Exhibit 10.46

 

WHEN RECORDED RETURN TO:

 

Thompson & Knight L.L.P.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Attention: Jeanne M. Burton

 

MORTGAGE AND SECURITY AGREEMENT

 

754867

 

A.                                   THIS MORTGAGE AND SECURITY AGREEMENT (as
the same may from time to time hereafter be modified, supplemented or amended,
this “Mortgage”) is made as of February 27, 2006, by and between MB KEENE
MONADNOCK, L.L.C., a Delaware limited liability company, having its principal
place of business and post office address at 2901 Butterfield Road, Oak Brook,
Illinois 60523 as “Borrower” (“Borrower” to be construed as “Borrowers” if the
context so requires), and PRINCIPAL COMMERCIAL FUNDING, LLC, a Delaware limited
liability company, having a principal place of business and post office address
c/o Principal Real Estate Investors, LLC at 801 Grand Avenue, Des Moines, Iowa
50392-1450 as “Lender”.

 

WITNESSETH:

 

B.                                     Borrower is justly indebted to Lender for
money borrowed (the “Loan”) in the original principal sum of Twenty Six Million
Seven Hundred Eighty Five Thousand and No/100 Dollars ($26,785,000.00) (the
“Loan Amount”) evidenced by Borrower’s secured promissory note of even date
herewith, made payable and delivered to Lender (as may be modified, amended,
supplemented, extended or consolidated in writing and any note(s) issued in
exchange therefor or replacement thereof) (the “Note”), in which Note Borrower
promises to pay to Lender the Loan Amount together with all accrued and unpaid
interest thereon, interest accrued at the Default Rate (if any), Late Charges
(if any), the Make Whole Premium (if any), and all other obligations and
liabilities due or to become due to Lender pursuant to the Loan Documents and
all other amounts, sums and expenses paid by or payable to Lender pursuant to
the Loan Documents and the Environmental Indemnity (collectively the
“Indebtedness”) until the Indebtedness has been paid, but in any event, the
unpaid balance (if any) remaining due on the Note shall be due and payable on
March 1, 2013 (the “Maturity Date”) or such earlier date resulting from the
acceleration of the Indebtedness by Lender.  Capitalized terms used herein and
not otherwise defined shall have those meanings given to them in the other Loan
Documents.

 

C.                                     NOW, THEREFORE, to secure the payment of
the Indebtedness in accordance with the terms and conditions of the Loan
Documents, and all extensions, modifications and renewals thereof and the
performance of the covenants and agreements contained therein, and also to
secure the payment of any and all other Indebtedness, direct or contingent, that
may now or hereafter become owing from Borrower to Lender in connection with the
Loan Documents, and in consideration of the Loan

 

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Amount in hand paid, receipt of which is hereby acknowledged, Borrower does by
these presents hereby grant and convey unto Lender, its successors and assigns
forever with MORTGAGE COVENANTS to secure the payment of Twenty Six Million
Seven Hundred Eighty Five Thousand and No/100 Dollars ($26,785,000.00), with
interest thereon and also perform all of the agreements and conditions as
provided in the Note, the Loan Agreement and the Loan Documents of even date
herewith, that certain real estate and all of Borrower’s estate, right, title
and interest therein, located in the Town of Keene, county of Cheshire, state of
New Hampshire, more particularly described in Exhibit A attached hereto and made
a part hereof (the “Land”), which Land, together with the following described
property, rights and interests, is collectively referred to herein as the
“Premises”.  This Mortgage is upon the STATUTORY CONDITION for any breach of
which Lender shall have the STATUTORY POWER OF SALE.

 

D.                                    Together with Borrower’s interest as
lessor in and to all Leases and all Rents which are pledged primarily and on a
parity with the Land and not secondarily, including but not limited to all
right, title and interest of Borrower in the following leases (individually a
“Ground Lease” and collectively, the “Ground Leases”): (i) Ground Lease
Agreement in favor of Brinker Restaurant Corporation dba Chili’s, dated
March 25, 2004, and (ii) Lease Agreement in favor of Rare Hospitality
Management, Inc., dba Longhorn Steak House, dated May 28, 2004; the tenants
thereunder being herein collectively called “Ground Lessees” and individually, a
“Ground Lessee”.

 

E.                                      Together with all and singular the
tenements, hereditaments, easements, appurtenances, passages, waters, water
courses, riparian rights, direct flow, ditch, reservoir, well and other water
rights, whether or not adjudicated, whether tributary or nontributary and
whether evidenced by deed, water stock, permit or otherwise, sewer rights,
rights in trade names, licenses, permits and contracts, and all other rights,
liberties and privileges of any kind or character in any way now or hereafter
appertaining to the Land, including but not limited to, homestead and any other
claim at law or in equity as well as any after-acquired title, franchise or
license and the reversion and reversions and remainder and remainders thereof.

 

F.                                      Subject to the terms of the Ground
Leases, together with the right in the case of foreclosure hereunder of the
encumbered property for Lender to take and use the name by which the buildings
and all other improvements situated on the Premises are commonly known and the
right to manage and operate the said buildings under any such name and variants
thereof.

 

G.                                     Together with all right, title and
interest of Borrower in any and all buildings and improvements of every kind and
description now or hereafter erected or placed on the said Land and all
materials intended for construction, reconstruction, alteration and repairs of
such buildings and improvements now or hereafter erected thereon, all of which
materials shall be deemed to be included within the Premises immediately upon
the delivery thereof to the Premises, and all fixtures now or hereafter owned by
Borrower and attached to or contained in and used in connection with the
Premises including, but not limited to, all machinery, motors, elevators,
fittings, radiators, awnings, shades, screens, and all plumbing, heating,
lighting, ventilating, refrigerating, incinerating, air-conditioning and
sprinkler equipment and fixtures and appurtenances thereto; and all items of
furniture, furnishings, equipment and personal property owned by Borrower used
or useful in the operation of the Premises; and all renewals or replacements of
all

 

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of the aforesaid property owned by Borrower or articles in substitution
therefor, whether or not the same are or shall be attached to said buildings or
improvements in any manner (collectively, the “Improvements”); it being mutually
agreed, intended and declared that all the aforesaid property owned by Borrower
and placed by it on the Land or used in connection with the operation or
maintenance of the Premises shall, so far as permitted by law, be deemed to form
a part and parcel of the Land and for the purpose of this Mortgage to be Land
and covered by this Mortgage, and as to any of the property aforesaid which does
not form a part and parcel of the Land or does not constitute a “fixture” (as
such term is defined in the Uniform Commercial Code (“UCC”)), this Mortgage and
the other Loan Documents (the terms of which grant a security interest in
personal property or real property, the proceeds of which may become personal
property) are each hereby deemed to be, as well, a security agreement under the
UCC for the purpose of creating a security interest in all items, including, but
not limited to all property and rights which Borrower may grant, assign,
bargain, sell, transfer, set over, deliver, or otherwise convey to Lender, as
secured party, under the terms of this Mortgage or any of the other Loan
Documents, including any and all proceeds thereof (as used herein, Borrower
shall mean “Debtor” under the UCC and Lender shall mean “Secured Party” under
the UCC).  Borrower hereby appoints Lender as its attorney-in-fact to execute
such documents necessary to perfect Lender’s security interest and authorizes
Lender at any time until the Indebtedness is paid in full, to prepare and file,
at Borrower’s expense, any and all UCC financing statements, amendments,
assignments, terminations and the like, necessary to create and/or maintain a
prior security interest in such property all without Borrower’s execution of the
same.  Furthermore, upon a default under the Loan Documents, Lender will, in
addition to all other remedies provided for in the Loan Documents, have the
remedies provided for under the UCC in effect in the State in which the Premises
is located.

 

H.                                    Together with all right, title and
interest of Borrower, now or hereafter acquired, in and to any and all strips
and gores of land adjacent to and used in connection with the Premises and all
right, title and interest of Borrower, now owned or hereafter acquired, in, to,
over and under the ways, streets, sidewalks and alleys adjoining the Premises.

 

I.                                         Together with all funds now or
hereafter held by Lender under any property reserves agreement (including any
proceeds derived from any letter of credit) or escrow security agreement or
under any of the terms hereof or of the Loan Documents, including but not
limited to funds held under the provisions of the Loan Agreement.

 

J.                                        Together with all of Borrower’s
payment intangibles, letter of credit rights, interest rate cap agreements,
tenant in common agreement rights, and any other contract rights of Borrower
related in any manner to the ownership, operation, or management of the
Premises, as well as any and all supporting obligations, and all proceeds,
renewals, replacements and substitutions thereof.

 

K.                                    Together with all funds, accounts and
proceeds thereof relating to the Premises whether or not such funds, accounts or
proceeds thereof are held by Lender under the terms of any of the Loan
Documents, including, but not limited to bankruptcy claims of Borrower against
any tenant at the Premises, and any proceeds thereof; proceeds of any Rents,
insurance proceeds from all insurance policies required to be maintained by
Borrower under the Loan Documents (subject to the balance of the terms of this
Mortgage) and all awards, decrees, proceeds, settlements or claims for damage
now or hereafter made to or for the benefit of Borrower by reason of any damage
to, destruction of

 

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or taking of the Premises or any part thereof, whether the same shall be made by
reason of the exercise of the right of eminent domain or by condemnation or
otherwise (a “Taking”).

 

L.                                      Notwithstanding anything contained
hereinto the contrary, this Mortgage is subject to the Ground Leases and does
not encumber or attach to the leasehold estates created by the Ground Leases;
provided however, this Mortgage does encumber Borrower’s interest in the Ground
Leases and all other Leases affecting the Premises.  So long as the Ground
Leases have not been terminated, this Mortgage is subordinate to the Ground
Leases and all estates arising from the Ground Leases, except for: (i) any
amendments or modifications to the Ground Leases made without Lender’s written
consent, (ii) Borrower’s interest which is encumbered by this Mortgage, and
(iii) any other Lease affecting the Premises.

 

M.                                 TO HAVE AND TO HOLD the same unto the Lender,
its successors and assigns forever, for the purposes and uses herein expressed.

 

N.                                    Borrower represents that it shall forever
warrant and defend the title to the Premises against all claims and demands of
all persons whomsoever and will on demand execute any additional instrument
which may be required to give Lender a valid first lien on all of the Premises,
subject to the “Permitted Encumbrances” set forth in the loan policy of title
insurance for the Premises issued to Lender.

 

O.                                    Borrower further represents that (i) the
Premises is not subject to any casualty damage; (ii) Borrower has not received
any written notice of any eminent domain or condemnation proceeding affecting
the Premises; and (iii) to the best of Borrower’s knowledge, following due and
diligent inquiry, there are no actions, suits or proceedings pending, completed
or threatened against or affecting Borrower or any person or entity owning an
interest (directly or indirectly) in Borrower (“Interest Owner(s)”) or any
property of Borrower or any Interest Owner in any court or before any arbitrator
of any kind or before or by any governmental authority (whether local, state,
federal or foreign) that, individually or in the aggregate, could reasonably be
expected by Lender to be material to the transaction contemplated hereby.

 

P.                                      Borrower further represents and warrants
that as of the date hereof and until the Indebtedness is paid in full:

 

(a)                                  Borrower and each person or entity owning
an interest in Borrower is not  (i) identified on the Specially Designated
Nationals and Blocked Persons List maintained by the Office of Foreign Assets
Control, Department of the Treasury (“OFAC”) and/or on any other similar list
maintained by OFAC pursuant to any authorizing statute, executive order or
regulation (collectively, the “List”), (ii) a person or entity with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States;

 

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(b)                                 none of the funds or other assets of
Borrower constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person (as hereinafter defined);

 

(c)                                  no Embargoed Person has any interest of any
nature whatsoever in Borrower (whether directly or indirectly);

 

(d)                                 none of the funds of Borrower have been
derived from any unlawful activity with the result that the investment in
Borrower is prohibited by law or that the agreement is in violation of law,

 

(e)                                  Borrower has and will continue to implement
procedures, and has consistently and will continue to consistently apply those
procedures, to ensure the foregoing representations and warranties remain true
and correct at all times.  The term “Embargoed Person” means any person, entity
or government subject to trade restrictions under U.S. law, including but not
limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et
seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Orders or regulations promulgated thereunder with the result that the
investment in Borrower is prohibited by law or Borrower is in violation of law;

 

(f)                                    Borrower has complied and will continue
to comply with all requirements of law relating to money laundering,
anti-terrorism, trade embargos and economic sanctions, now or hereafter in
effect;

 

(g)                                 Borrower has not and will not use funds from
any “Prohibited Person” (as such term is defined in the September 24, 2001
Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism) to make any payment due to
Lender under the Loan Documents

 

Borrower will immediately notify Lender in writing if any of the
representations, warranties or covenants are no longer true or have been
breached or if Borrower has a reasonable basis to believe that they may no
longer be true or have been breached.  In addition, Borrower will, at the
request of Lender, provide such information as may be requested by Lender to
determine Borrower’s compliance with the terms hereof.

 

BORROWER COVENANTS AND AGREES AS FOLLOWS:

 

1.                                       Borrower shall

 

(a)                                  pay each item of Indebtedness secured by
this Mortgage when due according to the terms of the Loan Documents;

 

(b)                                 pay a Late Charge on any payment of
principal, interest, Make Whole Premium or Indebtedness which is not paid on or
before the due date thereof to cover the expense involved in handling such late
payment;

 

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(c)                                  pay on or before the due date thereof any
indebtedness permitted to be incurred by Borrower pursuant to the Loan Documents
and any other claims which could become a lien on the Premises (unless otherwise
specifically addressed in paragraph 1(e) hereof), and upon request of Lender
exhibit satisfactory evidence of the discharge thereof;

 

(d)                                 complete within a reasonable time, the
construction of any Improvements now or at any time in process of construction
upon the Land which are required to be performed by Borrower;

 

(e)                                  manage, operate and maintain its interest
in the Premises and keep the Premises, including but not limited to, the
Improvements, in good condition and repair (for so long as the Ground Leases are
in effect, subject to the terms of the Ground Leases, duly enforced by Borrower)
and free from mechanics’ liens or other liens or claims for liens, provided
however, that Borrower may in good faith, with reasonable diligence and upon
written Notice to Lender within twenty (20) days after Borrower has knowledge of
such lien or claim, contest the validity or amount of any such lien or claim and
defer payment and discharge thereof during the pendency of such contest in the
manner provided by law, provided that (i) such contest may be made without the
payment thereof; (ii) such contest shall prevent the sale or forfeiture of the
Premises or any part thereof, or any interest therein, to satisfy such lien or
claim; (iii) Borrower shall have obtained a bond over such lien or claim from a
bonding company acceptable to Lender which has the effect of removing such lien
or collection of the claim or lien so contested; and (iv) Borrower shall pay all
costs and expenses incidental to such contest; and further provided, that in the
event of a final, non-appealable ruling or adjudication adverse to Borrower, and
provided the court of jurisdiction has not granted a stay of the enforcement of
the ruling or judgment, Borrower shall promptly pay such claim or lien, shall
indemnify and hold Lender and the Premises harmless from any loss for damage
arising from such contest and shall take whatever action necessary to prevent
sale, forfeiture or any other loss or damage to the Premises or to the Lender;
provided, however, Lender acknowledges and agrees that performance of the
obligations set forth in this Paragraph 1(e) by a Major Tenant (as defined in
Paragraph 4(c) hereof) or a Ground Lessee with respect to its leased premises
shall be deemed compliance with such provisions by Borrower with respect to such
portion of the Premises;

 

(f)                                    comply, and cause each lessee or other
user of the Premises to comply, with all requirements of law and ordinance, and
all rules and regulations, now or hereafter enacted, by authorities having
jurisdiction of the Premises and the use thereof, including but not limited to
all covenants, conditions and restrictions of record pertaining to the Premises,
the Improvements, and the use thereof (collectively, “Legal Requirements”);
provided, however, Lender acknowledges and agrees that performance of the
obligations set forth in this Paragraph 1(f) by a Major Tenant or a Ground
Lessee with respect to its leased premises shall be

 

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deemed compliance with such provisions by Borrower with respect to such portion
of the Premises;

 

(g)                                 subject to the provisions of paragraph 6
hereof, promptly repair, restore or rebuild any Improvements, now or hereafter a
part of the Premises which may become damaged or be destroyed by any cause
whatsoever, so that upon completion of the repair, restoration and rebuilding of
such Improvements there will be no liens of any nature arising out of the
construction and the Premises will be of substantially the same character and
quality as it was prior to the damage or destruction; provided, however, Lender
acknowledges and agrees that performance of the obligations set forth in this
Paragraph 1(g) by a Major Tenant with respect to its leased premises shall be
deemed compliance with such provisions by Borrower with respect to such portion
of the Premises; and provided further, with respect to the portion of the
Premises subject to the Ground Leases, while a Ground Lease is in full force and
effect, Borrower’s obligation under this subparagraph (g) shall be limited to
Borrower’s use of diligent and continuous efforts to cause the Ground Lessee
thereunder to fulfill its obligations under the Ground Lease with respect to
repair, restoration or rebuilding of the Improvements located on the portion of
the Premises subject to the Ground Lease;

 

(h)                                 if other than a natural person, do all
things necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state of its formation
and, if other than its state of formation, the State where the Premises is
located.  Borrower shall notify Lender at least thirty (30) days prior to
(i) any relocation of Borrower’s principal place of business to a different
state or any change in Borrower’s state of formation, and/or (ii) if Borrower is
an individual, any relocation of Borrower’s principal residence to a different
state;

 

(i)                                     do all things necessary to preserve and
keep in full force and effect Lender’s title insurance coverage insuring the
lien of this Mortgage as a first and prior lien, subject only to the Permitted
Encumbrances stated in the title insurance policy issued to Lender and any other
exceptions after the date of this Mortgage approved in writing by Lender,
including without limitation, delivering to Lender not less than 30 days prior
to the effective date of any rate adjustment, modification or extension of the
Note or any other Loan Document, any new policy or endorsement which may be
reasonably required to assure Lender of such continuing coverage;

 

(j)                                     execute any and all documents which may
be required to perfect the security interest granted by this Mortgage; and

 

(k)                                  remain a Single-Purpose Entity.

 

2.                                       Borrower shall not:

 

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(a)                                  construct any building or structure nor
make any alteration or addition (other than normal repair and maintenance) to
(i) the roof or any structural component of any Improvements on the Premises, or
(ii) the building operating systems, including but not limited to, the
mechanical, electrical, heating, cooling, or ventilation systems (other than
replacement with equal or better quality and capacity).

 

Notwithstanding anything hereinabove to the contrary, the restrictions set forth
in this Paragraph 2(a) shall not be applicable if such activity is (i) required
by applicable Legal Requirements; or (ii) specifically provided for in a Lease
approved by Lender prior to closing of the Loan or thereafter, in which a tenant
has the right to complete any of the above without Borrower’s prior consent in
its capacity as landlord under such Lease.  With respect to any Lease in which
the above activities require Borrower’s prior consent (in its capacity as
landlord under such Lease), Borrower shall also obtain Lender’s prior written
consent, not to be unreasonably withheld;

 

(b)                                 subject to the terms of the Ground Leases,
remove or demolish any material Improvements, or any portion thereof, which at
any time constitutes a part of the Premises.

 

Notwithstanding anything hereinabove to the contrary, Borrower may construct,
remove or demolish tenant improvements within the then existing building(s) or
other structures to the extent such work is required solely under the terms of
any Leases approved by Lender provided (i) no Event of Default exists under the
Loan Documents; (ii) the work is completed on a timely basis, in a good,
workmanlike, lien-free manner and in accordance with all Legal Requirements, and
(iii) such work does not negatively affect the structural integrity of the
Improvements or the value of the Premises;

 

(c)                                  subject to the terms of the Ground Leases,
cause or permit any change to be made in the general use of the Premises without
Lender’s prior written consent; provided, however, Borrower shall provide Lender
with written notice of any change in the general use of the Premises by a Ground
Lessee as permitted under its Ground Lease within fifteen (15) days after
Borrower becomes aware of any such change;

 

(d)                                 initiate any or acquiesce to a zoning
reclassification or material change in zoning without Lender’s prior written
consent.  Borrower shall use all reasonable efforts to contest any such zoning
reclassification or change;

 

(e)                                  make or permit any use of the Premises that
could with the passage of time result in the creation of any right of use, or
any claim of adverse possession or easement on, to or against any part of the
Premises in favor of any person or entity or the public;

 

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(f)                                    allow any of the following to occur
(unless a Permitted Transfer) except as expressly permitted herein:

 

(i)                                     a Transfer of all or any portion of the
Premises or any interest in the Premises;

 

(ii)                                  a Transfer of any ownership interest in
Borrower or any entity which owns, directly or indirectly, an interest in
Borrower at any level of the ownership structure;

 

(iii)                               in addition to (i) and (ii) above, if the
Borrower is a trust, or if a trust owns an interest, directly or indirectly, in
any entity which owns an interest in Borrower at any level of the ownership
structure, the addition, deletion or substitution of a trustee of such trust.

 

If any of such events occur, it shall be null and void and shall constitute an
Event of Default under the Loan Documents.

 

It is understood and agreed that the Indebtedness evidenced by the Note is
personal to Borrower and in reliance upon the ownership structure of Borrower
and in accepting the same Lender has relied upon what it perceived as the
willingness and ability of Borrower and the Interest Owners to perform its
obligations under the Loan Documents and the Environmental Indemnity and as
lessor under the Leases of the Premises.  Furthermore, Lender may consent to a
Transfer and expressly waive Borrower’s covenants contained in this paragraph
2(f), in writing to Borrower; however any such consent and waiver shall not
constitute any consent or waiver of such covenants as to any Transfer other than
that for which the consent and waiver was expressly granted.  Furthermore,
Lender’s willingness to consent to any Transfer and waive Borrower’s covenants
contained in this paragraph 2(f), implies no standard of reasonableness in
determining whether or not such consent shall be granted and the same may be
based upon what Lender solely deems to be in its best interest.

 

For purposes of the Loan Documents, the following terms shall have the
respective meanings set forth below:

 

“Transfer” or “Transferred” shall mean with respect to the Premises, an interest
in the Premises, or an ownership interest or interest therein (except for
transactions not involving Borrower or any Interest Owner that are expressly
permitted to be undertaken by a Ground Lessee or those claiming by, through or
under a Ground Lessee by the terms of its Ground Lease):

 

(i)                                     a sale, assignment, transfer, conveyance
or other disposition (whether voluntary, involuntary or by operation of law);

 

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(ii)                                  the creation, sufferance or granting of
any lien, encumbrance, security interest or collateral assignment (whether
voluntarily, involuntarily or by operation of law), other than the lien hereof,
the leases of the Premises assigned to Lender, the Permitted Encumbrances, the
granting of a lien on a tenant’s interest under any Lease in accordance with the
terms specifically set forth therein, and those liens which Borrower is
contesting in accordance with the provisions of paragraph 1(e);

 

(iii)                               the issuance or other creation of ownership
interests in an entity;

 

(iv)                              the reconstitution or conversion from one
entity to another type of entity;

 

(v)                                 a merger, consolidation, reorganization or
any other business combination; or

 

(vi)                              a conversion to or operation of all or any
portion of the Premises as a cooperative or condominium form of ownership.

 

“Permitted Transfer” shall mean:

 

(i)                                     a minor (as determined by Lender)
conveyance of an interest in the Premises by Borrower, such as a utility
easement, and for which Lender has given its prior written consent and imposed
such conditions as Lender deems advisable and appropriate; provided, however,
with regard to those easements for which Lender’s consent is required, if:
(A) Borrower provides Lender with a written request for consent to such easement
and the request is accompanied by a copy of the proposed easement together with
a certificate executed by Borrower confirming that such easement will not
adversely affect the Premises now or in the future; (B) the request is given in
the manner provided for the giving of notices in this Mortgage; (C) the request
is boldly noted as a request for consent to an easement for which Lender’s
consent is required and specifically states that the easement will be deemed
approved if Lender fails to respond within 12 business days (Lender and Borrower
hereby agree that such 12 business day period shall commence on the date of
Lender’s actual receipt of all information reasonably required by Lender in
connection with Lender’s review of said easement); and (D) in the event Lender
fails to respond to Borrower’s request for consent within the time period set
forth in subparagraph (C) above, then said consent shall be deemed to have been
given; or

 

(ii)                                  a sale, assignment, transfer or conveyance
of all or any portion of the Premises or an interest in the Premises for which
Borrower has complied with all of the Property Transfer Requirements; or

 

(iii)                               any of the following Transfers for which
Borrower has complied with all of the Ownership Transfer Requirements as
applicable and Lender has given

 

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its prior written consent (and in connection with such consent, Lender may
impose any conditions it wishes in its sole discretion);

 

(A)                              a sale, assignment, transfer, or conveyance of
an ownership interest or interest therein;

 

(B)                                the issuance or other creation of ownership
interests in an entity;

 

(C)                                a reconstitution or conversion from one
entity to another type of entity;

 

(D)                               a merger, consolidation, reorganization or any
other business combination;

 

(iv)          with at least thirty (30) days advance written notice, transfers
of ownership interests in Borrower and entities owning interests in Borrower
among Minto Builders (Florida), Inc., a Florida corporation (“Minto”), and/or
IARETI (hereinafter defined), and its wholly owned Affiliates for which Borrower
has complied with all of the Specific Transfer Requirements - 1;

 

(v)                                 with at least thirty (30) days advance
written notice, transfers of ownership interests in Borrower and/or shares in
entities owning interests in Borrower to Qualified New Members (hereinafter
defined), for which Borrower has complied with all of the Specific Transfer
Requirements - 2 (for purposes of this Permitted Transfer, a “Qualified New
Member” shall be defined as an institutional investor or fund managed by an
institutional investor having assets of $100,000,000 or more);

 

(vi)                              with at least thirty (30) days advance written
notice, transfers of direct or indirect ownership interests in Borrower and
entities owning interests in Borrower and transfers of direct or indirect
ownership interests in Minto and/or IARETI to a Qualified Successor (hereinafter
defined) for which Borrower has complied with all of the Specific Transfer
Requirements - 3 (for purposes of this Permitted Transfer, a “Qualified
Successor” shall be defined as an entity with a tangible net worth of
$200,000,000 or more; a debt to equity ratio of 1.5 or less; and management
personnel experienced in the ownership and management of retail properties
similar to the Premises);

 

(vii)                           transfers of ownership interests in Minto or,
provided Minto is the surviving entity, the merger of Minto with any of the
following entities: (A) Inland Retail Real Estate Trust, Inc., a Maryland
corporation, (B) Inland Real Estate Corporation, a Maryland corporation
(“IREC”), (C) Inland Real Estate Investment Corporation, a Delaware corporation
(“IREIC”), (D) Inland Western Retail Real Estate Trust, Inc., a Maryland
corporation (“IWRRET”), (E) Inland American Real Estate Trust, Inc., a Maryland
corporation (“IARETI”), (F) any other real estate investment trust

 

11

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sponsored by IREIC, or (G) any other entity composed entirely of any of the
foregoing, by merger or other business combination; or

 

(viii)                        within one year of the closing of the Loan, a one
time sale, assignment, transfer or conveyance of the Premises to a Permitted
Inland REIT for which Borrower has complied with all of the One-Time Permitted
Inland REIT Property Transfer Requirements; or

 

(ix)                                within one year of the closing of the Loan,
a one time sale, assignment, transfer or conveyance of the Premises to a joint
venture of a Permitted Inland REIT, a New Inland REIT or an Inland Affiliate
with an institutional investor for which Borrower has complied with all of the
One-Time Property Transfer Requirements.

 

“Permitted Inland REIT” shall collectively mean: Minto, IRRETI, IREC, IWRRET and
IARETI.

 

“New Inland REIT” shall mean: a newly formed real estate investment trust
sponsored by or affiliated with a Permitted Inland REIT or The Inland
Group, Inc., an Illinois corporation (“TIGI”).

 

“Inland Affiliates” shall mean: subsidiaries directly or indirectly wholly owned
by a Permitted Inland REIT or a New Inland REIT, or partnerships, trusts or
limited liability companies or other entities in which all of the equity
interests are owned by a Permitted Inland REIT, a New Inland REIT or TIGI.

 

“One-Time Permitted Inland REIT Property Transfer Requirements” are all of the
following:

 

1.                                       the Permitted Inland REIT which is to
become the successor borrower has a net worth equal to or greater than such
Permitted Inland REIT’s net worth as of the date hereof.

 

2.                                       Lender’s exposure limitations to the
successor borrower are acceptable to Lender;

 

3.                                       an experienced individual or entity,
acceptable to Lender, continues to manage and lease the Premises;

 

4.                                       Borrower satisfies subparagraphs 3
through 7 of the Property Transfer Requirements set forth below; and

 

5.                                       payment to Lender of an assumption fee
equal to one half of one percent (0.5%) of the principal balance of the Note;
provided, however, such fee shall not exceed $25,000 and shall not be less than
$10,000. Lender will require $5,000.00 of such fee to be paid at the beginning
of Lender’s review

 

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process, and such sum shall be nonrefundable and earned upon receipt by Lender
whether or not the transaction is ultimately completed or Lender ultimately
approves successor borrower.

 

“One-Time Property Transfer Requirements” are all of the following:

 

1.                                       For transfers of the Premises to (a) a
New Inland REIT; (b) an Inland Affiliate; or (c) an entity comprised of a
Permitted Inland REIT, a New Inland REIT or an Inland Affiliate with an
institutional investor, the OneTime Permitted Inland REIT Property Transfer
Requirements 1-5 above shall be applicable;

 

2.                                       Borrower satisfies subparagraph 1 of
the Property Transfer Requirements set forth below in Lender’s reasonable
discretion (in lieu of sole discretion); and

 

3.                                       Lender receives and approves the
appropriate background and credit checks and ERISA review and approvals.

 

“Property Transfer Requirements” are all of the following:

 

1.                                       Prior review and approval of the
proposed purchaser or other transferee and the subject transaction by Lender, at
Lender’s sole discretion.  Review of the proposed purchaser or other transferee
and the subject transaction shall encompass various factors, including, but not
limited to, the proposed purchaser’s or other transferee’s creditworthiness,
financial strength, and real estate management and leasing expertise as well as
the proposed transaction’s effect on the Premises, the Borrower, and other
security for the Loan;

 

2.                                       Payment to Lender of an assumption fee
equal to the greater of: (a) one half of one percent (0.5%) of the principal
balance of the Note; or (b) $15,000.00; provided, however, that Lender will
require $15,000.00 of such fee to be paid at the beginning of Lender’s review
process, and such sum shall be nonrefundable and earned upon receipt by Lender
whether or not the transaction is ultimately completed or Lender ultimately
approves the proposed purchaser or other transferee;

 

3.                                       Receipt, at Borrower’s expense, of
either (at Lender’s discretion) a new ALTA standard loan policy or an
endorsement updating the Lender’s existing loan policy in the full amount of the
Loan, in form and by an issuer satisfactory to Lender, and which insures this
Mortgage to be a first and prior lien subject only to those exceptions which
were previously approved by Lender and provides coverage against usury and
mechanic’s liens;

 

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4.                                       Receipt by Lender of copies of all
relevant information and documentation relating to or required by Lender in
connection with the proposed transfer including but not limited to (a) the
organizational documents of the proposed transferee and an opinion of counsel
satisfactory to Lender as to its due formation, valid existence and authority to
enter into and carry out the proposed transaction; (b) the deeds or other
instruments of transfer and documents relating to the assignment and assumption
of Leases; (c) evidence of compliance with the insurance requirements contained
in the Loan Documents; (d) compliance with the representations and warranties in
the Loan Agreement regarding the proposed transferee’s status as a Single
Purpose Entity, and (e) compliance with such other closing requirements as are
customarily imposed by Lender in connection with such transactions;

 

5.                                       Execution, delivery, acknowledgment and
recordation, as applicable, of new, revised and/or replacement assumption
agreements, loan modification agreements, indemnification agreements, escrow
security or property reserves agreements, security instruments, financing
statements, UCCs, new or revised letters of credit and/or guarantees in form and
substance satisfactory to Lender;

 

6.                                       Payment of outside counsel fees and
costs, other applicable professional’s fees and costs, taxes, recording fees and
the like, and any other fees and costs incurred;

 

7.                                       Receipt by Lender of 60 days advance
written notice of the proposed Transfer in question;

 

8.                                       Receipt by Lender of a waiver from any
tenant having a right or option to purchase the Premises or any portion thereof,
waiving such right or option in form and substance acceptable to Lender; and

 

9.                                       At Lender’s option, and if required by
the procedures promulgated by any rating agency(ies) associated with a
securitization transaction with respect to the Loan, receipt by Lender of
written evidence from such agency(ies) to the effect that the proposed transfer
will not result in a re-qualification, reduction or withdrawal of any rating in
effect immediately prior to such transfer issued in connection with the
securitization transaction.

 

“Ownership Transfer Requirements” are all of the Property Transfer Requirements
which Lender deems appropriate in its discretion, as well as a reasonable
processing fee to be determined by Lender; provided, however, that (i) with
respect to item 2 of the Property Transfer Requirements, the 0.5% component of
the fee shall be prorated (subject, however, to the $15,000 minimum) based on
Lender’s calculation of the effective percentage interest in Borrower
transferred, and (ii) item 3 of the Property Transfer Requirements shall be
required, at Lender’s discretion, only in the event of (A) a merger,
consolidation, reorganization or any

 

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other business combination, or (B) a reconstitution or conversion from one
entity to another type of entity.

 

“Specific Transfer Requirements -1” are all of the following which Borrower
agrees to provide to Lender prior to each proposed transfer: (i) a transfer fee
of $2,000.00; (ii) all relevant documentation and information related to the
organization, authority, and validity of the proposed ownership interest
purchaser, transferee and the transaction in general; (iii) all documents and
instruments of conveyance, transfer and assignment; (iv) at Lender’s discretion,
a reaffirmation of the obligations of the Guarantor(s) under the Guaranty; and
(v) evidence of payment of all outside counsel fees, professional fees, title
insurance fees, if any, and any and all other fees, costs and expenses related
to the proposed transfer (provided that no assumption or transfer fee other than
the $2,000 fee stated in (i) above shall be required).

 

“Specific Transfer Requirements - 2” are all of the following which Borrower
agrees to provide to Lender prior to each proposed transfer: Minto or a wholly
owned Affiliate thereof (i) (a) retains 51% or more of the ownership interest in
the Borrower, or (b) retains ownership of 20% to 50% of the ownership interest
in the Borrower subject to Lender’s review and approval in each instance of the
proposed transferee and the subject transaction; Lender’s review of the proposed
transferee and the subject transaction shall encompass various factors,
including but not limited to, transferee’s creditworthiness, financial strength,
and  real estate management expertise, as well as the proposed transaction’s
effect on the Premises, Borrower and the other security for the Loan, and
(ii) otherwise retains operational and management control of Borrower as
determined by Lender, and further provided Borrower provides Lender each of the
following items prior to each proposed transfer: (a) a transfer fee equal to the
greater of $5,000.00 or the product of the percentage ownership interest in
Borrower to be transferred multiplied by one percent (1%) of the outstanding
principal balance of the Loan; (b) all relevant documentation and information
related to the organization, authority, and validity of the proposed ownership
interest purchaser, transferee and the transaction in general; (c) all documents
and instruments of conveyance, transfer and assignment; (d) a reaffirmation of
the obligations of the Guarantor(s) under the Guaranty; and (e) evidence of
payment of all outside counsel fees, professional fees, title insurance fees and
any and all other fees, costs and expenses related to the proposed transfer
(provided that no assumption or transfer fee other than the $5,000.00 fee stated
in (a) above shall be required).

 

“Specific Transfer Requirements - 3” are all of the following which Borrower
agrees to provide to Lender prior to each proposed transfer: (i) said transfers
are made to accommodate either the merger of Minto with the Qualified Successor
or the sale of a majority of Minto’s assets to the Qualified Successor; and
(ii) the Qualified Successor retains direct or indirect ownership of 51% or more
of the ownership interests in the Borrower and (iv) the Qualified Successor
otherwise retains operational and management control of Borrower as determined
by Lender,

 

15

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and further provided, Borrower provides Lender with each of the following items
prior to the proposed transfer: (a) a transfer fee of $10,000.00; (b) all
relevant documentation and information related to the organization, authority,
and validity of the proposed ownership interest purchaser, transferee and the
transaction in general; (c) all documents and instruments of conveyance,
transfer and assignment; (d) a reaffirmation of the obligations of the
Guarantor(s) under the Guaranty or assumption thereof by an individual(s) or
entity(ies) acceptable to Lender in its sole discretion; and (e) evidence of
payment of all outside counsel fees, professional fees, title insurance fees and
any and all other fees, costs and expenses related to the proposed transfer
(provided that no assumption or transfer fee other than the $10,000.00 fee
stated in (a) above shall be required).

 

(g)                                 cause, permit or allow:

 

(i)                                     any person or entity to own an interest
in Borrower who is (A) identified on the Specially Designated Nationals and
Blocked Persons List maintained by OFAC and/or on any other similar list
maintained by OFAC, or (B) a party with whom a citizen of the United States is
prohibited to engage in transactions by any trade embargo, economic sanction, or
other prohibition of United States law, regulation, or Executive Order of the
President of the United States;

 

(ii)                                  any of the funds or other assets of
Borrower  to constitute property of, or be beneficially owned, directly or
indirectly, by any Embargoed Person;

 

(iii)                               an Embargoed Person to have any interest of
any nature whatsoever in Borrower (whether directly or indirectly); or

 

(iv)                              any of its funds to be derived from any
unlawful activity with the result that the investment in Borrower is prohibited
by law or that the agreement is in violation of law.

 

3.                                       (a)                                 
Borrower shall pay or cause to be paid when due and before any penalty attaches
or interest accrues all general taxes, special taxes, assessments (including
assessments for benefits from public works or improvements whenever begun or
completed), utility charges, water charges, sewer service charges, common area
maintenance charges, if any, vault or space charges and all other like charges
against or affecting the Premises or against any property or equipment located
on the Premises, or which might become a lien on the Premises, and shall, within
10 days following Lender’s request, furnish to Lender a duplicate receipt of
such payment.  If any such tax, assessment or charge may legally be paid in
installments, Borrower may, at its option, pay such tax, assessment or charge in
installments.  Lender acknowledges and agrees that performance of the
obligations set forth in this Paragraph 3(a) by a Major Tenant or a Ground
Lessee with respect to its leased premises shall be deemed compliance with such
provisions by Borrower with respect to such portion of the Premises.

 

16

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(b)                                 If Borrower desires to contest any tax,
assessment or charge relating to the Premises, Borrower may do so by paying the
same in full, under protest, in the manner provided by law; provided, however,
that

 

(i)                                     if contest of any tax, assessment or
charge may be made without the payment thereof, and

 

(ii)                                  such contest shall have the effect of
preventing the collection of the tax, assessment or charge so contested and the
sale or forfeiture of the Premises or any part thereof or any interest therein
to satisfy the same,

 

then Borrower may in its discretion and upon the giving of written notice to
Lender of its intended action and upon the furnishing to Lender of such security
or bond as Lender may require, contest any such tax, assessment or charge in
good faith and in the manner provided by law.  All costs and expenses incidental
to such contest shall be paid by Borrower.  In the event of a ruling or
adjudication adverse to Borrower, Borrower shall promptly pay such tax,
assessment or charge.  Borrower shall indemnify and save harmless the Lender and
the Premises from any loss or damage arising from any such contest and shall, if
necessary to prevent sale, forfeiture or any other loss or damage to the
Premises or to Lender, pay such tax, assessment or charge or take whatever
action is necessary to prevent any sale, forfeiture or loss.  Lender
acknowledges and agrees that upon compliance with the foregoing requirements, to
the extent permitted under its lease of the Premises, a Major Tenant or a Ground
Lessee shall have all rights of contest as set forth in this Paragraph 3(b).

 

4.                                       (a)                                 
With respect to the portion of the Premises subject to a Ground Lease, for so
long as the Ground Lease shall remain in full force and effect, (i) Borrower
shall cause such Ground Lessee to obtain and maintain all insurance required by
the terms thereof and, to comply with all requirements of such Ground Lease
relating thereto, (ii) all insurance shall be in form content and amounts and
written by insurance companies as required by such Ground Lease and shall
satisfy all other requirements of such Ground Lease, and (iii) Borrower shall at
all times keep or cause to be kept in force commercial general liability
insurance naming Lender as an additional insured protecting Borrower and Lender
against liability for bodily injury or property damage occurring in, on or
adjacent to the Premises in commercially reasonable amounts.  With respect to
the portion of the Premises not then subject to a Ground Lease, Borrower shall
at all times keep or cause to be kept in force (i) property insurance insuring
all Improvements which now are or hereafter become a part of the Premises for
perils covered by a causes of loss-special form insurance policy, including
coverage against terrorism containing both replacement cost and agreed amount
endorsements or equivalent coverage; (ii) commercial general liability insurance
naming Lender as an additional insured protecting Borrower and Lender against
liability for bodily injury or property damage occurring in, on or adjacent to
the Premises in

 

17

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commercially reasonable amounts; (iii) boiler and machinery insurance if the
property has a boiler or is an office building; (iv) rental value insurance for
the perils specified herein for one hundred percent (100%) of the Rents
(including operating expenses, real estate taxes, assessments and insurance
costs which are lessee’s liability) for a period of twelve (12) months;
(v) builders risk insurance during all periods of construction; and
(vi) insurance against all other hazards as may be reasonably required by
Lender, including, without limitation, insurance against loss or damage by
flood.  Notwithstanding anything herein above to the contrary, if neither:
(i) property insurance without an exclusion for terrorism, terrorist acts or
similar perils (“Terrorism”) nor; (ii) a separate policy insuring specifically
against Terrorism is available at a cost which is in Lender’s opinion is
commercially reasonable, taking into consideration, among other things: (a) how
properties similar in type, size, quality and location are insured with respect
to Terrorism; and (b) the amount of coverage, premium and deductible applicable
to such insurance, then Lender agrees to waive the requirement to provide
insurance covering Terrorism until such coverage again becomes available at a
cost, which in Lender’s opinion is commercially reasonable.

 

(b)                                 All insurance required to be maintained by
Borrower (including deductibles and exclusions) shall be in form, content and
amounts approved by Lender and written by an insurance company or companies
approved by Lender and rated  A-, class size VIII or better in the most current
issue of Best’s Insurance Reports and which is licensed to do business in the
State in which the Premises are located or a governmental agency or
instrumentality approved by Lender.  The policies for such insurance shall have
attached thereto standard mortgagee clauses in favor of and permitting Lender to
collect any and all proceeds payable thereunder and shall include a 30 day
(except for nonpayment of premium, in which case, a 10 day) notice of
cancellation clause in favor of Lender.  All certificates of insurance (or
policies if requested by Lender) shall be delivered to and held by Lender as
further security for the payment of the Note and any other obligations arising
under the Loan Documents, with evidence of renewal coverage delivered to Lender
at least 30 days before the expiration date of any policy.  Borrower shall not
carry or permit to be carried separate insurance, concurrent in kind or form and
contributing in the event of loss, with any insurance required in the Loan
Documents.

 

(c)                                  As used herein, the term “Major Tenant”
(collectively or individually as the context may require) shall mean the tenants
under the following leases: (i) Lease in favor of Price Chopper Operating Co. of
New Hampshire, Inc. dated December 18, 2003 (“Price Chopper”), (ii) Lease in
favor of Michael’s Stores, Inc. dated February 14, 2005, (iii) Lease in favor of
Bed Bath & Beyond, Inc. dated May 2, 2003, (iv) Lease in favor of GMRI, Inc.
dated May 11, 2004 (“Olive Garden”), (v) Lease in favor of Border’s, Inc. dated
March 26, 2003, (vi) Lease in favor of Circuit City Stores, Inc., dated May 16,
2005 (“Circuit City”), and (vii) Lease in favor of Pier 1 Imports (U.S.), Inc.
dated September 8, 2003, as amended, or any lease to any replacement tenant
under such leases

 

18

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approved by Lender (a “Replacement Tenant”).  To the contrary notwithstanding,
so long as there is no Event of Default hereunder and so long as the leases with
Price Chopper, Olive Garden or Circuit City or any Replacement Tenant under such
Lease remains in full force and effect and there are no material breaches
thereof beyond the expiration of any applicable notice and cure periods, Lender
will allow Price Chopper, Olive Garden or Circuit City or any said Replacement
Tenant to keep in force the insurance required herein, except with respect to
coverage for rental insurance, and such performance by Price Chopper, Olive
Garden or Circuit City shall be deemed performance by Borrower with respect to
such required insurance hereunder.  All insurance coverages and requirements
that are not maintained by Price Chopper, Olive Garden or Circuit City or a
Replacement Tenant in accordance with the Lender’s insurance requirements herein
shall at all times during the Loan be maintained by Borrower.

 

(d)                                 To the contrary notwithstanding, so long as
there is no Event of Default hereunder and so long as the lease between Borrower
and Major Tenant remains in full force and effect and there are no material
breaches thereof beyond the expiration of any applicable notice and cure
periods, Lender agrees to accept self-insurance by Circuit City for its leased
premises.  Lender will only accept self-insurance by Circuit City under the
terms of its lease if Circuit City maintains the minimum tangible net worth as
required by its Lease.  All insurance coverages and requirements that are not
self insured by Circuit City in accordance with the Lender’s insurance
requirements herein shall at all times during the Loan be maintained by Circuit
City or Borrower (with the exception of coverage for rental insurance, which
shall be provided by Borrower).

 

5.                                       Borrower shall deposit with and pay to
Lender the estimated taxes and assessments assessed or levied against and next
due on the Premises and the estimated premiums for the insurance required
pursuant to the Loan Documents, all in accordance with and subject to the
requirements of the Loan Agreement.

 

6.                                       In the event of any damage to or
destruction of the Premises, or any part thereof:

 

(a)                                  Borrower will immediately notify Lender
thereof in the manner provided in this Mortgage for the giving of notices. 
Lender shall have the right (which may be waived by Lender in writing) to settle
and adjust any claim under such insurance policies required to be maintained by
Borrower.  In all circumstances, the proceeds thereof shall be paid to Lender
and Lender is authorized to collect and to give receipts therefor.  Borrower
agrees and acknowledges that such proceeds shall be held by Lender without any
allowance of interest and that in any bankruptcy proceeding of Borrower, all
such proceeds shall be deemed to be “Cash Collateral” as that term is defined in
Section 363 of the Bankruptcy Code.  Provided that no Event of Default exists,
Borrower shall have the right to participate in any settlement or adjustment;
provided, however, that any settlement or adjustment shall be subject to the
written approval of Lender, not to be unreasonably withheld.

 

19

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(b)                                 Such proceeds, after deducting therefrom any
reasonable expenses incurred by Lender in the collection thereof (including but
not limited to reasonable attorneys’ fees and costs), shall be applied by Lender
to pay the Indebtedness secured hereby including, but not limited to the Make
Whole Premium, whether or not then due and payable, provided, however, that if
no Event of Default exists at the time of such application, no Make Whole
Premium shall be due.

 

Notwithstanding anything hereinabove to the contrary,

 

(i)                                     in the event the casualty occurs more
than six (6) months prior to the Maturity Date and no Event of Default exists,
Lender shall apply such proceeds as follows:

 

(A)                              If the aggregate amount of such proceeds is
less than $250,000, Lender shall pay such proceeds directly to Borrower, to be
held in trust for Lender and applied to the cost of rebuilding and restoring the
Premises.

 

(B)                                If the aggregate amount of such proceeds
equals or exceeds $250,000 Lender shall disburse such amounts of the proceeds as
Lender reasonably deems necessary for the repair or replacement of the Premises,
subject to the conditions set forth in paragraph 6(c) below.

 

(ii)                                  in the event (x) an Event of Default
exists, or (y) the casualty occurs during the last (6) months prior to the
Maturity Date and Lender determines that the repair and restoration of such
casualty cannot be completed prior to the Maturity Date, or (z) the conditions
set forth in paragraph 6(c) are not met, then Lender, in its sole and absolute
discretion may either:

 

(A)                              declare the entire Indebtedness to be
immediately due and payable, provided, however, that if no Event of Default
exists, no Make Whole Premium shall be due.  All proceeds shall be applied
toward payment of the Indebtedness in such priority as Lender elects; or

 

(B)                                disburse such proceeds as Lender reasonably
deems necessary for the repair or replacement of the Premises subject to those
conditions set forth in paragraph 6(c) which Lender in its sole and absolute
discretion may require.

 

(c)           (i)                                     In the event that Borrower
is to be reimbursed out of the insurance proceeds or out of any award or payment
received with respect to a Taking, Lender shall from time to time make available
such proceeds, subject to the following conditions: (a) there continues to exist
no Event of Default; (b) the delivery to Lender of satisfactory evidence of the
estimated cost of

 

20

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completion of such repair and restoration work and any architect’s certificates,
waivers of lien, contractor’s sworn statements, and other evidence of cost and
of payment and of the continued priority of the lien hereof over any potential
liens of mechanics and materialmen (including, without limitation, title policy
endorsements) as Lender may reasonably require and approve; (c) the time
required to complete the repair and restoration work and for the income from the
Premises to return to the level it was prior to the loss will not exceed the
coverage period of the rental value insurance required hereunder; (d) the annual
net cash flow (annual net operating income after deduction for tenant
improvements, leasing commissions, annual replacement reserves and a management
fee) shall equal or exceed 1.5 times the annual debt service on the Note.  Only
net operating income from approved executed Leases in effect on the Premises,
having at least three (3) years remaining prior to the expiration of their term,
with no uncured defaults, shall be used in Lender’s determination of the annual
net cash flow; (e) Lender approves the plans and specifications of such work
before such work is commenced if the estimated cost of rebuilding and
restoration exceeds 25% of the Indebtedness or involves any structural changes
or modifications.  If said plans and specifications substantially comply with
those previously approved by Lender, Lender’s approval shall not be unreasonably
withheld; (f) if the amount of any insurance proceeds, award or other payment is
insufficient to cover the cost of restoring and rebuilding the Premises,
Borrower shall pay such cost in excess of such proceeds, award or other payment
before being entitled to reimbursement out of such funds; (g) Borrower pays to
Lender a nonrefundable processing fee equal to the greater of $5,000.00 or .25%
of the amount of such proceeds within sixty (60) days of the occurrence of any
such damage or destruction and before Lender disburses any proceeds; and
(h) such other conditions to such disbursements, in Lender’s reasonable
discretion, as would be customarily required by a construction lender doing
business in the area where the Premises is located or which are otherwise
required by any rating agency rating a securitization transaction with respect
to the Loan.

 

(ii)                                  No payment made by Lender prior to the
final completion of the repair or restoration work shall, together with all
payments theretofore made, exceed 90% of the cost of such work performed to the
time of payment, and at all times the undisbursed balance of said proceeds shall
be at least sufficient to pay for the cost of completion of such work free and
clear of all liens.  Any proceeds remaining after payment of the cost of
rebuilding and restoration shall, at the option of Lender, either be (a) applied
in reduction of the Indebtedness secured hereby, provided, however, that if no
Event of Default exists at the time of such application, no Make Whole Premium
shall be due, or (b) paid to Borrower.

 

21

 

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(iii)                               Repair and restoration of the Premises shall
be commenced promptly after the occurrence of the loss and shall be prosecuted
to completion diligently, and the Premises shall be so restored and rebuilt to
substantially the same character and quality as prior to such damage and
destruction and shall comply with all Legal Requirements.

 

(d)                                 Should such damage or destruction occur
after foreclosure or sale proceedings have been instituted, the proceeds of any
such insurance policy or policies, if not applied in rebuilding or restoration
of the Improvements, shall be used to pay (i) the Indebtedness then due and
owing in the event of a non-judicial sale in such priority as Lender elects, or
(ii) the amount due in accordance with any decree of foreclosure or deficiency
judgment that may be entered in connection with such proceedings, and the
balance, if any, shall be paid to the owner of the equity of redemption if it
shall then be entitled to the same, or otherwise as any court having
jurisdiction may direct.

 

(e)                                  To the contrary notwithstanding, so long as
there is no Event of Default hereunder and so long as the lease with Major
Tenant remains in full force and effect, Lender agrees that the provisions of
the lease with Major Tenant governing the application of insurance proceeds and
restoration shall apply with respect to the Premises.

 

(f)                                    To the contrary notwithstanding, at any
time while a Ground Lease is in full force and effect, (i) the disbursement and
use of insurance proceeds resulting from damage or destruction to such portion
of the Premises shall be governed by the terms and provisions of the Ground
Lease with respect thereto and (ii) Lender shall have no right to receive any
loss proceeds except to the extent (and under the conditions) payable to
Borrower, as landlord under the Ground Lease, or a fee mortgagee under the
Ground Lease.  All proceeds payable to Lender thereunder, if any, shall be
applied in accordance with the preceding subparagraphs of this Section 6. 
Whether or not a Ground Lease is in full force and effect, Borrower shall pay to
Lender the actual costs incurred by Lender, if any, in connection with the
settlement of the insurance claim.

 

7.                                       In the event of the commencement of a
Taking affecting the Premises:

 

(a)                                  Borrower shall notify Lender thereof in the
manner provided in this Mortgage for the giving of notices.  Lender may
participate in such proceeding, and Borrower shall deliver to Lender all
documents requested by it to permit such participation.

 

(b)                                 Borrower shall cause the proceeds of any
award or other payment made relating to a Taking, to be paid directly to
Lender.  Lender, in its sole and absolute discretion: (i) may apply all such
proceeds to pay the Indebtedness in such priority as Lender elects, provided
however, that if no Event of Default exists at the time of such application no
Make Whole Premium shall be due; or (ii) subject to and in accordance with the
provisions set forth in paragraph 6(c) above, may

 

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disburse such amounts of the proceeds as Lender reasonably deems necessary for
the repair or replacement of the Premises; provided, however, with respect to
the portion of the Premises subject to a Ground Lease, if the Ground Lease is in
full force and effect, only those proceeds payable to Borrower in accordance
with the Ground Lease shall be so payable.

 

(c)                                  Notwithstanding anything herein above to
the contrary, provided no Event of Default exists, Lender agrees to disburse the
proceeds received from any Inconsequential Taking, as hereinafter defined, to
Borrower for the repair and/or replacement of the Premises.  An Inconsequential
Taking shall be a Taking which (i) results in less than $250,000 in proceeds;
(ii) does not, in Lender’s determination, materially or adversely affect the
Improvements, parking, access, ingress, egress or use of the Premises; and
(iii) does not trigger any rights or options of tenants under the Leases.

 

(d)                                 To the contrary notwithstanding, so long as
there is no Event of Default hereunder and so long as the lease with Major
Tenant remains in full force and effect, Lender agrees that the provisions of
the lease with Major Tenant governing the application of the proceeds of a
Taking shall apply with respect to the Premises.

 

8.                                       If by the laws of the United States of
America or of any state or governmental subdivision having jurisdiction over
Borrower or of the Premises or of the Loan evidenced by the Loan Documents or
any amendments or modifications thereof, any tax or fee is due or becomes due or
is imposed upon Lender in respect of the issuance of the Note hereby secured or
the making, recording and registration of this Mortgage or otherwise in
connection with the Loan Documents, the Environmental Indemnity or the Loan,
except for Lender’s income or franchise tax, Borrower covenants and agrees to
pay such tax or fee in the manner required by such law, and to hold harmless and
indemnify Lender, its successors and assigns, against any liability incurred by
reason of the imposition of any such tax or fee.

 

9.                                       (a)                                 
Upon the occurrence of any Event of Default, Lender may, but need not, make any
payment or perform any act herein required of Borrower, in any form and manner
deemed expedient and may, but need not, make full or partial payments of
principal or interest on prior encumbrances, if any, and purchase, discharge,
compromise or settle any tax lien or other prior lien or title or claim thereof,
or redeem from any tax sale or forfeiture affecting said Premises, or contest
any tax or assessment.  All moneys paid for any of the purposes herein
authorized and all reasonable expenses paid or incurred in connection therewith,
including but not limited to, reasonable attorneys’ fees and costs and
reasonable attorneys’ fees and costs on appeal, and any other money advanced by
Lender to protect the Premises and the lien hereof, shall be so much additional
Indebtedness secured hereby and shall become immediately due and payable without
notice and with interest thereon at the Default Rate from the date of
expenditure or advance until paid.

 

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(b)                                 In making any payment hereby authorized
relating to taxes or assessments or for the purchase, discharge, compromise or
settlement of any prior lien, Lender may make such payment according to any
bill, statement or estimate secured from the appropriate public office without
inquiry into the accuracy thereof or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof or without inquiry as to
the validity or amount of any claim for lien which may be asserted.

 

10.                                 If one or more of the following events
(herein called an “Event of Default” or “Events of Default” as the context so
requires) shall have occurred:

 

(a)                                  failure to pay when due any principal,
interest, Make Whole Premium or other Indebtedness, utilities, taxes or
assessments or insurance premiums required pursuant to the Loan Documents or the
Environmental Indemnity, and such failure shall have continued for 5 days, as to
payment of any principal, interest or taxes or assessments, or insurance
premiums or for 5 days after written notice specifying such default is given by
Lender to Borrower as to payment of any Make Whole Premium; or

 

(b)                                 Borrower, Interest Owner or any guarantor
voluntarily brings or acquiesces to any of the following:  (A) any action for
dissolution, act of dissolution or dissolution or the like of Borrower, Interest
Owner or any guarantor under the Federal Bankruptcy Code as now or hereafter
constituted; (B) the filing of a petition or answer proposing the adjudication
of Borrower, Interest Owner or any guarantor as a bankrupt or its reorganization
or arrangement, or any composition, readjustment, liquidation, dissolution or
similar relief with respect to it pursuant to any present or future federal or
state bankruptcy or similar law; or (C) the appointment by order of a court of
competent jurisdiction of a receiver, trustee or liquidator of the Premises or
any part thereof or of Borrower, Interest Owner or any guarantor or of
substantially all of the assets of Borrower, Interest Owner or any guarantor; or

 

(c)                                  one or more of the items set forth in
paragraph 10(b) above occur which were either not (i) voluntarily brought by
Borrower, Interest Owner or any guarantor or (ii) acquiesced in by Borrower,
Interest Owner or any guarantor, and which are not discharged or dismissed
within 90 days after the action, filing or appointment, as the case may be; or

 

With respect to the matters in (b) and (c) above for an Interest Owner only, no
Event of Default shall occur until an interested party or Interest Owner asserts
a claim or right against Borrower or the Premises which delays or otherwise
affects Lender’s rights, remedies, or interests granted under the Loan Documents
(whether or not such assertion is successful).

 

(d)                                 with respect to the matters not described in
the other subparagraphs of this paragraph 10, failure to duly observe or perform
any covenant, condition or

 

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agreement of the Borrower or any guarantor contained in this Mortgage, the Loan
Agreement, the Guaranty, the Note or the Assignment of Leases from Borrower to
Lender or in any other instrument or agreement which evidences or secures the
Loan (the “Loan Documents”), or in the Environmental Indemnity, and such failure
shall have continued for 30 days after Notice specifying such failure is given
by Lender to Borrower; or

 

If any failure to observe or perform under (d) above shall be of such nature
that it cannot be cured or remedied within 30 days, Borrower shall be entitled
to a reasonable period of time to cure or remedy such failure (not to exceed 90
days following the giving of Notice), provided Borrower commences the cure or
remedy thereof within the 30 day period following the giving of Notice and
thereafter proceeds with diligence, as determined by Lender, to complete such
cure or remedy.

 

(e)                                  the failure of Borrower to duly observe or
perform any of the covenants, conditions and agreements of the Borrower
contained in paragraph 2(f) of this Mortgage; or

 

(f)                                    any representation when made by or on
behalf of Borrower, Interest Owner or any guarantor regarding the Premises, the
making or delivery of any of the Loan Documents or the Environmental Indemnity
or in any material written information provided by or on behalf of Borrower,
Interest Owner or any guarantor in connection with the Loan shall prove to be
untrue or inaccurate in any material respect; or

 

(g)                                 the failure of Borrower to give Notice to
Lender within 90 days after the death of any individual who is personally liable
for any obligation under the Loan Documents or the Environmental Indemnity, as
Borrower, indemnitor or guarantor, whether or not such individual had executed
the Note or this Mortgage; or

 

(h)                                 subject to the provisions of paragraph 2(f),
the failure of Borrower to provide Lender with an assumption agreement in form
and substance and executed by a person(s) or entity(ies) acceptable to Lender in
its sole discretion to assume the obligations of any deceased individual who is
personally liable for any obligation under the Loan Documents or the
Environmental Indemnity, as Borrower, indemnitor or guarantor, whether or not
such individual had executed the Note or this Mortgage, and such failure shall
have continued for 90 days after the death of such individual; or

 

(i)                                     the failure of Borrower to remain a
Single-Purpose Entity;

 

then, in each and every such case, the whole of said principal sum hereby
secured shall, at the option of the Lender and without further notice to
Borrower, become immediately due and payable together with accrued interest
thereon, a Make Whole

 

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Premium calculated in accordance with the provisions of the Loan Documents and
all other Indebtedness, and whether or not Lender has exercised said option,
interest shall accrue on the entire principal balance and any interest or Make
Whole Premium or other Indebtedness then due, at the Default Rate until fully
paid or if Lender has not exercised said option, for the duration of any Event
of Default.

 

11.                                 Borrower agrees that if Lender accelerates
the whole or any part of the principal sum hereby secured after the occurrence
of an Event of Default, or applies any proceeds pursuant to the provisions
hereof, Borrower waives any right to prepay the principal sum hereby secured in
whole or in part without premium and agrees to pay, as yield maintenance
protection and not as a penalty, a “Make Whole Premium”.  However, in the event
any proceeds from a casualty or Taking of the Premises are applied to reduce the
principal balance under the Note, no Make Whole Premium shall be due so long as
no Event of Default exists at the time of such application.

 

12.                                 Upon the occurrence of any Event of Default,
in addition to any other rights or remedies provided in the Loan Documents, at
law, in equity or otherwise, Lender shall have the right to foreclose the lien
hereof, and to the extent permitted herein and by applicable law to sell the
Premises by sale independent of the foreclosure proceedings.  In any suit to
foreclose the lien hereof, and in any sale of the Premises, there shall be
allowed and included as additional Indebtedness payable by Borrower to Lender
and secured hereby all expenditures and expenses which may be paid or incurred
by or on behalf of Lender for attorneys’ fees and costs, including attorneys’
fees and costs on appeal, appraisers’ fees, expenditures for documentary and
expert evidence, stenographer’s charges, publication and advertising costs,
survey costs, environmental audits and costs (which may be estimated as to items
to be expended after the entry of any decree) of procuring all such abstracts of
title, title searches and examinations, title insurance policies, torrens
certificates and similar data and assurances with respect to title as Lender
deems reasonably necessary either to prosecute such suit or to consummate such
sale or to evidence to bidders at any sale the true condition of the title to or
the value of the Premises.

 

13.                                 The proceeds of any foreclosure sale, or
other sale of the Premises in accordance with the terms hereof or as permitted
by law, shall be distributed and applied in the following order of priority: 
first, to the payment of all costs and expenses incident to the foreclosure
and/or sale proceedings, including all items as are mentioned in any preceding
or succeeding paragraph hereof; second, to the payment of all other items which
under the terms hereof constitute secured Indebtedness in addition to that
evidenced by the Note, with interest thereon as herein provided; third, to the
payment of all principal, accrued interest remaining unpaid on the Note and Make
Whole Premium; fourth, any surplus to the Borrower or Borrower’s successors or
assigns, as their rights may appear.

 

14.                                 Following the occurrence of an Event of
Default, unless the same has been specifically waived in writing, Borrower shall
forthwith upon demand of Lender surrender to Lender possession of the Premises,
and Lender shall be entitled to take actual

 

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possession of the Premises or any part thereof personally or by its agents or
attorneys, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or
any part of the Premises together with all documents, books, records, papers and
accounts of the Borrower or the then owner of the Premises relating thereto, and
may exclude Borrower, its agents or assigns wholly therefrom, and may as
attorney-in-fact or agent of the Borrower, or in its own name as Lender and
under the powers herein granted:

 

(a)                                  hold, operate, maintain, repair, rebuild,
replace, alter, improve, manage or control the Premises as it deems judicious,
insure and reinsure the same and any risks related to Lender’s possession,
operation and management thereof and receive all Rents, either personally or by
its agents, and with full power to use such measures, legal or equitable, as in
its discretion it deems proper or necessary to enforce the payment or security
of the Rents, including actions for the recovery of Rent, actions in forcible
detainer and actions in distress for Rents, hereby granting full power and
authority to exercise each and every of the rights, privileges and powers herein
granted at any and all times hereafter, without notice to Borrower; and

 

(b)                                 conduct leasing activity pursuant to the
provisions of the Assignment of Leases.

 

Lender shall not be obligated to perform or discharge, nor does it hereby
undertake to perform or discharge, any obligation, duty or liability under any
Lease.  Except to the extent that the same is caused solely by Lender’s gross
negligence or willful misconduct, should Lender incur any liability, loss or
damage under any Leases, or under or by reason of the Assignment of Leases, or
in the defense of any claims or demands whatsoever which may be asserted against
Lender by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants or agreements in any Lease, the
amount thereof, including costs, expenses and reasonable attorneys’ fees and
costs, including reasonable attorneys’ fees and costs on appeal, shall be added
to the Indebtedness and secured hereby.

 

15.                                 Upon the occurrence of an Event of Default,
Lender in the exercise of the rights and powers conferred upon it shall have the
full power to use and apply the Rents, less costs and expenses of collection to
the payment of or on account of the items listed in (a) — (c) below (subject to
the Ground Leases), at the election of Lender and in such order as Lender may
determine as follows:

 

(a)                                  to the payment of (i) the expenses of
operating and maintaining Borrower’s interest in the Premises, including, but
not limited to the cost of management, leasing (which shall include reasonable
compensation to Lender and its agent or agents if management and/or leasing is
delegated to an agent or agents), repairing, rebuilding, replacing, altering and
improving the Premises, (ii) premiums on insurance as hereinabove authorized,
(iii) taxes and special assessments now due or which may hereafter become due on
the Premises and (iv) expenses of placing

 

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the Premises in such condition as will, in the sole judgment of Lender, make it
readily rentable;

 

(b)                                 to the payment of any principal, interest or
any other Indebtedness secured hereby or any deficiency which may result from
any foreclosure sale;

 

(c)                                  to the payment of established claims for
damages, if any, reasonable attorneys’ fees and costs and reasonable attorneys’
fees and costs on appeal.

 

The manner of the application of Rents, the reasonableness of the costs and
charges to which such Rents are applied and the item or items which shall be
credited thereby shall be within the sole and unlimited discretion of Lender. 
To the extent that the costs and expenses in (a) and (c) above exceed the
amounts collected, the excess shall be added to the Indebtedness and secured
hereby.

 

16.                                 Upon the occurrence of any Event of Default,
unless the same has been specifically waived in writing, Lender may apply to any
court having jurisdiction for the appointment of a receiver of the Premises. 
Such appointment may be made either before or after sale, without notice,
without regard to the solvency or insolvency of Borrower at the time of
application for such receiver and without regard to the then value of the
Premises or the adequacy of Lender’s security.  Lender may be appointed as such
receiver.  The receiver shall have the power to collect the Rents during the
pendency of any foreclosure proceeding and, in case of a sale, during the full
statutory period of redemption, if any, as well as during any further times when
Borrower, except for the intervention of such receiver, would be entitled to
collect such Rents.  In addition, the receiver shall have all other powers which
shall be necessary or are usual in such cases for the protection, possession,
control, management and operation of the Premises during the whole of said
period.  The court from time to time may authorize the receiver to apply the net
income in its possession at Lender’s election and in such order as Lender may
determine in payment in full or in part of those items listed in paragraph 15.

 

17.                                 (a)                                 
Borrower agrees that all reasonable costs, charges and expenses, including but
not limited to, reasonable attorneys’ fees and costs, incurred or expended by
Lender arising out of or in connection with any action, proceeding or hearing,
legal, equitable or quasi-legal, including the preparation therefor and any
appeal therefrom, in any way affecting or pertaining to the Loan Documents, the
Environmental Indemnity or the Premises, shall be promptly paid by Borrower. 
All such sums not promptly paid by Borrower shall be added to the Indebtedness
secured hereby and shall bear interest at the Default Rate from the date of such
advance and shall be due and payable on demand.

 

(b)                                 Borrower hereby agrees that upon the
occurrence of an Event of Default and the acceleration of the principal sum
secured hereby pursuant to this Mortgage, to the full extent that such rights
can be lawfully waived, Borrower hereby waives and agrees not to insist upon,
plead, or in any manner take advantage of, any notice of

 

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acceleration, any stay, extension, exemption, homestead, marshaling or
moratorium law or any law providing for the valuation or appraisement of all or
any part of the Premises prior to any sale or sales thereof under any provision
of this Mortgage or before or after any decree, judgment or order of any court
or confirmation thereof, or claim or exercise any right to redeem all or any
part of the Premises so sold and hereby expressly waives to the full extent
permitted by applicable law on behalf of itself and each and every person or
entity acquiring any right, title or interest in or to all or any part of the
Premises, all benefit and advantage of any such laws which would otherwise be
available to Borrower or any such person or entity, and agrees that neither
Borrower nor any such person or entity will invoke or utilize any such law to
otherwise hinder, delay or impede the exercise of any remedy granted or
delegated to Lender herein but will permit the exercise of such remedy as though
any such laws had not been enacted.  Borrower hereby further expressly waives to
the full extent permitted by applicable law on behalf of itself and each and
every person or entity acquiring any right, title or interest in or to all or
any part of the Premises any and all rights of redemption from any sale or any
order or decree of foreclosure obtained pursuant to provisions of this Mortgage.

 

18.                                 In accordance with and subject to the terms
and conditions of the Assignment of Leases, Borrower hereby assigns to Lender
directly and absolutely, and not merely collaterally, the interest of Borrower
as lessor under the Leases of the Premises, and the Rents payable under any
Lease and/or with respect to the use of the Premises, or portion thereof,
including any oil, gas or mineral lease, or any installments of money payable
pursuant to any agreement or any sale of the Premises or any part thereof,
subject only to a license, if any, granted by Lender to Borrower with respect
thereto prior to the occurrence of an Event of Default.  Borrower has executed
and delivered the Assignment of Leases which grants to Lender specific rights
and remedies in respect of said Leases and governs the collection of Rents
thereunder and from the use of the Premises, and such rights and remedies so
granted shall be cumulative of those granted herein.

 

The collection of such Rents and the application thereof as aforesaid shall not
cure or waive any Event of Default or notice of default hereunder or invalidate
any act done pursuant to such notice, except to the extent any such Event of
Default is fully cured.  Failure or discontinuance of Lender at any time, or
from time to time, to collect any such moneys shall not impair in any manner the
subsequent enforcement by Lender of the right, power and authority herein
conferred on Lender.  Nothing contained herein, including the exercise of any
right, power or authority herein granted to Lender, shall be, or be construed to
be, an affirmation by Lender of any tenancy, Lease or option, or an assumption
of liability under, or the subordination of the lien or charge of this Mortgage
to any such tenancy, Lease or option.  Borrower hereby agrees that, in the event
Lender exercises its rights as provided for in this paragraph or in the
Assignment of Leases, Borrower waives any right to compensation for the use of
Borrower’s furniture, furnishings or equipment in the Premises for the period
such assignment of rents or receivership is in effect, it being understood that
the Rents derived from the use

 

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of any such items shall be applied to Borrower’s obligations hereunder as above
provided.

 

19.                                 All rights and remedies granted to Lender in
the Loan Documents shall be in addition to and not in limitation of any rights
and remedies to which it is entitled in equity, at law or by statute, and the
invalidity of any right or remedy herein provided by reason of its conflict with
applicable law or statute shall not affect any other valid right or remedy
afforded to Lender.  No waiver of any default or Event of Default under any of
the Loan Documents shall at any time thereafter be held to be a waiver of any
rights of the Lender hereunder, nor shall any waiver of a prior Event of Default
or default operate to waive any subsequent Event of Default or default.  All
remedies provided for in the Loan Documents are cumulative and may, at the
election of Lender, be exercised alternatively, successively or concurrently. 
No act of Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision or to proceed against
one portion of the Premises to the exclusion of any other portion.  Time is of
the essence under this Mortgage and the Loan Documents.

 

20.                                 By accepting payment of any sum secured
hereby after its due date, Lender does not waive its right either to require
prompt payment when due of all other sums or installments so secured or to
declare a default for failure to pay such other sums or installments.

 

21.                                 The usury provisions of paragraph 6 of the
Note and the limitation of recourse liability provisions of paragraph 9 of the
Note are fully incorporated herein by reference as if the same were specifically
stated here.

 

22.                                 In the event one or more provisions of the
Loan Documents shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, and the Loan Documents shall be construed as if any such
provision had never been contained herein.

 

23.                                 If the payment of the Indebtedness secured
hereby or of any part thereof shall be extended or varied, or if any part of the
security be released, all persons now or at any time hereafter liable therefor,
or interested in said Premises, shall be held to assent to such extension,
variation or release, and their liability and the lien and all provisions hereof
shall continue in full force, the right of recourse against all such persons
being expressly reserved by Lender notwithstanding such variation or release.

 

24.                                 Upon payment in full of the principal sum,
interest and other Indebtedness secured by the Loan Documents, these presents
shall be null and void, and Lender shall release this Mortgage and the lien
hereof by proper instrument executed in recordable form.

 

25.                                 (a)                                 
Borrower hereby grants to Lender and its respective agents, attorneys,
employees, consultants, contractors and assigns an irrevocable license and
authorization to enter upon and inspect the Premises and all facilities located
thereon at reasonable times, subject to the inspection rights provisions
afforded

 

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to Borrower under the Leases.  Lender shall make reasonable efforts to ensure
that the operations of tenants are not disrupted.

 

(b)                                 In connection with any sale or conveyance of
this Mortgage, Borrower grants to Lender and its respective agents, attorneys,
employees, consultants, contractors and assigns an irrevocable license and
authorization to conduct, at Lender’s expense, a Phase I environmental audit of
the Premises, subject to the inspection rights provisions afforded to Borrower
under the Leases.

 

(c)                                  In the event there has been an Event of
Default or in the event Lender has formed a reasonable belief, based on its
inspection of the Premises or other factors known to it, that Hazardous
Materials may be present on the Premises, then Borrower grants to Lender and its
respective agents, attorneys, employees, consultants, contractors and assigns an
irrevocable license and authorization to conduct, at Borrower’s expense using
GEI Consultants, Inc. or the firm of Borrower’s choice, subject to Lender’s
reasonable approval, environmental tests of the Premises, including without
limitation, a Phase I environmental audit, subsurface testing, soil and ground
water testing, and other tests which may physically invade the Premises or
facilities (the “Tests”).  The scope of the Tests shall be such as Lender, in
its sole discretion, determines is necessary to (i) investigate the condition of
the Premises, (ii) protect the security interests created under this Mortgage,
or (iii) determine compliance with Environmental Laws, the provisions of the
Loan Documents and the Environmental Indemnity and other matters relating
thereto.  Lender shall make reasonable efforts to ensure that the operations of
the tenants are not disrupted.

 

(d)                                 Provided no Event of Default has occurred,
Lender will provide Borrower with reasonable notice of Lender’s intent to enter,
inspect and conduct the Tests provided for in this paragraph.  In addition,
Lender shall conduct such  inspections and Tests during normal business hours
and use reasonable efforts to minimize disruption of the lessees’ business
operations.

 

The foregoing licenses and authorizations are intended to be a means of
protection of Lender’s security interest in the Premises and not as
participation in the management of the Premises.

 

26.                                 Within 15 days after any written request by
either party to this Mortgage, the requested party shall certify, by a written
statement duly acknowledged, the amount of principal, interest and other
Indebtedness then owing on the Note, the terms of payment, Maturity Date and the
date to which interest has been paid.  Borrower shall further certify whether
any defaults, offsets or defenses exist against the Indebtedness secured
hereby.  Borrower shall also furnish to Lender, within 30 days of its request
therefor, tenant estoppel letters from such tenants of the Premises as Lender
may reasonably require; which Lender shall not request more than one (1) time
per annum, nor more than one (1) time prior to the date of the Securitization
Transaction.

 

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27.                                 Each notice, consent, request, report or
other communication under this Mortgage or any other Loan Document (each a
“Notice”) which any party hereto may desire or be required to give to the other
shall be deemed to be an adequate and sufficient notice if given in writing and
service is made by either (i) registered or certified mail, postage prepaid, in
which case notice shall be deemed to have been received three (3) business days
following deposit to U.S. mail; or (ii) nationally recognized overnight air
courier, next day delivery, prepaid, in which case such notice shall be deemed
to have been received one (1) business day following delivery to such nationally
recognized overnight air courier.  All Notices shall be addressed to Borrower at
its address given on the first page hereof or to Lender at c/o Principal Real
Estate Investors, LLC, 801 Grand Avenue, Des Moines, Iowa 50392-1450, Attn: 
Commercial Real Estate Servicing, Loan No. 754867, or to such other place as
either party may by written notice to the other hereafter designate as a place
for service of notice.  Borrower shall not be permitted to designate more than
one place for service of Notice concurrently.

 

28.                                 This Mortgage and all provisions hereof
shall inure to the benefit of the heirs, successors and assigns of Lender and
shall bind the heirs and permitted successors and assigns of Borrower.

 

29.                                 Borrower has had the opportunity to fully
negotiate the terms hereof and modify the draftsmanship of the Loan Documents
and the Environmental Indemnity.  Therefore, the terms of the Loan Documents and
the Environmental Indemnity shall be construed and interpreted without any
presumption, inference, or rule requiring construction or interpretation of any
provision of the Loan Documents and the Environmental Indemnity against the
interest of the party causing the Loan Documents and the Environmental Indemnity
or any portion of it to be drafted.  Borrower is entering into the Loan
Documents and the Environmental Indemnity freely and voluntarily without any
duress, economic or otherwise.

 

30.                                 This Mortgage shall be governed by, and
construed in accordance with the laws of the state of New Hampshire, without
regard to its conflicts of law principles.

 

31.                                 As used herein, the term “Default Rate”
means a rate equal to the lesser of (i) four percent (4%) per annum above the
then applicable interest rate payable under the Note or (ii) the maximum rate
allowed by applicable law.

 

32.                                 BORROWER AND LENDER EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY IN ANY ACTIONS BROUGHT BY BORROWER OR LENDER IN CONNECTION WITH THIS
MORTGAGE, ANY OF THE LOAN DOCUMENTS, THE INDEBTEDNESS SECURED HEREBY, OR ANY
OTHER STATEMENTS OR ACTIONS OF LENDER.

 

33.                                 This Mortgage and the Indebtedness secured
hereby is for the sole purpose of conducting or acquiring a lawful business,
professional or commercial activity or for

 

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the acquisition or management of real or personal property as a commercial
investment, and all proceeds of such Indebtedness shall be used for said
business or commercial investment purpose.  Such proceeds will not be used for
the purchase of any security within the meaning of the Securities Exchange Act
of 1934, as amended, or any regulation issued pursuant thereto, including
without limitation, Regulations U, T and X of the Board of Governors of the
Federal Reserve System.  This is not a purchase money mortgage where a seller is
providing financing to a buyer for the payment of all or any portion of the
purchase price, and the Premises secured hereby is not a residence or homestead
or used for mining, grazing, agriculture, timber or farming purposes.

 

34.                                 Unless Lender shall otherwise direct in
writing, Borrower shall appear in and defend all actions or proceedings
purporting to affect the security hereunder, or any right or power of the
Lender, excluding any Federal regulatory proceedings against Lender that are not
instituted because of any act or omission by Borrower, any Interest Owner or
which result from the Premises.  The Lender shall have the right to appear in
such actions or proceedings.  Borrower shall save Lender harmless from all
reasonable costs and expenses, including but not limited to, reasonable
attorneys’ fees and costs, and costs of a title search, continuation of abstract
and preparation of survey incurred by reason of any action, suit, proceeding,
hearing, motion or application before any court or administrative body in and to
which Lender may be or become a party by reason hereof, excluding any Federal
regulatory proceedings against Lender that are not instituted because of any act
or omission by Borrower, any Interest Owner or which result from the Premises. 
Such proceedings shall include but not be limited to condemnation, bankruptcy,
probate and administration proceedings, as well as any other action, suit,
proceeding, right, motion or application wherein proof of claim is by law
required to be filed or in which it becomes necessary to defend or uphold the
terms of this Mortgage or the Loan Documents or otherwise purporting to affect
the security hereof or the rights or powers of Lender.  All money paid or
expended by Lender in that regard, together with interest thereon from date of
such payment at the Default Rate shall be additional Indebtedness secured hereby
and shall be immediately due and payable by Borrower without notice.

 

35.                                 Upon the occurrence of an Event of Default,
unless the same has been specifically waived in writing, all Rents collected or
received by Borrower shall be accepted and held for Lender in trust and shall
not be commingled with the funds and property of Borrower, but shall be promptly
paid over to Lender.

 

36.                                 If more than one, all obligations and
agreements of Borrower are joint and several.

 

37.                                 This Mortgage may be executed in
counterparts, each of which shall be deemed an original; and such counterparts
when taken together shall constitute but one agreement.

 

38.                                 This Mortgage is upon the STATUTORY
CONDITION and upon further condition that all covenants and agreements of
Borrower contained herein and in the Note shall be

 

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kept and fully performed, for any breach of which, Lender shall have the
STATUTORY POWER OF SALE.

 

39.                                 Future advances from Lender shall be secured
by this Mortgage.

 

40.                                 Price Chopper Expansion.

 

(a)                                  By its acceptance of this Mortgage, Lender
acknowledges that pursuant to Section 8.3 of the Price Chopper Lease, Price
Chopper has the option to expand the square footage of its leased premises by
not more than 10,000 square feet (the “Expansion”) which will involve an
expansion of the building currently occupied by Price Chopper.  Notwithstanding
any provision contained in the Loan Documents to the contrary, the Expansion
shall not constitute an Event of Default provided the following terms and
conditions are satisfied:

 

(i)                                     at the time of the commencement of the
Expansion there shall exist no Event of Default under the Loan Documents;

 

(ii)                                  Borrower shall pay to Lender a $2,500 fee
for the processing and handling of the Expansion; review of all legal
documentation relating to the Expansion shall be handled by local counsel for
Lender at Borrower’s sole cost and expense;

 

(iii)                               Borrower shall deliver to Lender, no later
than 60 days prior to the estimated date that construction is to begin, prior
written notice to Lender of Price Chopper’s intent to construct the Expansion
and, simultaneous with such notice, Borrower shall provide Lender with  complete
copies of the proposed plans and specifications for the Expansion in form and
substance customarily required by an institutional commercial real estate
lender;

 

(iv)                              Borrower shall deliver to Lender evidence that
the proposed Expansion is in compliance with all codes, laws, rules and
regulations affecting the Premises and all private covenants, conditions,
restrictions and leases affecting the Premises and that upon completion of the
Expansion, the improvements will be in substantially the same quality and
character of the improvements on the Premises existing immediately prior to the
construction of the Expansion; and

 

(v)                                 Borrower shall deliver to Lender a fully
executed copy of the amendment to the Price Chopper Lease addressing the change
in square footage of the leased premises, the adjustment of rental due under the
lease and any other applicable matters, all of which shall be in form and
substance as would be reasonably acceptable to an institutional commercial real
estate lender.

 

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(b)                                 Borrower covenants and agrees with Lender
that:

 

(i)                                     Borrower will enforce its rights under
the Price Chopper Lease to ensure that the Expansion shall be completed in a
workmanlike, lien-free fashion and prosecuted to completion diligently in
accordance with: (A) all codes, laws, rules and regulations affecting the
Premises; and (B) the terms and conditions of the Loan Documents, all lease(s)
of the Premises and any private covenants, conditions and restrictions affecting
the Premises;

 

(ii)                                  upon completion of construction, Borrower
shall furnish to Lender the following, all at Borrower’s expense:

 

(A)                              final, unconditional certificate(s) of
occupancy for the improved space in customary form from the local authority
responsible for issuing such certificate(s);

 

(B)                                either (i) an updated property physical
condition report in form and substance similar to what Borrower provided to
Lender in connection with the Loan closing and prepared by the same engineering
firm or an engineering firm with similar qualifications and experience, or
(ii) a certification from an independent project architect or independent
engineer indicating that the Expansion has been completed in accordance with all
codes, laws, rules and regulations affecting the Premises;

 

(C)                                an updated as-built survey showing the
completed Expansion that: (i) is in form and substance similar to what Borrower
provided to Lender in connection with the Loan closing; and (ii) is acceptable
to the title insurance company; and

 

(D)                               after a sufficient period of time shall have
elapsed since the date of completion of construction of the Expansion so that
under applicable law no mechanic’s or materialmen’s liens could be perfected
against the Premises, an endorsement to the loan policy of title insurance for
the Premises issued to Lender or other assurances as are customarily required by
an institutional commercial real estate lender insuring the continued first lien
priority of the Loan Documents, without exception for mechanics’ or
materialmen’s liens and subject only to those exceptions previously approved by
Lender.

 

(c)                                  Borrower shall be responsible for all
costs, fees and expenses incurred by Lender and associated with the Expansion.

 

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

 

REMAINDER OF PAGE INTENTIONALLY BLANK

(Signatures on next page)

 

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SIGNATURE PAGE OF BORROWER TO
MORTGAGE AND SECURITY AGREEMENT

 

 

MB KEENE MONADNOCK, L.L.C., a Delaware
limited liability company

 

 

 

 

 

 

By:

MINTO BUILDERS (FLORIDA), INC., a

 

 

Florida corporation, Sole Member

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/Valerie Medina

 

 

 

 

Name:

Valerie Medina

 

 

 

 

Title:

Assistant Secretary

 

STATE OF ILLINOIS        )

 

 

 

 

                                                            )

SS.

 

 

 

 

COUNTY OF  DuPage )

 

 

 

 

 

 

 

 

 

 

The foregoing instrument was acknowledged before me the  23rd day of  February,
2006, by Valerie Medina, the Assistant Secretary of Minto Builders
(Florida), Inc., a Florida corporation, on behalf of the corporation, in its
capacity as the sole member of MB Keene Monadnock, L.L.C., a Delaware limited
liability company, on behalf of the limited liability company.

 

 

My commission expires:

 

/s/Elizabeth Ann Irving

 

11-14-2008

 

 

Notary Public

 

 

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EXHIBIT A

 

Legal Description

 

Unit

 

Address

 

Tax Parcel Number

2

 

30 Ash Brook Road, Keene, NH

 

502-01-001.0200

3

 

32 Ash Brook Road, Keene, NH

 

502-01-001.0300

4A

 

36 Ash Brook Road, Keene, NH

 

502-01-001.0400

4B

 

38 Ash Brook Road,

 

502-01-001.0500

7

 

41-43 Ash Brook Road, Keene, NH

 

502-01-001.1300

8

 

16 Ash Brook Road, Keene, NH

 

502-01-001.1000

9

 

14 Ash Brook Road, Keene, NH

 

502-01-001.0900

10

 

8 Ash Brook Road, Keene, NH

 

502-01-001.0600

11

 

4 Ash Brook Road, Keene, NH

 

502-01-001.0800

12

 

2 Ash Brook Road, Keene, NH

 

502-01-001.0700

13

 

7 Ash Brook Road, Keene, NH

 

502-01-001.1400

14

 

9 Ash Brook Road, Keene, NH

 

502-01-001.1500

 

Units 2, 3, 4A, 4B, 7, 8, 9, 10, 11, 12, 13 and 14 in Keene, New Hampshire, as
defined, described and identified in the Declaration of Monadnock Condominium,
dated September 4, 2002 and recorded in the Cheshire County Registry of Deeds at
Volume 1925, Page 176, Bylaws of Monadnock Condominium Association, dated
September 4, 2002 and recorded in the Cheshire County Registry of Deeds at
Volume 1925, Page 240; First Amendment to Declaration, dated September 4, 2002
and recorded in the Cheshire County Registry of Deeds at Volume 1925, Page 252;
Second Amendment to Declaration, dated September 4, 2002 and recorded in the
Cheshire County Registry of Deeds at Volume 1925, Page 257; Third Amendment to
Declaration dated January 8, 2004 and recorded in the Cheshire County Registry
of Deeds at Volume 2106, Page 866;  Fourth Amendment to Declaration, dated
June 29, 2004 and recorded in the Cheshire County Registry of Deeds at Volume
2152, Page 456; Fifth Amendment to Declaration, dated December 10, 2004 and
recorded in the Cheshire County Registry of Deeds at Volume 2206, Page 860;
Sixth Amendment to Declaration, dated February 17, 2005 and recorded in the
Cheshire County Registry of Deeds at Volume 2219, Page 961; and, Seventh
Amendment to Declaration, dated May 13, 2005 and recorded in the Cheshire County
Registry of Deeds at Volume 2249, Page 465, and certain abstract site and floor
plans recorded in said Registry of Deeds in Cabinet 12, Drawer 10, Slides
118-128, together with undivided fractional interests in the Common Area
appurtenant to each of the above Units, as defined, described and identified in
said Declaration.

 

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