any of the Assignment of Leases following an Event of Default;
(f) constitute a prohibition against Lender commencing any other appropriate
action or proceeding in order for Lender to exercise its remedies against the
Property; or (g) constitute a waiver of the right of Lender to enforce the
liability and obligation of Borrower, by money judgment or otherwise, to the
extent of any loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including attorneys’ fees and costs reasonably incurred)
arising out of or in connection with the following:

 

(i)            fraud or intentional misrepresentation by Borrower or any
guarantor in connection with the Loan;

 

(ii)           the gross negligence or willful misconduct of Borrower;

 

(iii)          material physical waste of the Property;

 

(iv)          the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the Mortgage
concerning environmental laws, hazardous substances and asbestos and any
indemnification of Lender with respect thereto in either document;

 

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

 

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(vi)                              the misapplication or conversion by Borrower
of (A) any insurance proceeds paid by reason of any loss, damage or destruction
to the Property which are not applied by Borrower in accordance with this
Agreement, (B) any awards or other amounts received in connection with the
condemnation of all or a portion of the Property which are not applied by
Borrower in accordance with this Agreement, or (C) any Rents following an Event
of Default;

 

(vii)                           failure to pay charges for labor or materials or
other charges that can create liens on any portion of the Property; or

 

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

 

Notwithstanding anything to the contrary in this Agreement, the Note or any of
the Loan Documents, (A) the Debt shall be fully recourse to the Borrower and (B)
Lender shall not be deemed to have waived any right which Lender may have under
Section 506(a), 506(b), 111l(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Debt secured by the Mortgage or
to require that all collateral shall continue to secure all of the Debt owing to
Lender in accordance with the Loan Documents in the event that the (I) first
full monthly payment under the Note is not paid within five (5) days of notice
that such payment is late (provided, however, that such grace period relates
only to the recourse trigger described in this paragraph), or (II) failure of
Borrower to permit on-site inspections of the Property subject to the rights of
Tenants and any applicable cure period set forth in the Loan Documents, to
provide financial information as required under the Loan Documents subject to
any applicable cure period (except for financial information required to be
delivered by a tenant pursuant to the applicable Lease that has not been
delivered to Borrower, provided Borrower has requested such financial
information from such tenant), or (III) failure of Borrower to comply with
Section 4.1.30 hereof, or (IV) failure of Borrower to obtain Lender’s prior
written consent (to extent such consent is required) to any subordinate
financing or other voluntary lien encumbering the Property, or (V) failure of
Borrower to obtain Lender’s prior written consent to any assignment, transfer or
conveyance of the Property, or any portion thereof, or any interest therein as
required by this Agreement. Notwithstanding the provision set forth in clause
(IV) of this paragraph, a voluntary lien other than a lien securing an extension
of credit filed against the Property shall not constitute a recourse trigger for
purposes of this paragraph provided such lien (A) is fully bonded to the
satisfaction of Lender and discharged of record within ninety (90) days of
filing, or (B) within such ninety (90) day period, Lender receives affirmative
title insurance from the title insurance company insuring the lien of the
Mortgage that such lien is subject and subordinate to the lien of the Mortgage
and no enforcement action is commenced by the applicable lien holder. Upon the
acceptance by Lender of any cure by Borrower of a recourse trigger described in
clauses (I), (II) or (IV) above, the Debt shall no longer be fully recourse to
Borrower solely as a result of such trigger. Upon the acceptance by Lender of
any cure by Borrower of a recourse trigger described in clauses (III) or (V)
above, the Debt shall no longer be fully recourse to Borrower solely as a result
of such trigger, provided, however, Borrower shall remain liable to

 

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the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys’ fees and costs reasonably
incurred) arising out of or in connection with such trigger.

 

Section 9.5                                      Termination of Manager.  If (a)
the amounts evidenced by the Note have been accelerated pursuant to
Section 8.1(b) hereof, (b) the Manager shall become insolvent, (c) the Manager
is in default under the terms of the Management Agreement beyond any applicable
grace or cure period, or (d) Manager is not managing the Property in accordance
with the management practices of nationally recognized management companies
managing similar properties in locations comparable to those of the Property,
then, in the case of (a), (b), (c) or (d), Borrower shall, at the request of
Lender, terminate the Management Agreement and replace the Manager with a
manager reasonably approved by Lender on terms and conditions reasonably
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market rates. In
addition and without limiting the rights of Lender hereunder or under any of the
other Loan Documents, in the event that (i) the Management Agreement is
terminated, (ii) the Manager no longer manages the Property, or (iii) a
receiver, liquidator or trustee shall be appointed for Manager or if Manager
shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Manager, or if any proceeding for the dissolution or liquidation of
Manager shall be instituted, then Borrower (at Borrower’s sole cost and expense)
shall immediately, in its name, establish new deposit accounts separate from any
other Person with a depository satisfactory to Lender into which all Rents and
other income from the Property shall be deposited and shall grant Lender a first
priority security interest in such account pursuant to documentation
satisfactory in form and substance to Lender.

 

Section 9.6                                      Servicer.  At the option of
Lender, the Loan may be serviced by a servicer/trustee (the “Servicer”) selected
by Lender and Lender may delegate all or any portion of its responsibilities
under this Agreement and the other Loan Documents to the Servicer pursuant to a
servicing agreement (the “Servicing Agreement”) between Lender and Servicer.
 Lender shall be responsible for any set-up fees or any other costs relating to
or arising under the Servicing Agreement.

 

Section 9.7                                      Splitting the Loan.  At the
election of Lender in its sole discretion, the Loan or any individual Note
making up the Loan shall be split and severed into two or more loans which, at
Lender’s election, shall not be cross-collateralized or cross-defaulted with
each other. Borrower hereby agrees to deliver to Lender to effectuate such
severing of the Loan or any individual Note, as the case may be, as reasonably
requested by Lender, (a) additional executed documents, or amendments and
modifications to the applicable Loan Documents, (b) new opinions or updates to
the opinions delivered to Lender in connection with the closing of the Loan, (c)
endorsements and/or updates to the title insurance policies delivered to Lender
in connection with the closing of the Loan, and (d) any other certificates,
instruments and documentation reasonably determined by Lender as necessary or
appropriate to such severance (the items described in subsections (a) through
(d) collectively hereinafter shall be referred to as “Severing Documentation”),
which Severing Documentation shall be acceptable to Lender in form and substance
in its reasonable discretion. Lender hereby agrees to be responsible for all
reasonable third-party expenses incurred in connection with the preparation and
delivery of the

 

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Severing Documentation and the effectuation of the uncrossing of the Loan from
the additional Loans. Borrower hereby acknowledges and agrees that upon such
severing of the Loan, Lender may effect, in its sole discretion, one or more
Securitizations of which the severed loans may be a part.

 

ARTICLE X
MISCELLANEOUS

 

Section 10.1                                Survival.  This Agreement and all
covenants, agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lender of the Note, and shall continue in
full force and effect so long as all or any of the Debt is outstanding and
unpaid unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the legal representatives, successors
and assigns of such party.  All covenants, promises and agreements in this
Agreement, by or on behalf of Borrower, shall inure to the benefit of the legal
representatives, successors and assigns of Lender.

 

Section 10.2                                Lender’s Discretion.  Whenever
pursuant to this Agreement, Lender exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to approve or disapprove or to decide whether arrangements or
terms are satisfactory or not satisfactory shall (except as is otherwise
specifically herein provided) be in the sole discretion of Lender and shall be
final and conclusive.

 

Section 10.3                                Governing Law.  THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE
PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAWS.

 

Section 10.4                                Modification, Waiver in Writing.  No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, or of the Note, or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

 

Section 10.5                                Delay Not a Waiver.  Neither any
failure nor any delay on the part of Lender in insisting upon strict performance
of any term, condition, covenant or agreement, or exercising any right, power,
remedy or privilege hereunder, or under the Note or under any other Loan
Document, or any other instrument given as security therefor, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting
payment after the due date of any amount payable under this Agreement,

 

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the Note or any other Loan Document, Lender shall not be deemed to have waived
any right either to require prompt payment when due of all other amounts due
under this Agreement, the Note or the other Loan Documents, or to declare a
default for failure to effect prompt payment of any such other amount.

 

Section 10.6                                Notices.  All notices, consents,
approvals and requests required or permitted hereunder or under any other Loan
Document shall be given in writing and shall be effective for all purposes if
hand delivered or sent by (a) certified or registered United States mail,
postage prepaid, return receipt requested or (b) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery, and by telecopier (with answer back acknowledged), addressed
as follows (or at such other address and Person as shall be designated from time
to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided for in this Section):

 

If to Lender:

 

Bear Stearns Commercial Mortgage, Inc.
383 Madison Avenue
New York, New York 10179
Attention: J. Christopher Hoeffel

 

with a copy to:

 

Katten Muchin Zavis Rosenman
401 South Tryon Street
Suite 2600
Charlotte, North Carolina 28202-1935
Attention: Daniel S. Huffenus, Esq.

 

If to Borrower:

 

Inland Western Placentia, L.L.C.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Steven Grimes

 

with a copy to:

 

Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Robert H. Baum, Esq.

 

and with a copy to:

 

Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, IL 60523
Attention: Roberta Matlin

 

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A notice shall be deemed to have been given; in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
Business Day.

 

Section 10.7                                Trial by Jury.  BORROWER AND LENDER
HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY,
AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT
SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER AND LENDER.

 

Section 10.8                                Headings.  The Article and/or
Section headings and the Table of Contents in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

 

Section 10.9                                Severability.  Wherever possible,
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

 

Section 10.10                          Preferences.

 

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

 

Section 10.11                          Waiver of Notice.  Borrower shall not be
entitled to any notices of any nature whatsoever from Lender except with respect
to matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by Lender to Borrower and except with
respect to matters for which Borrower is not, pursuant to applicable

 

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Legal Requirements, permitted to waive the giving of notice. Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Agreement or the other Loan Documents do not specifically
and expressly provide for the giving of notice by Lender to Borrower.

 

Section 10.12                          Remedies of Borrower.  In the event that
a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment.

 

Section 10.13                          Expenses; Indemnity.

 

(a)                                  Borrower covenants and agrees to pay or, if
Borrower fails to pay, to reimburse, Lender upon receipt of written notice from
Lender for all reasonable costs and expenses (including reasonable attorneys’
fees and disbursements) incurred by Lender inconnection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the other
Loan Documents and the consummation of the transactions contemplated hereby and
thereby and all the costs of furnishing all opinions by counsel for Borrower
(including without limitation any opinions requested by Lender as to any legal
matters arising under this Agreement or the other Loan Documents with respect to
the Property); (ii) Borrower’s ongoing performance of and compliance with
Borrower’s respective agreements and covenants contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) Lender’s ongoing performance and
compliance with all agreements and conditions contained in this Agreement and
the other Loan Documents on its part to be performed or complied with after the
Closing Date; (iv) except as otherwise provided in this Agreement, the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Agreement and the
other Loan Documentsand any other documents or matters reasonably requested by
Lender; (v) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and
expenses, title insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other LoanDocuments; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Property or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or of any insolvency or
bankruptcyproceedings; provided, however, that Borrower shall not be liable for
the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud or willful misconduct of
Lender.

 

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(b)                                 Borrower shall indemnify, defend and hold
harmless Lender from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for Lender in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not Lender shall be designated a party
thereto), that may be imposed on, incurred by, or asserted against Lender in any
manner relating to or arising out of (i) any breach by Borrower of its
obligations under, or any material misrepresentation by Borrower contained in,
this Agreement or the other Loan Documents, or (ii) the use or intended use of
the proceeds of the Loan (collectively, the “Indemnified Liabilities”);
provided, however, that Borrower shall not have any obligation to Lender
hereunder to the extent that such Indemnified Liabilities arise from the gross
negligence, illegal acts, fraud or willful misconduct of Lender. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, Borrower shall pay the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Lender.

 

Section 10.14                          Schedules Incorporated.  The Schedules
annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

 

Section 10.15                          Offsets, Counterclaims and Defenses.  Any
assignee of Lender’s interest in and to this Agreement, the Note and the other
Loan Documents shall take the same free and clear of all offsets, counterclaims
or defenses which are unrelated to such documents which Borrower may otherwise
have against any assignor of such documents, and no such unrelated counterclaim
or defense shall be interposed or asserted by Borrower in any action or
proceeding brought by any such assignee upon such documents and any such right
to interpose or assert any such unrelated offset, counterclaim or defense in any
such action or proceeding is hereby expressly waived by Borrower.

 

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

 

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

 

(b)                                 This Agreement and the other Loan Documents
are solely for the benefit of Lender and Borrower and nothing contained in this
Agreement or the other Loan Documents shall be deemed to confer upon anyone
other than Lender and Borrower any right to insist upon or to enforce the
performance or observance of any of the obligations contained herein or therein,
All conditions to the obligations of Lender to make the Loan hereunder are
imposed solely and exclusively for the benefit of Lender and no other Person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that Lender will refuse to make the
Loan in the absence of strict compliance with any or all thereof and no other
Person shall under any circumstances be deemed to be a beneficiary of such

 

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conditions, any or all of which may be freely waived in whole or in part by
Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

 

Section 10.17                          Publicity.  All news releases, publicity
or advertising by Borrower or their Affiliates through any media intended to
reach the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents, to Lender, Bear Stearns, or any of their
Affiliates shall be subject to the prior written approval of Lender. All news
releases, publicity or advertising by Lender through any media intended to reach
the general public which refers solely to the Borrower or to the Loan made by
the Lender to the Borrower shall be subject to the prior written approval of
Borrower, provided however, the foregoing shall not apply to Provided
Information included in disclosure documents in connection with a
Securitization.

 

Section 10.18                          Waiver of Marshalling of Assets.  To the
fullest extent permitted by law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower,
Borrower’s partners and others with interests in Borrower, and of the Property,
or to a sale in inverse order of alienation in the event of foreclosure of the
Mortgage or sale of the Property by power of sale, and agrees not to assert any
right under any laws pertaining to the marshalling of assets, the sale in
inverse order of alienation, homestead exemption, the administration of estates
of decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Lender under the Loan Documents to a sale of the Property for the
collection of the Debt without any prior or different resort for collection or
of the right of Lender to the payment of the Debt out of the net proceeds of the
Property in preference to every other claimant whatsoever.

 

Section 10.19                          Waiver of Counterclaim.  Borrower hereby
waives the right to assert a counterclaim, other than a compulsory counterclaim,
in any action or proceeding brought against it by Lender or its agents.

 

Section 10.20                          Conflict; Construction of Documents:
Reliance.  In the event of any conflict between the provisions of this Loan
Agreement and any of the other Loan Documents, the provisions of this Loan
Agreement shall control. The parties hereto acknowledge that they were
represented by competent counsel in connection with the negotiation, drafting
and execution of the Loan Documents and that such Loan Documents shall not be
subject to the principle of construing their meaning against the party which
drafted same. Borrower acknowledges that, with respect to the Loan, Borrower
shall rely solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or Affiliate of Lender.
Lender shall not be subject to any limitation whatsoever in the exercise of any
rights or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by it
or any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its Affiliates.

 

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

 

Section 10.22                          Prior Agreements.  This Agreement and the
other Loan Documents contain the entire agreement of the parties hereto and
thereto in respect of the transactions contemplated hereby and thereby, and all
prior agreements or understandings among or between such parties, whether oral
or written, are superseded by the terms of this Agreement and the other Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of such prior agreement do not
survive execution of this Agreement.

 

Section 10.23                          Transfer of Loan.  In the event that
Lender transfers the Loan, Borrower shall continue to make payments at the place
set forth in the Note until such time that Borrower is notified in writing by
Lender that payments are to be made at another place.

 

Section 10.24                          Joint and Several Liability.  If Borrower
consists of more than one person or party, the obligations and liabilities of
each person or party shall be joint and several.

 

(THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK)

 

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

 

 

BORROWER:

 

 

 

INLAND WESTERN PLACENTIA, L.L.C., a

 

Delaware limited liability company

 

 

 

By:

Inland Western Retail Real Estate Trust,
Inc., a Maryland corporation, its sole
member

 

 

 

 

By:

/s/ Debra A. Palmer

 

 

 

Name:  Debra A. Palmer

 

 

Title:  Assistant Secretary

 

 

 

 

 

LENDER:

 

 

 

BEARSTEARNS COMMERCIAL

 

MORTGAGE, INC., a New York corporation

 

 

 

 

 

By:

 

 

 

Michael A. Forastiere
Managing Director

 

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SCHEDULE I

 

Intentionally omitted.

 

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SCHEDULE II

 

Intentionally omitted.

 

SCH. X-2

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