Exhibit 10.50


 


 


LOAN AGREEMENT 


 


 


Dated as of March 3, 2006


 


 


Between


 


 


MB SUGAR LAND GILLINGHAM LIMITED PARTNERSHIP, an
 Illinois limited partnership

as Borrower




 


and




 


NOMURA CREDIT & CAPITAL, INC.,

as Lender



















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS; PRINCIPLES OF
  CONSTRUCTION

  	
  1

  
	
  Section 1.1. Definitions

  	
  1

  
	
  Section 1.2. Principles of Construction

  	
  18

  
	
  ARTICLE II GENERAL TERMS

  	
  19

  
	
  Section 2.1.
  Loan Commitment; Disbursement to Borrower

  	
  19

  
	
  Section 2.2. Interest; Loan Payments; Late Payment Charge

  	
  19

  
	
  Section 2.3.
  Prepayments

  	
  21

  
	
  Section 2.4. Intentionally Omitted

  	
  22

  
	
  Section 2.5. Release of Property

  	
  22

  
	
  Section 2.6. Manner of Making Payments

  	
  23

  
	
  ARTICLE III CONDITIONS PRECEDENT

  	
  23

  
	
  Section 3.1. Conditions Precedent to Closing

  	
  23

  
	
  ARTICLE IV REPRESENTATIONS AND
  WARRANTIES

  	
  27

  
	
  Section 4.1. Borrower Representations

  	
  27

  
	
  Section 4.2. Survival of
  Representations

  	
  34

  
	
  ARTICLE V BORROWER COVENANTS

  	
  35

  
	
  Section 5.1. Affirmative Covenants

  	
  35

  
	
  Section 5.2. Negative Covenants

  	
  43

  
	
  ARTICLE VI INSURANCE; CASUALTY;
  CONDEMNATION

  	
  51

  
	
  Section 6.1. Insurance

  	
  51

  
	
  Section 6.2. Casualty

  	
  55

  
	
  Section 6.3. Condemnation

  	
  55

  
	
  Section 6.4. Restoration

  	
  55

  
	
  ARTICLE VII RESERVE FUNDS

  	
  60

  
	
  Section 7.1. Required Repair Funds

  	
  60

  
	
  Section 7.2. Tax and Insurance Escrow Fund

  	
  61

  
	
  Section 7.3. Replacements and Replacement Reserve

  	
  62

  
	
  Section 7.4. Intentionally Omitted

  	
  67

  
	
  Section 7.5. Intentionally Omitted

  	
  68

  
	
  Section 7.6. Intentionally Omitted

  	
  68

  
	
  Section 7.7. Reserve Funds, Generally

  	
  68

  
	
  ARTICLE VIII DEFAULTS

  	
  68

  
	
  Section 8.1. Event of Default

  	
  68

  
	
  Section 8.2. Remedies

  	
  70

  
	
  Section 8.3. Remedies Cumulative; Waivers

  	
  71

  
	
  ARTICLE IX SPECIAL PROVISIONS

  	
  72

  
	
  Section 9.1. Sale of Notes and Securitization

  	
  72

  
	
  Section 9.2. Securitization

  	
  72

  
	
  Section 9.3. Rating Surveillance

  	
  73

  
	
  Section 9.4. Exculpation

  	
  73

  
	
  Section 9.5. Termination of Manager

  	
  75

  



 


i

















 


	
  Section 9.6. Servicer

  	
  75

  
	
  Section 9.7. Splitting the Loan

  	
  76

  
	
  ARTICLE X MISCELLANEOUS

  	
  76

  
	
  Section 10.1. Survival

  	
  76

  
	
  Section 10.2. Lender’s Discretion

  	
  76

  
	
  Section 10.3. Governing Law

  	
  76

  
	
  Section 10.4. Modification, Waiver in Writing

  	
  77

  
	
  Section 10.5. Delay Not a Waiver

  	
  77

  
	
  Section 10.6. Notices

  	
  77

  
	
  Section 10.7. Trial by Jury

  	
  78

  
	
  Section 10.8. Headings

  	
  78

  
	
  Section 10.9. Severability

  	
  78

  
	
  Section 10.10. Preferences

  	
  79

  
	
  Section 10.11. Waiver of Notice

  	
  79

  
	
  Section 10.12. Remedies of Borrower

  	
  79

  
	
  Section 10.13. Expenses; Indemnity

  	
  79

  
	
  Section 10.14. Schedules Incorporated

  	
  80

  
	
  Section 10.15. Offsets, Counterclaims and Defenses

  	
  80

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

  	
  81

  
	
  Section 10.17. Publicity

  	
  81

  
	
  Section 10.18. Waiver of Marshalling of Assets

  	
  81

  
	
  Section 10.19. Waiver of Counterclaim

  	
  82

  
	
  Section 10.20. Conflict; Construction of Documents; Reliance

  	
  82

  
	
  Section 10.21. BROKERS AND FINANCIAL ADVISORS

  	
  82

  
	
  Section 10.22. Prior Agreements

  	
  82

  
	
  Section 10.23. Transfer of Loan

  	
  83

  
	
  Section 10.24. Joint and Several Liability

  	
  83

  
	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
  Schedule I

  	
  -

  	
  Form of Tenant Direction Letter

  
	
  Schedule II

  	
  -

  	
  Intentionally Reserved

  
	
  Schedule III

  	
  -

  	
  Required Repairs

  
	
  Schedule IV

  	
  -

  	
  Rent Roll

  
				



 


ii

















 


LOAN AGREEMENT


 


THIS LOAN AGREEMENT, dated as of this 3rd day of
March, 2006 (as amended, restated, replaced, supplemented or otherwise modified
from time to time, this “Agreement”),
between NOMURA CREDIT & CAPITAL, INC.,
a Delaware corporation, having an address at Two World Financial Center,
Building B, New York, New York 10281 (“Lender”),
and MB SUGAR LAND GILLINGHAM LIMITED PARTNERSHIP, an Illinois limited partnership,
having an address at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Borrower”).


 


W I T N E S S E T H:


 


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


 


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


 


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


 


ARTICLE 
I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


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


 


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


 


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


 


“Anchor Tenant”
shall mean THERMO PROCESS INSTRUMENTS, L.P.,
pursuant to the Anchor Tenant Lease.


 


“Anchor Tenant Lease” shall mean
that certain lease by and between Borrower (or its predecessor in title), as
landlord, and Anchor Tenant, as tenant, as the same may be amended,
restated, renewed, substituted or replaced (but only to the extent permitted
under this Agreement).


 


“Anticipated Repayment Date” shall mean March 11,
2011.


 


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


 

















 


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


 


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


 


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


 


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


 


“Borrower” shall mean MB SUGAR LAND GILLINGHAM LIMITED PARTNERSHIP, an Illinois limited partnership,
together with its permitted successors and assigns.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Closing Date” shall mean the date
hereof.


 


2

















 


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


 


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


 


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


 


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


 


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


 


(a)                                  the numerator is the Net Operating Income
(excluding interest on credit accounts) for such period as set forth in the
statements required hereunder, without deduction for (i) actual management
fees incurred in connection with the operation of the Property, (ii) amounts
paid to the Reserve Funds, less (A) management fees equal to the greater
of (1) assumed management fees of four and one-half percent (4.5%) of
Gross Income from Operations or (2) the actual management fees incurred, (B) assumed
Replacement Reserve Fund contributions equal to $0.10 per square foot of gross
leaseable area at the Property; and (C) assumed reserves for tenant
improvements and leasing commissions equal to $0.00 per square foot of gross
leaseable area at the Property; and


 


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


 


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


 


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


 


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


 


“Eligible Account” shall mean a
separate and identifiable account from all other funds held by the holding
institution that is either (a) an account or accounts maintained with a
federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated
trust account or accounts maintained with a


 


3

















 


federal or state chartered depository institution or trust
company acting in its fiduciary capacity which, in the case of a state
chartered depository institution or trust company, is subject to regulations
substantially similar to 12 C.F.R. §9.10(b), having in either case a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“General Partner” shall mean MB SUGAR LAND GILLINGHAM GP, L.L.C., a Delaware limited
liability company.


 


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


 


4

















 


“Gross Income from Operations” shall
mean all sustainable income as reported on the financial statements delivered
by the Borrower in accordance with this Agreement, computed in accordance with
accounting principles reasonably acceptable to Lender, consistently applied,
derived from the ownership and operation of the Property from whatever source, including, but not limited to, (i) Rents
from Tenants that are in occupancy, open for business and paying unabated Rent,
(ii) utility charges, (iii) escalations, (iv) intentionally
omitted; (v) service fees or charges, (vi) license fees, (vii) parking
fees, and (viii) other required pass-throughs but excluding
(i) Rents from Tenants that are subject to any bankruptcy proceeding
(unless such Tenant has affirmed its Lease or Sole Member has master leased
such Tenant’s premises for full contract rent for a period not less than three
years, and the net worth of Sole Member (as determined by Lender) is not less
than such entity’s net worth as of December 31, 2005), or are not in
occupancy, open for business or paying unabated Rent, (ii) sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower
to any Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales
of furniture, fixtures and equipment, (v) Insurance Proceeds (other than
business interruption or other loss of income insurance), (vi) Awards, (vii) unforfeited
security deposits, (viii) utility and other similar deposits and (ix) any
disbursements to Borrower from the Reserve Funds. Gross income shall not be
diminished as a result of the Mortgage or the creation of any intervening
estate or interest in the Property or any part thereof.


 


“Hyper-Am Interest Rate” shall mean
a rate per annum equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) two (2%) percent above the Interest Rate.


 


“Hyper-Am Prepayment” shall mean any
application of Excess Cash Flow to the Debt pursuant to Section 2.2.4.


 


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


 


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


 


“Indemnitor” shall mean Minto
Builders (Florida), Inc.


 


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


 


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


 


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


 


5

















 


“Interest Rate” shall mean Five and
twenty-four hundreths percent (5.24%) per annum.


 


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


 


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


 


“Lender” shall mean Nomura Credit &
Capital, Inc., together with its successors and assigns.


 


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


 


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


 


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


 


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


 


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


 


6

















 


“Manager” shall mean INLAND AMERICAN INDUSTRIAL MANAGEMENT, LLC, a Delaware
limited liability company.


 


“Maturity Date” shall mean March 11, 2031, or such other date on which the final
payment of principal of the Note becomes due and payable as therein or herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.


 


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


 


“Minto Builders (Floirda), Inc.”  shall mean Minto Builders (Florida), Inc.,
a Florida corporation.


 


“Monthly Debt Service Payment Amount”
shall mean an amount equal to $35,811.03.


 


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


 


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


 


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


 


“Net Cash Flow Schedule” shall have
the meaning set forth in Section 5.1.11(b) hereof.


 


“Net Operating Income” shall mean
the amount obtained by subtracting from Gross Income from Operations (i) Operating
Expenses, and (ii) a vacancy allowance equal to the greater of (x) market
vacancy (as reasonably determined by Lender), less actual vacancy, and (y)
underwritten vacancy of 3%, less actual vacancy. Notwithstanding the foregoing,
if actual vacancy exceeds market vacancy and underwritten vacancy, then there
shall be no adjustment for a vacancy allowance.


 


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


 


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


 


7

















 


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


 


“Note” shall mean that certain
Promissory Note of even date herewith in the principal amount of EIGHT MILLION TWO HUNDRED ONE THOUSAND AND 00/100 DOLLARS
($8,201,000.00) made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


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


 


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


 


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


 


“Payment Date” shall mean the
eleventh (11th) day of each calendar month during the term of the
Loan or, if such day is not a Business Day, the immediately succeeding Business
Day.


 


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


 


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


 


8

















 


(i)                                     obligations of, or obligations fully guaranteed as
to payment of principal and interest by, the United States or any agency or
instrumentality thereof provided such obligations are backed by the full faith
and credit of the United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),
the Farmers Home Administration (certificates of beneficial ownership), the
General Services Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small Business
Administration (guaranteed participation certificates and guaranteed pool
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;


 


(ii)                                  Federal Housing Administration debentures;


 


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


 


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


 


9

















 


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


 


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


 


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


 


(viii)                        units of taxable money market funds, which funds are regulated investment
companies, seek to maintain a constant net asset value per share and invest
solely in obligations backed by the full faith and credit of the United States,
which funds


 


10

















 


have the
highest rating available from each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of
the initial, or, if higher, then current ratings assigned to the Securities)
for money market funds; and


 


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


 


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


 


“Permitted Prepayment Date” shall
mean the date that is the eleventh day of the 
month occurring after the date which is three (3) years following
Securitization of the Loan.


 


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


 


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


 


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


 


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


 


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


 


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


 


11

















 


above, the “Prepayment Rate” shall be the yield on the
United States Treasury Security most recently issued as of such date. If the
publication of the Prepayment Rate in The Wall Street Journal is discontinued,
Lender shall determine the Prepayment Rate on the basis of “Statistical Release
H.15(519), Selected Interest Rates,” or any successor publication, published by
the Board of Governors of the Federal Reserve System, or on the basis of such
other publication or statistical guide as Lender may reasonably select.


 


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


 


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


 


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


 


“Purchase Contract” means that
certain Purchase and Sale Agreement between 1410 Gillingham, Ltd., a Texas
limited partnership, Seller, and Inland Real Estate Acquisitions, Inc., an
Illinois corporation, as Purchaser, and pertaining to the Property, and as
assigned to Borrower.


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


“Rents” shall mean, with respect to
the Property, all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil
and gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or
for the account of or benefit of Borrower or its agents or employees from any
and all sources arising from or attributable to the Property, and proceeds, if
any, from business interruption or other loss of income insurance .


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


“Sole Member” shall mean MINTO BUILDERS (FLORIDA), INC., a Florida corporation


 


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


 


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


 


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


 


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


 


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


 


(v)                                 intentionally omitted;


 


(vi)                              if such entity is a corporation, has not caused or allowed and will not
cause or allow the board of directors of such entity to take any action related
to a


 


14

















 


bankruptcy
or insolvency proceeding or a voluntary dissolution without the unanimous
affirmative vote of 100% of the members of its board of directors;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(xxi)                           has and will have no Indebtedness (including loans (whether or not such
loans are evidenced by a written agreement) between Borrower and any Affiliates
of Borrower and relating to the management of funds in the custodial account
maintained by the Manager) other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership and
operation of the Property and the routine administration of Borrower, which
liabilities are not more than sixty (60) days past the date incurred (unless
disputed in accordance with applicable law), are not evidenced by a note and
are paid when due, and which amounts are normal and reasonable under the
circumstances and do not in any event exceed $100,000 in the aggregate, and (iii) such
other liabilities that are permitted pursuant to this Agreement;


 


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


 


16

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Transfer Restriction Period”  shall mean the period commencing on the date
which is thirty (30) days prior to any Securitization and ending on the date
which is thirty (30) days following such Securitization.


 


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


 


“U.S. Obligations” shall mean direct
non-callable obligations of the United States of America as defined in Section 2(a)(16)
of the Investment Company Act as amended (15 USC 80a-1) stated in REMIC Section 1.86
OG-2(a)(8).


 


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


 


18

















 


ARTICLE  II

GENERAL TERMS


 


Section 2.1.                                   Loan Commitment; Disbursement to Borrower.


 


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


 


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


 


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


 


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


 


Section 2.2.                                   Interest; Loan Payments; Late Payment Charge.


 


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


 


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


 


2.2.3                        Payments Generally. Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the date of Loan proceeds disbursement up to but not
including March 11, 2006, and
(b) on April 11, 2006
and each Payment Date thereafter up to but not including the Maturity Date, an
amount equal to the Monthly Debt Service Payment Amount, which shall be applied
to interest on the outstanding principal amount of the Loan for the prior
payment period at the Interest Rate.


 


19

















 


2.2.4                        Payments after Anticipated Repayment Date. On each Payment Date after the Anticipated
Repayment Date up to but not including the Maturity Date, in addition to the
Monthly Debt Service Payment Amount, Borrower shall pay to Lender any Excess
Cash Flow for the calendar month preceding such Payment Date. Each such payment
of Excess Cash Flow, together with any remaining amount of the Monthly Debt
Service Payment Amount paid on such date after the payment of interest on the
outstanding principal balance of the Loan at the Interest Rate, shall be
applied (i) first, to the prepayment of outstanding principal until the
Loan has been paid in full, and (ii) next, to the payment of the
difference, if any, between (y) the sum of (i) interest accrued and unpaid
on the principal amount of the Loan at the Hyper-Am Rate and (ii) interest
on such accrued and unpaid interest at the Hyper-Am Rate and (z) the interest
paid at the Interest Rate on such Payment Date.


 


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


 


2.2.6                        Payments after Default. Upon the occurrence and during the continuance
of an Event of Default, interest on the outstanding principal balance of the
Loan and, to the extent permitted by law, overdue interest and other amounts
due in respect of the Loan, shall accrue at the Default Rate, calculated from
the date such payment was due without regard to any grace or cure periods
contained herein. Interest at the Default Rate shall be computed from the
occurrence of the Event of Default until the earlier of (i) in the event
of a non-monetary default, the cure of such Event of Default by Borrower and
acceptance of such cure by Lender, and (ii) in the event of a monetary
default, the actual receipt and collection of the Debt (or that portion thereof
that is then due). To the extent permitted by applicable law, interest at the
Default Rate shall be added to the Debt, shall itself accrue interest at the
same rate as the Loan and shall be secured by the Mortgage. This paragraph
shall not be construed as an agreement or privilege to extend the date of the
payment of the Debt, nor as a waiver of any other right or remedy accruing to
Lender by reason of the occurrence of any Event of Default and Lender retains
its rights under the Note and this Agreement to accelerate and to continue to
demand payment of the Debt upon the happening and continuance of any Event of
Default.


 


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


 


2.2.8                        Usury Savings. This Agreement and the Note are subject
to the express condition that at no time shall Borrower be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the
other Loan Documents, Borrower is at any time required or obligated to pay
interest on the


 


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principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the Interest Rate the Hyper-Am Interest Rate, or the Default Rate, as the case may be,
shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.


 


Section 2.3.                                   Prepayments.


 


2.3.1                        Voluntary Prepayments.


 


(a)                                  Except as otherwise provided herein, Borrower
shall not have the right to prepay the Loan in whole or in part prior to
the Permitted Prepayment Date. On or after the Permitted Prepayment Date,
Borrower may, provided it has given Lender prior written notice in accordance
with the terms of this Agreement, prepay the unpaid principal balance of the
Loan in whole, but not in part, by paying, together with the amount to be
prepaid, (i) interest accrued and unpaid on the outstanding principal
balance of the Loan being prepaid to and including the date of prepayment, (ii) unless
prepayment is tendered on a Payment Date, an amount equal to the interest that
would have accrued on the amount being prepaid after the date of prepayment
through and including the next Payment Date had the prepayment not been made
(which amount shall constitute additional consideration for the prepayment), (iii) all
other sums then due under this Agreement, the Note, the Mortgage and the other
Loan Documents, and (iv) if prepayment occurs prior to the Anticipated
Repayment Date which is three months prior to the Maturity Date, a prepayment
consideration (the “Prepayment Consideration”)
equal to the greater of (A) one percent (1%) of the outstanding principal
balance of the Loan being prepaid or (B) the excess, if any, of (1) the
sum of the present values of all then-scheduled payments of principal and
interest under this Agreement including, but not limited to, principal and
interest on the Anticipated Repayment Date (with each such payment discounted
to its present value at the date of prepayment at the rate which, when
compounded monthly, is equivalent to the Prepayment Rate), over (2) the
outstanding principal amount of the Loan. Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment consideration.


 


(b)                                 On the Payment Date that is three (3) months
prior to the Anticipated Repayment Date, and on each day thereafter through the
Maturity Date, Borrower may, at its option, prepay the Debt, in whole or in part (including
a Hyper-Am Prepayment), without payment of any Prepayment Consideration;
provided, however, if such prepayment (other than a Hyper-Am Prepayment) is not
paid on a regularly scheduled Payment Date, such prepayment shall include
interest that would have accrued on such prepayment through and including the
day immediately preceding the next Payment. Except in connection with a
Hyper-Am Prepayment, Borrower’s
right to prepay any portion of the principal balance of the Loan shall be
subject to (i) Borrower’s submission of a notice to Lender setting forth
the amount to be prepaid and the projected date of prepayment, which date shall
be no less than thirty (30) days from the date of such notice, and (ii) Borrower’s
actual payment to Lender of the amount to be prepaid as set


 


21

















 


forth in such notice on the projected date set forth in such notice or
any day following such projected date occurring in the same calendar month as
such projected date.


 


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


 


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


 


2.3.3                        Prepayments after Default. Following an Event of Default, if Borrower or
anyone on Borrower’s behalf makes a tender of payment of all or any portion of
the Debt at any time prior to a foreclosure sale (including a sale under the
power of sale under the Mortgage), or during any redemption period after
foreclosure, (i) the tender of payment shall constitute an evasion of Borrower’s
obligation to pay any Prepayment Consideration due under this Agreement and
such payment shall, therefore, to the maximum extent permitted by law, include
a premium equal to the Prepayment Consideration that would have been payable on
the date of such tender had the Loan not been so accelerated, or (ii) if
at the time of such tender a prepayment of the principal amount of the Loan
would have been prohibited under this Agreement had the principal amount of the
Loan not been so accelerated, the tender of payment shall constitute an evasion
of such prepayment prohibition and shall, therefore, to the maximum extent
permitted by law, include an amount equal to the greater of (i) 1% of the
then principal amount of the Loan (or the relevant portion thereof being
prepaid) and (ii) an amount equal to the excess of (A) the sum of the
present values of a series of payments payable at the times and in the
amounts equal to the payments of principal and interest (including, but not
limited to the principal and interest payable on the Anticipated Repayment
Date) which would have been scheduled to be payable after the date of such
tender under this Agreement had the Loan (or the relevant portion thereof) not
been accelerated, with each such payment discounted to its present value at the
date of such tender at the rate which when compounded monthly is equivalent to
the Prepayment Rate, over (B) the then principal amount of the Loan.


 


Section 2.4.                                   Intentionally Omitted.


 


Section 2.5.                                   Release of Property. Except as set forth in this Section 2.5, no
repayment or prepayment of all or any portion of the Loan shall cause, give
rise to a right to require, or otherwise result in, the release of any Lien of
the Mortgage on the Property. If


 


22

















 


Borrower has elected to prepay the entire amount of the Loan pursuant
to Section 2.3.1 and the requirements of this Section 2.5 have been
satisfied, the Property shall be released from the Lien of the Mortgage.


 


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


 


2.5.2                        Intentionally Omitted.


 


Section 2.6.                                   Manner of Making Payments.


 


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


 


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


 


ARTICLE 
III

CONDITIONS PRECEDENT


 


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


 


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


 


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


 


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


 


(a)                                  Mortgage, Assignment of Leases and other Loan
Documents. Lender shall have
received from Borrower fully executed and acknowledged counterparts of the


 


23

















 


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


 


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


 


(c)                                  Survey. Lender shall have received a title survey for the Property, certified to
the title company and Lender and their successors and assigns, in form and
content satisfactory to Lender and prepared by a professional and properly
licensed land surveyor satisfactory to Lender in accordance with the most
recent Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys. The
following additional items from the list of “Optional Survey Responsibilities
and Specifications” (Table A) should be added to each survey: 2, 3, 4, 6, 8, 9,
10, 11 and 13. The survey shall reflect the same legal description contained in
the Title Insurance Policy relating to the Property referred to in clause (ii) above
and shall include, among other things, a legal description of the real property
comprising part of such Property reasonably satisfactory to Lender. The
surveyor’s seal shall be affixed to each survey and the surveyor shall provide
a certification for each survey in form and substance acceptable to Lender.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3.1.11                  Tenant Estoppels. Borrower shall exercise reasonable commercial efforts to deliver
estoppel letters from Tenants occupying not less than eighty percent (80%) of
the gross


 


25

















 


leasable area of the Property; Borrower
shall deliver to Lender an estoppel letter executed by Anchor Tenant,
reasonably acceptable to Lender).


 


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


 


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


 


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


 


3.1.15                  Subordination and Attornment. Lender shall have received an appropriate
instrument, acceptable to Lender in its commercially reasonable discretion,
subordinating the Anchor Tenant Lease(s) and any leases of record prior to the
Mortgage and including an agreement by such Tenant(s) to attorn to Lender in
the event of a foreclosure or delivery of a deed in lieu thereof.


 


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


 


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


 


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


 


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


 


3.1.20                  Financial Statements. Lender shall have received (a) a balance
sheet with respect to the Property for the two most recent Fiscal Years and
statements of income and


 


26

















 


statements of cash flows with respect to the Property for the three
most recent Fiscal Years, each in form and substance reasonably
satisfactory to Lender or (b) such other financial statements relating to
the ownership and operation of the Property, in form and substance
reasonably satisfactory to Lender.


 


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


 


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


 


ARTICLE 
IV

REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


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


 


4.1.3                        No Conflicts. The execution, delivery and performance of this Agreement and the other
Loan Documents by Borrower will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance (other than pursuant
to the Loan Documents) upon any of the property or assets of Borrower pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement,
partnership agreement or other agreement or instrument to which Borrower is a
party or by which any of Borrower’s property or assets is subject, nor will
such action result in


 


27

















 


any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
Borrower or any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.


 


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


 


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


 


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


 


4.1.7                        Solvency; No Bankruptcy
Filing. Borrower (a) has not entered into the transaction or executed
the Note, this Agreement or any other Loan Documents with the actual intent to
hinder, delay or defraud any creditor and (b) received reasonably
equivalent value in exchange for its obligations under such Loan Documents. Giving
effect to the Loan, the fair


 


28

















 


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


 


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


 


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


 


4.1.10                  Compliance.  To Borrower’s knowledge, Borrower
and the Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes (including, without limitation, number of parking
spaces).  Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any Governmental
Authority.  There has not been committed
by Borrower or, to Borrower’s knowledge, any other Person in occupancy of or
involved with the operation or use of the Property any act or omission
affording the federal government or any other


 


29

















 


Governmental Authority the right of forfeiture as against the Property
or any part thereof or any monies paid in performance of Borrower’s obligations
under any of the Loan Documents.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4.1.21                  Use of Property.  The Property is used exclusively
for office/industrial/manufacturing purposes and other appurtenant and related
uses.


 


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


 


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


 


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


 


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


 


4.1.26                  Leases.  The Property is not subject to
any Leases other than the Anchor Tenant Lease (and subleases permitted under
the Anchor Tenant Lease).  No Person has
any possessory interest in the Property or right to occupy the same except
under and pursuant to the provisions of the Anchor Tenant Lease.  The Anchor Tenant Lease is in full force and
effect and to Borrower’s knowledge after inquiry, there are no defaults
thereunder by either party and there are no conditions that, with the passage
of time or the giving of notice, or both, would constitute defaults
thereunder.  No Rent (including security
deposits) has been paid more than one (1) month in advance of its due
date.  To best of Borrower’s knowledge, all work to be performed by Borrower under the Anchor
Tenant Lease has been performed as required and has been accepted by the Anchor
Tenant, and any payments, free rent, partial rent, rebate of rent or other
payments, credits, allowances or abatements required to be given by Borrower to
the Anchor Tenant have already been received by the Anchor Tenant.  There has been no prior sale, transfer or
assignment, hypothecation or pledge of the Anchor Tenant Lease or of the Rents
received therein which is outstanding. 
To Borrower’s knowledge after inquiry, except as set forth on Schedule IV,
the Anchor Tenant has not assigned the Anchor Tenant Lease or sublet all or any
portion of the premises demised thereby, nor does anyone except the Anchor
Tenant and its employees occupy such leased premises.  Except as set forth on Schedule IV, The
Anchor Tenant does not have a right or option pursuant to the Anchor Tenant
Lease to purchase all or any part of the leased premises or the building of
which the leased premises are a part. 
Except as disclosed in the Environmental Report delivered to Lender in
connection herewith, to Borrower’s actual knowledge, no hazardous wastes or
toxic substances, as defined by applicable federal, state or local statutes, rules and
regulations, have been disposed, stored or treated by Anchor Tenant on or about
the leased premises nor does Borrower have any knowledge of Anchor Tenant’s
intention to use its leased premises for any activity which, directly or
indirectly, involves the use, generation, treatment, storage, disposal or
transportation of any petroleum product or any toxic or hazardous chemical,
material, substance or waste, except in either event, in compliance with
applicable federal, state or local statues, rules and regulations.


 


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


 


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


 


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


 


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


 


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


 


(c)                                  Intentionally omitted.


 


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


 


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


 


4.1.33                  No Change in Facts or Circumstances; Disclosure.  All
information submitted by Borrower to Lender and in all financial statements,
rent rolls, reports, certificates and other documents submitted in connection
with the Loan or in satisfaction of the terms thereof and all statements of
fact made by Borrower in this Agreement or in any other Loan Document, are
accurate, complete and correct in all material respects, provided, however,
that if such information was provided to Borrower by non-affiliated third parties,
Borrower represents that such information is, to the best of its knowledge
after due inquiry, accurate, complete and correct in all material
respects.  There has been no material
adverse change in any condition, fact, circumstance or event that would make
any such information inaccurate, incomplete or


 


33

















 


otherwise misleading in any material respect or that otherwise
materially and adversely affects or might materially and adversely affect the
Property or the business operations or the financial condition of
Borrower.  Borrower has disclosed to
Lender all material facts and has not failed to disclose any material fact that
could cause any representation or warranty made herein to be materially
misleading.


 


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


 


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


 


4.1.36                  Service and Maintenance Contracts.  There are
no service or maintenance contracts binding upon the Property which are not
terminable, without penalty, upon not more than thirty (30) days notice.


 


4.1.37                  Embargoed Person.   As of the Closing Date, to the
best of Borrower’s knowledge, (a) none of the funds or other assets of
Borrower constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person; (b) no Embargoed Person has any
interest of any nature whatsoever in Borrower with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law; and (c) none of the funds of Borrower
have been derived from any unlawful activity with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law. 
Borrower covenants and agrees to deliver to Lender any certification or
other evidence requested from time to time by Lender in its reasonable
discretion, confirming Borrower’s compliance with this Section 5.2.37.


 


4.1.38                  Purchase Contract.  Borrower
has delivered to Lender a true and complete copy of the Purchase Contract,
including all amendments and modifications thereto and there are no agreements
or understandings between the parties thereto except as set forth in such
Purchase Contract.


 


Section 4.2.                                   Survival of Representations.  Borrower
agrees that all of the representations and warranties of Borrower set forth in Section 4.1
and elsewhere in this Agreement and in the other Loan Documents shall survive
for so long as any amount remains


 


34

















 


owing to Lender under this Agreement or any of the other Loan Documents
by Borrower.  All representations,
warranties, covenants and agreements made in this Agreement or in the other
Loan Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.


 


ARTICLE 
V

BORROWER COVENANTS


 


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


 


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


 


35

















 


in connection therewith (provided, however, if Anchor Tenant is
conducting the contest pursuant to the Anchor Tenant Lease, and is not required
under the Anchor Tenant Lease to post any such security, then this clause (vii) shall
not apply).  Lender may apply any such
security, as necessary to cause compliance with such Legal Requirement at any
time when, in the reasonable judgment of Lender, the validity, applicability or
violation of such Legal Requirement is finally established or the Property (or
any part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost.


 


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


 


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5.1.3                        Litigation.  Borrower shall give prompt
written notice to Lender of any litigation or governmental proceedings pending
or threatened against Borrower which might materially adversely affect Borrower’s
condition (financial or otherwise) or business or the Property.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


37

















 


5.1.10                  Intentionally Omitted.


 


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


 


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


 


38

















 


(c)                                  Borrower will furnish, or cause to be furnished,
to Lender on or before forty five (45) days after the end of each calendar
quarter the following items, accompanied by a certificate of the chief
financial officer of Borrower, General Partner or Sole Member, as applicable,
stating that such items are true, correct, accurate, and complete and fairly
present the financial condition and results of the operations of Borrower and
the Property (subject to normal year-end adjustments) as applicable: (i) a
rent roll for the subject month accompanied by an Officer’s Certificate with
respect thereto; (ii) quarterly and year-to-date operating statements
(including Capital Expenditures) prepared for each calendar quarter, noting Net
Operating Income, Gross Income from Operations, and Operating Expenses (not
including any contributions to the Replacement Reserve Fund, and other
information necessary and sufficient to fairly represent the financial position
and results of operation of the Property during such calendar month, and
containing a comparison of budgeted income and expenses and the actual income
and expenses together with a detailed explanation of any variances of five
percent (5%) or more between budgeted and actual amounts for such periods, all
in form satisfactory to Lender; (iii) a calculation reflecting the annual
Debt Service Coverage Ratio for the immediately preceding twelve (12) month period
as of the last day of such month accompanied by an Officer’s Certificate with
respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash
Flow for the Borrower may be unaudited if it is certified by an officer of the
Borrower).  In addition, such certificate
shall also be accompanied by a certificate of the chief financial officer of
Borrower, General Partner or Sole Member stating that the representations and
warranties of Borrower set forth in Section 4.1.30(a) are true and
correct as of the date of such certificate.


 


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


 


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


 


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


 


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


 


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


 


39

















 


thereto, in electronic form and prepared using a Microsoft Word for
Windows or WordPerfect for Windows files (which files may be prepared using a
spreadsheet program and saved as word processing files).


 


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


 


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


 


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


 


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


 


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


 


40

















 


calendar year or with respect to the Anchor Tenant only, the maximum
frequency set forth in the Anchor Tenant Lease, whichever is less frequent.


 


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


 


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


 


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


 


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


 


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


 


5.1.20                  Leasing Matters.  Any Leases with respect to the
Property written after the Closing Date for more than the Relevant Leasing
Threshold square footage shall be subject to the prior written approval of
Lender, which approval may be given or withheld in the sole discretion of
Lender.  Lender shall approve or
disapprove any such Lease, other than a Lease for all or substantially all of
the Property which shall not be subject to such ten business-day period, within
ten (10) Business Days of Lender’s receipt of a final execution draft of
such Lease (including all exhibits, schedules, supplements, addenda or other
agreements relating thereto) and a written notice from Borrower requesting
Lender’s approval to such Lease, and such Lease shall be deemed approved, if
Lender does not disapprove such Lease within said ten (10) Business Day
period provided such written notice
conspicuously states, in large bold type, that “PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THE LEASE SHALL
BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10) BUSINESS
DAYS OF LENDER’S RECEIPT OF SUCH LEASE AND WRITTEN NOTICE”.  Borrower shall furnish Lender with executed
copies of all Leases.  All renewals of
Leases and all proposed Leases shall provide for rental rates comparable to
existing


 


41

















 


local market rates (unless such rental rates are otherwise set forth in
the Leases executed prior to the Closing Date). 
All proposed Leases shall be on commercially reasonable terms and shall
not contain any terms which would materially affect Lender’s rights under the
Loan Documents.  All Leases executed
after the Closing Date shall provide that they are subordinate to the Mortgage
encumbering the Property and that the tenant thereunder agrees to attorn to
Lender or any purchaser at a sale by foreclosure or power of sale.  Borrower (i) shall observe and perform
the obligations imposed upon the lessor under the Leases in a commercially
reasonable manner; (ii) shall enforce the terms, covenants and conditions
contained in the Leases upon the part of the tenant thereunder to be observed
or performed in a commercially reasonable manner and in a manner not to impair
the value of the Property involved except that no termination by Borrower or
acceptance of surrender by a tenant of any Lease shall be permitted unless by
reason of a tenant default and then only in a commercially reasonable manner to
preserve and protect the Property provided, however, that no such
termination or surrender of any Lease covering more than the Relevant Leasing
Threshold will be permitted without the written consent of Lender which consent
may be withheld in the sole discretion of Lender; (iii) shall not collect
any of the rents more than one (1) month in advance (other than security
deposits); (iv) shall not execute any other assignment of lessor’s
interest in the Leases or the Rents (except as contemplated by the Loan
Documents); (v) shall not alter, modify or change the terms of the Leases
in a manner inconsistent with the provisions of the Loan Documents without the
prior written consent of Lender, which consent may be withheld in the sole
discretion of Lender; and (vi) shall execute and deliver at the request of
Lender all such further assurances, confirmations and assignment in connection
with the Leases as Lender shall from time to time reasonably require.  Notwithstanding the foregoing, Borrower may,
without the prior written consent of Lender, terminate any Lease which demises
less than the Relevant Leasing Threshold under any of the following
circumstances: (i) the tenant under said Lease is in default beyond any
applicable grace and cure period, and Borrower has the right to terminate such
Lease; (ii) such termination is permitted by the terms of the Lease in
question and Borrower has secured an obligation from a third party to lease the
space under the Lease to be terminated at a rental equal to or higher than the
rental due under the Lease to be terminated; and (iii) if the tenant under
the Lease to be terminated, has executed a right under said Lease to terminate
its lease upon payment of a termination fee to Borrower, and has in fact
terminated its lease and paid said fee, Borrower may accept said
termination.  In addition, the
requirements set forth in this Section 5.1.20 shall not apply to any
sublease by Anchor Tenant pursuant to the relevant provisions of the Anchor
Tenant Lease.


 


5.1.21                  Alterations.  Subject to the rights of tenants
to make alterations pursuant to the terms of their respective Leases, Borrower
shall obtain Lender’s prior written consent to any alterations to any
Improvements, which consent shall not be unreasonably withheld or delayed
except with respect to alterations that may have a material adverse effect on
Borrower’s financial condition, the value of the Property or the Net Operating
Income.  Notwithstanding the foregoing,
Lender’s consent shall not be required in connection with any alterations that
will not have a material adverse effect on Borrower’s financial condition, the
value of the Property or the Net Operating Income, provided that such
alterations are made in connection with (a) tenant improvement work
performed pursuant to the terms of any Lease executed on or before the Closing
Date, (b) tenant improvement work performed pursuant to the terms and
provisions of a Lease and not adversely affecting any structural component of
any Improvements, any utility or HVAC system contained in any Improvements or
the exterior of any building constituting a part


 


42

















 


of any Improvements, (c) alterations performed in connection with
the restoration of the Property after the occurrence of a casualty in accordance
with the terms and provisions of this Agreement or (d) any structural
alteration which costs less than $50,000.00 in the aggregate for all components
thereof which constitute such alteration or any non-structural alteration which
costs less than $100,000.00 in the aggregate for all components thereof which
constitute such alteration.  If the total
unpaid amounts due and payable with respect to alterations to the Improvements
at the Property (other than such amounts to be paid or reimbursed by tenants
under the Leases) shall at any time equal or exceed $350,000.00 (the “Threshold Amount”), Borrower, upon
Lender’s request, shall promptly deliver to Lender as security for the payment
of such amounts and as additional security for Borrower’s obligations under the
Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other
securities having a rating acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization, or (D) a
completion bond or letter of credit issued by a financial institution having a
rating by Standard & Poor’s Ratings Group of not less than A-1+ if the
term of such bond or letter of credit is no longer than three (3) months
or, if such term is in excess of three (3) months, issued by a financial
institution having a rating that is acceptable to Lender and that the
applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade, withdrawal or qualification of the initial, or,
if higher, then current ratings assigned in connection with any
Securitization.  Such security shall be
in an amount equal to the excess of the total unpaid amounts with respect to
alterations to the Improvements on the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) over the Threshold Amount and,
if cash, may be applied from time to time, at the option of Borrower, to pay
for such alterations.  At the option of
Lender, following the occurrence and during the continuance of an Event of
Default, Lender may terminate any of the alterations and use the deposit to
restore the Property to the extent necessary to prevent any material adverse
effect on the value of the Property.


 


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


 


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


 


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


 


43

















 


(i)                                     Permitted Encumbrances;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


44

















 


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


 


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


 


5.2.11                  Intentionally Omitted.


 


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


 


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


 


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


 


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


 


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


 


5.2.13                  Transfers.  Unless such action is permitted
by the provisions of this Section 5.2.13,
Borrower agrees that it will not (i) sell, assign, convey, transfer or
otherwise dispose of its interests in the Property or any part thereof, (ii) permit
any owner, directly or indirectly, of an ownership interest in the Property, to
transfer such interest, whether by transfer of stock or other interest in
Borrower or any entity, or otherwise, (iii) incur Indebtedness (other than
the Indebtedness permitted pursuant to the terms of this Agreement), (iv) mortgage,
hypothecate or otherwise encumber or grant a security interest in the Property
or any part thereof, (v) sell, assign, convey, transfer, mortgage,
encumber, grant a security interest in, or otherwise dispose of any direct or
indirect ownership interest in Borrower, or permit any owner of an interest in
Borrower to do the same, or (vi) file a declaration of condominium with
respect to the Property (any of the foregoing transactions, a “Transfer”).  For purposes hereof, a “Transfer” shall not
include (A) any issuance, sale or transfer of interests in Sole Member or
any successor entity resulting from any merger permitted hereunder, (B) a
transfer by devise or


 


45

















 


descent or by operation of law upon the death of a member or partner of
Borrower, or (C) the merger of the Sole Member with any of the following
entities:  Inland American Real Estate
Trust, Inc., Inland Retail Real Estate Trust, Inc., a Maryland
corporation, Inland Real Estate Corporation, a Maryland corporation, Inland
Real Estate Investment Corporation, a Delaware corporation, Inland Western
Retail Real Estate Trust, Inc., a Maryland corporation, any other real estate
investment trust sponsored by Inland Real Estate Investment Corporation, or any
other entity composed entirely of any of the foregoing by merger; provided,
however, Lender shall receive not less than thirty (30) days prior written
notice of such proposed transfer and, in connection with a merger hereinabove
described, the net worth of the entity surviving the merger shall not be less
than the net worth of the Sole Member immediately prior to such merger and the
entity surviving the merger shall be publicly traded.


 


(a)                                  On and after the Closing Date, Lender shall not
withhold its consent to a Transfer of the Property as part of a single
transaction, provided that the following conditions are satisfied:


 


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


 


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


 


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


 


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


 


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


 


(6)                                       Borrower
shall have paid (A) an assumption fee equal to one percent (1.0%) of the
then outstanding principal balance of the Loan, and (B) the reasonable and
customary third-party expenses (including reasonable attorneys’ fees and
disbursements) actually incurred by Lender in connection with such Transfer; provided,
however,


 


46

















 


(A)                              no
assumption fee shall be required for a Transfer of the Property to a Transferee
acceptable to Lender in connection with a joint venture between Sole Member and
an entity acceptable to Lender, provided Sole Member or an Affiliate
wholly-owned (directly or indirectly) by Sole Member owns at least ten percent
(10%) of the ownership interests in such Transferee and for which Sole Member
or an Affiliate wholly owned (directly or indirectly) by Sole Member, is the
managing entity and otherwise maintains operational and managerial control of
such Transferee, and Minto Builders (Florida), Inc. remains as Indemnitor,
provided that, Borrower shall pay all of Lender’s reasonable and customary
third-party expenses (including reasonable attorneys’ fees and disbursements)
actually incurred by Lender in connection with such Transfer and a processing
fee of $5,000.


 


(B)                                for
a Transfer as described in clause (6)(a) immediately above, except solely
that such Transfer results in Sole Member or an Affiliate wholly-owned
(directly or indirectly) by Sole Member, owning less than ten (10%) percent and
not less than one (1%) percent of ownership interests in such Transferee, the
assumption fee payable shall be $15,000.00;


 


(7)                                       the
proposed Transfer is not requested during, and shall not occur during, a
Transfer Restriction Period.


 


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


 


(b)                                 On and after the Closing Date, and provided the
proposed Transfer is not requested during, and shall not occur during, a
Transfer Restriction Period, Lender shall not withhold its consent to, and
shall not charge an assumption fee in connection with, (1) a Transfer of
up to, in the aggregate, forty-nine percent (49%) of the direct or indirect
ownership interests in Borrower, or (2) a Transfer of greater than
forty-nine percent (49%) of the direct or indirect ownership interest in
Borrower, provided that (A) such transfer is to a Qualified Entity
(as defined below), and (B) Borrower shall pay all of Lender’s reasonable
and customary third-party expenses (including reasonable attorneys’ fees and
disbursements) actually incurred by Lender in connection with such Transfer and
a processing fee of $5,000.  For purposes
of this Agreement, a “Qualified Entity”
shall mean an entity (x) with a net worth of $200,000,000 or more, (y) with


 


47

















 


sufficient experience (determined by Lender in its reasonable
discretion) in the ownership and management of properties similar to the
Property, and (z) which owns or manages office/industrial/manufacturing
properties containing at least 1,000,000 square feet of gross leasable
area.  If required or requested by any of
the Rating Agencies, Borrower shall deliver a substantive non-consolidation
opinion with respect to any party not now owning more than 49% of the ownership
interests in Borrower acquiring more than 49% of the ownership interests in
Borrower.


 


(c)                                  Notwithstanding anything in this Section 5.2.13 to the
contrary, on and after the Closing Date, and provided the proposed Transfer is
not requested during, and shall not occur during, a Transfer Restriction
Period, Borrower shall be permitted to Transfer the entire Property in a single
transaction to one newly-formed Special Purpose Entity which shall be a wholly-owned
subsidiary of Sole Member (“Permitted Affiliate
Transferee”) which shall be approved by Lender in its reasonable
discretion (“Permitted Affiliate Transfer”),
provided (1) no Event of Default shall have occurred and be continuing, (2) the
creditworthiness of Sole Member, as applicable, has not deteriorated, in the
sole discretion of Lender, from the Closing Date to the date of the proposed
Transfer, and (3) Borrower shall have paid all reasonable and customary
third party expenses (including reasonable attorneys’ fees and disbursements)
actually incurred by Lender in connection with such Transfer (but not any
assumption or processing fee).


 


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


 


Section 5.3.                                   Cash Management.   (a) At the Closing,
Borrower shall execute and deliver to Lender, and thereafter, as herein
provided, following the execution and delivery of any other Lease with any
other replacement tenant(s) which may hereafter occupy all or any portion of
the premises demised to Anchor Tenant as of the date hereof, a letter (“Tenant
Direction Letter”) instructing such tenant to pay Rent directly to Lender’s
servicer (or as Lender may otherwise direct from time to time).  A form of such Tenant Direction Letter is
attached hereto as Schedule I; Borrower shall, at any time and from time
to time as requested by Lender, execute and deliver to Lender a new Tenant
Direction Letter in order to reflect changes to Lender’s servicing agent and/or
the Lockbox Account set forth in the form. 
Lender shall hold the Tenant Direction Letter(s) so delivered until such
time as a Restrictive Condition occurs, in


 


48

















 


which event Lender may, in Lender’s sole and absolute discretion,
deliver any such Tenant Direction Letters. 
Borrower covenants and agrees to execute and deliver to Lender a Tenant
Direction Letter for each new tenant at the Property within thirty (30) days
after the execution of the lease with such new tenant.  Without the prior written consent of Lender,
which Lender may give or withhold in its sole discretion, Borrower shall not
terminate, amend, revoke or modify any Tenant Direction Letter in any manner
whatsoever, nor shall Borrower permit or consent to, directly or by
acquiescence, any failure or refusal of Anchor Tenant or any Replacement Tenant
to pay Rent as provided pursuant to the Tenant Direction Letter (or as Lender
may otherwise direct in writing from time to time).  Any Rents which may be received by Borrower
from Anchor Tenant, any Replacement Tenant or otherwise from the Property on or
after the occurrence of any Restrictive Condition, whether or not any such Tenant
Direction Letter shall have been delivered to any tenant of the Property, shall
be deemed to be collateral held in trust for the benefit of Lender, shall not
be commingled with any other funds or property of Borrower, and shall be
delivered by Borrower to Lender within one (1) Business Days following
receipt thereof.


 


(b)                                 Following the occurrence of a Restrictive
Condition, Rents shall be deposited into an escrow account (the “Lockbox
Account”) established by Lender and under Lender’s sole dominion and control
for such purpose.  The Lockbox Account
shall be interest-bearing and will, at Lender’s option and in Lender’s sole
discretion, be an Eligible Account at an Eligible Institution.  Interest, if any, accrued on the funds in the
Lockbox Account shall remain in and constitute part of the Lockbox Account
funds and shall be disbursed as provided for herein.  Borrower shall have no right of withdrawal or
direction with respect to the Lockbox Account and Lender shall have the sole
right to withdraw and/or direct the disbursement of funds from such Lockbox
Account.  On each Payment Date following
the occurrence of a Restrictive Condition, funds in the Lockbox Account shall
be applied by Lender to pay debt services, taxes, insurance premiums and any
required reserve amounts, if any, hereunder in such order and amount as Lender
shall deem appropriate in Lender’s sole discretion provided, however, that
notwithstanding the foregoing to the contrary, provided no event of default has
occurred under the Anchor Tenant Lease which remains uncured, Lender will, if
any only to the extent funds then in the Lockbox Account are sufficient
therefore, first pay the Taxes and Insurance then due and payable, if any.  Any funds remaining in the Lockbox Account
following payment of any of the foregoing shall be distributed to Borrower only
to the extent of operating expenses for the Property approved by Lender, in
Lender’s sole discretion, and after payment of such operating expenses, if any,
Lender and/or Lender’s servicing agent shall have no obligation to remit all or
any portion of any Excess Rent Proceeds remaining in the Lockbox Account to
Borrower and Lender may, at its sole election and in its sole discretion,
retain such Excess Rent Proceeds as security for Borrower’s payment and
performance of its obligations under the Loan Documents.


 


(c)                                  Upon the earlier to occur of repayment in full of
the Loan in accordance with the terms hereof and a Cash Management Termination
Event, the balance of funds, if any, on deposit with Lender and/or Lender’s
servicer pursuant to this provision shall be distributed to Borrower.


 


(d)                                 Borrower shall be responsible for all costs
associated with the cash management arrangements, including Lender’s cost and
expense, if any, for any accounts therefore.


 


49

















 


(e)                                  The insufficiency of funds, if any, delivered to
or deposited with Lender or Lender’s servicer pursuant to these provisions
shall not relieve Borrower, in whole or in part, of any of its obligations
pursuant to this Loan Agreement or the other Loan Documents, including without
limitation, the obligation to make payments as and when due and payable
pursuant to the Loan Documents.


 


(f)                                    For purposes of this Section 5.3, the
following terms shall have the meanings set forth below:


 


(1)                                       “Commitment”
shall mean and refer to a fully executed written commitment for the refinancing
of the entire outstanding principal balance of the Loan, together with all
accrued interest thereon, from an institutional lender.


 


(2)                                       “Excess
Rent Proceeds” shall mean, as of any date of determination thereof, the excess,
if any, of (A) Rent received by Lender or its servicer for such month,
over (B) all amounts due and payable by Borrower hereunder and under the
other Loan Documents, including without limitation, the monthly payment of
interest and any monthly deposits to reserves required hereunder or under the
other Loan Documents, if any.  Excess
Rent Proceeds shall be determined by Lender or its servicer as of each Payment
Date.


 


(3)                                       “Restrictive
Condition” shall mean and refer to the occurrence of any of the following:  (A) an Event of Default hereunder or
under any of the other Loan Documents, (B) Borrower (i) fails to
provide Lender with a Commitment on or prior to the Refinance Notification
Date, or (ii) provides Lender with a Commitment on or prior to the
Refinance Notification Date and the Void Commitment Date occurs, but in all
events if not then in effect, a Restrictive Condition shall commence on the
Maturity Anticipated Repayment Date .


 


(4)                                       “Refinance
Notification Date” shall mean three (3) months prior to the Maturity
Anticipated Repayment Date.


 


(5)                                       “Void
Commitment Date” shall mean the date, if any, upon which the Commitment lapses,
terminates or is otherwise withdrawn.


 


(6)                                       “Cash
Management Termination Event” shall mean that Lender has accepted in writing
Borrower’s cure of the Event of Default which was the basis for the occurrence
of the Restrictive Condition (it being understood that this provision does not,
and is not intended to, create or impose any obligation on Lender’s part to
accept such cure), and there shall not then exist any other Event of Default,
provided, however, that under no circumstances shall there be more than two (2) Cash
Management Termination Events during the term of the Loan.


 


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ARTICLE 
VI

INSURANCE; CASUALTY; CONDEMNATION


 


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


 


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


 


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


 


(iii)                               business income insurance (A) with loss payable to Lender; (B) covering
all risks required to be covered by the insurance provided for in subsection (i) above;
(C) covering rental losses or business interruption, as may be applicable,
for a period of at least twelve (12) months after the date of the casualty [and
containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will


 


51

















 


be insured
until such income either returns to the same level it was at prior to the loss,
or the expiration of six (6) months from the date that the Property is
repaired or replaced and operations are resumed, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such period; and
(D) in an annual amount equal to (100%) of the rents or estimated gross
revenues from the operation of the Property (as reduced to reflect expenses not
incurred during a period of Restoration). 
The amount of such business income insurance shall be determined prior
to the date hereof and at least once each year thereafter based on Borrower’s
reasonable estimate of the gross income from the Property for the succeeding
twelve (12) month period.  All proceeds
payable to Lender pursuant to this subsection shall be held by Lender and
shall be applied to the obligations secured by the Loan Documents from time to
time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;


 


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


 


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


 


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


 


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


 


(viii)                        if any of the policies of insurance covering the risks required to be
covered under subsections (i) through (vii) above contains an
exclusion from coverage for acts of terrorism, Borrower shall obtain and
maintain a separate policy providing such coverages in the event of any act of
terrorism, provided such coverage is commercially available for properties
similar to the Property and located in or around the region in which the
Property is located. Notwithstanding the
foregoing, Borrower shall not be required to obtain such a policy, provided (I)
Borrower confirms to Lender, in writing, that it shall protect and hold Lender
harmless from any losses associated with such risks by, among other things,
either (A) depositing with Lender sums sufficient to pay for all uninsured
costs related to a Restoration of the Property following any act of terrorism
(which sum


 


52

















 


shall be treated as a Net Proceeds Deficiency), or (B) provided
such act of terrorism occurs on or after the Permitted Prepayment Date,
prepaying the Loan in accordance with the terms hereof; (II) Sole Member (“Terrorism Insurance Guarantor”)
executes a guaranty, in form and substance satisfactory to Lender, guaranteeing
in the event of any act of terrorism, payment to Lender of any sums that
Borrower is obligated to pay to Lender under clause (I) above (which shall be
applied in accordance with Section 6.4 hereof) and (III) Terrorism
Insurance Guarantor maintains a net worth of at least $300,000,000 (as
determined by such entity’s most recent audited financial statements), such
entity maintains a direct or indirect ownership interest in Borrower, and the
aggregate loan-to-value ratio (as determined by Lender) (“LTV”) for all
properties on which such entity has a direct or indirect ownership interest
shall not exceed 60%, however, Terrorism Insurance Guarantor may exceed the 60%
LTV for a period not to exceed six (6) months out of any twelve (12) month
period either 1) during the time period when Terrorism Insurance Guarantor is
offering securities to the public, or 2) when in the business judgement of
Terrorism Insurance Guarantor, exceeding an LTV of 60% is necessary given
existing circumstances of the credit environment, but in no event shall the LTV
exceed 65% if Terrorism Insurance Guarantor maintains a net worth greater than
or equal to $300,000,000, but less than $400,000,000, or 70% if Terrorism
Insurance Guarantor maintains a net worth of at least $400,000,000


 


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


 


(b)                                 All insurance provided for in Section 6.1(a) shall
be obtained under valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to
the approval of Lender as to insurance companies, amounts, deductibles, loss
payees and insureds.  The Policies shall
be issued by financially sound and responsible insurance companies authorized
to do business in the State and having a rating of “A:X” or better in the
current Best’s Insurance Reports and a claims paying ability rating of “AA” or
better by at least two (2) of the Rating Agencies including, (i) Standard &
Poor’s Ratings Group, and (ii) Moody’s Investors Services, Inc. if
Moody’s Investors Service, Inc. is rating the Securities.  The Policies described in Section 6.1
(other than those strictly limited to liability protection) shall designate
Lender as loss payee.  Not less than
thirty (30) days prior to the expiration dates of the Policies theretofore
furnished to Lender, certificates of insurance evidencing the Policies
accompanied by evidence satisfactory to Lender of payment of the premiums due
thereunder (the “Insurance Premiums”),
shall be delivered by Borrower to Lender.


 


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


 


(d)                                 All Policies of insurance provided for or
contemplated by Section 6.1(a), except for the Policy referenced in Section 6.1(a)(v),
shall name Borrower, or the Tenant, as the insured and Lender as the additional
insured, as its interests may appear, and in the case of


 


53

















 


property damage, boiler and machinery, flood and earthquake insurance,
shall contain a so-called New York standard non-contributing mortgagee clause
in favor of Lender providing that the loss thereunder shall be payable to
Lender.


 


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


 


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


 


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


 


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


 


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


 


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


 


(g)                                 Notwithstanding anything herein to the contrary,
provided no default shall exist under the Anchor Tenant Lease, and further
provided that Anchor Tenant shall maintain a credit rating issued by Standard
and Poor’s of BB or better (or an equivalent rating issued by another
nationally recognized rating agency reasonably acceptable to Lender), Anchor
Tenant shall be permitted to self-insure with respect to the coverage required
hereunder in strict accordance with the Anchor Tenant Lease, and such
self-insurance shall be deemed to satisfy the requirements of this Section 6.1.


 


54

















 


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


 


Section 6.3.                                   Condemnation.


 


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


 


(b)                                 Notwithstanding the foregoing, with respect to the
Property, provided the Anchor Tenant Lease continues to be in full force and
effect, Anchor Tenant remains the Tenant under the Anchor Tenant Lease, and no
default shall then exist under the Anchor Tenant Lease, in the event of a
conflict between the terms set forth in subsection 6.3(a) and the
terms of the Anchor Tenant Lease, the Anchor Tenant Lease shall govern and
control.


 


Section 6.4.                                   Restoration.  The following provisions shall
apply in connection with the Restoration of the Property:


 


55

















 


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


 


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


 


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


 


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


 


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


 


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


 


56

















 


the event the
Net Proceeds are Condemnation Proceeds, a percentage amount equal to fifty
percent (50%);


 


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


 


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


 


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


 


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


 


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


 


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


 


(J)                                   the
Debt Service Coverage Ratio, after giving effect to the Restoration, shall be
equal to or greater than 2.20:1.0;


 


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


 


57

















 


owned and
operated by nationally recognized owners and operators of office/industrial/manufacturing
properties located in the areas in which the Property is located; and


 


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


 


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


 


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


 


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


 


58

















 


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


 


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


 


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


 


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


 


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


 


59

















 


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


 


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


 


(e)                                  Lender shall with reasonable promptness following
any Casualty or Condemnation notify Borrower whether or not Net Proceeds are
required to be made available to Borrower for restoration pursuant to this Section 6.4.
All Net Proceeds not required to be made available for Restoration shall be
retained and applied by Lender in accordance with Section 2.3.2(a) hereof
(a “Net Proceeds Prepayment”). If such
Net Proceeds Prepayment shall be equal to or greater than FOUR MILLION
NINE HUNDRED TWENTY THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($4,920,600.00);Borrower
shall have the right to elect to prepay the remaining outstanding principal
balance of the Note (a “Casualty/Condemnation
Prepayment”) in accordance with Section 2.3.2(b) hereof
upon satisfaction of the following conditions: 
(i) within thirty (30) days following the date of the Net Proceeds
Prepayment, Borrower shall provide Lender with written notice of Borrower’s
intention to pay the Note in full, (ii) Borrower shall prepay the Note in
accordance with Section 2.3.2(b) hereof on or before the second
Payment Date occurring following the date of the Net Proceeds Prepayment, and (iii) no
Event of Default shall exist on the date of such Casualty/Condemnation
Prepayment. Notwithstanding anything in Section 6.2 or Section 6.3 to
the contrary, Borrower shall have no obligation to commence Restoration of the
Property upon delivery of the written notice set forth in clause (i) of
the preceding sentence (unless Borrower subsequently shall fail to satisfy the
requirement of clause (ii) of the preceding sentence).


 


(f)                                    Notwithstanding the foregoing, provided the Anchor
Tenant Lease continues to be in full force and effect, Anchor Tenant remains
the Anchor Tenant under the Anchor Tenant Lease, and no default shall then
exist under the Anchor Tenant Lease, the Anchor Tenant Lease shall govern and
control in the event of a conflict between the provisions of this Section 6.4
and the Anchor Tenant Lease regarding Restoration of the Property.


 


ARTICLE  VII

RESERVE FUNDS


 


Section 7.1.                                   Required Repair Funds.


 


7.1.1                        Deposits. Borrower shall perform the repairs at the Property, if any, as more
particularly set forth on Schedule III hereto (such repairs
hereinafter referred to as “Required
Repairs”) within nine (9) months from the Closing Date, or
such earlier time as specified on Schedule III. If Borrower has not
delivered to Lender evidence reasonably satisfactory to Lender that it has
completed all Required Repairs on or before the date that is six


 


60

















 


(6) months from the Closing Date, or such earlier time as
specified on Schedule III, Borrower shall deposit with Lender the
amount for the Property set forth on such Schedule III hereto, if
any (less the amount allocated to the performance of Required Repairs for which
evidence of completion has been delivered to Lender), to perform the
Required Repairs for the Property. Amounts so deposited with Lender, if any,
shall be held by Lender in an interest bearing account. Amounts so deposited,
if any, shall hereinafter be referred to as Borrower’s “Required Repair Fund” and the account,
if any, in which such amounts are held shall hereinafter be referred to as
Borrower’s “Required Repair Account”.
It shall be an Event of Default under this Agreement if Borrower does not
either (i) does not deposit with Lender the Required Repair Fund as set
forth above, or (ii) complete the Required Repairs at the Property within
nine (9) months from the Closing Date. Upon the occurrence of such an
Event of Default, Lender, at its option, may withdraw all Required Repair
Funds from the Required Repair Account and Lender may apply such funds
either to completion of the Required Repairs at the Property or toward payment
of the Debt in such order, proportion and priority as Lender may determine
in its sole discretion. Lender’s right to withdraw and apply Required Repair
Funds shall be in addition to all other rights and remedies provided to Lender
under this Agreement and the other Loan Documents.


 


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


 


Section 7.2.                                   Tax and Insurance Escrow Fund. Borrower shall pay to Lender on each Payment
Date (a) one-twelfth of the Taxes that Lender estimates will be payable
during the next ensuing twelve (12) months in order to accumulate with Lender
sufficient funds to pay all such Taxes at least thirty (30) days prior to their
respective due dates and (b) one-twelfth of the 


 


61

















 


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


 


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


 


Section 7.3.                                   Replacements and Replacement Reserve.


 


7.3.1                        Replacement Reserve Fund. Borrower shall pay to Lender on the Closing Date
and on each Payment Date one twelfth of the amount (the “Replacement Reserve Monthly Deposit”)
reasonably estimated by Lender in its sole discretion to be due for
replacements and


 


62

















 


repairs required to be made to the Property during the calendar year
(collectively, the “Replacements”),
which Replacement Reserve Monthly Deposit shall be in an amount equal to no
less than $0.15 per year per square foot of gross leasable area. Amounts so
deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund” and the
account in which such amounts are held shall hereinafter be referred to as
Borrower’s “Replacement Reserve Account”.
Lender may reassess its estimate of the amount necessary for the
Replacement Reserve Fund from time to time, and may increase the monthly
amounts required to be deposited into the Replacement Reserve Fund upon thirty
(30) days notice to Borrower if Lender determines in its reasonable discretion
that an increase is necessary to maintain the proper maintenance and operation
of the Property. Any amount held in the Replacement Reserve Account and
allocated for the Property shall be retained by Lender in an interest bearing
account, or, at the option of Lender, in an Eligible Account at an Eligible
Institution; provided, however, that, any interest earned on said
account shall accrue in said account for the benefit of Borrower, but shall
remain in and constitute part of the Replacement Reserve Fund, and shall
be disbursed in accordance with the terms hereof.


 


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


 


7.3.2                        Disbursements from Replacement Reserve Account.


 


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


 


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


 


(c)                                  Each request for disbursement from the Replacement
Reserve Account shall be in a form specified or approved by Lender and
shall specify (i) the specific Replacements for which the disbursement is
requested, (ii) the quantity and price of each item


 


63

















 


purchased, if the Replacement includes the purchase or replacement of
specific items, (iii) the price of all materials (grouped by type or
category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other
services applicable to each Replacement for which such request for disbursement
is made. With each request Borrower shall certify that all Replacements have
been made in accordance with all applicable Legal Requirements of any
Governmental Authority having jurisdiction over the Property to which the
Replacements are being provided and, unless Lender has agreed to issue joint
checks as described below, each request shall include evidence of payment of
all such amounts. Each request for disbursement shall include copies of
invoices for all items or materials purchased and all contracted labor or
services provided. Except as provided in Section 7.3.2(e), each request
for disbursement from the Replacement Reserve Account shall be made only after
completion of the Replacement for which disbursement is requested. Borrower
shall provide Lender evidence of completion satisfactory to Lender in its
reasonable judgment.


 


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


 


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


 


(f)                                    Borrower shall not make a request for disbursement
from the Replacement Reserve Account more frequently than once in any calendar
month and (except in connection


 


64

















 


with the final disbursement) the total cost of all Replacements in any
request shall not be less than $5,000.00.


 


7.3.3                        Performance of Replacements.


 


(a)                                  Borrower shall make Replacements when required in
order to keep the Property in condition and repair consistent with other first
class, full service office/industrial/manufacturing properties in the same
market segment in the metropolitan area in which the Property is located, and
to keep the Property or any portion thereof from deteriorating. Borrower shall
complete all Replacements in a good and workmanlike manner as soon as
practicable following the commencement of making each such Replacement.


 


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


 


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


 


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


 


65

















 


rehabilitation and repair of the Property; and (vii) to do any and
every act which Borrower might do in its own behalf to fulfill the terms of
this Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7.3.6                        INDEMNIFICATION. BORROWER SHALL INDEMNIFY LENDER
AND HOLD LENDER HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS,
DEMANDS, LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES
(INCLUDING LITIGATION COSTS AND REASONABLE ATTORNEYS FEES AND EXPENSES) ARISING
FROM OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OF THE REPLACEMENTS UNLESS
THE SAME ARE SOLELY DUE TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LENDER. BORROWER
SHALL ASSIGN TO LENDER ALL RIGHTS AND CLAIMS BORROWER MAY HAVE AGAINST ALL
PERSONS OR ENTITIES SUPPLYING LABOR OR MATERIALS IN CONNECTION WITH THE
REPLACEMENTS; PROVIDED, HOWEVER, THAT LENDER MAY NOT PURSUE
ANY SUCH RIGHT OR CLAIM UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND REMAINS
UNCURED.


 


Section 7.4.                                   Intentionally Omitted.


 


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Section 7.5.                                   Intentionally Omitted.


 


Section 7.6.                                   Intentionally Omitted.


 


Section 7.7.                                   Reserve Funds, Generally.


 


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


 


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


 


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


 


7.7.4                        Intentionally omitted.


 


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


 


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


 


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


 


ARTICLE 
VIII

DEFAULTS


 


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


 


(i)                                     if any portion of the Debt is not paid on the
applicable due date;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(xii)                             if Borrower shall continue to be in Default under any of the other terms,
covenants or conditions of this Agreement not specified in subsections (i) to
(xi) above, for ten (10) days after notice to Borrower from Lender, in the
case of any Default which


 


69

















 


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


 


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


 


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


 


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


 


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(b)                                 Lender shall have the right from time to time to
partially foreclose the Mortgage in any manner permitted by applicable law and
for any amounts secured by the Mortgage then due and payable as determined by
Lender in its sole discretion including, without limitation, the following
circumstances: (i) in the event Borrower defaults beyond any applicable
grace period in the payment of one or more scheduled payments of principal and
interest, Lender may foreclose the Mortgage to recover such delinquent
payments, or (ii) in the event Lender elects to accelerate less than the
entire outstanding principal balance of the Loan, Lender may foreclose the
Mortgage to recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Mortgage as Lender may elect. Notwithstanding
one or more partial foreclosures, the Property shall remain subject to the
Mortgage to secure payment of sums secured by the Mortgage and not previously
recovered.


 


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


 


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


 


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


 


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ARTICLE  IX

SPECIAL PROVISIONS


 


Section 9.1.                                   Sale of Notes and Securitization. At the request of the holder of the Note and, to
the extent not already required to be provided by Borrower under this
Agreement, Borrower shall cooperate with Lender to allow Lender to satisfy the
market standards to which the holder of the Note customarily adheres or which may be
reasonably required in the marketplace or by the Rating Agencies in connection
with the sale of the Note or participations therein or the first successful
securitization (such sale and/or securitization, the “Securitization”) of rated single or multi-class securities
(the “Securities”) secured by or
evidencing ownership interests in the Note and the Mortgage. In this regard
Borrower shall:


 


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


 


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


 


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


 


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


 


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


 


Section 9.2.                                   Securitization. Borrower understands that certain of the Provided Information may be
included in disclosure documents in connection with the Securitization,
including, without limitation, a prospectus, prospectus supplement or private
placement memorandum (each, a “Disclosure
Document”) and may also be included in filings with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the


 


72

















 


“Securities Act”), or the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made
available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization. In the event
that the Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower will cooperate with the holder of the Note in updating the
Disclosure Document by providing all current information necessary to keep the
Disclosure Document accurate and complete in all material respects.


 


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


 


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


 


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


 


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


 


(iii)                               material physical waste of the Property;


 


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


 


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


 


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


 


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


 


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


 


Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) the Debt shall be fully recourse to the Borrower and (B) Lender
shall not be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to
file a claim for the full amount of the Debt secured by the Mortgage or to
require that all collateral shall continue to secure all of the Debt owing to
Lender in accordance with the Loan Documents in the event that the (I) first
full monthly payment under the Note is not paid within five (5) days of
notice that such payment is late (provided, however, that such grace period
relates only to the recourse trigger described in this paragraph), or (II)
failure of Borrower to permit on-site inspections of the Property subject to
the rights of Tenants and any applicable cure period set forth in the Loan
Documents, to provide financial information as required under the Loan
Documents subject to any applicable cure period (except for financial
information required to be delivered by a tenant pursuant to the applicable Lease
that has not been delivered to Borrower, provided Borrower has requested such
financial information from such tenant), or (III) failure of Borrower to comply
with Section 4.1.30 hereof, or (IV) failure of Borrower to obtain Lender’s
prior written consent (to extent such consent is required) to any subordinate
financing or other voluntary lien encumbering the Property, or (V) failure of
Borrower to obtain Lender’s prior written consent to any assignment, transfer
or conveyance of the Property, or any portion thereof, or any interest therein
as required by this Agreement. Notwithstanding the provision set forth in
clause (IV) of this paragraph, a voluntary lien other than a lien
securing an extension of credit filed against the Property shall not constitute
a recourse trigger for purposes of this paragraph provided such lien (A) is
fully bonded to the satisfaction of Lender and discharged of record within
ninety (90) days of filing, or (B)


 


74

















 


within such ninety (90) day period, Lender receives
affirmative title insurance from the title insurance company insuring the lien
of the Mortgage that such lien is subject and subordinate to the lien of the
Mortgage and no enforcement action is commenced by the applicable lien holder. Notwithstanding
the foregoing provisions of this Section 9.4, upon the acceptance by
Lender of any cure by Borrower of a recourse trigger described in clauses (I),
(II) or (IV) above, the Debt shall no longer be fully recourse to Borrower solely
as a result of such trigger. Upon the acceptance by Lender of any cure by
Borrower of a recourse trigger described in clauses (III) or (V) above, the
Debt shall no longer be fully recourse to Borrower solely as a result of such
trigger, provided, however, Borrower shall remain liable to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys’ fees and costs reasonably incurred) arising out of
or in connection with such trigger. Notwithstanding any provision herein or in
any of the other Loan Documents to the contrary, the provisions in this
paragraph (i.e., the last paragraph contained within this Section 9.4)
shall apply to and inure only to the benefit of the original Borrower named herein
and any other entity which hereafter may become the Borrower which either
(x) is an Affiliate wholly-owned (directly or
indirectly) by Sole Member, (y) is a Qualified Entity, or (z) a transferee
described in Section 5.2.13(a)(6) hereof.


 


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


 


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


 


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Lender shall be responsible for any set-up fees or any other costs
relating to or arising under the Servicing Agreement.


 


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


 


ARTICLE  X

MISCELLANEOUS


 


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


 


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


 


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


 


76

















 


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


 


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


 


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


 


If to Lender:


 


Nomura Credit & Capital, Inc.

Two World Financial Center, Building B

New York, New York 10281

Attention: N. Dante LaRocca


 


with a copy to:


 


Cassin Cassin & Joseph LLP 

711 Third Avenue, 20th Floor 

New York, New York 10017

Attention: Carol M. Joseph


 


If to Borrower:


 


77

















 


MB Sugar Land Gillingham Limited Partnership

2901 Butterfield Road

Oak Brook, IL 60523

Attention:  Roberta S. Matlin


 


with a copy to:


 


Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

Attention: Robert H. Baum, Esq.


 


and with a copy to:


 


Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

Attention: Roberta S. Matlin


 


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


 


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


 


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


 


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


 


78

















 


Section 10.10.                       Preferences. Lender shall have the continuing and exclusive right to apply or reverse
and reapply any and all payments by Borrower to any portion of the obligations
of Borrower hereunder. To the extent Borrower makes a payment or payments to
Lender, which payment or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy
law, state or federal law, common law or equitable cause, then, to the extent
of such payment or proceeds received, the obligations hereunder or part thereof
intended to be satisfied shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received by Lender.


 


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


 


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


 


Section 10.13.                       Expenses; Indemnity.


 


(a)                                  Borrower covenants and agrees to pay or, if
Borrower fails to pay, to reimburse, Lender upon receipt of written notice from
Lender for all reasonable costs and expenses (including reasonable attorneys’
fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the
other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for
Borrower (including without limitation any opinions requested by Lender as to
any legal matters arising under this Agreement or the other Loan Documents with
respect to the Property); (ii) Borrower’s ongoing performance of and
compliance with Borrower’s respective agreements and covenants contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (iii) Lender’s
ongoing performance and compliance with all agreements and conditions contained
in this Agreement and the other Loan Documents on its part to be performed
or complied with after the Closing Date; (iv) except as otherwise provided
in this Agreement, the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Agreement and the other Loan Documents and any other documents or matters
reasonably requested by Lender; (v) securing Borrower’s


 


79

















 


compliance with any requests made pursuant to the provisions of this
Agreement; (vi) the filing and recording fees and expenses, title
insurance and reasonable fees and expenses of counsel for providing to Lender
all required legal opinions, and other similar expenses incurred in creating
and perfecting the Liens in favor of Lender pursuant to this Agreement and the
other Loan Documents; (vii) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; and (viii) enforcing any obligations of or
collecting any payments due from Borrower under this Agreement, the other Loan
Documents or with respect to the Property or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a “work-out” or of any insolvency or bankruptcy proceedings;
provided, however, that Borrower shall not be liable for the payment of any
such costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.


 


(b)                                 BORROWER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS LENDER FROM AND AGAINST ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS,
EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR LENDER IN
CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING
COMMENCED OR THREATENED, WHETHER OR NOT LENDER SHALL BE DESIGNATED A PARTY
THERETO), THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST LENDER
IN ANY MANNER RELATING TO OR ARISING OUT OF (I) ANY BREACH BY BORROWER OF ITS
OBLIGATIONS UNDER, OR ANY MATERIAL MISREPRESENTATION BY BORROWER CONTAINED IN,
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR (II) THE USE OR INTENDED USE OF
THE PROCEEDS OF THE LOAN (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED,
HOWEVER, THAT BORROWER SHALL NOT HAVE ANY OBLIGATION TO LENDER HEREUNDER
TO THE EXTENT THAT SUCH INDEMNIFIED LIABILITIES ARISE FROM THE GROSS
NEGLIGENCE, ILLEGAL ACTS, FRAUD OR WILLFUL MISCONDUCT OF LENDER. TO THE EXTENT
THAT THE UNDERTAKING TO INDEMNIFY, DEFEND AND HOLD HARMLESS SET FORTH IN THE
PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE IT VIOLATES ANY LAW OR
PUBLIC POLICY, BORROWER SHALL PAY THE MAXIMUM PORTION THAT IT IS PERMITTED TO
PAY AND SATISFY UNDER APPLICABLE LAW TO THE PAYMENT AND SATISFACTION OF ALL
INDEMNIFIED LIABILITIES INCURRED BY LENDER.


 


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


 


Section 10.15.                       Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this
Agreement, the Note and the other Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to such
documents


 


80

















 


which Borrower may otherwise have against any assignor of such
documents, and no such unrelated counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon such documents and any such right to interpose or assert any such
unrelated offset, counterclaim or defense in any such action or proceeding is
hereby expressly waived by Borrower.


 


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


 


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


 


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


 


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


 


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


 


81

















 


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


 


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


 


Section 10.21.                       BROKERS AND FINANCIAL ADVISORS. BORROWER HEREBY REPRESENTS THAT IT HAS DEALT
WITH NO FINANCIAL ADVISORS, BROKERS, UNDERWRITERS, PLACEMENT AGENTS, AGENTS OR
FINDERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
OTHER THAN INLAND MORTGAGE CORP. BORROWER HEREBY AGREES TO INDEMNIFY, DEFEND
AND HOLD LENDER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES,
COSTS AND EXPENSES OF ANY KIND (INCLUDING LENDER’S REASONABLE ATTORNEYS’ FEES
AND EXPENSES) IN ANY WAY RELATING TO OR ARISING FROM A CLAIM BY ANY PERSON THAT
SUCH PERSON ACTED ON BEHALF OF BORROWER OR LENDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREIN. THE PROVISIONS OF THIS SECTION 10.21
SHALL SURVIVE THE EXPIRATION AND TERMINATION OF THIS AGREEMENT AND THE PAYMENT
OF THE DEBT.


 


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


 


82

















 


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


 


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


 


 


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


 


83

















 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MB SUGAR LAND GILLINGHAM LIMITED

  
	
   

  	
  PARTNERSHIP, an Illinois limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MB SUGAR LAND GILLINGHAM GP,

  
	
   

  	
   

  	
  L.L.C., a Delaware limited liability company,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MINTO BUILDERS (FLORIDA), INC.,

  
	
   

  	
   

  	
   

  	
  a Florida corporation, Its Sole
  Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/
  Debra A. Palmer

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Debra A. Palmer

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
							



 


 


[SIGNATURE PAGE FOLLOWS]


 

















 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  NOMURA CREDIT & CAPITAL, INC.,
  a

  
	
   

  	
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra Paoli

  	
   

  
	
   

  	
  Name:

  	
  Debra Paoli

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
					



 

















 


SCHEDULE I


 


[Form of Tenant Direction  Letter]


 


[BORROWER
LETTERHEAD]


 


As of March      ,
2006


 


Thermo Process
Instruments, L.P.


1410
Gillingham Lane

Sugar Land, Texas 77478

Attention:  Mr. Marvin Van Dyke,

                 
Director of Finance


 


RE:                  Lease by and
among 1410 Gillingham, Ltd. (“Original Landlord”), and Thermo Process
Instruments, L.P. (“Tenant”) dated as of November 18, 2004 (as amended to
from time to time, the “Lease”)


 


Dear Sir or
Madam:


 


You are hereby notified that MB SUGAR LAND GILLINGHAM LIMITED PARTNERSHIP, an Illinois limited partnership (“Borrower”)
has granted a security interest in the captioned lease and all rents,
additional rent and all other monetary obligations to the landlord thereunder
(collectively, “Rent”) in favor of Nomura Credit & Capital, Inc.,
as lender (“Lender”), to secure a loan made by Lender to Borrower (the “Loan”).
In connection with the Loan, Borrower hereby irrevocably instructs and
authorizes you to disregard any and all previous notices sent to you in
connection with Rent and hereafter to remit all rent, additional rent, common
area expenses or any other charge or expense payable by you under the Lease
directly to Lender’s servicer as follows:


 


If rent will be delivered via regular
U.S. Mail, please send to:


 


ARCap Servicing, Inc.

P.O. Box 915054

Dallas, Texas 75391-5054

Reference:  Nomura/Thermo Process Systems
(Loan No.                            )


 


If rent will be delivered by
courier/overnight delivery, please send to:


 


J.P. Morgan Chase Bank - Texas 

Dallas Wholesale Lockbox Department 

Maxus Energy Tower 

717 N. Harwood Street, 6th Floor 

Dallas, Texas 75201-6507 

Attn:                    ARCap
Servicing, Inc. 

Lockbox #                    


Reference: Nomura/Thermo Process Systems (Loan No.                            )


 

















 


In
order to induce Lender to accept these arrangements, we have agreed that this
notification and the directions set forth herein are irrevocable and are not
subject to modification in any manner, except that Lender, or any successor
lender so identified by Lender, may by written notice to you (i) rescind
the directions contained herein or (ii) change the account to which Rent
shall be sent, and you shall comply with any such direction(s) received from
Lender. Lender shall have no control over the management or operation of the
Property and shall have no liability under the Lease. Rent (and other sums)
paid to any party other than as set forth above will not be credited as being
paid under your Lease.


 


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MB SUGAR LAND GILLINGHAM LIMITED

  
	
   

  	
  PARTNERSHIP, an Illinois limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MB SUGAR LAND GILLINGHAM GP,

  
	
   

  	
   

  	
  L.L.C., a Delaware limited liability company,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MINTO BUILDERS (FLORIDA), INC.,

  
	
   

  	
   

  	
   

  	
  a Florida corporation, Its Sole
  Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 

















 


SCHEDULE II


 


Intentionally Reserved


 

















 


SCHEDULE III


 


REQUIRED REPAIRS


 


None


 

















 


SCHEDULE IV


 


Rent Roll


 


[exhibit follows this page]