**Exhibit 10.462**

 

**LOAN AGREEMENT**

 

 

Datedas of December 16, 2004

 

 

Between

 

 

INLAND WESTERN MINNEAPOLIS 3RD AVENUE, L.L.C.,

 

 

asBorrower

 

 

and

 

 

**BANK OF AMERICA, N.A.,**

as Lender

 

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TABLEOF CONTENTS

 
| **ARTICLE 1 DEFINITIONS; PRINCIPLES OF  CONSTRUCTION**         |   |
|----------------------------------------------------------------|--------|
|                                                           |   |
| SECTION  1.1. DEFINITIONS                                      |   |
| SECTION  1.2. PRINCIPLES OF CONSTRUCTION                       |   |
|                                                           |   |
| **ARTICLE 2 GENERAL TERMS**                                    |   |
|                                                           |   |
| SECTION  2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER        |   |
| SECTION  2.2. LOAN PAYMENTS                                    |   |
| SECTION  2.3. PREPAYMENT                                       |   |
|                                                           |   |
| **ARTICLE 3 CONDITIONS PRECEDENT**                             |   |
|                                                           |   |
| **ARTICLE 4 REPRESENTATIONS AND WARRANTIES**                   |   |
| ** **                                                     |   |
| SECTION  4.1. ORGANIZATION                                     |   |
| SECTION  4.2. STATUS OF BORROWER                               |   |
| SECTION  4.3. VALIDITY OF DOCUMENTS                            |   |
| SECTION  4.4. NO CONFLICTS                                     |   |
| SECTION  4.5. LITIGATION                                       |   |
| SECTION  4.6. AGREEMENTS                                       |   |
| SECTION 4.7. SOLVENCY                                          |   |
| SECTION  4.8. FULL AND ACCURATE DISCLOSURE                     |   |
| SECTION  4.9. NO PLAN ASSETS                                   |   |
| SECTION  4.10. NOT A FOREIGN PERSON                            |   |
| SECTION  4.11. ENFORCEABILITY                                  |   |
| SECTION 4.12.  BUSINESS PURPOSES                               |   |
| SECTION 4.13.  COMPLIANCE                                      |   |
| SECTION  4.14. FINANCIAL INFORMATION                           |   |
| SECTION 4.15.  CONDEMNATION                                    |   |
| SECTION  4.16. UTILITIES AND PUBLIC ACCESS; PARKING            |   |
| SECTION  4.17. SEPARATE LOTS                                   |   |
| SECTION  4.18. ASSESSMENTS                                     |   |
| SECTION  4.19. INSURANCE                                       |   |
| SECTION  4.20. USE OF PROPERTY                                 |   |
| SECTION  4.21. CERTIFICATE OF OCCUPANCY; LICENSES              |   |
| SECTION  4.22. FLOOD ZONE                                      |   |
| SECTION  4.23. PHYSICAL CONDITION                              |   |
| SECTION  4.24. BOUNDARIES; SURVEY                              |   |
| SECTION  4.25. LEASES                                          |   |
| SECTION  4.26. FILING AND RECORDING TAXES                      |   |
| SECTION  4.27. MANAGEMENT AGREEMENT                            |   |
| SECTION  4.28. ILLEGAL ACTIVITY                                |   |
| SECTION  4.29. CONSTRUCTION EXPENSES                           |   |
| SECTION  4.30. PERSONAL PROPERTY                               |   |
| SECTION  4.31. TAXES                                           |   |
| SECTION  4.32. PERMITTED ENCUMBRANCES                          |   |
| SECTION  4.33. FEDERAL RESERVE REGULATIONS                     |   |
| SECTION  4.34. INVESTMENT COMPANY ACT                          |   |
| SECTION  4.35. RECIPROCAL EASEMENT AGREEMENTS                  |   |
| SECTION  4.36. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE |   |

 

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| SECTION  4.37. INTELLECTUAL PROPERTY                          |   |
|---------------------------------------------------------------|--------|
| SECTION  4.38. COMPLIANCE WITH ANTI-TERRORISM LAWS            |   |
| SECTION  4.39. PATRIOT ACT                                    |   |
| SECTION  4.40. SURVIVAL                                       |   |
| ** **                                                    |   |
| **ARTICLE 5 BORROWER COVENANTS**                              |   |
|                                                          |   |
| SECTION  5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS   |   |
| SECTION  5.2. MAINTENANCE AND USE OF PROPERTY                 |   |
| SECTION  5.3. WASTE                                           |   |
| SECTION  5.4. TAXES AND OTHER CHARGES                         |   |
| SECTION  5.5. LITIGATION                                      |   |
| SECTION  5.6. ACCESS TO PROPERTY                              |   |
| SECTION  5.7. NOTICE OF DEFAULT                               |   |
| SECTION  5.8. COOPERATE IN LEGAL PROCEEDINGS                  |   |
| SECTION  5.9. PERFORMANCE BY BORROWER                         |   |
| SECTION  5.10. AWARDS; INSURANCE PROCEEDS                     |   |
| SECTION 5.11. FINANCIAL REPORTING                             |   |
| SECTION 5.12. ESTOPPEL STATEMENT                              |   |
| SECTION 5.13.  LEASING MATTERS                                |   |
| SECTION 5.14.  PROPERTY MANAGEMENT                            |   |
| SECTION 5.15. LIENS                                           |   |
| SECTION 5.16. DEBT  CANCELLATION                              |   |
| SECTION 5.17. ZONING                                          |   |
| SECTION 5.18. ERISA                                           |   |
| SECTION 5.19. NO  JOINT ASSESSMENT                            |   |
| SECTION  5.20. RECIPROCAL EASEMENT AGREEMENTS                 |   |
|                                                          |   |
| **ARTICLE  6 ENTITY COVENANTS**                               |   |
| ** **                                                    |   |
| SECTION  6.1. SINGLE PURPOSE ENTITY/SEPARATENESS              |   |
| SECTION  6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE           |   |
| SECTION 6.3.  BUSINESS AND OPERATIONS                         |   |
| SECTION 6.4.  INDEPENDENT DIRECTOR                            |   |
|                                                          |   |
| **ARTICLE  7 NO SALE OR ENCUMBRANCE**                         |   |
| ** **                                                    |   |
| SECTION 7.1.  TRANSFER DEFINITIONS                            |   |
| SECTION 7.2. NO  SALE/ENCUMBRANCE                             |   |
| SECTION 7.3.  PERMITTED TRANSFERS                             |   |
| SECTION 7.4. LENDER’S  RIGHTS                            |   |
| SECTION 7.5. ASSUMPTION                                       |   |
| SECTION  7.6. ASSUMPTION BY INLAND PERMITTED TRANSFEREE       |   |
|                                                          |   |
| **ARTICLE  8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION** |   |
| ** **                                                    |   |
| SECTION 8.1. INSURANCE                                        |   |
| SECTION 8.2. CASUALTY                                         |   |
| SECTION 8.3.  CONDEMNATION                                    |   |
| SECTION 8.4. RESTORATION                                      |   |
|                                                          |   |
| **ARTICLE  9 REPLACEMENTS; RESERVE FUNDS**                    |   |
| ** **                                                    |   |
| SECTION 9.1.  REPLACEMENTS                                    |   |
| SECTION  9.2. TAX AND INSURANCE RESERVE FUNDS                 |   |
| SECTION 9.3.  RESERVE FUNDS GENERALLY                         |   |
|                                                          |   |
| **ARTICLE  10 CASH MANAGEMENT**                               |   |
| ** **                                                    |   |
| SECTION  10.1. CASH MANAGEMENT ACCOUNT                        |   |
| SECTION  10.2. DEPOSITS AND WITHDRAWALS                       |   |
| SECTION 10.3.  SECURITY INTEREST                              |   |

 

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| **ARTICLE  11 EVENTS OF DEFAULT; REMEDIES**                            |   |
|------------------------------------------------------------------------|--------|
| ** **                                                             |   |
| SECTION 11.1. EVENT  OF DEFAULT                                        |   |
| SECTION 11.2. REMEDIES                                                 |   |
|                                                                   |   |
| **ARTICLE  12 ENVIRONMENTAL PROVISIONS**                               |   |
| ** **                                                             |   |
| SECTION  12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES            |   |
| SECTION  12.2. ENVIRONMENTAL COVENANTS                                 |   |
| SECTION 12.3.  LENDER’S RIGHTS                                    |   |
| SECTION  12.4. OPERATIONS AND MAINTENANCE PROGRAMS                     |   |
| SECTION  12.5. ENVIRONMENTAL DEFINITIONS                               |   |
|                                                                   |   |
| **ARTICLE  13 SECONDARY MARKET**                                       |   |
| ** **                                                             |   |
| SECTION 13.1.  TRANSFER OF LOAN                                        |   |
| SECTION  13.2. DELEGATION OF SERVICING                                 |   |
| SECTION  13.3. DISSEMINATION OF INFORMATION                            |   |
| SECTION 13.4.  COOPERATION                                             |   |
|                                                                   |   |
| **ARTICLE  14 INDEMNIFICATIONS**                                       |   |
| ** **                                                             |   |
| SECTION 14.1.  GENERAL INDEMNIFICATION                                 |   |
| SECTION  14.2. MORTGAGE AND INTANGIBLE TAX INDEMNIFICATION             |   |
| SECTION 14.3.  ERISA INDEMNIFICATION                                   |   |
| SECTION 14.4. SURVIVAL                                                 |   |
|                                                                   |   |
| **ARTICLE  15 EXCULPATION**                                            |   |
| ** **                                                             |   |
| SECTION 15.1.  EXCULPATION                                             |   |
|                                                                   |   |
| **ARTICLE  16 NOTICES**                                                |   |
| ** **                                                             |   |
| SECTION 16.1. NOTICES                                                  |   |
|                                                                   |   |
| **ARTICLE  17 FURTHER ASSURANCES**                                     |   |
| ** **                                                             |   |
| SECTION 17.1.  REPLACEMENT DOCUMENTS                                   |   |
| SECTION  17.2. RECORDING OF MORTGAGE, ETC.                             |   |
| SECTION 17.3.  FURTHER ACTS, ETC.                                      |   |
| SECTION  17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS |   |
| SECTION 17.5. EXPENSES                                                 |   |
|                                                                   |   |
| **ARTICLE  18 WAIVERS**                                                |   |
| ** **                                                             |   |
| SECTION  18.1. REMEDIES CUMULATIVE; WAIVERS                            |   |
| SECTION  18.2. MODIFICATION, WAIVER IN WRITING                         |   |
| SECTION 18.3.  DELAY NOT A WAIVER                                      |   |
| SECTION 18.4. TRIAL BY  JURY                                           |   |
| SECTION 18.5.  WAIVER OF NOTICE                                        |   |
| SECTION 18.6.  REMEDIES OF BORROWER                                    |   |
| SECTION  18.7. WAIVER OK MARSHALLING OF ASSETS                         |   |
| SECTION  18.8. WAIVER OF STATUTE OF LIMITATIONS                        |   |
| SECTION 18.9.  WAIVER OF COUNTERCLAIM                                  |   |
|                                                                   |   |
| **ARTICLE  19 GOVERNING LAW**                                          |   |
| ** **                                                             |   |
| SECTION 19.1. CHOICE  OF LAW                                           |   |
| SECTION 19.2.  SEVERABILITY                                            |   |
| SECTION 19.3.  PREFERENCES                                             |   |
|                                                                   |   |
| **ARTICLE 20 MISCELLANEOUS**                                           |   |
| ** **                                                             |   |
| SECTION 20.1. SURVIVAL                                                 |   |
| SECTION 20.2.  LENDER’S DISCRETION                                |   |

 

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| SECTION 20.3. HEADINGS                                                       |   |
|------------------------------------------------------------------------------|--------|
| SECTION 20.4.  COST OF ENFORCEMENT                                           |   |
| SECTION 20.5.  SCHEDULES INCORPORATED                                        |   |
| SECTION  20.6. OFFSETS, COUNTERCLAIMS AND DEFENSES                           |   |
| SECTION  20.7. NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY BENEFICIARIES |   |
| SECTION 20.8. PUBLICITY                                                      |   |
| SECTION  20.9. CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE                 |   |
| SECTION 20.10.  ENTIRE AGREEMENT                                             |   |

 

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LOANAGREEMENT

 

THIS LOAN AGREEMENT, datedas of December 16, 2004 (as amended, restated, replaced, supplemented orotherwise modified from time to time, this **“Agreement”**),****betweenBANK OF AMERICA, N.A., a national banking association, having an address atBank of America Corporate Center, 214 North Tryon Street, Charlotte, NorthCarolina 28255 (together with its successors and/or assigns, **“Lender”**)****and INLAND WESTERNMINNEAPOLIS 3RD AVENUE, L.L.C., a Delaware limited liability companyhaving an address at c/o Inland Real Estate Investment Corporation, 2901Butterfield Road, Oak Brook, Illinois 60523 (together with its successorsand/or assigns, **“Borrower”**).

 

**RECITALS:**

 

Borrower desires to obtain the Loan (defined below) from Lender.

 

Lender is willing to makethe Loan to Borrower, subject to and in accordance with the terms of thisAgreement and the other Loan Documents (defined below).

 

In consideration of themaking of the Loan by Lender and the covenants, agreements, representations andwarranties set forth in this Agreement, the parties hereto hereby covenant,agree, represent and warrant as follows:

 

**ARTICLE 1****DEFINITIONS; PRINCIPLES OF CONSTRUCTION**

 

**Section 1.1****.****           Definitions**

 

For all purposes of thisAgreement, except as otherwise expressly required or unless the context clearlyindicates a contrary intent:

 

**“Account Collateral”**shall mean (i) the Accounts, and all cash,checks, drafts, certificates and instruments, if any, from time to timedeposited or held in the Accounts; (ii) any and all amounts in or credited tothe Accounts invested in Permitted Investments; (iii) all interest, dividends,cash, instruments and other property from time to time received, receivable or**otherwise payable in respect of, or inexchange for, any or all of the foregoing; and (iv) to the extent not coveredby clauses (i) - (iii) above, all “proceeds” (as defined under the UCC as ineffect in the State in which the Accounts are located) of any or all of theforegoing.

 

**“Accounts”**shall mean the Cash Management Account, the Tax and Insurance ReserveAccounts, if any, and any other account or sub-account established by thisAgreement, the Mortgage, or the other Loan Documents.

 

**“Accredited Investor”**shall have the meaning set forth in the regulationspromulgated by the Securities and Exchange Commission.

 

**“Act”**shall have the meaning set forth in Section 6.1(c).

 

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

 

**“Affiliated Loans”**shall mean a loan made by Lender to a parent,subsidiary or such other entity affiliated with Borrower or Borrower Principal.

 

**“Affiliated Manager”**shall have the meaning set forth in Section7.1 hereof.

 

**“ALTA”**shall mean American Land Title Association, orany successor thereto.

 

**“American Express”**shall mean American Express Travel RelatedServices Company, Inc., a New York corporation.

 

**“American Express Lease”**shall mean that certain Lease Agreement datedas of December 16, 2004 between Borrower, as landlord, and American Express, astenant, with respect to the Property.

 

**“American Express Lease Default”**shall mean (i) a default, after theexpiration of any applicable notice or cure periods, under the American ExpressLease or (ii) the cancellation, termination or surrender of the AmericanExpress Lease.

 

**“Assignment of Management Agreement”**shall mean that certain Assignment andSubordination of Management Agreement dated the date hereof 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 inconnection with a Condemnation in respect of all or any part of the Property.

 

**“Borrower Principal”**shall mean Inland Western Retail Real EstateTrust, Inc., a Maryland corporation.

 

**“Business Day”**shall mean a day on which Lender is open forthe conduct of substantially all of its banking business at its office in thecity in which the Note is payable (excluding Saturdays and Sundays).

 

**“Cash Management Account”**shall have the meaning set forth in Section10.1(a) hereof.

 

**“Cash Management Period”**shall mean the period commencing on the 45thday prior to the Optional Prepayment Date.

 

**“Casualty”**shall have the meaning set forth in Section 8.2.

 

**“Closing Date”**shall mean the date of the funding of theLoan.

 

**“Control”**shall have the meaning set forth in Section 7.1 hereof.

 

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** **

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

 

**“Condemnation Proceeds”**shall have the meaning set forth in Section8.4(b)

 

**“Creditors Rights****Laws****”** shall mean with respect to any Person anyexisting or future law of any jurisdiction, domestic or foreign, relating tobankruptcy, insolvency, reorganization, conservatorship, arrangement,adjustment, winding-up, liquidation, dissolution, composition or other reliefwith respect to its debts or debtors.

 

**“Debt”**shall mean the outstanding principal amount set forth in, and evidencedby, this Agreement and the Note together with all interest accrued and unpaidthereon and all other sums 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 particularperiod of time, scheduled principal and/or interest payments under the Note.

 

**“Default”**shall mean the occurrence of any event hereunder or under any otherLoan 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 rateper annum equal to the lesser of (a) the maximum rate permitted by applicablelaw, or (b) four percent (4%) above the Note Rate.

 

**“Eligible Account”**shall mean a separate and identifiableaccount from all other funds held by the holding institution that is either (a)an account or accounts maintained with a federal or state chartered depositoryinstitution or trust company which complies with the definition of EligibleInstitution or (b) a segregated trust account or accounts maintained with thecorporate trust department of a federal or state chartered depositoryinstitution or trust company acting in its fiduciary capacity which, in thecase of a federally chartered depository institution or trust company acting inits fiduciary capacity is subject to the regulations regarding adversary fundson deposit therein under 12 CFR §9.10(b), and in the case of a state chartereddepository institution or trust company, is subject to regulationssubstantially similar to 12 C.F.R. §9.10(b), having in either case a combinedcapital surplus of at least $50,000,000 and subject to supervision orexamination by federal and state authority. An Eligible Account will not beevidenced by a certificate of deposit, passbook or other instrument.

 

**“Eligible Institution”**shall mean a depository institution or trustcompany insured by the Federal Deposit Insurance Corporation, the short termunsecured debt obligations or commercial paper of which are rated at least “A-l”by S&P, “P-l” by Moody’s and “F-1” by Fitch in the case of accounts inwhich funds are held for thirty (30) days or less (or, in the case of accountsin which funds are held for more than thirty (30) days, the long term unsecureddebt obligations of which are rated at least “AA-” by Fitch and S&P (or “A-”by S&P, if such depository’s short

 

3

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term unsecured debt rating is at least “A-l” byS&P) and “Aa2” by Moody’s). Notwithstanding the foregoing, prior to aSecuritization, Bank of America, N.A. shall be an Eligible Institution.

 

**“Embargoed Person”**shall mean any person identified by OFAC orany other Person with whom a Person resident in the United States of Americamay not conduct business or transactions by prohibition of federal law orExecutive Order of the President of the United States of America.

 

**“Environmental Indemnity”**shall mean that certain EnvironmentalIndemnity Agreement, dated as of the date hereof, executed by Borrower andBorrower Principal in connection with the Loan for the benefit of Lender, asthe same may be amended, restated, replaced, supplemented or otherwise modifiedfrom time to time.

 

**“Environmental Law”**shall have the meaning set forth in Section12.5 hereof.

 

**“Environmental Liens”**shall have the meaning set forth in Section12.5 hereof.

 

**“Environmental Report”**shall have the meaning set forth in Section12.5 hereof.

 

**“ERISA”**shall mean the Employee Retirement Income Security Act of 1974, asamended from time to time and any successor statutes thereto and applicableregulations issued pursuant thereto in temporary or final form.

 

**“Event of Default”**shall have the meaning set forth in Section11.1 hereof.

 

**“Exchange Act”**shall mean the Securities and Exchange Act of1934, as amended.

 

**“Fitch”**shall mean Fitch, Inc.

 

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

 

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

 

**“Guarantor”**shall mean any Person having a long-term unsecured debt rating abovethe Trigger Rating that may, from time to time, at the option of AmericanExpress, execute a guaranty in favor of landlord under the American ExpressLease.

 

**“Hazardous Materials”**shall have the meaning set forth in Section12.5 hereof.

 

**“Improvements”**shall have the meaning set forth in thegranting clause of the Mortgage.

 

**“Indemnified Parties”**shall mean (a) Lender, (b) any prior owner orholder of the Loan or Participations in the Loan, (c) any servicer or priorservicer of the Loan, (d) any Investor or any prior Investor in any Securities,(e) any trustees, custodians or other fiduciaries who hold or

 

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who have held a full or partial interest inthe Loan for the benefit of any Investor or other third party, (f) any receiveror other fiduciary appointed in a foreclosure or other Creditors Rights Lawsproceeding, (g) any officers, directors, shareholders, partners, members,employees, agents, servants, representatives, contractors, subcontractors,affiliates or subsidiaries of any and all of the foregoing, and (h) the heirs,legal representatives, successors and assigns of any and all of the foregoing(including, without limitation, any successors by merger, consolidation oracquisition of all or a substantial portion of the Indemnified Parties’ assetsand business), in all cases whether during the term of the Loan or as part ofor following a foreclosure of the Mortgage.

 

**“Independent Director”**shall have the meaning set forth in Section6.4(a).

 

**“Inland Permitted Transferee”**shall mean a newly-formed special purposeentity that is wholly-owned (directly or indirectly) by Inland Retail RealEstate Trust, Inc., a Maryland corporation; Inland Real Estate Corporation, aMaryland corporation, Inland Real Estate Corporation, a Delaware corporation orBorrower Principal.

 

**“Insurance Premiums”**shall have the meaning set forth in Section8.1 hereof.

 

**“Insurance Proceeds”**shall have the meaning set forth in Section8.4(b) hereof.

 

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

 

**“Investor”**shall have the meaning set forth in Section13.3 hereof.

 

**“Lease”**shall have the meaning set forth in theMortgage.

 

**“Legal Requirements”**shall mean all statutes, laws, rules, orders,regulations, ordinances, judgments, decrees and injunctions of Governmental Authoritiesaffecting the Property or any part thereof, or the construction, use,alteration or operation thereof, whether now or hereafter enacted and in force,and all permits, licenses, authorizations and regulations relating thereto, andall covenants, agreements, restrictions and encumbrances contained in anyinstruments, either of record or known to Borrower, at any time in forceaffecting the Property or any part thereof, including, without limitation, anywhich may (a) require repairs, modifications or alterations in or to theProperty or any part thereof, or (b) in any way limit the use and enjoymentthereof.

 

**“Lien”**shall mean any mortgage, deed of trust, lien, pledge, hypothecation,assignment, security interest, or any other encumbrance, charge or transfer of,on or affecting Borrower, the Property, any portion thereof or any interesttherein, including, without limitation, any conditional sale or other titleretention agreement, any financing lease having substantially the same economiceffect as any of the foregoing, the filing of any financing statement, andmechanic’s, materialmen’s and other similar liens and encumbrances.

 

**“LLC Agreement”**shall have the meaning set forth in Section6.1(c).

 

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**“Loan”**shall mean the loan made by Lender to Borrower pursuant to thisAgreement.

 

**“Loan Documents”**shall mean, collectively, this Agreement, theNote, the Mortgage, the Environmental Indemnity, the Assignment of ManagementAgreement and any and all other documents, agreements and certificates executedand/or delivered in connection with the Loan, as the same may be amended,restated, replaced, supplemented or otherwise modified from time to time.

 

**“Lockout Period”**shall mean the period commencing on the datehereof and ending on the date of the second anniversary hereof.

 

**“Losses”**shall mean any and all claims, suits, liabilities (including, withoutlimitation, strict liabilities), actions, proceedings, obligations, debts,damages, losses, costs, expenses, fines, penalties, charges, fees, judgments,awards, amounts paid in settlement of whatever kind or nature (including butnot limited to legal fees and other costs of defense).

 

**“Management Agreement”**shall mean the management agreement enteredinto by and between Borrower and Manager, pursuant to which Manager is toprovide management and other services with respect to the Property, as the samemay be amended, restated, replaced, supplemented or otherwise modified inaccordance with the terms of this Agreement.

 

**“Manager”**shall mean Inland US Management LLC, a Delaware limited liabilitycompany or such other entity selected as the manager of the Property inaccordance with the terms of this Agreement.

 

**“Material Litigation”**shall mean, with respect to any Person, anymaterial conviction, indictment (that is not dismissed before trial), judgment,litigation or regulatory action. For purposes of this definition, a mattershall be deemed material if it is reasonably foreseeable that a prudentinstitutional commercial real estate mortgage lender would consider such matteras a material adverse factor in its underwriting of the Person in question.With respect to non-criminal matters, isolated actions occurring more than five(5) years prior to the date of a proposed transfer shall not be deemed materialprovided that there is no indication of fraud, intentional misrepresentation orintent to defraud creditors with respect to such actions.

 

**“Maturity Date”**shall have the meaning set forth in the Note.

 

**“Maximum Legal Rate”**shall mean the maximum nonusurious interestrate, 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 Noteand as provided for herein or the other Loan Documents, under the laws of suchstate or states whose laws are held by any court of competent jurisdiction togovern the interest rate provisions of the Loan.

 

**“Member”**shall have the meaning set forth in Section 6.1(c).

 

**“Monthly Payment Amount”**shall mean the monthly payment of interestdue on each Scheduled Payment Date as set forth in the Note.

 

**“Moody’s”**shall mean Moody’s Investor Services, Inc.

 

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**“Mortgage”**shall mean that certain first priority mortgage/deed of trust/deed tosecure debt and security agreement dated the date hereof, executed anddelivered by Borrower as security for the Loan and encumbering the Property, asthe same may be amended, restated, replaced, supplemented or otherwise modifiedfrom time to time.

 

“**Net Proceeds”**shall have the meaning set forth in Section 8.4(b) hereof.

 

**“Net Proceeds Deficiency”**shall have the meaning set forth in Section8.4(b)(vi) hereof.

 

**“Note”**shall mean that certain promissory note of even date herewith in the principalamount of $56,050,000, made by Borrower in favor of Lender, as the same may beamended, restated, replaced, supplemented or otherwise modified from time totime.

 

**“Note Rate”**shall have the meaning set forth in the Note.

 

**“OFAC”**shall have the meaning set forth in Section 4.38 hereof.

 

**“Operating Expenses”**shall mean, with respect to any period oftime, the total of all expenses actually paid or payable, computed inaccordance with federal tax basis accounting, or in accordance with othermethods acceptable to Lender in its sole discretion, of whatever kind relatingto the operation, maintenance and management of the Property, including,without limitation, utilities, ordinary repairs and maintenance, InsurancePremiums, license fees, Taxes and Other Charges, advertising expenses, payrolland related taxes, computer processing charges, management fees equal to thegreater of 4% of the Operating Income and the management fees actually payableunder the Management Agreement for such period of time, operational equipmentor other lease payments as approved by Lender, normalized capital expendituresbut specifically excluding depreciation and amortization, income taxes, DebtService, any incentive fees due under the Management Agreement, any item ofexpense that in accordance with federal tax basis accounting should becapitalized, any item of expense that would otherwise be covered by theprovisions hereof but which is paid by American Express under the AmericanExpress Lease and deposits into the Reserve Accounts.

 

**“Optional Prepayment Date”**shall have the meaning set forth in the Note.

 

**“Other Charges”**shall mean all ground rents, maintenancecharges, 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 orassessed or imposed against the Property or any part thereof.

 

**“Participations”**shall have the meaning set forth in Section 1.3.1hereof.

 

**“Patriot Act”**shall have the meaning set forth in Section4.38 hereof.

 

**“Permitted Encumbrances”**shall mean collectively, (a) the Lien andsecurity interests created by the Loan Documents, (b) all Liens, encumbrancesand other matters disclosed in the Title Insurance Policy, (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 mayapprove in writing in Lender’s sole discretion.

 

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**“Permitted****Investments****”** shall mean to the extent available fromLender or Lender’s servicer for deposits in the Reserve Accounts and theLockbox Account, any one or more of the following obligations or securitiesacquired at a purchase price of not greater than par, including those issued bya servicer of the Loan, the trustee under any securitization or any of theirrespective Affiliates, payable on demand or having a maturity date not laterthan the Business Day immediately prior to the date on which the funds used toacquire such investment, are required to be used under this Agreement andmeeting one of the appropriate standards set forth below:

 

(a)           obligations of, orobligations fully guaranteed as to payment of principal and interest by, theUnited States or any agency or instrumentality thereof provided suchobligations are backed by the full faith and credit of the United States ofAmerica including, without limitation, obligations of: the U.S. Treasury (alldirect or fully guaranteed obligations), the Farmers Home Administration(certificates of beneficial ownership), the General Services Administration(participation certificates), the U.S. Maritime Administration (guaranteedTitle XI financing), the Small Business Administration (guaranteedparticipation certificates and guaranteed pool certificates), the U.S.Department of Housing and Urban Development (local authority bonds) and theWashington Metropolitan Area Transit Authority (guaranteed transit bonds);provided, however, that the investments described in this clause must (i) havea predetermined fixed dollar of principal due at maturity that cannot vary orchange, (ii) be rated “AAA” or the equivalent by each of the Rating Agencies,(iii) if rated by S&P, must not have an “r” highlighter affixed to theirrating, (iv) if such investments have a variable rate of interest, suchinterest rate must be tied to a single interest rate index plus a fixed spread(if any) and must move proportionately with that index, and (v) suchinvestments must not be subject to liquidation prior to their maturity;

 

(b)           Federal HousingAdministration debentures;

 

(c)           obligations of thefollowing United States government sponsored agencies: Federal Home LoanMortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwidebonds and notes), the Federal Home Loan Banks (consolidated debt obligations),the Federal National Mortgage Association (debt obligations), the FinancingCorp. (debt obligations), and the Resolution Funding Corp. (debt obligations); *provided,**however*,**that the investments described in thisclause must (i) have a predetermined fixed dollar of principal due at maturitythat cannot vary or change, (ii) if rated by S&P, must not have an “r”highlighter affixed to their rating, (iii) if such investments have a variablerate of interest, such interest rate must be tied to a single interest rateindex plus a fixed spread (if any) and must move proportionately with thatindex, and (iv) such investments must not be subject to liquidation prior totheir maturity;

 

(d)           federal funds,unsecured certificates of deposit, time deposits, bankers’ acceptances andrepurchase agreements with maturities of not more than 365 days of any bank, theshort term obligations of which at all times are rated in the highest shortterm rating category by each Rating Agency (or, if not rated by all RatingAgencies, rated by at least one Rating Agency in the highest short term ratingcategory and otherwise acceptable to each other Rating Agency, as confirmed inwriting that such investment would not, in and of itself, result in a downgrade,qualification or withdrawal of the initial, or, if higher, then current ratingsassigned

 

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to the Securities); provided, however, thatthe investments described in this clause must (i) have a predetermined fixeddollar of principal due at maturity that cannot vary or change, (ii) if ratedby S&P, must not have an “r” highlighter affixed to their rating, (iii) ifsuch investments have a variable rate of interest, such interest rate must betied to a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (iv) such investments must not be subjectto liquidation prior to their maturity;

 

(e)           fully FederalDeposit Insurance Corporation-insured demand and time deposits in, orcertificates of deposit of, or bankers’ acceptances with maturities of not morethan 365 days and issued by, any bank or trust company, savings and loanassociation or savings bank, the short term obligations of which at all timesare 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 thehighest short term rating category and otherwise acceptable to each otherRating Agency, as confirmed in writing that such investment would not, in andof 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 (i) have a predeterminedfixed dollar of principal due at maturity that cannot vary or change, (ii) ifrated by S&P, must not have an “r” highlighter affixed to their rating,(iii) if such investments have a variable rate of interest, such interest ratemust be tied to a single interest rate index plus a fixed spread (if any) andmust move proportionately with that index, and (iv) such investments must notbe subject to liquidation prior to their maturity;

 

(f)            debt obligationswith maturities of not more than 365 days and at all times rated by each RatingAgency (or, if not rated by all Rating Agencies, rated by at least one Rating Agencyand otherwise acceptable to each other Rating Agency, as confirmed in writingthat such investment would not, in and of itself, result in a downgrade,qualification or withdrawal of the initial, or, if higher, then current ratingsassigned to the Securities) in its highest long-term unsecured rating category;provided, however, that the investments described in this clause must (i) havea predetermined fixed dollar of principal due at maturity that cannot vary orchange, (ii) if rated by S&P, must not have an “r” highlighter affixed totheir rating, (iii) if such investments have a variable rate of interest, suchinterest rate must be tied to a single interest rate index plus a fixed spread(if any) and must move proportionately with that index, and (iv) suchinvestments must not be subject to liquidation prior to their maturity;

 

(g)           commercial paper(including both non-interest-bearing discount obligations and interest-bearingobligations payable on demand or on a specified date not more than one year afterthe date of issuance thereof) with maturities of not more than 365 days andthat at all times is rated by each Rating Agency (or, if not rated by allRating Agencies, rated by at least one Rating Agency and otherwise acceptableto each other Rating Agency, as confirmed in writing that such investment wouldnot, in and of itself, result in a downgrade, qualification or withdrawal ofthe initial, or, if higher, then current ratings assigned to the Securities) inits highest short-term unsecured debt rating; provided, however, that theinvestments described in this clause must (i) have a predetermined fixed dollarof principal due at maturity that cannot vary or change, (ii) if rated byS&P, must not have an “r” highlighter affixed to their rating, (iii) ifsuch investments have a variable rate of interest, such interest rate must betied to a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (iv) such investments must not be subjectto liquidation prior to their maturity;

 

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(h)           units of taxablemoney market funds, with maturities of not more than 365 days and which fundsare regulated investment companies, seek to maintain a constant net asset valueper share and invest solely in obligations backed by the full faith and creditof the United States, which funds have the highest rating available from eachRating Agency (or, if not rated by all Rating Agencies, rated by at least oneRating Agency and otherwise acceptable to each other Rating Agency, asconfirmed in writing that such investment would not, in and of itself, resultin a downgrade, qualification or withdrawal of the initial, or, if higher, thencurrent ratings assigned to the Securities) for money market funds; and

 

(i)            any other security,obligation or investment which has been approved as a Permitted Investment inwriting by (i) Lender and (ii) each Rating Agency, as evidenced by a writtenconfirmation that the designation of such security, obligation or investment asa Permitted Investment will not, in and of itself, result in a downgrade,qualification or withdrawal of the initial, or, if higher, then current ratingsassigned to the Securities by such Rating Agency;

 

*provided, however,*that no obligation or security shall be aPermitted Investment if (A) such obligation or security evidences a right toreceive only interest payments, (B) the right to receive principal and interestpayments on such obligation or security are derived from an underlyinginvestment that provides a yield to maturity in excess of one hundred twentypercent (120%) of the yield to maturity at par of such underlying investment or(C) such obligation or security has a remaining term to maturity in excess ofone (1) year.

 

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

 

**“Personal Property”**shall have the meaning set forth in thegranting clause of the Mortgage.

 

**“Policies”**shall have the meaning set forth in Section8.1 hereof. 

 

**“Prohibited Transfer”**shall have the meaning set forth in Section7.2 hereof.

 

**“Property”**shall mean the parcel of real property, theImprovements thereon and all Personal Property owned by Borrower and encumberedby the Mortgage, together with all rights pertaining to such property andImprovements, as more particularly described in the granting clause of theMortgage and referred to therein as the “Property”.

 

**“Property Condition Report”**shall mean a report prepared by a companysatisfactory to Lender regarding the physical condition of the Property, satisfactoryin form and substance to Lender in its sole discretion.

 

**Qualified Manager****”**shall mean (a) Manager or (b) a reputable andexperienced professional management organization (i) which manages, togetherwith its affiliates, at least ten (10) first class office buildings totaling atleast 3,500,000 square feet of gross leasable area, exclusive of the Propertyand (ii) approved by Lender, which approval shall not have been unreasonablywithheld and for which Lender shall have received written confirmation from the

 

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Rating Agencies that the employment of suchmanager will not result in a downgrade, withdrawal or qualification of theinitial, or if higher, then current ratings issued in connection with a Securitization,or if a Securitization has not occurred, any ratings to be assigned inconnection with a Securitization.

 

**“Rating Agencies”**shall mean each of S&P, Moody’s andFitch, or any other nationally-recognized statistical rating agency which hasbeen approved by Lender.

 

**“REA”**shall mean any construction, operation and reciprocal easementagreement or similar agreement (including any separate agreement or otheragreement between Borrower and one or more other parties to an REA with respectto such REA) affecting the Property or portion thereof.

 

**“Release”**shall have the meaning set forth in Section12.5 hereof.

 

**“REMIC Trust”**shall mean a “real estate mortgage investmentconduit” (within the meaning of Section 860D, or applicable successorprovisions, of the Code) that holds the Note.

 

**“Rents”**shall have the meaning set forth in theMortgage.

 

**“Replacements”**shall have the meaning set forth in Section9.2(a) hereof.

 

**“Required Repairs”**shall have the meaning set forth in Section9.1 (a) hereof.

 

**“Reserve Accounts”**shall mean the Tax and Insurance ReserveAccount.

 

**“Reserve Funds”**shall mean the Tax and Insurance ReserveFunds.

 

**“Restoration”**shall mean, following the occurrence of aCasualty or a Condemnation which is of a type necessitating the repair of theProperty, the completion of the repair and restoration of the Property asnearly as possible to the condition the Property was in immediately prior tosuch Casualty or Condemnation, with such alterations as may be reasonablyapproved by Lender.

 

**“Restoration Consultant”**shall have the meaning set forth in Section8.4(b)(iii) hereof.

 

**“Restoration Retainage”**shall have the meaning set forth in Section8.4(b)(iv) hereof.

 

**“Restricted Party”**shall have the meaning set forth in Section7.1 hereof.

 

**“Sale or Pledge”**shall have the meaning set forth in Section7.1 hereof.

 

**“Scheduled Payment Date”**shall have the meaning set forth in the Note.

 

**“Securities”**shall have the meaning set forth in Section13.1 hereof.

 

**“Securities Act”**shall mean the Securities Act of 1933, as amended.

 

**“Securities Liabilities”**shall have the meaning set forth in Section13.5 hereof.

 

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**“Securitization”**shall have the meaning set forth in Section13.1 hereof.

 

**“Special Member”**shall have the meaning set forth in Section6.1(c).

 

**“S&P”**shall mean Standard & Poor’s Ratings Services, a division of TheMcGraw-Hill Companies, Inc.

 

**“State”**shall mean the state in which the Property orany part thereof is located.

 

**“Tax and Insurance Reserve Account”**shall have the meaning set forth in Section9.6 hereof.

 

**“Tax and Insurance Reserve Funds”**shall have the meaning set forth in Section 9.6 hereof.

 

**“Taxes”**shall mean all real estate and personal properly taxes, assessments,water rates or sewer rents, now or hereafter levied or assessed or imposedagainst the Properly or part thereof.

 

**“Tenant”**shall mean any Person leasing, subleasing or otherwise occupying anyportion of the Property under a Lease or other occupancy agreement withBorrower, including, without limitation, American Express, as tenant under theAmerican Express Lease.

 

**“Tenant Direction Letter”**shall have the meaning set forth in Section10.2(a)(i) hereof.

 

**“Title Insurance Policy”**shall mean that certain ALTA mortgagee titleinsurance policy issued with respect to the Property and insuring the lien ofthe Mortgage.

 

**“Transferee”**shall have the meaning set forth in Section 7.5 hereof.

 

**“Trigger Rating”**shall mean the long-term unsecured debtrating of Guarantor (or American Express if there is no Guarantor) below BBB asissued by S&P or below Baa2 as issued by Moody’s.

 

**“UCC” or “Uniform Commercial Code”**shall mean the Uniform Commercial Code as ineffect in the State where the applicable Property is located.

 

**Section****1.2.****          ****Principlesof Construction.**

 

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

 

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**ARTICLE 2****GENERAL TERMS**

 

**Section 2.1.****           LoanCommitment; Disbursement to Borrower**

 

(a)           Subject to and upon the terms and conditions set forthherein, Lender hereby agrees to make and Borrower hereby agrees to accept theLoan on the Closing Date.

 

(b)           Borrower may request and receive only one borrowing inrespect of the Loan and any amount borrowed and repaid in respect of the Loanmay not be reborrowed.

 

(c)           The Loan shall be evidenced by the Note and secured by theMortgage and the other Loan Documents.

 

(d)           Borrower shall use the proceeds of the Loan to (i) pay thepurchase price for acquiring the Property, (ii) pay certain costs and expensesincurred in connection with the closing of the Loan, as approved by Lender,(iv) fund any working capital requirements of the Property, and (v) distributethe balance, if any, to its members.

 

**Section****2.2.****          ****Loan Payments**

 

(a)           The Loan and interest shall be payable pursuant to theterms of the Note.

 

**Section****2.3.****          ****Prepayment**

 

The Loan may not be prepaid,in whole or in part, except in strict accordance with the express terms and conditionsof the Note.

 

**ARTICLE 3****CONDITIONS PRECEDENT**

 

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

 

**ARTICLE 4****REPRESENTATIONS AND WARRANTIES**

 

Borrower and, wherespecifically indicated, each Borrower Principal represents and warrants toLender as of the Closing Date that:

 

**Section 4.1.****           Organization**

 

Borrower and each BorrowerPrincipal (when not an individual) (a) has been duly organized and is validlyexisting and in good standing with requisite power and authority to own itsproperties and to transact the businesses in which it is now engaged, (b) isduly qualified to do business and is in good standing in each jurisdictionwhere it is required to be so qualified in

 

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connection with its properties, businessesand operations, (c) possesses all rights, licenses, permits and authorizations,governmental or otherwise, necessary to entitle it to own its properties and totransact the businesses in which it is now engaged, and the sole business ofBorrower is the ownership, management and operation of the Property, and (d) inthe case of Borrower, has full power, authority and legal right to mortgage,grant, bargain, sell, pledge, assign, warrant, transfer and convey the Propertypursuant to the terms of the Loan Documents, and in the case of Borrower andeach Borrower Principal, has full power, authority and legal right to keep andobserve all of the terms of the Loan Documents to which it is a party. Borrowerand each Borrower Principal represent and warrant that the chart attachedhereto as Exhibit A sets forth an accurate listing of the direct and indirectowners of the equity interests in Borrower, and each Borrower Principal (whennot an individual).

 

**Section****4.2.****          ****Status of Borrower**

 

Borrower’s exact legal nameis correctly set forth on the first page of this Agreement, on the Mortgage andon any UCC-1 Financing Statements filed in connection with the Loan. Borroweris an organization of the type specified on the first page of this Agreement.Borrower is organized under the laws of the State of Delaware. Borrower’sprincipal place of business and chief executive office, and the place whereBorrower keeps its books and records, including recorded data of any kind ornature, regardless of the medium of recording, including software, writings,plans, specifications and schematics, has been for the preceding four months(or, if less, the entire period of the existence of Borrower) the address ofBorrower set forth on the first page of this Agreement. Borrower’sorganizational identification number, if any, assigned by the state ofincorporation or organization is correctly set forth on the first page of theNote.

 

**Section 4.3.****           Validityof Documents**

 

Borrower and BorrowerPrincipal have taken all necessary action to authorize the execution, deliveryand performance of this Agreement and the other Loan Documents to which theyare parties. This Agreement and such other Loan Documents have been dulyexecuted and delivered by or on behalf of Borrower and Borrower Principal andconstitute the legal, valid and binding obligations of Borrower and BorrowerPrincipal enforceable against Borrower and Borrower Principal in accordancewith their respective terms, subject only to applicable bankruptcy, insolvencyand similar laws affecting rights of creditors generally, and subject, as to enforceability,to general principles of equity (regardless of whether enforcement is sought ina proceeding in equity or at law).

 

**Section 4.4.****          ****No****Conflicts**

 

The execution, delivery andperformance of this Agreement and the other Loan Documents by Borrower andBorrower Principal will not conflict with or result in a breach of any of theterms or provisions of, or constitute a default under, or result in thecreation or imposition of any lien, charge or encumbrance (other than pursuantto the Loan Documents) upon any of the property or assets of Borrower orBorrower Principal pursuant to the terms of any agreement or instrument towhich Borrower or Borrower Principal is a party or by which any of Borrower’sor Borrower Principal’s property or assets is subject, nor will such actionresult in any violation of the provisions of any statute or any order, rule orregulation of any

 

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Governmental Authority having jurisdictionover Borrower or Borrower Principal or any of Borrower’s or Borrower Principal’sproperties or assets, and any consent, approval, authorization, order,registration or qualification of or with any Governmental Authority requiredfor the execution, delivery and performance by Borrower or Borrower Principalof this Agreement or any of the other Loan Documents has been obtained and isin full force and effect.

 

**Section 4.5.****           Litigation**

 

There are no actions, suitsor proceedings at law or in equity by or before any Governmental Authority orother agency now pending or, to Borrower’s or Borrower Principal’s knowledge,threatened against or affecting Borrower, Borrower Principal, Manager or theProperty, which actions, suits or proceedings, if determined against Borrower,Borrower Principal, Manager or the Property, would materially adversely affectthe condition (financial or otherwise) or business of Borrower or BorrowerPrincipal or the condition or ownership of the Property.

 

**Section 4.6.****           Agreements**

 

Borrower is not a party toany agreement or instrument or subject to any restriction which wouldmaterially and adversely affect Borrower or the Property, or Borrower’sbusiness, properties or assets, operations or condition, financial orotherwise. Borrower is not in default in any material respect in theperformance, observance or fulfillment of any of the obligations, covenants orconditions contained in any agreement or instrument to which it is a party orby which Borrower or the Property is bound. Borrower has no material financialobligation under any agreement or instrument to which Borrower is a party or bywhich Borrower or the Property is otherwise bound, other than (a) obligationsincurred in the ordinary course of the operation of the Property and (b)obligations under the Loan Documents.

 

**Section****4.7.****          ****Solvency**

 

Borrower and each BorrowerPrincipal have (a) not entered into the transaction or executed the Note, thisAgreement or any other Loan Documents with the actual intent to hinder, delayor defraud any creditor and (b) received reasonably equivalent value inexchange for their obligations under such Loan Documents. Giving effect to theLoan, the fair saleable value of the assets of Borrower and each Borrower Principalexceeds and will, immediately following the making of the Loan, exceed thetotal liabilities of Borrower and Borrower Principal, including, withoutlimitation, subordinated, unliquidated, disputed and contingent liabilities. Nopetition in bankruptcy has been filed against Borrower, Borrower Principal, orAffiliated Manager in the last ten (10) years, and neither Borrower norBorrower Principal, or Affiliated Manager in the last ten (10) years has madean assignment for the benefit of creditors or (taken advantage of any CreditorsRights Laws. Neither Borrower nor Borrower Principal, or Affiliated Manager iscontemplating either the filing of a petition by it under any Creditors RightsLaws or the liquidation of all or a major portion of Borrower’s assets orproperty, and Borrower has no knowledge of any Person contemplating the filingof any such petition against Borrower or Borrower Principal, or AffiliatedManager.

 

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**Section 4.8.****           Fulland Accurate Disclosure**

 

No statement of fact made byor on behalf of Borrower or Borrower Principal in this Agreement or in any ofthe other Loan Documents or in any other document or certificate delivered byor on behalf of Borrower or Borrower Principal contains any untrue statement ofa material fact or omits to state any material fact necessary to makestatements contained herein or therein not misleading. There is no materialfact presently known to Borrower or Borrower Principal which has not beendisclosed to Lender which adversely affects, nor as far as Borrower or BorrowerPrincipal can reasonably foresee, might adversely affect, the Property or thebusiness, operations or condition (financial or otherwise) of Borrower orBorrower Principal.

 

**Section 4.9.****           NoPlan Assets**

 

Borrower is not an “employeebenefit plan,” as defined in Section 3(3) of ERISA, subject to Title I ofERISA, and none of the assets of Borrower constitutes or will constitute “planassets” of one or more such plans within the meaning of 29 C.F.R. Section2510.3-101. In addition, (a) Borrower is not a “governmental plan” within themeaning of Section 3(32) of ERISA and (b) transactions by or with Borrower arenot subject to state statutes regulating investment of, and fiduciaryobligations with respect to, governmental plans similar to the provisions ofSection 406 of ERISA or Section 4975 of the Internal Revenue Code currently ineffect, which prohibit or otherwise restrict the transactions contemplated bythis Agreement.

 

**Section 4.10.****        Not aForeign Person**

 

Neither Borrower norBorrower Principal is a “foreign Person” within the meaning of §1445(f)(3) of the Internal Revenue Code.

 

**Section 4.11****.****        Enforceability**

 

The Loan Documents are notsubject to any right of rescission, set-off, counterclaim or defense byBorrower, including the defense of usury, nor would the operation of any of theterms of the Loan Documents, or the exercise of any right thereunder, renderthe Loan Documents unenforceable, and neither Borrower nor Borrower Principalhas asserted any right of rescission, set-off, counterclaim or defense withrespect thereto. No Default or Event of Default exists under or with respect toany Loan Document.

 

**Section 4.12.****        BusinessPurposes**

 

The Loan is solely for thebusiness purpose of Borrower, and is not for personal, family, household, oragricultural purposes.

 

**Section 4.13.****        Compliance**

 

Except as expresslydisclosed by Borrower to Lender in writing in connection with the closing ofthe Loan, to Borrower’s knowledge, Borrower and the Property, and the use andoperation thereof, comply in all material respects with all Legal Requirements,including, without limitation, building and zoning ordinances and codes and theAmericans with Disabilities Act. To Borrower’s knowledge, Borrower is not indefault or violation of any order,

 

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writ, injunction, decree or demand of anyGovernmental Authority and Borrower has received no written notice of any suchdefault or violation. There has not been committed by Borrower or, to Borrower’sknowledge, any other Person in occupancy of or involved with the operation oruse of the Property any act or omission affording any Governmental Authoritythe right of forfeiture as against the Property or any part thereof or anymonies paid in performance of Borrower’s obligations under any of the LoanDocuments.

 

**Section 4.14.****        FinancialInformation**

 

All financial data,including, without limitation, the balance sheets, statements of cash flow,statements of income and operating expense and rent rolls, that have beendelivered to Lender in respect of Borrower, Borrower Principal and/or theProperty (a) are true, complete and correct in all material respects, (b)accurately represent the financial condition of Borrower, Borrower Principal orthe Property, as applicable, as of the date of such reports, and (c) to theextent prepared or audited by an independent certified public accounting firm,have been prepared in accordance with tax basis accounting throughout theperiods covered, except as disclosed therein. Borrower does not have anycontingent liabilities, liabilities for taxes, unusual forward or long-termcommitments or unrealized or anticipated losses from any unfavorablecommitments that are known to Borrower and reasonably likely to have a materialadverse effect on the Property or the current and/or intended operationthereof, except as referred to or reflected in said financial statements. Sincethe date of such financial statements, there has been no materially adversechange in the financial condition, operations or business of Borrower orBorrower Principal from that set forth in said financial statements.

 

**Section 4.15.****        Condemnation**

 

No Condemnation or otherproceeding has been commenced or, to Borrower’s best knowledge, is threatenedor contemplated with respect to all or any portion of the Property or for therelocation of roadways providing access to the Property.

 

**Section 4.16.****        Utilitiesand Public Access; Parking**

 

To the best of Borrower’sknowledge, the Property has adequate rights of access to public ways and isserved by water, sewer, sanitary sewer and storm drainfacilities adequate to service the Property for full utilization of theProperty for its intended uses. All public utilities necessary to the full useand enjoyment of the Property as currently used and enjoyed are located eitherin the public right-of-way abutting the Property (which are connected so as toserve the Property without passing over other property) or in recordedeasements serving the Property and such easements are set forth in and insuredby the Title Insurance Policy. All roads necessary for the use of the Propertyfor its current purposes have been completed and dedicated to public use andaccepted by all Governmental Authorities. The Property has, or is served by,parking to the extent required to comply with all Legal Requirements.

 

**Section 4.17.****        SeparateLots**

 

The Property is assessed forreal estate tax purposes as one or more wholly independent tax lot or lots,separate from any adjoining land or improvements not constituting a part of such

 

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lot or lots, and no other land or improvementsis assessed and taxed together with the Property or any portion thereof.

 

**Section 4.18.****        Assessments**

 

To Borrower’s knowledge,there are no pending or proposed special or other assessments for publicimprovements or otherwise affecting the Property, nor are there anycontemplated improvements to the Property that may result in such special orother assessments.

 

**Section 4.19.****        Insurance**

 

Borrower has obtained andhas delivered to Lender either (a) certified copies of all Policies or, to theextent such Policies are not available as of the Closing Date, certificates ofinsurance with respect to all such Policies reflecting the insurance coverages,amounts and other requirements set forth in this Agreement or (b) thecertificate of American Express that American Express is a self-insurer withrespect to the occurrences referred to in Section 8.1 and that the rating ofAmerican Express by the Rating Agencies has not fallen below the TriggerRating.

 

**Section 4.20.****        Use ofProperty**

 

The Property is usedexclusively for general office purposes and other appurtenant and related uses.

 

**Section 4.21.****        Certificateof Occupancy; Licenses**

 

All certificates ofoccupancy and to Borrower’s knowledge all certifications, permits, licenses andapprovals, including, without limitation, certificates of completion and anyapplicable liquor license required for the legal use, occupancy and operationof the Property for the purpose intended herein, have been obtained and arevalid and in full force and effect. Borrower shall keep and maintain (orrequire American Express to maintain) all licenses necessary for the operationof the Property for the purpose intended herein. The use being made of theProperty is in conformity with the final certificate of occupancy (orcompliance, if applicable) and any other permits or licenses issued for theProperty.

 

**Section****4.22.****       ****Flood Zone**

 

None of the Improvements onthe Property are located in an area identified by the Federal EmergencyManagement Agency as an area having special flood hazards, or, if any portionof the Improvements is located within such area, Borrower will obtain or causeAmerican Express to obtain the insurance prescribed in Section 8.1(a)(i) at anytime during the term of the Loan when American Express ceases to be aself-insurer or when the rating of American Express by the Rating Agenciesfalls below the Trigger Rating.

 

**Section 4.23.****        PhysicalCondition**

 

Except as set forth in theProperty Condition Report, to Borrower’s knowledge, the Property, including,without limitation, all buildings, improvements, parking facilities,

 

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sidewalks, storm drainage systems, roofs, plumbingsystems, HVAC systems, fire protection systems, electrical systems, equipment,elevators, exterior sidings and doors, landscaping, irrigation systems and allstructural components, are in good condition, order and repair in all materialrespects. Except as set forth in the Property Condition Report, to Borrower’sknowledge, there exist no structural or other material defects or damages inthe Property, as a result of a Casualty or otherwise, and whether latent orotherwise. Borrower has not received notice from any insurance company orbonding company of any defects or inadequacies in the Property, or any partthereof, which would adversely affect the insurability of the same or cause theimposition of extraordinary premiums or charges thereon or of any terminationor threatened termination of any policy of insurance or bond.

 

**Section 4.24.****        Boundaries;Survey**

 

(a)           None of the Improvements which were included indetermining the appraised value of the Property lie outside the boundaries andbuilding restriction lines of the Property to any material extent, and (b) noimprovements on adjoining properties encroach upon the Property and noeasements or other encumbrances upon the Properly encroach upon any of theImprovements so as to materially affect the value or marketability of theProperty.

 

**Section 4.25.****        Leases**

 

The entire Property has beenleased to American Express pursuant to the American Express Lease. (a) TheAmerican Express Lease is in full force and effect; (b) the premises demisedunder the American Express Lease have been completed and American Express hasaccepted possession of and is in occupancy of the demised premises; (c)American Express has commenced the payment of rent under the American ExpressLease, there are no offsets, claims or defenses to the enforcement thereof andBorrower has no monetary obligations to American Express under the AmericanExpress Lease; (d) all Rents due and payable under the American Express Leasehave been paid and no portion thereof has been paid for any period more thanthirty (30) days in advance; (e) the rent payable under the American ExpressLease is the amount of fixed rent set forth in the American Express Lease, andthere is no claim or basis for a claim by American Express thereunder for anadjustment to the Rent; (f) Borrower is the sole owner of the entire landlord’sinterest in the American Express Lease; (g) the American Express Lease is thevalid, binding and enforceable obligation of Borrower and American Expressthereunder and there are no agreements with American Express with respect tothe American Express Lease other than as expressly set forth therein; (h) noPerson has any possessory interest in, or right to occupy, the Property or anyportion thereof except under the American Express Lease; (i) except for theright of first refusal set forth in Article 4 and the right to offer topurchase the Property under Article 12, the American Express Lease docs notcontain any option or offer to purchase or right of first refusal to purchasethe Property or any part thereof; and (j) neither the American Express Leasenor the Rents have been assigned or pledged except to Lender, and no otherPerson has any interest therein.

 

**Section4.26.****        Filing and Recording Taxes**

 

All mortgage, mortgagerecording, stamp, intangible or other similar tax required to be paid by anyPerson under applicable Legal Requirements currently in effect in connectionwith

 

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the execution, delivery, recordation, filing,registration, perfection or enforcement of any of the Loan Documents,including, without limitation, the Mortgage, have been paid or will be paid,and, under current Legal Requirements, the Mortgage is enforceable in accordancewith its terms by Lender (or any subsequent holder thereof).

 

**Section****4.27.****       ****Management Agreement**

 

The Management Agreement isin full force and effect and there is no default thereunder by any partythereto and, to Borrower’s knowledge, no event has occurred that, with thepassage of time and/or the giving of notice, would constitute a defaultthereunder. No management fees under the Management Agreement are accrued andunpaid.

 

**Section 4.28.****        IllegalActivity**

 

No portion of the Propertyhas been or will be purchased with proceeds of any illegal activity, and nopart of the proceeds of the Loan will be used in connection with any illegalactivity.

 

**Section 4.29.****        ConstructionExpenses**

 

All costs and expenses ofany and all labor, materials, supplies and equipment used in the construction,maintenance or repair of the Improvements have been paid in full. To Borrower’sknowledge after due inquiry, there are no claims for payment for work, labor ormaterials affecting the Property which are or may become a lien prior to, or ofequal priority with, the Liens created by the Loan Documents.

 

**Section4.30.****        Personal Property**

 

Borrower has paid in fullfor, and is the owner of, all Personal Property (other than tenants’ property)used in connection with the operation of the Property, free and clear of anyand all security interests, liens or encumbrances, except for PermittedEncumbrances and the Lien and security interest created by the Loan Documents.

 

**Section 4.31.****        Taxes**

 

Borrower and BorrowerPrincipal have filed all federal, state, county, municipal, and city income,personal property and other tax returns required to have been filed by them andhave paid all taxes and related liabilities which have become due pursuant tosuch returns or pursuant to any assessments received by them. Neither Borrowernor Borrower Principal knows of any basis for any additional assessment inrespect of any such taxes and related liabilities for prior years.

 

**Section 4.32.****        PermittedEncumbrances**

 

None of the PermittedEncumbrances, individually or in the aggregate, materially interferes with thebenefits of the security intended to be provided by the Loan Documents,materially and adversely affects the value of the Property, impairs the use orthe operation of the Property or impairs Borrower’s ability to pay itsobligations in a timely manner.

 

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**Section 4.33.****        FederalReserve Regulations**

 

Borrower will use theproceeds of the Loan for the purposes set forth in Section 2.1(d) hereof andnot for any illegal activity. No part of the proceeds of the Loan will be usedfor the purpose of purchasing or acquiring any “margin stock” within themeaning of Regulation U of the Board of Governors of the Federal Reserve Systemor for any other purpose which would be inconsistent with such Regulation U orany other Regulations of such Board of Governors, or for any purposesprohibited by Legal Requirements or prohibited by the terms and conditions ofthis Agreement or the other Loan Documents.

 

**Section 4.34.****        InvestmentCompany Act**

 

Borrower is not (a) an “investmentcompany” or a company “controlled” by an “investment company,” within themeaning of the Investment Company Act of 1940, as amended; (b) a “holdingcompany” or a “subsidiary company” of a “holding company” or an “affiliate” ofeither a “holding company” or a “subsidiary company” within the meaning of thePublic Utility Holding Company Act of 1935, as amended; or (c) subject to anyother federal or state law or regulation which purports to restrict or regulateits ability to borrow money.

 

**Section 4.35.****        ReciprocalEasement Agreements**

 

(a)           Neither Borrower nor any other party is currently indefault (nor has any notice been given or received with respect to an allegedor current default) under any of the terms and conditions of the REA, and theREA remains unmodified and in full force and effect;

 

(b)           All easements granted pursuant to the REA which were tohave survived the site preparation and completion of construction (to theextent that the same has been completed), remain in full force and effect andhave not been released, terminated, extinguished or discharged by agreement orotherwise;

 

(c)           To the best of Borrower’s knowledge, all sums due andowing by Borrower to the other parties to the REA (or by the other parties tothe REA to the Borrower) pursuant to the terms of the REA, including withoutlimitation, all sums, charges, fees, assessments, costs, and expenses inconnection with any taxes, site preparation and construction, non-shareholder contributions,and common area and other property management activities have been paid, are current,and no lien has attached on the Property (or threat thereof been made) forfailure to pay any of the foregoing;

 

(d)           The terms, conditions, covenants, uses and restrictionscontained in the REA do not conflict in any manner with any terms, conditions,covenants, uses and restrictions contained in any Lease or in any agreementbetween Borrower and occupant of any peripheral parcel, including without limitation,conditions and restrictions with respect to kiosk placement, tenant restrictions(type, location or exclusivity), sale of certain goods or services, and/orother use restrictions; and

 

(e)           The terms, conditions, covenants, uses and restrictions containedin the American Express Lease do not conflict in any manner with any terms,conditions, covenants, uses and restrictions contained in the REA, any otherlease or in any agreement between Borrower and

 

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occupant of any peripheral parcel, includingwithout limitation, conditions and restrictions with respect to kioskplacement, tenant restrictions (type, location or exclusivity), sale of certaingoods or services, and/or other use restrictions.

 

**Section 4.36.****       ****No****Change in Facts orCircumstances; Disclosure**

 

All information submitted byBorrower or its agents to Lender and in all financial statements, reports,certificates and other documents submitted in connection with the Loan or insatisfaction of the terms thereof and all statements of fact made by Borrowerin this Agreement or in any other Loan Document, are accurate, complete andcorrect in all material respects. There has been no material adverse change inany condition, fact, circumstance or event that would make any such informationinaccurate, incomplete or otherwise misleading in any material respect or thatotherwise materially and adversely affects or might materially and adverselyaffect the Property or the business operations or the financial condition ofBorrower. Borrower has disclosed to Lender all material facts and has notfailed to disclose any material fact that could cause any representation orwarranty made herein to be materially misleading.

 

**Section****4.37.****       ****Intellectual Property**

 

All trademarks, trade namesand service marks necessary to the business of Borrower as presently conductedor as Borrower contemplates conducting its business are in good standing and,to the extent of Borrower’s actual knowledge, uncontested. Borrower has notinfringed, is not infringing, and has not received notice of infringement withrespect to asserted trademarks, trade names and service marks of others. ToBorrower’s knowledge, there is no infringement by others of trademarks, tradenames and service marks of Borrower.

 

**Section 4.38.****        Compliancewith Anti-Terrorism Laws**

 

None of Borrower, BorrowerPrincipal or any Person who Controls Borrower or Borrower Principal currentlyis identified by the Office of Foreign Assets Control, Department of theTreasury (**“OFAC”**) or otherwise qualifies as anEmbargoed Person, and Borrower has implemented procedures to ensure that noPerson who now or hereafter owns a material direct or indirect equity interestin Borrower is an Embargoed Person or is Controlled by an Embargoed Person. ToBorrower’s knowledge neither Borrower nor Borrower Principal is in violation ofany applicable law relating to anti-money laundering or anti-terrorism,including, without limitation, those related to transacting business withEmbargoed Persons or the requirements of the Uniting and Strengthening Americaby Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Actof 2001, U.S. Public Law 107-56, and the related regulations issued thereunder,including temporary regulations (collectively, as the same may be amended fromtime to time, the **“Patriot****Act”**). To the best of Borrower’s knowledge, no tenant at theProperty is currently identified by OFAC or otherwise qualifies as an EmbargoedPerson, or is owned or Controlled by an Embargoed Person.

 

**Section 4.39.****        PatriotAct**

 

Neither Borrower norBorrower Principal shall (a) be or become subject at any time to any law,regulation, or list of any government agency (including, without limitation,the list maintained by OFAC and accessible through the OFAC website) thatprohibits or limits any

 

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lender from making any advance or extensionof credit to Borrower or from otherwise conducting business with Borrower andBorrower Principal, or (b) fail to provide documentary and other evidence ofBorrower’s identity as may be requested by any lender at any time to enable anylender to verify Borrower’s identity or to comply with any applicable law orregulation, including, without limitation, the Patriot Act. In addition,Borrower hereby agrees to provide to Lender any additional information thatLender deems necessary from time to time in order to ensure compliance with allapplicable laws concerning money laundering and similar activities.

 

**Section 4.40.****        Survival**

 

Borrower agrees that, unlessexpressly provided otherwise, all of the representations and warranties ofBorrower set forth in this Article 4 and elsewhere in this Agreement and in theother Loan Documents shall survive for so long as any portion of the Debtremains owing to Lender. All representations, warranties, covenants andagreements made in this Agreement or in the other Loan Documents by Borrowershall be deemed to have been relied upon by Lender notwithstanding any investigationheretofore or hereafter made by Lender or on its behalf.

 

**ARTICLE 5****BORROWER COVENANTS**

 

From the date hereof anduntil repayment of the Debt in full and performance in full of all obligationsof Borrower under the Loan Documents or the earlier release of the Lien of theMortgage (and all related obligations) in accordance with the terms of thisAgreement and the other Loan Documents, Borrower hereby covenants and agreeswith Lender that:

 

**Section 5.1.****           Existence;Compliance with Legal Requirements**

 

(a)           Borrower shall do or cause to be done all things necessaryto preserve, renew and keep in full force and effectits existence, rights, licenses, permits and franchises and comply with allLegal Requirements applicable to it and the Property. Borrower hereby covenantsand agrees not to commit, permit or suffer to existany act or omission affording any Governmental Authority the right offorfeiture as against the Property or any part thereof or any monies paid in performanceof Borrower’s obligations under any of the Loan Documents. Borrower shall atall times maintain, preserve and protect all franchises and trade names used inconnection with the operation of the Property. So long as American Express isin compliance with the terms of the American Express Lease with respect to thematters described in this Section 5.1, Borrower shall be deemed in compliancewith this Section 5.1.

 

(b)           Borrower, at its own expense, may contest or permitAmerican Express to contest by appropriate legal proceeding, promptly initiatedand conducted in good faith and with due diligence, the Legal Requirementsaffecting the Property, provided that (i) no Default or Event of Default hasoccurred and is continuing; (ii) such proceeding shall be permitted under andbe conducted in accordance with the provisions of any other instrument to whichBorrower or the Property is subject and shall not constitute a defaultthereunder; (iii) neither the Property, any part thereof or interest therein,any of the tenants or occupants thereof, nor Borrower shall be affected in anymaterial adverse way as a result of such proceeding; (iv) non-compliance withthe

 

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Legal Requirements shall not impose civil orcriminal liability on Borrower or Lender; (v) unless the contest is initiatedand conducted by American Express pursuant to the American Express LeaseBorrower shall have furnished the security as may be required in the proceedingor by Lender to ensure compliance by Borrower with the Legal Requirements; and(vi) if the contest is initiated and conducted by Borrower, Borrower shall havefurnished to Lender all other items reasonably requested by Lender. Borrowershall give written notice to Lender of any contest initiated and conducted byBorrower promptly after initiation thereof and shall inform Lender of anycontest initiated and conducted by American Express of which Borrower is givennotice by American Express.

 

**Section 5.2.****           Maintenanceand Use of Property**

 

Borrower shall cause theProperty to be maintained in a good and safe condition and repair. TheImprovements and the Personal Property shall not be removed, demolished orexcept as may be expressly permitted under the American Express Lease withoutthe consent of the landlord thereunder, materially altered (except for normalreplacement of the Personal Property) without the prior written consent ofLender. So long as American Express is in compliance with the terms of theAmerican Express Lease with respect to the matters described in this Section5.2, Borrower shall be deemed in compliance with this Section 5.2. If underapplicable zoning provisions the use of all or any portion of the Property isor shall become a nonconforming use, Borrower will not cause or permit the nonconforminguse to be discontinued or the nonconforming Improvement to be abandoned withoutthe express written consent of Lender.

 

**Section 5.3.****           Waste**

 

Borrower shall not commit orsuffer any waste of the Property or make any change in the use of the Propertywhich will in any way materially increase the risk of fire or other hazardarising out of the operation of the Property, or take any action that mightinvalidate or give cause for cancellation of any Policy, or do or permit to bedone thereon anything that may in any way impair the value of the Property orthe security for the Loan. Borrower will not, without, the prior writtenconsent of Lender, permit any drilling or exploration for or extraction,removal, or production of any minerals from the surface or the subsurface ofthe Property, regardless of the depth thereof or the method of mining orextraction thereof.

 

**Section 5.4.****           Taxesand Other Charges**

 

(a)           Borrower shall pay or cause American Express to pay allTaxes and Other Charges now or hereafter levied or assessed or imposed againstthe Property or any part thereof as the same become due and payable. Borrowershall furnish or cause to be furnished to Lender such receipts for the paymentof the Taxes and the Other Charges as are delivered to Borrower by AmericanExpress and, upon request by Lender, a certificate from Borrower and BorrowerPrincipal that as of the date of such certificate there are no liens filedagainst the Property arising from the non-payment of Taxes or Other Charges.Borrower shall not suffer nor permit American Express to suffer and shallpromptly cause to be paid and discharged any Lien or charge whatsoever whichmay be or become a Lien or charge against the Property, and shall promptly payfor all utility services provided to the Property. So long as American Expressis in

 

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compliance with the terms of the American Express Leasewith respect to the matters described in this Section 5.4, Borrower shall bedeemed in compliance with this Section 5.4.

 

(b)           Borrower, at its own expense, may contest or permitAmerican Express to contest by appropriate legal proceeding, promptly initiatedand conducted in good faith and with due diligence, the amount or validity orapplication in whole or in part of any Taxes or Other Charges, provided that(i) no Default or Event of Default has occurred and remains uncured; (ii) suchproceeding shall be permitted under and be conducted in accordance with theprovisions of any other instrument to which Borrower is subject and shall notconstitute a default thereunder and such proceeding shall be conducted inaccordance with all applicable Legal Requirements; (iii) neither the Propertynor any part thereof or interest therein will be in danger of being sold,forfeited, terminated, canceled or lost; (iv) Borrower shall promptly uponfinal determination thereof pay the amount, of any such Taxes or Other Charges,together with all costs, interest and penalties which may be payable inconnection therewith; (v) such proceeding shall suspend the collection of suchcontested Taxes or Other Charges from the Property; and (vi) Borrower shallfurnish or cause American Express to furnish (but only to the extent requiredto be furnished by American Express under the American Express Lease) suchsecurity as may be required in the proceeding, or deliver to Lender suchreserve deposits as may be requested by Lender, to insure the payment of anysuch Taxes or Other Charges, together with all interest and penalties thereon(unless Borrower or American Express has paid all of the Taxes or Other Chargesunder protest). Lender may pay over any such cash deposit or part thereof heldby Lender to the claimant entitled thereto at any time when, in the judgment ofLender, the entitlement of such claimant is established or the Property (orpart thereof or interest therein) shall be in danger of being sold, forfeited,terminated, canceled or lost or there shall be any danger of the Lien of theMortgage being primed by any related Lien.

 

**Section****5.5.****          ****Litigation**

 

Borrower shall give promptwritten notice to Lender of any litigation or governmental proceedings pendingor threatened in writing against Borrower which might materially adverselyaffect Borrower’s condition (financial or otherwise) or business or theProperty.

 

**Section 5.6.****          ****Access****to Property**

 

Borrower shall permitagents, representatives and employees of Lender to inspect the Property or anypart thereof at reasonable hours upon reasonable advance notice, subject to therights of American Express under the American Express Lease.

 

**Section****5****.****7.****          ****Notice of Default**

 

Borrower shall promptlyadvise Lender of any material adverse change in the condition (financial orotherwise) of Borrower, any Borrower Principal or the Property or of theoccurrence of any Default or Event of Default of which Borrower has knowledgeand of any American Express Lease Default of which Borrower has knowledge.

 

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**Section 5.8.****          ****Cooperate in LegalProceedings**

 

Borrowershall at Borrower’s expense cooperate fully with Lender with respect to anyproceedings before any court, board or other Governmental Authority which mayin any way affect the rights of Lender hereunder or any rights obtained byLender under any of the other Loan Documents and, in connection therewith,permit Lender, at its election, to participate in any such proceedings.

 

**Section 5.9.****          ****Performance by Borrower**

 

Borrowershall in a timely manner observe, perform and fulfill each and every covenant,term and provision to be observed and performed by Borrower under thisAgreement and the other Loan Documents and any other agreement or instrumentaffecting or pertaining to the Property and any amendments, modifications orchanges thereto.

 

**Section 5.10.****       ****Awards; Insurance Proceeds**

 

Borrowershall cooperate with Lender in obtaining for Lender the benefits of any Awardsor Insurance Proceeds lawfully or equitably payable to Borrower in connectionwith the Property, and Lender shall be reimbursed for any expenses incurred inconnection therewith (including reasonable, actual attorneys’ fees anddisbursements, and the payment by Borrower of the expense of an appraisal onbehalf of Lender in case of a Casualty or Condemnation affecting the Propertyor any part thereof) out of such Awards or Insurance Proceeds. The actualpayment of any Awards shall be governed by Section 8.4 hereof.

 

**Section 5.11****.****       ****Financial Reporting**

 

(a)                                  Borrower and Borrower Principal shall keep adequatebooks and records of account in accordance with federal tax basis accounting,or in accordance with other methods acceptable to Lender in its solediscretion, consistently applied and shall furnish to Lender:

 

(i)                                     prior to a Securitization, at the request ofLender, monthly, and following a Securitization, quarterly and annualcertificates signed and dated by Borrower, certifying that the American ExpressLease is in full force and effect, whether any defaults (or any matter that,with the passage of time or the giving of notice, could become a default) existthereunder and any other information as is reasonably required by Lender,within twenty (20) days after the end of each calendar month, thirty (30) daysafter the end of each fiscal quarter or one hundred twenty (120) days after theclose of each fiscal year of Borrower, as applicable;

 

(ii)                                  prior to a Securitization, at the request ofLender, monthly, and following a Securitization, quarterly and annual operatingstatements of the Property, prepared and certified by Borrower in the formrequired by Lender, detailing the revenues received, the expenses incurred andthe net operating income before and after debt service (principal and interest)and major capital improvements (including, without limitation, any capitalimprovements planned by American Express of which Borrower has notice) for theperiod of calculation and containing appropriate year-to-date information,within twenty (20) days after the end of each calendar month, thirty (30) daysafter the end of each

 

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fiscalquarter or one hundred (120) days after the close of each fiscal year ofBorrower, as applicable;

 

(iii)                               annual balance sheets, profit and lossstatements, statements of cash flows, and statements of change in financialposition of Borrower and Borrower Principal in the form required by Lenderprepared and certified by Borrower and Borrower Principal within one hundredtwenty (120) days after the close of each fiscal year of Borrower and BorrowerPrincipal, as the case may be (provided that with respect to Borrower, suchstatements may be delivered by the holder(s) of beneficial interests inBorrower in accordance with Section 6.1 (a)(viii); and

 

(iv)                              all financial statements, operatingstatements, budgets, capital repair estimates or projections and certificationsof any kind with respect to the foregoing delivered to Borrower by AmericanExpress under the American Express Lease.

 

(b)           To the extent not inconsistent with the provisionsof Section 5.11(a) hereof (e.g., GAAP accounting and audits shall not berequired), Borrower and Borrower Principal shall furnish Lender with such otheradditional financial or management information (including state and federal taxreturns) as may, from time to time, be reasonably required by Lender in formand substance satisfactory to Lender (including, without limitation, anyfinancial reports required to be delivered by any Tenant or any guarantor ofany Lease pursuant to the terms of such Lease), and shall furnish to Lender andits agents convenient facilities for the examination and audit of any suchbooks and records

 

(c)           Without limiting any other rights availableto Lender under this Loan Agreement or any of the other Loan Documents, in theevent Borrower shall fail to timely furnish Lender any financial document orstatement in accordance with this Section 5.11, Borrower shall promptlypay to Lender a non-refundable charge in the amount of $500 for each suchfailure. The payment of such amount shall not be construed to relieve Borrowerof any Event of Default hereunder arising from such failure.

 

(d)           All items requiring the certification ofBorrower shall, except where Borrower is an individual, require a certificateexecuted by the general partner, managing member or chief executive officer ofBorrower, as applicable (and the same rules shall apply to any sole shareholder,general partner or managing member which is not an individual).

 

**Section ****5.12.**        **Estoppel Statement**

 

(a)           After request by Lender, Borrower shallwithin ten (10) Business Days furnish Lender with a statement, dulyacknowledged and certified, setting forth (i) the amount of the originalprincipal amount of the Note, (ii) the rate of interest on the Note, (iii) theunpaid principal amount of the Note, (iv) the date installments of interestand/or principal were last paid, (v) any offsets or defenses to the payment ofthe Debt, if any, and (vi) that the Note, this Agreement, the Mortgage and theother Loan Documents are valid, legal and binding obligations and have not beenmodified or if modified, giving particulars of such modification.

 

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(b)           Borrower shall use its best efforts todeliver to Lender, promptly upon request, a duly executed estoppel certificatefrom American Express on the form attached to the American Express Lease as anexhibit.

 

**Section 5.13.****       ****Leasing Matters.**

 

(a)           Borrower (i) shall observe and perform allthe obligations imposed on the landlord under the American Express Lease andshall not do or permit to be done anything to impair the value of the AmericanExpress Lease as security for the Debt; (ii) shall promptly send copies toLender of all notices of default which Borrower shall send or receivethereunder; (iii) shall enforce all of the material terms, covenants andconditions contained in the American Express Lease on the part of the tenantthereunder to be observed or performed; (iv) shall not collect any of the Rentsmore than one (1) month in advance; (v) shall not execute any other assignmentof the landlord’s interest in the American Express Lease or the Rents; and (vi)shall not consent to any assignment of or subletting under the American ExpressLease not in accordance with its terms without the prior written consent ofLender.

 

(b)           Borrower shall not, without the prior writtenconsent of Lender, enter into, renew, extend, amend, modify, waive anyprovisions of, terminate, reduce Rents under, accept a surrender of space underor shorten the term of the American Express Lease.

 

**Section 5.14.****       ****Property Management**

 

(a)           Borrower shall (i) promptly perform andobserve all of the covenants required to be performed and observed by it underthe Management Agreement and do all things necessary to preserve and to keepunimpaired its material rights thereunder; (ii) promptly notify Lender of anydefault under the Management Agreement of which it is aware; (iii) promptlydeliver to Lender a copy of any notice of default or other material noticereceived by Borrower under the Management Agreement; (iv) promptly give noticeto Lender of any notice or information that Borrower receives which indicatesthat Manager is terminating the Management Agreement or that Manager isotherwise discontinuing its management of the Property; and (v) promptly enforcethe performance and observance of all of the covenants required to be performedand observed by Manager under the Management Agreement.

 

(b)           If at any time, (i) Manager shall becomeinsolvent or a debtor in a bankruptcy proceeding; (ii) an Event of Default hasoccurred and is continuing; or (iii) a default has occurred and is continuingafter the expiration of any applicable cure periods under the Management Agreement,Borrower shall, at the request of Lender, terminate the Management Agreement uponthirty (30) days prior notice to Manager and replace Manager with a QualifiedManager, it being understood and agreed that the management fee for suchreplacement manager shall not exceed then prevailing market rates.

 

(c)           In addition to the foregoing, in the eventthat Lender, in Lender’s reasonable discretion, at any time prior to thetermination of the Assignment of Management Agreement, determines that theProperty is not being managed in accordance with generally accepted managementpractices for projects similarly situated, Lender may deliver written noticethereof to Borrower and Manager, which notice shall specify with particularitythe grounds for Lender’s

 

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determination.If Lender reasonably determines that the conditions specified in Lender’snotice are not remedied to Lender’s reasonable satisfaction by Borrower orManager within thirty (30) days from the date of such notice or that Borroweror Manager has failed to diligently undertake correcting such conditions withinsuch thirty (30) day period, Lender may direct Borrower to terminate theManagement Agreement and to replace Manager with a Qualified Manager on termsand conditions satisfactory to Lender, it being understood and agreed that themanagement fee for such replacement manager shall not exceed then prevailingmarket rates.

 

(d)           Borrower shall not, without the prior writtenconsent of Lender (which consent shall not be unreasonably withheld,conditioned or delayed): (i) surrender, terminate or cancel the ManagementAgreement or otherwise replace Manager or enter into any other management agreementwith respect to the Property; (ii) reduce or consent to the reduction of theterm of the Management Agreement; (iii) increase or consent to the increase ofthe amount of any charges under the Management Agreement; or (iv) otherwisemodify, change, supplement, alter or amend, or waive or release any of its rightsand remedies under, the Management Agreement in any material respect. In theevent that Borrower replaces Manager at any time during the term of Loanpursuant to this subsection, such Manager shall be a Qualified Manager.

 

(e)           Notwithstanding the foregoing, Borrower shallbe permitted to transfer the management of the Property to an Affiliate ofManager provided that the terms of the management contract between Borrower andsuch entity provides for fees no greater than, is on terms that aresubstantially similar to and is no less favorable to Borrower than the ManagementAgreement in effect as of the date hereof.

 

**Section ****5.15.****       ****Liens**

 

Borrowershall not, without the prior written consent of Lender, create, incur, assumeor suffer to exist any Lien on any portion of the Property or permit any suchaction to be taken, except Permitted Encumbrances.

 

**Section 5.16.****       ****Debt Cancellation**

 

Borrowershall not cancel or otherwise forgive or release any claim or debt owed toBorrower by any Person, except for adequate consideration and in the ordinarycourse of Borrower’s business.

 

**Section 5.17.****       ****Zoning**

 

Borrowershall not initiate or consent to any zoning reclassification of any portion ofthe Property or seek any variance under any existing zoning ordinance or use orpermit the use of any portion of the Property in any manner that could resultin such use becoming a non-conforming use under any zoning ordinance or anyother applicable land use law, rule or regulation, without the prior writtenconsent of Lender.

 

**Section 5.18.****                        ****ERISA**

 

(a)                                  Borrower shall not engage in any transactionwhich would cause any obligation, or action taken or to be taken, hereunder (orthe exercise by Lender of any of its rights under the

 

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Note,this Agreement or the other Loan Documents) to be a non-exempt (under astatutory or administrative class exemption) prohibited transaction under ERISA.

 

(b)                                 Borrower further covenants and agrees todeliver to Lender such certifications or other evidence from time to timethroughout the term of the Loan, as requested by Lender in its sole discretion,that (i) Borrower is not and does not maintain an “employee benefit plan” asdefined in Section 3(3) of ERISA, which is subject to Title I of ERISA, ora “governmental plan” within the meaning of Section 3(3) of ERISA; (ii)Borrower is not subject to state statutes regulating investments and fiduciaryobligations with respect to governmental plans; and (iii) one or more of thefollowing circumstances is true:

 

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

 

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

 

(C)           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).

 

**Section 5.19.****       ****No****Joint Assessment**

 

Borrowershall 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 personalproperty, or any other procedure whereby the Lien of any taxes which may belevied against such personal property shall be assessed or levied or charged tothe Property.

 

**Section 5.20.****       ****Reciprocal EasementAgreements**

 

Borrowershall not enter into, terminate or modify any REA without Lender’s priorwritten consent, which consent shall not be unreasonably withheld, conditionedor delayed. Borrower shall enforce, comply with, and cause each of the partiesto the REA to comply with all of the material economic terms and conditionscontained in the REA, provided that Borrower may agree, without Lender’s consent,to modifications to any REA or to grant easements with respect to the Propertywhich could not reasonably be expected to have a material adverse effect on theuse, value or operation of the Property, on the ability of American Express toperform its obligations under the American Express Lease or on Borrower’sability to perform its obligations under the Loan Documents.

 

**ARTICLE 6**

**ENTITY COVENANTS**

 

**Section 6.1.****          ****Single PurposeEntity/Separateness**

 

Untilthe Debt has been paid in full, Borrower represents, warrants and covenants asfollows:

 

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(a)           Borrower has not and will not:

 

(i)            engage in any business or activity other thanthe ownership, operation and maintenance of the Property, and activitiesincidental thereto;

 

(ii)           acquire or own any assets other than (A) the Property, and (B) suchincidental Personal Property as may be necessary for the operation of theProperty;

 

(iii)          except as expressly provided in Article 7 hereof, merge into orconsolidate with any Person, or dissolve, terminate, liquidate in whole or inpart, transfer or otherwise dispose of all or substantially all of its assetsor change its legal structure;

 

(iv)          fail to observe all organizational formalities, or fail to preserve itsexistence as an entity duly organized, validly existing and in good standing(if applicable) under the applicable Legal Requirements of the jurisdiction ofits organization or formation, or amend, modify, terminate or fail to complywith the provisions of its organizational documents;

 

(v)           own any subsidiary, or make any investment in, any Person;

 

(vi)          commingle its assets with the assets of any other Person, or permit anyAffiliate or constituent party independent access to its bank accounts;

 

(vii)         incur any debt, secured or unsecured, direct or contingent (includingguaranteeing any obligation), other than (A) the Debt, (B) trade andoperational indebtedness incurred in the ordinary course of business with tradecreditors, provided such indebtedness is (1) unsecured, (2) not evidenced by anote, (3) on commercially reasonable terms and conditions, and (4) due not morethan sixty (60) days past the date incurred and paid on or prior to such date,and/or (C) financing leases and purchase money indebtedness incurred in theordinary course of business relating to Personal Property on commerciallyreasonable terms and conditions; provided however, the aggregate amount of theindebtedness described in (B) and (C) shall not exceed at any time threepercent (3%) of the outstanding principal amount of the Note;

 

(viii)        permit its records, books of account, bank accounts, financialstatements and accounting records (including with respect to financialposition, assets, liabilities, net worth and operating results) to be shown onthe financial statements of any holder of a beneficial interest in Borrowerunless such financial statements shall contain a footnote indicating thatBorrower is a separate legal entity and the assets of Borrower are notavailable as collateral to creditors of such holder;

 

(ix)           enter into any contract or agreement with any general partner, member,shareholder, principal, guarantor of the obligations of Borrower, or anyAffiliate of the foregoing, except upon terms and conditions that areintrinsically fair, commercially reasonable and substantially similar to thosethat would be available on an arm’s-length basis with unaffiliated thirdparties;

 

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(x)            maintain its assets in such a manner that itwill be costly or difficult to segregate, ascertain or identify its individualassets from those of any other Person;

 

(xi)           assume or guarantee the debts of any other Person, hold itself out tobe responsible for the debts of any other Person, or otherwise pledge itsassets for the benefit of any other Person or hold out its credit as beingavailable to satisfy the obligations of any other Person;

 

(xii)          make any loans or advances to any Person;

 

(xiii)         fail to file its own tax returns or files a consolidated federal incometax return with any Person (unless prohibited or required, as the case may be,by applicable Legal Requirements);

 

(xiv)        fail either to hold itself out to the public as a legal entity separateand distinct from any other Person or to conduct its business solely in its ownname or fail to correct any known misunderstanding regarding its separateidentity;

 

(xv)         fail to maintain adequate capital for the normal obligations reasonablyforeseeable in a business of its size and character and in light of itscontemplated business operations (provided that Borrower’s failure to do sosolely because of a shortfall in cash flow derived from the operation of theProperty shall not, by itself, constitute a breach of this covenant);

 

(xvi)        Without the unanimous written consent of all of its members, asapplicable, and the written consent of 100% of the managers of Borrower,including, without limitation, the Independent Director, (a) file or consent tothe filing of any petition, either voluntary or involuntary, to take advantageof any Creditors Rights Laws, (b) seek or consent to the appointment of areceiver, liquidator or any similar official, (c) take any action that mightcause such entity to become insolvent, or (d) make an assignment for the benefitof creditors;

 

(xvii)       fail to allocate shared expenses (including, without limitation, sharedoffice space and services performed by an employee of an Affiliate) among thePersons sharing such expenses and to use separate stationery, invoices andchecks;

 

(xviii)      fail to remain solvent or pay its own liabilities (including, withoutlimitation, salaries of its own employees) only from its own funds (providedthat Borrower’s failure to do so solely because of a shortfall in cash flowderived from the operation of the Property shall not, by itself, constitute abreach of this covenant);

 

(xix)         acquire obligations or securities of its partners, members,shareholders or other affiliates, as applicable;

 

(xx)          violate or cause to be violated the assumptions made with respect toBorrower, Manager (if applicable) and their respective direct and/or indirectowners in any opinion letter pertaining to substantive consolidation deliveredto Lender in connection with the Loan; or

 

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(xxi)         fail to maintain a sufficient number of employees in light of itscontemplated business operations.

 

(b)           The limited liability company agreement ofBorrower (the **“LLC Agreement”**) shall providethat (i) upon the occurrence of any event that causes the sole member ofBorrower **(“Member”)** to cease to be the member ofBorrower (other than (A) upon an assignment by Member of all of its limitedliability company interest in Borrower and the admission of the transferee inaccordance with the Loan Documents and the LLC Agreement, or (B) theresignation of Member and the admission of an additional member of Borrower inaccordance with the terms of the Loan Documents and the LLC Agreement), anyperson acting as Independent Director of Borrower shall, without any action ofany other Person and simultaneously with the Member ceasing to be the member ofBorrower, automatically be admitted to Borrower **(“SpecialMember”)** and shall continue Borrower without dissolution and (ii)Special Member may not resign from Borrower or transfer its rights as SpecialMember unless (A) a successor Special Member has been admitted to Borrower asSpecial Member in accordance with requirements of Delaware law and (B) suchsuccessor Special Member has also accepted its appointment as an IndependentDirector. The LLC Agreement shall further provide that (i) Special Member shallautomatically cease to be a member of Borrower upon the admission to Borrowerof a substitute Member, (ii) Special Member shall be a member of Borrower thathas no interest in the profits, losses and capital of Borrower and has no rightto receive any distributions of Borrower assets, (iii) pursuant to Section 18-301of the Delaware Limited Liability Company Act (the **“Act”**),Special Member shall not be required to make any capital contributions toBorrower and shall not receive a limited liability company interest inBorrower, (iv) Special Member, in its capacity as Special Member, may not bindBorrower and (v) except as required by any mandatory provision of the Act,Special Member, in its capacity as Special Member, shall have no right to voteon, approve or otherwise consent to any action by, or matter relating to,Borrower, including, without limitation, the merger, consolidation orconversion of Borrower; provided, however, such prohibition shall not limit theobligations of Special Member, in its capacity as Independent Director, to voteon such matters required by the Loan Documents or the LLC Agreement. In orderto implement the admission to Borrower of Special Member, Special Member shallexecute a counterpart to the LLC Agreement. Prior to its admission to Borroweras Special Member, Special Member shall not be a member of Borrower.

 

Uponthe occurrence of any event that causes the Member to cease to be a member ofBorrower, to the fullest extent permitted by law, the personal representativeof Member shall, within ninety (90) days after the occurrence of the event thatterminated the continued membership of Member in Borrower, agree in writing (i)to continue Borrower and (ii) to the admission of the personal representativeor its nominee or designee, as the case may be, as a substitute member ofBorrower, effective as of the occurrence of the event that terminated thecontinued membership of Member of Borrower in Borrower. Any action initiated byor brought against Member or Special Member under any Creditors Rights Lawsshall not cause Member or Special Member to cease to be a member of Borrowerand upon the occurrence of such an event, the business of Borrower shallcontinue without dissolution. The LLC Agreement shall provide that each ofMember and Special Member waives any right it might have to agree in writing todissolve Borrower upon the occurrence of any action initiated by or broughtagainst Member or Special Member under any Creditors Rights Laws, or theoccurrence of an event that causes Member or Special Member to cease to be amember of Borrower.

 

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**Section 6.2.****          ****Change of Name, Identity orStructure**

 

Borrowershall not change or permit to be changed (a) Borrower’s name, (b) Borrower’sidentity (including its trade name or names), (c) Borrower’s principal place ofbusiness set forth on the first page of this Agreement, (d) the corporate,partnership or other organizational structure of Borrower, or BorrowerPrincipal, (e) Borrower’s state of organization, or (f) Borrower’sorganizational identification number, without in each case notifying Lender ofsuch change in writing at least thirty (30) days prior to the effective date ofsuch change and, in the case of a change in Borrower’s structure, without firstobtaining the prior written consent of Lender. In addition, Borrower shall notchange or permit to be changed any organizational documents of Borrower if suchchange would adversely impact the covenants set forth in Section 6.1 and Section 6.4hereof. Borrower authorizes Lender to file any financing statement or financingstatement amendment required by Lender to establish or maintain the validity, perfectionand priority of the security interest granted herein. At the request of Lender,Borrower shall execute a certificate in form satisfactory to Lender listing thetrade names under which Borrower intends to operate the Property, and representingand warranting that Borrower does business under no other trade name withrespect to the Property. If Borrower does not now have an organizationalidentification number and later obtains one, or if the organizational identificationnumber assigned to Borrower subsequently changes, Borrower shall promptly notifyLender of such organizational identification number or change. Nothing in this Section 6.2shall be deemed to restrict any express rights granted to Borrower under Article 7hereof.

 

**Section 6.3.****          ****Business and Operations**

 

Borrowerwill qualify to do business and will remain in good standing under the laws ofthe State as and to the extent the same are required for the ownership,maintenance, management and operation of the Property.

 

**Section 6.4.****          ****Independent Director**

 

(a)           The organizational documents of Borrowershall provide that at all times there shall be, and Borrower shall cause thereto be, at least one duly appointed member of the board of managers (each an **‘‘Independent Director”**) of Borrower reasonably satisfactoryto Lender who is not at the time of such individual’s initial appointment, andshall not have been at any time during the preceding five (5) years, and shallnot be at any time while serving as a manager of Borrower, either (i) a shareholder(or other equity owner) of, or an officer, director, partner, manager, member(other than as a Special Member in the case of single member Delaware limitedliability companies), employee, attorney or counsel of, Borrower, BorrowerPrincipal or any of their respective shareholders, partners, members,subsidiaries or affiliates; (ii) a customer or creditor of, or supplier to,Borrower or any of its respective shareholders, partners, members, subsidiariesor affiliates who derives any of its purchases or revenue from its activitieswith Borrower or any Affiliate of any of them; (iii) a Person who Controls oris under common Control with any such shareholder, officer, director, partner,manager, member, employee, supplier, creditor or customer; or (iv) a member ofthe immediate family of any such shareholder, officer, director, partner,manager, member, employee, supplier, creditor or customer.

 

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(b)           The organizational documents of Borrowershall provide that the board of managers of Borrower shall not take any actionwhich, under the terms of any certificate of incorporation, by-laws or anyvoting trust agreement with respect to any common stock, requires an unanimousvote of the board of managers of Borrower unless at the time of such actionthere shall be at least one member of the board who is an Independent Director.Borrower will not, without the unanimous written consent of its board ofmanagers including the Independent Director, on behalf of Borrower, (i) file orconsent to the filing of any petition, either voluntary or involuntary, to takeadvantage of any applicable Creditors Rights Laws; (ii) seek or consent to theappointment of a receiver, liquidator or any similar official; (iii) take anyaction that might cause such entity to become insolvent; or (iv) make anassignment for the benefit of creditors.

 

**ARTICLE 7**

**NO SALE OR ENCUMBRANCE**

 

**Section 7.1.****          ****Transfer Definitions**

 

Forpurposes of this Article 7 an **“AffiliatedManager”**shall mean any managing agent in which Borrower, BorrowerPrincipal, or any affiliate of such entities has, directly or indirectly, anylegal, beneficial or economic interest; **“Control”**shall mean the power to direct the management and policies of aRestricted Party, directly or indirectly, whether through the ownership ofvoting securities or other beneficial interests, by contract or otherwise; **“Restricted Party”**shall mean Borrower,Borrower Principal, any Affiliated Manager, or any shareholder, partner, memberor non-member manager, or any direct or indirect legal or beneficial owner ofBorrower, Borrower Principal, any Affiliated Manager or any non-member manager;and a **“Sale or Pledge”**shall meana voluntary or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance,pledge, assignment, grant of any options with respect to, or any other transferor disposition of (directly or indirectly, voluntarily or involuntarily, byoperation of law or otherwise, and whether or not for consideration or ofrecord) of a legal or beneficial interest.

 

**Section ****7.2.****          ****No Sale/Encumbrance**

 

(a)           Borrower shall not cause or permit a Sale orPledge of the Property or any part thereof or any legal or beneficial interesttherein nor permit a Sale or Pledge of an interest in any Restricted Party (ineach case, a **“Prohibited Transfer”**), other than pursuant to theAmerican Express Lease, without the prior written consent of Lender.

 

(b)           A Prohibited Transfer shall include, but notbe limited to, (i) an installment sales agreement wherein Borrower agrees tosell the Property or any part thereof for a price to be paid in installments;(ii) an agreement by Borrower leasing all or a substantial part of the Propertyfor other than actual occupancy by a space tenant thereunder or a sale, assignmentor other transfer of, or the grant of a security interest in, Borrower’s right,title and interest in and to any Leases or any Rents; (iii) if a Restricted Partyis a corporation, any merger, consolidation or Sale or Pledge of suchcorporation’s stock or the creation or issuance of new stock in one or a seriesof transactions; (iv) if a Restricted Party is a limited or general partnershipor joint venture, any merger or consolidation or the change, removal,resignation or addition of a general partner or the Sale or Pledge of thepartnership interest of any general or limited partner or any profits or proceedsrelating to such partnership interests or the creation or issuance of newpartnership

 

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interests;(v) if a Restricted Party is a limited liability company, any merger orconsolidation or the change, removal, resignation or addition of a managingmember or non-member manager (or if no managing member, any member) or the Saleor Pledge of the membership interest of any member or any profits or proceedsrelating to such membership interest; (vi) if a Restricted Party is a trust ornominee trust, any merger, consolidation or the Sale or Pledge of the legal orbeneficial interest in a Restricted Party or the creation or issuance of newlegal or beneficial interests; or (vii) the removal or the resignation of theManager (including, without limitation, an Affiliated Manager) other than inaccordance with Section 5.14.

 

**Section ****7.3.****          ****Permitted Transfers**

 

Notwithstandingthe provisions of Section 7.2, the following transfers shall not be deemedto be a Prohibited Transfer: (a) a transfer by devise or descent or byoperation of law upon the death of a member, partner or shareholder of aRestricted Party, so long as Borrower delivers notice to Lender as soon aspracticable thereafter and that such Restricted Party is promptlyreconstituted, if applicable, following the death of such member, partner orshareholder and there is no change in Control of such Restricted Party as aresult of such transfer; (b) the Sale or Pledge, in one or a series of relatedtransactions, of not more than forty-nine percent (49%) of the stock, limitedpartnership interests or non-managing membership interests (as the case may be)in a Restricted Party; provided, however, no such transfers shall result in achange in Control in the Restricted Party or change in control of the Property,and as a condition to each such transfer, Lender shall receive not less thanthirty (30) days prior written notice of such proposed transfer.Notwithstanding the foregoing, any one or more of the transfers that results inany Person owning in excess of forty-nine percent (49%) of the ownershipinterest in a Restricted Party shall comply with the requirements of Section 7.4.

 

**Section ****7****.****4****.****          ****Lender’s Rights**

 

Lenderreserves the right to condition the consent to a Prohibited Transfer requestedhereunder upon (a) a modification of the terms hereof and an assumption of theNote and the other Loan Documents as so modified by the proposed ProhibitedTransfer, (b) receipt of payment of a transfer fee equal to one percent (1%) ofthe outstanding principal balance of the Loan and all of Lender’s expensesincurred in connection with such Prohibited Transfer, (c) receipt of writtenconfirmation from the Rating Agencies that the Prohibited Transfer will notresult in a downgrade, withdrawal or qualification of the initial, or ifhigher, then current ratings issued in connection with a Securitization, or ifa Securitization has not occurred, any ratings to be assigned in connectionwith a Securitization, (d) the proposed transferee’s continued compliance withthe covenants set forth in this Agreement (including, without limitation, thecovenants in Article 6) and the other Loan Documents, (e) a new managerfor the Property and a new management agreement satisfactory to Lender, and (f)the satisfaction of such other conditions and/or legal opinions as Lender shalldetermine in its sole discretion to be in the interest of Lender. All expensesincurred by Lender shall be payable by Borrower whether or not Lender consentsto the Prohibited Transfer. Lender shall not be required to demonstrate anyactual impairment of its security or any increased risk of default hereunder inorder to declare the Debt immediately due and payable upon a ProhibitedTransfer made without Lender’s consent. This provision shall apply to each andevery Prohibited Transfer, whether or not Lender has consented to any previousProhibited Transfer. In the event an opinion letter pertaining to

 

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substantiveconsolidation was delivered to Lender and the Rating Agencies in connectionwith the closing of the Loan, and if any Sale or Pledge permitted under this Article 7results in any Person and its Affiliates owning in excess of forty-nine percent(49%) of the ownership interests in a Restricted Party, Borrower shall, priorto such transfer, and in addition to any other requirement for Lender consentcontained herein, deliver a revised substantive non-consolidation opinionletter to Lender reflecting such Prohibited Transfer, which opinion shall be inform, scope and substance acceptable in all respects to Lender and the RatingAgencies.

 

**Section ****7****.****5****.****          ****Assumption**

 

Notwithstandingthe foregoing provisions of this Article 7, following the date which issix (6) months from the Closing Date, Lender shall not unreasonably withholdconsent to a transfer of the Property in its entirety to, and the relatedassumption of the Loan by, any Person (a **“Transferee”)**provided that each of the following terms and conditions aresatisfied:

 

(a)           no Default or Event of Default has occurred;

 

(b)           Borrower shall have (i) delivered writtennotice to Lender of the terms of such prospective transfer not less thanforty-five (45) days before the date on which such transfer is scheduled toclose and, concurrently therewith, all such information concerning the proposedTransferee as Lender shall reasonably require and (ii) paid to Lender a non-refundableprocessing fee in the amount of $10,000. Lender shall have the right to approveor disapprove the proposed transfer based on its then current underwriting andcredit requirements for similar loans secured by similar properties which loansare sold in the secondary market, such approval not to be unreasonablywithheld. In determining whether to give or withhold its approval of the proposedtransfer, Lender shall consider the experience and track record of Transfereeand its principals in owning and operating facilities similar to the Property,the financial strength of Transferee and its principals, the general businessstanding of Transferee and its principals and Transferee’s and its principals’relationships and experience with contractors, vendors, tenants, lenders andother business entities; provided, however, that, notwithstanding Lender’sagreement to consider the foregoing factors in determining whether to give orwithhold such approval, such approval shall be given or withheld based on whatLender determines to be commercially reasonable and, if given, may be givensubject to such conditions as Lender may deem reasonably appropriate;

 

(c)           Borrower shall have paid to Lender,concurrently with the closing of such transfer, (i) a non-refundable assumptionfee in an amount equal to one percent (1.0%) of the then outstanding principalbalance of the Note, and (ii) all out-of-pocket costs and expenses, includingreasonable attorneys’ fees, incurred by Lender in connection with the transfer;

 

(d)           (i) Transferee shall have assumed and agreedto pay the Debt as and when due subject to the provisions of Article 15hereof and, prior to or concurrently with the closing of such transfer,Transferee and its constituent partners, members or shareholders as Lender may require,shall have executed, without any cost or expense to Lender, such documents and agreementsas Lender shall reasonably require to evidence and effectuate said assumptionand (ii) if required by Lender, a Person affiliated with Transferee andacceptable to Lender shall have

 

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assumedthe obligations of Borrower Principal under the Loan Documents with respect toall acts and events occurring or arising after the transfer of the Propertypursuant to this Section 7.5;

 

(e)           Borrower and Transferee, without any cost toLender, shall furnish any information requested by Lender for the preparationof, and shall authorize Lender to file, new financing statements and financingstatement amendments and other documents to the fullest extent permitted byapplicable law, and shall execute any additional documents reasonably requestedby Lender;

 

(f)            Borrower shall have delivered to Lender,without any cost or expense to Lender, such endorsements to Lender’s TitleInsurance Policy insuring that fee simple or leasehold title to the Property,as applicable, is vested in Transferee (subject to Permitted Encumbrances), hazardinsurance endorsements or certificates and other similar materials as Lendermay deem necessary at the time of the transfer, all in form and substancesatisfactory to Lender;

 

(g)           Transferee shall have furnished to Lender, ifTransferee is a corporation, partnership, limited liability company or otherentity, all appropriate papers evidencing Transferee’s organization and goodstanding, and the qualification of the signers to execute the assumption of theDebt, which papers shall include certified copies of all documents relating to theorganization and formation of Transferee and of the entities, if any, which arepartners or members of Transferee. Transferee and such constituent partners,members or shareholders of Transferee (as the case may be), as Lender shallrequire, shall comply with the covenants set forth in Article 6 hereof;

 

(h)           Transferee shall assume the obligations ofBorrower under any Management Agreement or provide a new management agreementwith a new manager which meets with the requirements of Section 5.14hereof and assign to Lender as additional security such new managementagreement;

 

(i)            Transferee shall furnish an opinion ofcounsel satisfactory to Lender and its counsel (A) that Transferee’s formationdocuments provide for the matters described in subparagraph (g) above, (B) thatthe assumption of the Debt has been duly authorized, executed and delivered,and that the Note, the Mortgage, this Agreement, the assumption agreement andthe other Loan Documents are valid, binding and enforceable against Transfereein accordance with their terms, (C) that Transferee and any entity which is acontrolling stockholder, member or general partner of Transferee, have beenduly organized, and are in existence and good standing, and (E) with respect tosuch other matters as Lender may reasonably request;

 

(j)            if required by Lender, Lender shall havereceived confirmation in writing from the Rating Agencies that rate theSecurities to the effect that the transfer will not result in a qualification,downgrade or withdrawal of any rating initially assigned or to be assigned tothe Securities;

 

(k)           Borrower’s obligations under the contract ofsale pursuant to which the transfer is proposed to occur shall expressly besubject to the satisfaction of the terms and conditions of this Section 7.5;and

 

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(1)           Transferee shall, prior to such transfer,deliver a substantive non-consolidation opinion to Lender, which opinion shallbe in form, scope and substance acceptable in all respects to Lender and theRating Agencies.

 

Aconsent by Lender with respect to a transfer of the Property in its entiretyto, and the related assumption of the Loan by, a Transferee pursuant to this Section 7.5 shall not be construed to be awaiver of the right of Lender to consent to any subsequent Sale or Pledge ofthe Property. Upon the transfer of the Property pursuant to this Section 7.5,Borrower and Borrower Principal shall be relieved of all liability under theLoan Documents for acts, events, conditions, or circumstances occurring orarising after the date of such transfer, except to the extent that such acts,events, conditions, or circumstances are the proximate result of acts, events,conditions, or circumstances that existed prior to the date of such transfer,whether or not discovered prior or subsequent to the date of such transfer.

 

**Section 7.6.****          ****Assumption by InlandPermitted Transferee**

 

Notwithstandingthe foregoing provisions of this Article 7, Borrower shall be permitted totransfer the Property in its entirety to, provided the Loan is simultaneouslyassumed by, an Inland Permitted Transferee, and provided further that each ofthe following terms and conditions is satisfied:

 

(a)           no Default or Event of Default has occurred;

 

(b)           Borrower shall have delivered written noticeto Lender of the terms of such prospective transfer not less than forty-five(45) days before the date on which such transfer is scheduled to close and,concurrently therewith, all such information concerning the proposed Transfereeas Lender shall reasonably require;

 

(c)           Borrower shall have paid to Lender allout-of-pocket costs and expenses, including reasonable attorneys’ fees,incurred by Lender in connection with the transfer;

 

(d)           such Inland Permitted Transferee assumes andagrees to pay the Debt as and when due subject to the provisions of Article 15hereof and, prior to or concurrently with the closing of such transfer, suchInland Permitted Transferee and its constituent partners, members or shareholdersas Lender may require, shall execute, without any cost or expense to Lender,such documents and agreements as Lender shall reasonably require to evidenceand effectuate said assumption;

 

(e)           Borrower and such Inland PermittedTransferee, without any cost to Lender, shall furnish any information requestedby Lender for the preparation of, and shall authorize Lender to file, newfinancing statements and financing statement amendments and other documents tothe fullest extent permitted by applicable law, and shall execute anyadditional documents reasonably requested by Lender;

 

(f)            Borrower shall have delivered to Lender,without any cost or expense to Lender, endorsements to Lender’s Title InsurancePolicy insuring that fee simple title to the Property is vested in such InlandPermitted Transferee (subject to Permitted Encumbrances), hazard

 

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insuranceendorsements or certificates and other similar materials as Lender may deemnecessary at the time of the transfer, all in form and substance satisfactoryto Lender;

 

(g)           such Inland Permitted Transferee shall havefurnished to Lender, if such Inland Permitted Transferee is a corporation,partnership, limited liability company or other entity, all appropriate papersevidencing Transferee’s organization and good standing, and the qualification ofthe signers to execute the assumption of the Debt, which papers shall includecertified copies of all documents relating to the organization and formation ofTransferee and of the entities, if any, which are partners or members ofTransferee. Transferee and such constituent partners, members or shareholdersof Transferee (as the case may be), as Lender shall require, shall comply withthe covenants set forth in Article 6 hereof, provided, however, that, (i)if such Inland Permitted Transferee is a limited partnership or a limitedliability company (with more than one member), Lender may require that thegeneral partner or managing member of such Inland Permitted Transferee alsocomply with the covenants set forth in Article 6, as modified to statethat such general partner or managing member holds an interest in the InlandPermitted Transferee rather than an interest in the Property or (ii) if suchInland Permitted Transferee is a single member limited liability company, thestate of organization of such entity must be Delaware and the organizationaldocuments must provide for a springing member upon the bankruptcy ordissolution of the sole member;

 

(h)           such Inland Permitted Transferee shall assumethe obligations of Borrower under any Management Agreement or provide a newmanagement agreement with a new manager which meets with the requirements of Section 5.14hereof and assign to Lender as additional security such new managementagreement;

 

(i)            Transferee shall furnish an opinion ofcounsel satisfactory to Lender and its counsel (A) that Transferee’s formationdocuments provide for the matters described in subparagraph (g) above, (B) thatthe assumption of the Debt has been duly authorized, executed and delivered,and that the Note, the Mortgage, this Agreement, the assumption agreement andthe other Loan Documents are valid, binding and enforceable against Transfereein accordance with their terms, (C) that Transferee and any entity which is acontrolling stockholder, member or general partner of Transferee, have beenduly organized, and are in existence and good standing, and (E) with respect tosuch other matters as Lender may reasonably request, including, withoutlimitation, customary single member limited liability company opinions in theevent that such Inland Permitted Transferee is a Delaware limited liabilitycompany; and

 

(j)            in the event a substantive non-consolidationopinion was required in connection with the closing of the Loan, Transfereeshall, prior to such transfer, deliver a substantive non-consolidation opinionto Lender, which opinion shall be in form, scope and substance acceptable inall respects to Lender and the Rating Agencies.

 

Aconsent by Lender with respect to a transfer of the Property in its entiretyto, and the related assumption of the Loan by, a Transferee pursuant to this Section 7.6shall not be construed to be a waiver of the right of Lender to consent to anysubsequent Sale or Pledge of the Property.

 

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**ARTICLE 8**

**INSURANCE; CASUALTY; CONDEMNATION; RESTORATION**

 

**Section 8.1.****          ****Insurance**

 

(a)           Subject to the provisions of paragraph (g) ofthis Section 8.1, Borrower shall obtain and maintain, or cause AmericanExpress to maintain, insurance for Borrower and the Property providing at leastthe following coverages:

 

(i)            comprehensive “special causes of loss” formof insurance (or its equivalent) on the Improvements and the Personal Property(A) in an amount equal to not less than one hundred percent (100%) of the “FullReplacement Cost,” which for purposes of this Agreement shall mean actualreplacement value (exclusive of costs of excavations, foundations, undergroundutilities and footings) with a waiver of depreciation; (B) written on areplacement cost basis and containing either an agreed amount endorsement withrespect to the Improvements and Personal Property or a waiver of allco-insurance provisions; (C) providing for no deductible in excess of $10,000for all such insurance coverage; (D) at all times insuring against at leastthose hazards that are commonly insured against under a “special causes of loss”form of policy, as the same shall exist on the date hereof, and together withany increase in the scope of coverage provided under such form after the datehereof; and (E) if any of the Improvements or the use of the Property shall atany time constitute legal non-conforming structures or uses, providing coveragefor contingent liability from Operation of Building Laws, Demolition Costs andIncreased Cost of Construction Endorsements and containing an “Ordinance or LawCoverage” or “Enforcement” endorsement. In addition, Borrower shall obtain: (y)if any portion of the Improvements is currently or at any time in the futurelocated in a “special flood hazard area” designated by the Federal EmergencyManagement Agency, flood hazard insurance in an amount equal to the maximumamount of such insurance available under the National Flood Insurance Act of1968, the Flood Disaster Protection Act of 1973 or the National Flood InsuranceReform Act of 1994, as each may be amended; and (z) earthquake insurance inamounts and in form and substance reasonably satisfactory to Lender in theevent the Property is located in an area with a high degree of seismic risk,provided that the insurance pursuant to clauses (y) and (z) hereof shall be onterms consistent with the special causes of loss form required under this subsection (i);

 

(ii)           commercial general liability insurance against claims for personalinjury, bodily injury, death or property damage occurring upon, in or about theProperty, with such insurance (A) to be on the so-called “occurrence” form witha general aggregate limit of not less than $2,000,000 and a per occurrencelimit of not less than $1,000,000; (B) to continue at not less than theaforesaid limit until required to be changed by Lender in writing by reason ofchanged economic conditions making such protection inadequate; and (C) to coverat least the following hazards: (1) premises and operations; (2) products andcompleted operations; (3) independent contractors; (4) blanket contractualliability; and (5) contractual liability covering the indemnities contained in Article 12and Article 14 hereof to the extent the same is available;

 

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(iii)          if the rating of American Express issued by the Rating Agencies fallsbelow the Trigger Rating, loss of rents insurance or business income insurance,as applicable, (A) with loss payable to Lender; (B) covering all risks requiredto be covered by the insurance provided for in subsection (i) above; and(C) which provides that after the physical loss to the Improvements andPersonal Property occurs, the loss of rents or income, as applicable, will beinsured until such rents or income, as applicable, either returns to the samelevel that existed prior to the loss or the expiration of twelve (12) months,whichever first occurs, and notwithstanding that the policy may expire prior tothe end of such period; and (D) which contains an extended period of indemnityendorsement which provides that after the physical loss to the Improvements andPersonal Property has been repaired, the continued loss of income will beinsured until such income either returns to the same level it was at prior tothe loss, or the expiration of twelve (12) months from the date that theProperty is repaired or replaced and operations are resumed, whichever firstoccurs, and notwithstanding that the policy may expire prior to the end of suchperiod. The amount of such loss of rents or business income insurance, asapplicable, shall be determined prior to the date hereof and at least once eachyear thereafter based on Borrower’s reasonable estimate of the gross incomefrom the Property for the succeeding period of coverage required above. Allproceeds payable to Lender pursuant to this subsection shall be held byLender and shall be applied to the obligations secured by the Loan Documentsfrom time to time due and payable hereunder and under the Note; provided,however, that nothing herein contained shall be deemed to relieve Borrower ofits obligations to pay the obligations secured by the Loan Documents on therespective dates of payment provided for in the Note, this Agreement and theother Loan Documents except to the extent such amounts are actually paid out ofthe proceeds of such loss of rents or business income insurance, as applicable;

 

(iv)          at all times during which structural construction, repairs oralterations are being made with respect to the Improvements, and only if theProperty coverage form does not otherwise apply, (A) owner’s contingent orprotective liability insurance covering claims not covered by or under theterms or provisions of the above mentioned commercial general liabilityinsurance policy; and (B) the insurance provided for in subsection (i)above written in a so-called Builder’s Risk Completed Value form (1) on anon-reporting basis, (2) against “special causes of loss” insured againstpursuant to subsection (i) above, (3) including permission to occupy theProperty, and (4) with an agreed amount endorsement waiving co-insuranceprovisions;

 

(v)           workers’ compensation, subject to the statutory limits of the State,and employer’s liability insurance in respect of any work or operations on orabout the Property, or in connection with the Property or its operation (ifapplicable);

 

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

 

(vii)         excess liability insurance in an amount not less than $75,000,000 peroccurrence on terms consistent with the commercial general liability insurancerequired under subsection (ii) above; and

 

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(viii)        upon sixty (60) days’ written notice, such other reasonable insuranceand in such reasonable amounts as Lender from time to time may reasonablyrequest against such other insurable hazards which at the time are commonlyinsured against for property similar to the Property located in or around theregion in which the Property is located.

 

Withrespect to the policies required to be maintained pursuant to clauses (i)through (viii) above, Borrower shall use commercially reasonable efforts,consistent with those of prudent owners of institutional quality commercialreal estate, to maintain insurance against Losses resulting from acts ofterrorism.

 

(b)           All insurance provided for in Section 8.1(a) shall be obtainedunder valid and enforceable policies (collectively, the **“Policies”**or in the singular, the **“Policy”**), andshall be subject to the approval of Lender as to insurance companies, amounts,deductibles, loss payees and insureds. The Policies shall be issued byfinancially sound and responsible insurance companies authorized to do businessin the State and having a claims paying ability rating of “A-” or better byS&P (or such other ratings approved by Lender) and/or a general policyrating of “A” or better and a financial class of VIII or better by A.M. BestCompany, Inc. The Policies described in Section 8.1(a) shall designateLender and its successors and assigns as additional insureds, mortgagees and/orloss payee as deemed appropriate by Lender. To the extent such Policies are notavailable as of the Closing Date, Borrower shall deliver to Lender prior to theClosing Date an Acord 28 or similar certificate of insurance evidencing thecoverages and amounts required hereunder and, upon request of Lender as soon asavailable after the Closing Date, certified copies of all Policies. Not lessthan ten (10) days prior to the expiration dates of any insurance coverage inplace with respect to the Property, Borrower shall deliver to Lender an Acord28 or similar certificate, accompanied by evidence satisfactory to Lender ofpayment of the premiums due in connection therewith (the **“InsurancePremiums”**), and, as soon as available thereafter, certified copiesof all renewal Policies.

 

(c)           Any blanket insurance Policy shall specifically allocate to theProperty the amount of coverage from time to time required hereunder and shallotherwise provide the same protection as would a separate Policy insuring onlythe Property in compliance with the provisions of Section 8.1(a).

 

(d)           All Policies provided for or contemplated by Section 8.1(a),except for the Policy referenced in Section 8.1(a)(v), shall name Borroweras the insured and Lender as the additional insured, as its interests mayappear, and in the case of property damage, boiler and machinery, flood andearthquake insurance, shall contain a so-called New York standardnon-contributing mortgagee clause in favor of Lender providing that the lossthereunder shall be payable to Lender.

 

(e)           All Policies provided for in Section 8.1(a) shall contain clausesor endorsements to the effect that:

 

(i)            no act or negligence of Borrower, or anyoneacting for Borrower, or of any Tenant or other occupant, or failure to complywith the provisions of any Policy, which might otherwise result in a forfeitureof the insurance or any part thereof, shall in

 

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anyway affect the validity or enforceability of the insurance insofar as Lender isconcerned;

 

(ii)           the Policies shall not be materially changed (other than to increasethe coverage provided thereby) or canceled by the insurer without at leastthirty (30) days’ (ten (10) days’ in the case of non-payment of premium) priorwritten notice to Lender and any other party named therein as an additionalinsured;

 

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

 

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

 

(f)            If at any time Lender is not in receipt ofwritten evidence that all insurance required hereunder is in full force andeffect, Lender shall have the right, without notice to Borrower, to take suchaction as Lender deems necessary to protect its interest in the Property, including,without limitation, obtaining such insurance coverage as Lender in its solediscretion deems appropriate. All premiums incurred by Lender in connectionwith such action or in obtaining such insurance and keeping it in effect shallbe paid by Borrower to Lender upon demand and, until paid, shall be secured bythe Mortgage and shall bear interest at the Default Rate.

 

(g)           Notwithstanding any other provision hereof to the contrary, Lenderacknowledges that so long as no American Express Lease Default has occurred,Borrower shall not be required to obtain the insurance coverages set forth inparagraphs (a)(i) through (viii) if (x) Guarantor (or American Express if thereis no Guarantor) is a self-insurer and maintains a rating issued by the RatingAgencies of not less than the Trigger Rating or (y) American Express maintainsinsurance with coverages and carriers in compliance with the terms of theAmerican Express Lease.

 

**Section 8.2.****          ****Casualty**

 

If the Property shall be damaged or destroyed, in whole or in part, byfire or other casualty (a **“Casualty”**),Borrower shall give prompt notice of such damage to Lender and shall promptlycommence and diligently prosecute the Restoration of the Property in accordancewith Section 8.4, whether or not Lender makes any Net Proceeds availablepursuant to Section 8.4. Borrower shall pay all costs of such Restorationwhether or not such costs are covered by insurance. Lender may, but shall notbe obligated to make proof of loss if not made promptly by Borrower. Borrowershall adjust all claims for Insurance Proceeds in consultation with, andapproval of, Lender; provided, however, if an Event of Default has occurred andis continuing, Lender shall have the exclusive right to participate in theadjustment of all claims for Insurance Proceeds.

 

**Section 8.3.****          ****Condemnation**

 

Borrower shall promptly give Lender notice of the actual or threatenedcommencement of any proceeding for the Condemnation of the Property of whichBorrower has knowledge and shall deliver to Lender copies of any and all papersserved in connection with such proceedings.

 

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Lendermay participate in any such proceedings, and Borrower shall from time to timedeliver to Lender all instruments requested by it to permit such participation.Borrower shall, at its expense, diligently prosecute any such proceedings, andshall consult with Lender, its attorneys and experts, and cooperate with themin the carrying on or defense of any such proceedings. Notwithstanding anytaking by any public or quasi-public authority through Condemnation orotherwise (including but not limited to any transfer made in lieu of or inanticipation of the exercise of such taking), Borrower shall continue to paythe Debt at the time and in the manner provided for its payment in the Note andin this Agreement and the Debt shall not be reduced until any Award shall havebeen actually received and applied by Lender, after the deduction of expensesof collection, to the reduction or discharge of the Debt. Lender shall not belimited to the interest paid on the Award by the condemning authority but shallbe entitled to receive out of the Award interest at the rate or rates providedherein or in the Note. If the Property or any portion thereof is taken by acondemning authority, Borrower shall promptly commence and diligently prosecutethe Restoration of the Property and otherwise comply with the provisions of Section 8.4,whether or not Lender makes any Net Proceeds available pursuant to Section 8.4.If the Property is sold, through foreclosure or otherwise, prior to the receiptby Lender of the Award, Lender shall have the right, whether or not adeficiency judgment on the Note shall have been sought, recovered or denied, toreceive the Award, or a portion thereof sufficient to pay the Debt. So long asno American Express Lease Default has occurred, the payment and allocation ofany Awards shall be governed by the American Express Lease.

 

**Section 8.4.****          ****Restoration**

 

Thefollowing provisions shall apply in connection with the Restoration of theProperty:

 

(a)           If the Net Proceeds shall be less than$50,000 and the costs of completing the Restoration shall be less than $50,000,the Net Proceeds will be disbursed by Lender to Borrower upon receipt, providedthat all of the conditions set forth in Section 8.4(b)(i) are met and Borrowerdelivers to Lender a written undertaking to expeditiously commence and to satisfactorilycomplete with due diligence the Restoration in accordance with the terms ofthis Agreement.

 

(b)           If the Net Proceeds are equal to or greaterthan $50,000 or the costs of completing the Restoration are equal to or greaterthan $50,000, Lender shall make the Net Proceeds available for the Restorationin accordance with the provisions of this Section 8.4. The term **“Net Proceeds”**for purposes of this Section 8.4shall mean: (i) the net amount of all insurance proceeds received by Lenderpursuant to Section 8.1(a)(i), (iv), (vi) and (viii) as a result of a Casualty,after deduction of its reasonable costs and expenses (including, but notlimited to, reasonable counsel fees), if any, in collecting the same (**“InsuranceProceeds”**),****or(ii) the net amount of the Award as a result of a Condemnation, after deductionof its reasonable costs and expenses (including, but not limited to, reasonablecounsel fees), if any, in collecting the same (**“Condemnation Proceeds”**), whicheverthe case may be.

 

(i)            The Net Proceeds shall be made available toBorrower for Restoration provided that each of the following conditions aremet:

 

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

 

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(B)           (1) in the event the Net Proceeds areInsurance Proceeds, less than thirty percent (30%) of the total floor area ofthe Improvements on the Property has been damaged, destroyed or renderedunusable as a result of a Casualty, or (2) in the event the Net Proceeds areCondemnation Proceeds, less than ten percent (10%) of the land constituting theProperty is taken, such land is located along the perimeter or periphery of theProperty, and no portion of the Improvements is located on such land;

 

(C)           The American Express Lease shall remain infull force and effect during and after completion of the Restoration withoutabatement of Rent;

 

(D)          Borrower shall commence the Restoration assoon as reasonably practicable (but in no event later than sixty (60) daysafter such Casualty or Condemnation, whichever the case may be, occurs) andshall diligently pursue the same to satisfactory completion;

 

(E)           Lender shall be satisfied that any operatingdeficits, including all scheduled payments under the Note, which will beincurred with respect to the Property as a result of the occurrence of any suchCasualty or Condemnation, whichever the case may be, will be covered out of theinsurance coverage referred to in Section 8.1(a)(iii) above;

 

(F)           Lender shall be satisfied that theRestoration will be completed on or before the earliest to occur of (1) six (6)months prior to the Maturity Date, (2) the earliest date required for suchcompletion under the terms of any Leases or material agreements affecting theProperty, (3) such time as may be required under applicable zoning law,ordinance, rule or regulation, or (4) the expiration of the insurance coveragereferred to in Section 8.1(a)(iii);

 

(G)           the Property and the use thereof after theRestoration will be in compliance with and permitted under all LegalRequirements;

 

(H)                               the Restoration shall be done and completed by Borrower in anexpeditious and diligent fashion and in compliance with all applicable LegalRequirements;

 

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

 

(J)                                   Borrower shall deliver, or cause to bedelivered, to Lender a signed detailed budget approved in writing by Borrower’sarchitect or engineer stating the entire cost of completing the Restoration,which budget shall be acceptable to Lender; and

 

(K)                               the Net Proceeds together with any cash or cash equivalent deposited byBorrower with Lender are sufficient in Lender’s reasonable judgment to coverthe cost of the Restoration.

 

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(ii)           The Net Proceeds shall be held by Lender until disbursements commence,and, until disbursed in accordance with the provisions of this Section 8.4,shall constitute additional security for the Debt and other obligations underthe Loan Documents. The Net Proceeds shall be disbursed by Lender to, or asdirected by, Borrower from time to time during the course of the Restoration,upon receipt of evidence satisfactory to Lender that (A) all the conditionsprecedent to such advance, including those set forth in Section 8.4(b)(i),have been satisfied, (B) all materials installed and work and labor performed(except to the extent that they are to be paid for out of the requesteddisbursement) in connection with the related Restoration item have been paidfor in full, and (C) there exist no notices of pendency, stop orders, mechanic’sor materialman’s liens or notices of intention to file same, or any other liensor encumbrances of any nature whatsoever on the Property which have not eitherbeen fully bonded to the satisfaction of Lender and discharged of record or inthe alternative fully insured to the satisfaction of Lender by the titlecompany issuing the Title Insurance Policy. Notwithstanding the foregoing,Business Interruption Proceeds required to be maintained by Borrower pursuantto section 8.1(a)(iii) shall be controlled by Lender at all times, shallnot be subject to the provisions of this Section 8.4 and shall be usedsolely for the payment of the obligations under the Loan Documents andOperating Expenses.

 

(iii)          All plans and specifications required in connection with theRestoration shall be subject to prior review and acceptance in all respects byLender and by an independent consulting engineer selected by Lender (the **“Restoration Consultant”**). Lender shall have the use of theplans and specifications and all permits, licenses and approvals required orobtained in connection with the Restoration. The identity of the contractors,subcontractors and materialmen engaged in the Restoration, as well as thecontracts in excess of $50,000 under which they have been engaged, shall besubject to prior review and acceptance by Lender and the RestorationConsultant. All costs and expenses incurred by Lender in connection with makingthe Net Proceeds available for the Restoration, including, without limitation,reasonable counsel fees and disbursements and the Restoration Consultant’sfees, shall be paid by Borrower.

 

(iv)          In no event shall Lender be obligated to make disbursements of the NetProceeds in excess of an amount equal to the costs actually incurred from timeto time for work in place as part of the Restoration, as certified by theRestoration Consultant, minus the Restoration Retainage. The term **“Restoration Retainage”**shall mean anamount equal to ten percent (10%) of the costs actually incurred for work inplace as part of the Restoration, as certified by the Restoration Consultant,until the Restoration has been completed. The Restoration Retainage shall bereduced to five percent (5%) of the costs incurred upon receipt by Lender ofsatisfactory evidence that fifty percent (50%) of the Restoration has beencompleted. The Restoration Retainage shall in no event, and notwithstandinganything to the contrary set forth above in this Section 8.4(b), beless than the amount actually held back by Borrower from contractors,subcontractors and materialmen engaged in the Restoration. The RestorationRetainage shall not be released until the Restoration Consultant certifies toLender that the Restoration has been completed in accordance with the provisionsof this Section 8.4(b) and that all approvals necessary for there-occupancy and use of the Property have been obtained from all appropriateGovernmental Authorities, and Lender receives evidence satisfactory to

 

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Lenderthat the costs of the Restoration have been paid in full or will be paid infull out of the Restoration Retainage; provided, however, that Lender willrelease the portion of the Restoration Retainage being held with respect to anycontractor, subcontractor or materialman engaged in the Restoration as of thedate upon which the Restoration Consultant certifies to Lender that thecontractor, subcontractor or materialman has satisfactorily completed all workand has supplied all materials in accordance with the provisions of thecontractor’s, subcontractor’s or materialman’s contract, the contractor,subcontractor or materialman delivers the lien waivers and evidence of paymentin full of all sums due to the contractor, subcontractor or materialman as maybe reasonably requested by Lender or by the title company issuing the TitleInsurance Policy, and Lender receives an endorsement to the Title InsurancePolicy insuring the continued priority of the lien of the Mortgage and evidenceof payment of any premium payable for such endorsement. If required by Lender,the release of any such portion of the Restoration Retainage shall be approvedby the surety company, if any, which has issued a payment or performance bondwith respect to the contractor, subcontractor or materialman.

 

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

 

(vi)          If at any time the Net Proceeds or the undisbursed balance thereofshall not, in the reasonable opinion of Lender in consultation with theRestoration Consultant, be sufficient to pay in full the balance of the costswhich are estimated by the Restoration Consultant to be incurred in connectionwith the completion of the Restoration, Borrower shall deposit the deficiency(the **“Net Proceeds Deficiency”**) with Lenderbefore any further disbursement of the Net Proceeds shall be made. The NetProceeds Deficiency deposited with Lender shall be held by Lender and shall bedisbursed for costs actually incurred in connection with the Restoration on thesame conditions applicable to the disbursement of the Net Proceeds, and untilso disbursed pursuant to this Section 8.4(b) shall constitute additionalsecurity for the Debt and other obligations under the Loan Documents.

 

(vii)         The excess, if any, of the Net Proceeds and the remaining balance, ifany, of the Net Proceeds Deficiency deposited with Lender after the RestorationConsultant certifies to Lender that the Restoration has been completed inaccordance with the provisions of this Section 8.4(b), and the receipt byLender of evidence satisfactory to Lender that all costs incurred in connectionwith the Restoration have been paid in full, shall be remitted by Lender toBorrower, provided no Event of Default shall have occurred and shall becontinuing under the Note, this Agreement or any of the other Loan Documents.

 

(c)           All Net Proceeds not required (i) to be made available for theRestoration or (ii) to be returned to Borrower as excess Net Proceeds pursuantto Section 8.4(b)(vii) may (x) be retained and applied by Lender towardthe 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,or, (y) at the sole discretion of Lender, the same may be paid, either in wholeor in part, to Borrower for such purposes and upon such conditions as Lendershall designate.

 

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(d)           In the event of foreclosure of the Mortgage, or other transfer of titleto the Property in extinguishment in whole or in part of the Debt, all right,title and interest of Borrower in and to the Policies then in force concerningthe Property and all proceeds payable thereunder shall thereupon vest in the purchaserat such foreclosure, Lender or other transferee in the event of such othertransfer of title.

 

(e)           Notwithstanding the foregoing, so long as no American Express LeaseDefault has occurred, the Net Proceeds shall be used for restoration of theProperty in accordance with the provisions of the American Express Lease.

 

**ARTICLE 9**

**REPLACEMENTS; RESERVE FUNDS**

 

**Section 9.1.****          ****Replacements**

 

Onan ongoing basis throughout the term of the Loan, Borrower shall make capitalrepairs, replacements and improvements necessary to keep the Property in goodorder and repair and in a good marketable condition or prevent deterioration ofthe Property. So long as no American Express Lease Default shall have occurred,the compliance by American Express with its obligations for maintenance of theProperty as set forth in the American Express Lease shall be deemed complianceby Borrower with the provisions of this Section 9.1.

 

**Section 9.2.****          ****Tax and Insurance ReserveFunds**

 

If required by Lender following a default by American Express under theAmerican Express Lease Borrower shall establish an Eligible Account with Lenderor Lender’s agent sufficient to discharge Borrower’s obligations for thepayment of Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1hereof (the **“Tax and Insurance ReserveAccount”**) Borrowershall deposit into the Tax and Insurance Reserve Account on each ScheduledPayment Date (a) one-twelfth of the Taxes that Lender estimates will be payableduring the next ensuing twelve (12) months or such higher amount necessary toaccumulate with Lender sufficient funds to pay all such Taxes at least thirty(30) days prior to the earlier of (i) the date that the same will becomedelinquent and (ii) the date that additional charges or interest will accruedue to the non-payment thereof, and (b) except to the extent Lender has waivedthe insurance escrow because the insurance required hereunder is maintainedunder a blanket insurance Policy acceptable to Lender in accordance with Section 8.1(c),one-twelfth of the Insurance Premiums that Lender estimates will be payableduring the next ensuing twelve (12) months for the renewal of the coverageafforded by the Policies upon the expiration thereof or such higher amountnecessary to accumulate with Lender sufficient funds to pay all such InsurancePremiums at least thirty (30) days prior to the expiration of the Policies(said amounts in (a) and (b) above hereinafter called the **“Tax and Insurance Reserve Funds”**). Lender will apply the Tax andInsurance Reserve Funds to payments of Taxes and Insurance Premiums required tobe made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.In making any disbursement from the Tax and Insurance Reserve Account, Lendermay do so according to any bill, statement or estimate procured from theappropriate public office or tax lien service (with respect to Taxes) orinsurer or agent (with respect to Insurance Premiums), without inquiry into theaccuracy of such bill, statement or estimate or into the validity of any tax, assessment,sale, forfeiture, tax lien or title or claim

 

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thereof.If the amount of the Tax and Insurance Reserve Funds shall exceed the amountsdue for Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1hereof, Lender shall, in its sole discretion, return any excess to Borrower orcredit such excess against future payments to be made to the Tax and InsuranceReserve Account. In allocating any such excess, Lender may deal with the personshown on Lender’s records as being the owner of the Property. Any amountremaining in the Tax and Insurance Reserve Account after the Debt has been paidin full shall be returned to Borrower or the person shown on Lender’s recordsas being the owner of the Property and no other party shall have any right orclaim thereto. If at any time Lender reasonably determines that the Tax andInsurance Reserve Funds are not or will not be sufficient to pay Taxes andInsurance Premiums by the dates set forth in (a) and (b) above, Lender shallnotify Borrower of such determination and Borrower shall pay to Lender anyamount necessary to make up the deficiency within ten (10) days after noticefrom Lender to Borrower requesting payment thereof.

 

**Section 9.3.****          ****Reserve Funds Generally**

 

(a)           No earnings or interest on the Reserve Accounts shall be payable toBorrower. Neither Lender nor any loan servicer that at any time holds ormaintains the Reserve Accounts shall have any obligation to keep or maintainsuch Reserve Accounts or any funds deposited therein in interest-bearingaccounts. If Lender or any such loan servicer elects in its sole and absolutediscretion to keep or maintain any Reserve Accounts or any funds depositedtherein in an interest-bearing account (i) the account shall be an EligibleAccount, (ii) such funds shall not be invested except in Permitted Investments,and (iii) all interest earned or accrued thereon shall be for the account ofand be retained by Lender or such loan servicer.

 

(b)           Borrower grants to Lender a first-priority perfected security interestin, and assigns and pledges to Lender, each of the Reserve Accounts and any andall funds hereafter deposited therein as additional security for payment of theDebt. Until expended or applied in accordance herewith, the Reserve Accountsand the Reserve Funds shall constitute additional security for the Debt. Theprovisions of this Section 9.9 are intended to give Lender or any subsequentholder of the Loan “control” of the Reserve Accounts within the meaning of the UCC.

 

(c)           The Reserve Accounts and any and all Reserve Funds deposited thereinshall be subject to the exclusive dominion and control of Lender, which shallhold the Reserve Accounts and any or all Reserve Funds now or hereafterdeposited therein subject to the terms and conditions of this Agreement.Borrower shall have no right of withdrawal from the Reserve Accounts or anyother right or power with respect to the Reserve Accounts or any or all of the ReserveFunds hereinafter deposited therein, except as expressly provided in thisAgreement.

 

(d)           Lender shall furnish or cause to be furnished to Borrower, withoutcharge, an annual accounting of each Reserve Account in the normal format ofLender or its loan servicer, showing credits and debits to such Reserve Accountand the purpose for which each debit to such Reserve Account was made.

 

(e)           As long as no Event of Default has occurred, Lender shall makedisbursements from the Reserve Accounts in accordance with this Agreement. Allsuch disbursements shall be

 

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deemedto have been expressly pre-authorized by Borrower, and shall not be deemed toconstitute the exercise by Lender of any remedies against Borrower unless anEvent of Default has occurred and is continuing and Lender has expressly statedin writing its intent to proceed to exercise its remedies as a secured party,pledgee or lienholder with respect to the Reserve Accounts.

 

(f)            The Reserve Funds shall not constitute escrowor trust funds and may be commingled with other monies held by Lender.Notwithstanding anything else herein to the contrary, Lender may commingle inone or more Eligible Accounts any and all funds controlled by Lender,including, without limitation, funds pledged in favor of Lender by otherborrowers, whether for the same purposes as the Reserve Accounts or otherwise.Without limiting any other provisions of this Agreement or any other LoanDocument, the Reserve Accounts may be established and held in such name ornames as Lender or its loan servicer, as agent for Lender, shall deemappropriate, including, without limitation, in the name of Lender or such loanservicer as agent for Lender. In the case of any Reserve Account which is heldin a commingled account, Lender or its loan servicer, as applicable, shallmaintain records sufficient to enable it to determine at all times whichportion of such account is related to the Loan. The Reserve Accounts are solelyfor the protection of Lender and Lender shall have no responsibility beyond theallowance of due credit for the sums actually received by Lender or beyond the reimbursementor payment of the costs and expenses for which such accounts were establishedin accordance with their terms. Upon assignment of the Loan by Lender, anyReserve Funds shall be turned over to the assignee and any responsibility ofLender as assignor shall terminate. The requirements of this Agreementconcerning Reserve Accounts in no way supersede, limit or waive any otherrights or obligations of the parties under any of the Loan Documents or under applicablelaw.

 

(g)           Borrower shall not, without obtaining the prior written consent ofLender, further pledge, assign or grant any security interest in the ReserveAccounts or the Reserve Funds deposited therein or permit any Lien to attachthereto, except for the security interest granted in this Section 9.9, orany levy to be made thereon, or any UCC Financing Statements, except those namingLender as the secured party, to be filed with respect thereto.

 

(h)           Borrower will maintain the security interest created by this Section 9.9as a first priority perfected security interest and will defend the right,title and interest of Lender in and to the Reserve Accounts and the ReserveFunds against the claims and demands of all Persons whomsoever. At any time andfrom time to time, upon the written request of Lender, and at the sole expenseof Borrower, Borrower will promptly and duly execute and deliver such furtherinstruments and documents and will take such further actions as Lenderreasonably may request for the purpose of obtaining or preserving the fullbenefits of this Agreement and of the rights and powers herein granted.

 

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**ARTICLE 10**

**CASH MANAGEMENT**

 

**Section 10.1.****       ****Cash Management Account**

 

(a)           Borrower acknowledges and confirms that Borrower has established, and Borrowercovenants that it shall maintain an Eligible Account into which Borrower shall,and shall cause Manager to, deposit or cause to be deposited all Rents andother revenue from the Property during the Cash Management Period or upon theoccurrence of an Event of Default prior to the commencement of the CashManagement Period pursuant to the terms of Section 10.2 hereof (such account,the sub-accounts thereof, all funds at any time on deposit therein and anyproceeds, replacements or substitutions of such account or funds therein, arereferred to herein as the **“Cash ManagementAccount”**).

 

(b)           The Cash Management Account shall be in the name of Borrower for thebenefit of Lender, provided that Borrower shall be the owner of all funds ondeposit in such accounts for federal and applicable state and local taxpurposes (except to the extent Lender retains any interest earned on the CashManagement Account for its own account following the occurrence and during thecontinuance of an Event of Default). Sums on deposit in the Cash Management Accountshall not be invested except in such Permitted Investments as determined anddirected by Lender and all income earned thereon shall be the income ofBorrower and be applied to and become part of the Cash Management Account, tobe disbursed in accordance with this Article 10. Lender shall have noliability for any loss resulting from the investment of funds in PermittedInvestments in accordance with the terms and conditions of this Agreement.

 

(c)           The Cash Management Account shall be subject to the exclusive dominionand control of Lender during the Cash Management Period or the continuance ofan Event of Default and, except as otherwise expressly provided herein, neitherBorrower, Manager nor any other party claiming on behalf of, or through,Borrower or Manager, shall have any right of withdrawal therefrom or any otherright or power with respect thereto.

 

(d)           Borrower agrees to pay the customary fees and expenses incurred inconnection with maintaining the Cash Management Account.

 

(e)           Lender shall be responsible for the performance only of such dutieswith respect to the Cash Management Account as are specifically set forthherein, and no duty shall be implied from any provision hereof. Lender shallnot be under any obligation or duty to perform any act which would involve itin expense or liability or to institute or defend any suit in respect hereof,or to advance any of its own monies. Borrower shall indemnify and hold Lenderand its directors, employees, officers and agents harmless from and against anyloss, cost or damage (including, without limitation, reasonable attorneys’ feesand disbursements) incurred by such parties in connection with the CashManagement Account other than such as result from the gross negligence orwillful misconduct of Lender or intentional nonperformance by Lender of its obligationsunder this Agreement.

 

**Section 10.2.****       ****Deposits and Withdrawals**

 

(a)           Borrower represents, warrants and covenants that:

 

(i)            Concurrently with the execution of thisAgreement Borrower has executed and delivered to Lender an instruction letterin the form of Exhibit B attached hereto addressed to American Express (the “TenantDirection Letter”). Upon the occurrence of

 

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anEvent of Default or upon commencement of the Cash Management Period, Lender orLender’s agent shall have the right to deliver the Tenant Direction Letter toAmerican Express and all payments of Rent and other items payable under theAmerican Express Lease shall thereafter be sent directly to the Cash ManagementAccount;

 

(ii)           On the occurrence of an Event of Default or the commencement of theCash Management Period Borrower shall, and shall cause Manager to, instruct allPersons that maintain open accounts with Borrower or Manager with respect tothe Property or with whom Borrower or Manager does business on an “accountsreceivable” basis with respect to the Property to deliver all payments dueunder such accounts to the Cash Management Account. Neither Borrower norManager shall direct any such Person to make payments due under such accountsin any other manner;

 

(iii)          All Rents or other income from the Property received after thecommencement of the Cash Management Period or the occurrence of an Event ofDefault shall (A) be deemed additional security for payment of the Debt andshall be held in trust for the benefit, and as the property, of Lender, (B) notbe commingled with any other funds or property of Borrower or Manager, and (C)if received by Borrower or Manager notwithstanding the delivery of the TenantDirection Letter, be deposited in the Cash Management Account within one (1)Business Day of receipt;

 

(iv)          Without the prior written consent of Lender, so long as any portion ofthe Debt remains outstanding, during the Cash Management Period or thecontinuance of an Event of Default neither Borrower nor Manager shallterminate, amend, revoke or modify the Tenant Direction Letter in any mannerwhatsoever or direct or cause American Express to pay any amount in any mannerother than as provided in the Tenant Direction Letter; and

 

(v)           So long as any portion of the Debt remains outstanding, during the CashManagement Period or during the continuance of an Event of Default neitherBorrower, Manager nor any other Person shall open or maintain any accountsother than the Cash Management Account into which revenues from the ownershipand operation of the Property are deposited.

 

(b)           Intentionally Omitted.

 

(c)           Ifan Event of Default shall have occurred and be continuing or during a Cash ManagementPeriod, on each Scheduled Payment Date (and if such day is not a Business Day, thenthe immediately preceding day which is a Business Day) commencing the month immediatelyfollowing the month during which the Cash Management Period commences, Borrowerhereby irrevocably authorizes Lender to withdraw or allocate to thesub-accounts of the Cash Management Account, as the case may be, amountsreceived in the Cash Management Account, in each case to the extent that sufficientfunds remain therefor:

 

(i)            following a default by American Express underthe American Express Lease, funds sufficient to pay the monthly deposits to theTax and Insurance Reserve

 

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Accountshall be allocated to the Tax and Insurance Reserve Account to be held anddisbursed in accordance with Section 9.2;

 

(ii)           funds sufficient to pay the Monthly Payment Amount shall be withdrawnand paid to Lender;

 

(iii)          funds sufficient to pay any interest accruing at the Default Rate, latepayment charges, if any, and any other sums due and payable to Lender under anyof the Loan Documents, shall be withdrawn and paid to Lender and appliedagainst such items;

 

(iv)          funds sufficient to pay Operating Expenses (to the extent actuallyincurred) for the following month shall be allocated to the Operating ExpenseReserve Account to be held and disbursed to pay Operating Expenses;

 

(v)           funds in an amount equal to the balance (if any) remaining on depositin the Cash Management Account after the foregoing withdrawals and allocationsshall be withdrawn and paid to Lender to be applied to the principal amount ofthe Loan until the principal amount of the Loan is paid in full.

 

(d)           Notwithstanding anything to the contrary herein,Borrower acknowledges that Borrower is responsible for monitoring thesufficiency of funds deposited in the Cash Management Account and that Borroweris liable for any deficiency in available funds, irrespective of whetherBorrower has received any account statement, notice or demand from Lender orLender’s servicer. If the amount on deposit in the Cash Management Account is insufficientto make all of the withdrawals and allocations described in Section 10.2(c)(i)through (v) above, Borrower shall deposit such deficiency into the CashManagement Account within five (5) days (provided that such five day periodshall not constitute a grace period for any default or Event of Default underthis Agreement or any other Loan Document based on a failure to satisfy anymonetary obligation provided in any Loan Document).

 

(e)           If an Event of Default shall have occurredand be continuing, Borrower hereby irrevocably authorizes Lender to make anyand all withdrawals from the Cash Management Account and transfers between anyReserve Account as Lender shall determine in Lender’s sole and absolutediscretion and Lender may use all funds contained in any such accounts for any purpose,including but not limited to repayment of the Debt in such order, proportionand priority as Lender may determine in its sole and absolute discretion.Lender’s right to withdraw and apply funds as stated herein shall be inaddition to all other rights and remedies provided to Lender under thisAgreement, the Note, the Mortgage and the other Loan Documents.

 

**Section 10.3.****       ****Security Interest**

 

(a)           To secure the full and punctual payment ofthe Debt and performance of all obligations of Borrower now or hereafterexisting under this Agreement and the other Loan Documents, Borrower herebygrants to Lender a first-priority perfected security interest in each of theAccounts and the Account Collateral. Furthermore, Borrower shall not, withoutobtaining the prior written consent of Lender, further pledge, assign or grantany security interest in any of the foregoing or permit any Lien to attachthereto or any levy to be made thereon or any UCC Financing Statements to befiled with respect thereto. Borrower will maintain the security

 

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interestcreated by this Section 10.3(a) as a first priority perfected securityinterest and will defend the right, title and interest of Lender in and to eachof the Accounts and the Account Collateral against the claims and demands ofall Persons whomsoever.

 

(b)           Borrower authorizes Lender to file anyfinancing statement or statements required by Lender to establish or maintainthe validity, perfection and priority of the security interest granted hereinin connection with the Cash Management Account. Borrower agrees that at any timeand from time to time, at the expense of Borrower, Borrower will promptly andduly execute and deliver all further instruments and documents, and take allfurther action, that may be necessary or desirable, or that Lender mayreasonably request, in order to perfect and protect any security interestgranted or purported to be granted hereby (including, without limitation, any securityinterest in and to any Permitted Investments) or to enable Lender to exerciseand enforce its rights and remedies hereunder.

 

(c)           Upon the occurrence of an Event of Default,Lender may exercise any or all of its rights and remedies as a secured party,pledgee and lienholder with respect to the Accounts and the Account Collateral.Without limitation of the foregoing, upon any Event of Default, Lender may usethe Accounts and the Account Collateral for any of the following purposes: (A) repaymentof the Debt, including, but not limited to, principal prepayments and theprepayment premium applicable to such full or partial prepayment (asapplicable); (B) reimbursement of Lender for all losses, fees, costs andexpenses (including, without limitation, reasonable legal fees) suffered orincurred by Lender as a result of such Event of Default; (C) payment of any amountexpended in exercising any or all rights and remedies available to Lender atlaw or in equity or under this Agreement or under any of the other LoanDocuments; (D) payment of any item as required or permitted under thisAgreement; or (E) any other purpose permitted by applicable law; provided,however, that any such application of funds shall not cure or be deemed to cureany Event of Default. Without limiting any other provisions hereof, each of theremedial actions described in the immediately preceding sentence shall bedeemed to be a commercially reasonable exercise of Lender’s rights and remediesas a secured party with respect to the Accounts and the Account Collateral andshall not in any event be deemed to constitute a setoff or a foreclosure of astatutory banker’s lien. Nothing in this Agreement shall obligate Lender toapply all or any portion of the Accounts and the Account Collateral to effect acure of any Event of Default, or to pay the Debt, or in any specific order ofpriority. The exercise of any or all of Lender’s rights and remedies under thisAgreement or under any of the other Loan Documents shall not in any wayprejudice or affect Lender’s right to initiate and complete a foreclosure underthe Mortgage.

 

**ARTICLE 11**

**EVENTS OF DEFAULT; REMEDIES**

 

**Section 11.1.****       ****Event of Default**

 

Theoccurrence of any one or more of the following events shall constitute an **“Event of Default”**:

 

(a)           if any portion of the Debt is not paid on orprior to the tenth day following the date the same is due or if the entire Debtis not paid on or before the Maturity Date;

 

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(b)           except as otherwise expressly provided in theLoan Documents, if any of the Taxes or Other Charges are not paid when the sameare due and payable, unless there is sufficient money in the Tax and InsuranceReserve Account for payment of amounts then due and payable and Lender’s accessto such money has not been constrained or restricted in any manner;

 

(c)           should American Express cease to be aself-insurer or if the rating of American express issued by the Rating Agenciesfalls below the Trigger Rating, if (i) the Policies are not kept in full forceand effect, or (ii) the Accord 28 (or similar) certificate is not delivered to Lenderin accordance with Section 8.1;

 

(d)           if Borrower breaches any covenant withrespect to itself contained in Article 6 or any covenant contained in Article 7hereof;

 

(e)           if any representation or warranty of, or withrespect to, Borrower or Borrower Principal, or any member, general partner,principal or beneficial owner of any of the foregoing, made herein, in anyother Loan Document, or in any certificate, report, financial statement or otherinstrument or document furnished to Lender at the time of the closing of theLoan or during the term of the Loan shall have been false or misleading in anymaterial respect when made;

 

(f)            if (i) Borrower, or any managing member orgeneral partner of Borrower, Borrower Principal, or American Express shallcommence any case, proceeding or other action (A) under any Creditors RightsLaws, seeking to have an order for relief entered with respect to it, orseeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, or(B) seeking appointment of a receiver, trustee, custodian, conservator or othersimilar official for it or for all or any substantial part of its assets, orBorrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express shall make a general assignment for the benefitof its creditors; or (ii) there shall be commenced against Borrower, anymanaging member or general partner of Borrower, Borrower Principal, or AmericanExpress any case, proceeding or other action of a nature referred to in clause(i) above which (A) results in the entry of an order for relief or any suchadjudication or appointment or (B) remains undismissed, undischarged orunbonded for a period of sixty (60) days; or (iii) there shall be commenced againstBorrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express any case, proceeding or other action seekingissuance of a warrant of attachment, execution, distraint or similar processagainst all or any substantial part of its assets which results in the entry ofany order for any such relief which shall not have been vacated, discharged, orstayed or bonded pending appeal within sixty (60) days from the entry thereof;or (iv) Borrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express shall take any action in furtherance of, orindicating its consent to, approval of, or acquiescence in, any of the acts setforth in clause (i), (ii), or (iii) above; or (v) Borrower, any managing memberor general partner of Borrower, Borrower Principal, or American Express shallgenerally not, or shall be unable to, or shall admit in writing its inabilityto, pay its debts as they become due;

 

(g)           if Borrower shall be in default beyondapplicable notice and grace periods under any other mortgage, deed of trust,deed to secure debt or other security agreement covering any part of theProperty, whether it be superior or junior in lien to the Mortgage;

 

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(h)           if the Property becomes subject to anymechanic’s, materialman’s or other Lien other than a Lien for any Taxes orOther Charges not then due and payable and the Lien shall remain undischargedof record (by payment, bonding or otherwise) for a period of thirty (30) days;

 

(i)            if any federal income tax lien is filedagainst Borrower, any member or general partner of Borrower, BorrowerPrincipal, or the Property and same is not discharged of record (or bonded orinsured to Lender’s satisfaction) within thirty (30) days after same is filed;

 

(j)            if an uninsured judgment is filed against theBorrower in excess of $20,000 which is not vacated or discharged (or bonded orinsured to Lender’s satisfaction) within 30 days;

 

(k)           if any default occurs under any guaranty orindemnity executed in connection herewith and such default continues after theexpiration of applicable grace periods, if any;

 

(1)           if Borrower shall permit any event within itscontrol to occur that would cause any REA to terminate without notice or actionby any party thereto or would entitle any party to terminate any REA and theterm thereof by giving notice to Borrower; or any REA shall be surrendered,terminated or canceled for any reason or under any circumstance whatsoeverexcept as provided for in such REA; or any term of any REA shall be modified orsupplemented unless permitted by the American Express Lease; or Borrower shallfail, within ten (10) Business Days after demand by Lender, to exercise itsoption to renew or extend the term of any REA or shall fail or neglect topursue diligently all actions necessary to exercise such renewal rightspursuant to such REA except as provided for in such REA; or

 

(m)          if an American Express Lease Default shalloccur under the American Express Lease; or

 

(n)           if Borrower shall continue to be in defaultunder any other term, covenant or condition of this Agreement or any of theLoan Documents for more than ten (10) days after notice from Lender in the caseof any default which can be cured by the payment of a sum of money or forthirty (30) days after notice from Lender in the case of any other default,provided that if such default cannot reasonably be cured within such thirty(30) day period and Borrower shall have commenced to cure such default withinsuch thirty (30) day period and thereafter diligently and expeditiouslyproceeds to cure the same, such thirty (30) day period shall be extended for solong as it shall require Borrower in the exercise of due diligence to cure suchdefault, it being agreed that no such extension shall be for a period in excessof one hundred twenty (120) days.

 

**Section 11.2.****       ****Remedies**

 

(a)           Upon the occurrence of an Event of Default(other than an**Event of Defaultdescribed in Section 11.1(f) above) and at any time thereafter Lender may,in addition to any other rights or remedies available to it pursuant to thisAgreement and the other Loan Documents or at law or in equity, take suchaction, without notice or demand, that Lender deems advisable to protect andenforce its rights against Borrower and in the Property, including, withoutlimitation, declaring the Debt to be immediately due and payable, and Lendermay enforce or avail itself of any or all rights or remedies provided in theLoan Documents against Borrower and the Property,

 

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including,without limitation, all rights or remedies available at law or in equity; andupon any Event of Default described in Section 11.1(f) above, the Debt andall other obligations of Borrower hereunder and under the other Loan Documentsshall immediately and automatically become due and payable, without notice ordemand, and Borrower hereby expressly waives any such notice or demand,anything contained herein or in any other Loan Document to the contrarynotwithstanding.

 

(b)           Upon the occurrence of an Event of Default,all or any one or more of the rights, powers, privileges and other remediesavailable to Lender against Borrower under this Agreement or any of the otherLoan Documents executed and delivered by, or applicable to, Borrower or at lawor 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, andwhether or not Lender shall have commenced any foreclosure proceeding or otheraction for the enforcement of its rights and remedies under any of the LoanDocuments with respect to the Property. Any such actions taken by Lender shallbe cumulative and concurrent and may be pursued independently, singularly,successively, together or otherwise, at such time and in such order as Lendermay determine in its sole discretion, to the fullest extent permitted by law,without impairing or otherwise affecting the other rights and remedies ofLender permitted by law, equity or contract or as set forth herein or in theother Loan Documents.

 

**ARTICLE 12**

**ENVIRONMENTAL PROVISIONS**

 

**Section 12.1.****       ****EnvironmentalRepresentations and Warranties**

 

Borrowerrepresents and warrants, except as disclosed in an Environmental Report of theProperty and information that Borrower knows that: (a) there are no HazardousMaterials or underground storage tanks in, on, or under the Property, exceptthose that are both (i) in compliance with Environmental Laws and with permitsissued pursuant thereto (if such permits are required), if any, and (ii) either(A) in the case of Hazardous Materials, in amounts not in excess of thatnecessary to operate the Property for the purposes set forth herein or (B)fully disclosed to and approved by Lender in writing pursuant to anEnvironmental Report; (b) there are no past, present or threatened Releases ofHazardous Materials in violation of any Environmental Law or which wouldrequire remediation by a Governmental Authority in, on, under or from theProperty except as described in the Environmental Report; (c) there is nothreat of any Release of Hazardous Materials migrating to the Property exceptas described in the Environmental Report; (d) there is no past or presentnon-compliance with Environmental Laws, or with permits issued pursuantthereto, in connection with the Property except as described in theEnvironmental Report; (e) Borrower does not know of, and has not received, anywritten or oral notice or other communication from any Person relating toHazardous Materials in, on, under or from the Property; (f) the Property isfree of Mold; and (g) Borrower has truthfully and fully provided to Lender, inwriting, any and all information relating to environmental conditions in, on,under or from the Property known to Borrower or contained in Borrower’s filesand records, including but not limited to any reports relating to HazardousMaterials in, on, under or migrating to or from the Property and/or to theenvironmental condition of or the presence of Mold at the Property.

 

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**Section 12.2.****       ****Environmental Covenants**

 

Borrowercovenants and agrees that so long as Borrower owns, manages and is inpossession of the operation of the Property: (a) all uses and operations on orof the Property, whether by Borrower or any other Person, shall be incompliance with all Environmental Laws and permits issued pursuant thereto; (b)there shall be no Releases of Hazardous Materials in, on, under or from theProperty; (c) there shall be no Hazardous Materials in, on, or under theProperty, except those that are both (i) in compliance with all EnvironmentalLaws and with permits issued pursuant thereto, if and to the extent required,and (ii) (A) in amounts not in excess of that necessary to operate the Propertyfor the purposes set forth herein or (B) fully disclosed to and approved byLender in writing or (C) with respect to Mold, not in a condition, location, orof a type which may pose a risk to human health or safety or the environment orwhich may result in damage to or would adversely affect or impair the value ormarketability of the Property; (d) Borrower shall keep the Property free andclear of all Environmental Liens; (e) Borrower shall, at its sole cost andexpense, fully and expeditiously cooperate in all activities pursuant to Section 12.4below, including but not limited to providing all relevant information andmaking knowledgeable persons available for interviews; (f) Borrower shall, atits sole cost and expense, perform any environmental site assessment or otherinvestigation of environmental conditions in connection with the Property,pursuant to any reasonable written request of Lender, upon Lender’s reasonablebelief that the Property is not in full compliance with all Environmental Laws,and share with Lender the reports and other results thereof, and Lender andother Indemnified Parties shall be entitled to rely on such reports and otherresults thereof; (g) Borrower shall keep the Property free of Mold; and (h)Borrower shall, at its sole cost and expense, comply with all reasonablewritten requests of Lender to (i) reasonably effectuate remediation of anyHazardous Materials in, on, under or from the Property; and (ii) comply withany Environmental Law; (i) Borrower shall not allow any tenant or other user ofthe Property to violate any Environmental Law; and (j) Borrower shallimmediately notify Lender in writing after it has become aware of (A) anypresence or Release or threatened Release of Hazardous Materials in, on, under,from or migrating towards the Property; (B) any non-compliance with anyEnvironmental Laws related in any way to the Property; (C) any actual orpotential Environmental Lien against the Property; (D) any required or proposedremediation of environmental conditions relating to the Property; and (E) anywritten or oral notice or other communication of which Borrower becomes awarefrom any source whatsoever (including but not limited to a GovernmentalAuthority) relating in any way to Hazardous Materials. Any failure of Borrowerto perform its obligations pursuant to this Section 12.2 shall constitutebad faith waste with respect to the Property.

 

**Section 12.3.****       ****Lender’s Rights**

 

Lenderand any other Person designated by Lender, including but not limited to anyrepresentative of a Governmental Authority, and any environmental consultant,and any receiver appointed by any court of competent jurisdiction, shall havethe right, but not the obligation, to enter upon the Property at all reasonabletimes to assess any and all aspects of the environmental condition of theProperty and its use, including but not limited to conducting any environmentalassessment or audit (the scope of which shall be determined in Lender’s solediscretion) and taking samples of soil, groundwater or other water, air, orbuilding materials, and conducting

 

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otherinvasive testing. Borrower shall cooperate with and provide access to Lenderand any such person or entity designated by Lender.

 

**Section 12.4.****       ****Operations and MaintenancePrograms**

 

Ifrecommended by the Environmental Report or any other environmental assessmentor audit of the Property, Borrower shall establish and comply with anoperations and maintenance program with respect to the Property, in form andsubstance reasonably acceptable to Lender, prepared by an environmentalconsultant reasonably acceptable to Lender, which program shall address anyasbestos-containing material or lead based paint that may now or in the future bedetected at or on the Property. Without limiting the generality of thepreceding sentence, Lender may require (a) periodic notices or reports toLender in form, substance and at such intervals as Lender may specify, (b) anamendment to such operations and maintenance program to address changingcircumstances, laws or other matters, (c) at Borrower’s sole expense,supplemental examination of the Property by consultants specified by Lender,(d) access to the Property by Lender, its agents or servicer, to review andassess the environmental condition of the Property and Borrower’s compliancewith any operations and maintenance program, and (e) variation of theoperations and maintenance program in response to the reports provided by anysuch consultants.

 

**Section 12.5.****       ****Environmental Definitions**

 

**“Environmental Law”**means any present and future federal, state and local laws, statutes,ordinances, rules, regulations, standards, policies and other governmentdirectives or requirements, as well as common law, including but not limited tothe Comprehensive Environmental Response, Compensation and Liability Act andthe Resource Conservation and Recovery Act, that apply to Borrower or theProperty and relate to Hazardous Materials or protection of human health or theenvironment. **“Environmental Liens”**meansall Liens and other encumbrances imposed pursuant to any Environmental Law,whether due to any act or omission of Borrower or any other Person. **“Environmental Report”**means the writtenreports resulting from the environmental site assessments of the Propertydelivered to Lender in connection with the Loan. **“Hazardous Materials”**shall mean petroleum and petroleumproducts and compounds containing them, including gasoline, diesel fuel andoil; explosives, flammable materials; radioactive materials; polychlorinatedbiphenyls and compounds containing them; lead and lead-based paint; asbestos orasbestos-containing materials in any form that is or could become friable;underground or above-ground storage tanks, whether empty or containing anysubstance; any substance the presence of which on the Property is prohibited byany federal, state or local authority; any substance that requires specialhandling; and any other material or substance now or in the future defined as a“hazardous substance,” “hazardous material”, “hazardous waste”, “toxicsubstance”, “toxic pollutant”, “contaminant”, or “pollutant” within the meaningof any Environmental Law. **“Mold”**shallmean any mold, fungi, bacterial or microbial matter present at or in theProperty, including, without limitation, building materials which is in acondition, location or a type which may pose a risk to human health or safetyor the environment, may result in damage to or would adversely affect or impairthe value or marketability of the Property. **“Release”**of any Hazardous Materials includes but is not limited to any release, deposit,discharge, emission, leaking, spilling, seeping, migrating, injecting,

 

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pumping,pouring, emptying, escaping, dumping, disposing or other movement of HazardousMaterials.

 

**ARTICLE 13**

**SECONDARY MARKET**

 

**Section 13.1.****       ****Transfer of Loan**

 

Lendermay, at any time, sell, transfer or assign the Loan Documents, or grantparticipations therein (**“Participations”**)or syndicate the Loan (**“Syndication”**)or issue mortgage pass-through certificates or other securities evidencing abeneficial interest in a rated or unrated public offering or private placement(**“Securities”**) (a Syndication or theissuance of Participations and/or Securities, a **“Securitization”**).

 

**Section 13.2.****       ****Delegation of Servicing**

 

Atthe option of Lender, the Loan may be serviced by a servicer/trustee selectedby Lender and Lender may delegate all or any portion of its responsibilitiesunder this Agreement and the other Loan Documents to such servicer/trusteepursuant to a servicing agreement between Lender and such servicer/trustee.

 

**Section 13.3.****       ****Dissemination of Information**

 

Lendermay forward to each purchaser, transferee, assignee, or servicer of, and eachparticipant, or investor in, the Loan, or any Participations and/or Securitiesor any of their respective successors (collectively, the **“Investor”**)or any Rating Agency rating the Loan, or any Participations and/or Securities,each prospective Investor, and any organization maintaining databases on theunderwriting and performance of commercial mortgage loans, all documents andinformation which Lender now has or may hereafter acquire relating to the Debtand to Borrower, any managing member or general partner thereof, BorrowerPrincipal, and the Property, including financial statements, whether furnishedby Borrower or otherwise, as Lender determines necessary or desirable. Borrowerirrevocably waives any and all rights it may have under applicable LegalRequirements to prohibit such disclosure, including but not limited to anyright of privacy.

 

**Section 13.4.****       ****Cooperation**

 

Borrowerand Borrower Principal agree to cooperate with Lender in connection with anysale or transfer of the Loan or any Participation and/or Securities createdpursuant to this Article 13, including, without limitation, (a) thedelivery of an estoppel certificate required in accordance with Section 5.12(a)and such other documents as may be reasonably requested by Lender, (b) theexecution of such amendments to the Loan Documents as may be requested by theholder of the Note or the Rating Agencies or otherwise to effect theSecuritization including, without limitation, bifurcation of the Loan into twoor more components and/or separate notes; provided, however, that Borrowershall not be required to modify or amend any Loan Document if such modificationor amendment would (i) change the interest rate, the stated maturity or theamortization of principal set forth in the Note, except in connection with a bifurcationof the Loan which may result in varying fixed interest rates and amortizationschedules, but which shall

 

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havethe same initial weighted average coupon of the original Note, or (ii) in the reasonablejudgment of Borrower, modify or amend any other material economic term of theLoan, or (iii) in the reasonable judgment of Borrower, materially increaseBorrower’s obligations and liabilities under the Loan Documents, and (c)**make changes to the organizationaldocuments of Borrower and its principals and/or use its best efforts to causechanges to the legal opinions delivered by Borrower in connection with theLoan, provided, that such changes shall not result in a material adverseeconomic effect to Borrower. Borrower shall also furnish and Borrower andBorrower Principal consent to Lender furnishing to such Investors or suchprospective Investors or such Rating Agency any and all information concerningthe Property, the American Express Lease, the financial condition of Borroweror Borrower Principal as may be requested by Lender, any Investor, anyprospective Investor or any Rating Agency in connection with any sale ortransfer of the Loan or any Participations or Securities. Neither Borrower norBorrower Principal shall be responsible for any costs incurred by Lender inconnection with a Securitization.

 

**ARTICLE 14**

**INDEMNIFICATIONS**

 

**Section 14.1.****       ****General Indemnification**

 

Borrower shall indemnify, defend and hold harmless the IndemnifiedParties from and against any and all Losses imposed upon or incurred by orasserted against any Indemnified Parties and directly or indirectly arising outof or in any way relating to any one or more of the following: (a) anyaccident, injury to or death of persons or loss of or damage to propertyoccurring in, on or about the Property or any part thereof or on the adjoiningsidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;(b) any use, nonuse or condition in, on or about the Property or any partthereof or on the adjoining sidewalks, curbs, adjacent property or adjacentparking areas, streets or ways; (c) performance of any labor or services or thefurnishing of any materials or other property in respect of the Property or anypart thereof; (d) any failure of the Property to be in compliance with anyapplicable Legal Requirements; (e) any and all claims and demands whatsoeverwhich may be asserted against Lender by reason of any alleged obligations orundertakings on its part to perform or discharge any of the terms, covenants,or agreements contained in any Lease; (f) the holding or investing of theReserve Accounts, or (g) the payment of any commission, charge or brokerage feeto anyone which may be payable in connection with the funding of the Loan(collectively, the **“Indemnified Liabilities”**);** **provided, however, thatBorrower shall not have any obligation to Lender hereunder to the extent thatsuch Indemnified Liabilities arise from the gross negligence, illegal acts,fraud or willful misconduct of Lender. To the extent that the undertaking toindemnify, defend and hold harmless set forth in the preceding sentence may beunenforceable because it violates any law or public policy, Borrower shall paythe maximum portion that it is permitted to pay and satisfy under applicablelaw to the payment and satisfaction of all Indemnified Liabilities incurred byLender.

 

**Section 14.2.****       ****Mortgage and Intangible Taxindemnification**

 

Borrowershall, at its sole cost and expense, protect, defend, indemnify, release andhold harmless the Indemnified Parties from and against any and all Lossesimposed upon or incurred by or asserted against any Indemnified Parties anddirectly or indirectly arising out of or in any

 

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wayrelating to any tax on the making and/or recording of the Mortgage, the Note orany of the other Loan Documents, but excluding any income, franchise or othersimilar taxes.

 

**Section 14.3.****       ****ERISA Indemnification**

 

Borrowershall, at its sole cost and expense, protect, defend, indemnify, release and holdharmless the Indemnified Parties from and against any and all Losses(including, without limitation, reasonable attorneys’ fees and costs incurredin the investigation, defense, and settlement of Losses incurred in correctingany prohibited transaction or in the sale of a prohibited loan, and inobtaining any individual prohibited transaction exemption under ERISA that maybe required, in Lender’s sole discretion) that Lender may incur, directly orindirectly, as a result of a default under Section 4.9 or Section 5.18of this Agreement.

 

**Section 14.4.****       ****Survival**

 

Theobligations and liabilities of Borrower and Borrower Principal under this Article 14shall fully survive indefinitely notwithstanding any termination, satisfaction,assignment, entry of a judgment of foreclosure, exercise of any power of sale,or delivery of a deed in lieu of foreclosure of the Mortgage.

 

**ARTICLE 15**

**EXCULPATION**

 

**Section 15.1.****       ****Exculpation**

 

(a)           Except as otherwise provided herein or in theother Loan Documents, Lender shall not enforce the liability and obligation ofBorrower or Borrower Principal, as applicable, to perform and observe theobligations contained herein or in the other Loan Documents by any action orproceeding wherein a money judgment shall be sought against Borrower orBorrower Principal, except that Lender may bring a foreclosure action, actionfor specific performance or other appropriate action or proceeding to enableLender to enforce and realize upon this Agreement, the Note, the Mortgage andthe other Loan Documents, and the interest in the Property, the Rents(following an Event of Default) and any other collateral given to Lendercreated by this Agreement, the Note, the Mortgage and the other Loan Documents;provided, however, that any judgment in any such action or proceeding shall beenforceable against Borrower or Borrower Principal, as applicable, only to theextent of Borrower’s or Borrower Principal’s interest in the Property, in theRents and in any other collateral given to Lender. Lender, by accepting thisAgreement, the Note, the Mortgage and the other Loan Documents, agrees that itshall not, except as otherwise provided in this Section 15.1, sue for,seek or demand any deficiency judgment against Borrower or Borrower Principalin any such action or proceeding, under or by reason of or under or inconnection with this Agreement, the Note, the Mortgage or the other LoanDocuments. The provisions of this Section 15.1 shall not, however, (i)constitute a waiver, release or impairment of any obligation evidenced orsecured by this Agreement, the Note, the Mortgage or the other Loan Documents;(ii) impair the right of Lender to name Borrower or Borrower Principal as aparty defendant in any action or suit for judicial foreclosure and sale underthis Agreement and the Mortgage; (iii) affect, the validity or enforceabilityof any indemnity (including, without limitation, those contained in Section 12.6

 

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andArticle 14 of this Agreement), environmental indemnity, guaranty, masterlease or similar instrument made in connection with this Agreement, the Note,the Mortgage and the other Loan Documents; (iv) impair the right of Lender toobtain the appointment of a receiver; (v) impair the enforcement of theassignment of leases provisions contained in the Mortgage; or (vi) impair theright of Lender to obtain a deficiency judgment or other judgment on the Noteagainst Borrower or Borrower Principal if necessary to obtain any InsuranceProceeds or Awards to which Lender would otherwise be entitled under thisAgreement; provided however, Lender shall only enforce such judgment to theextent of the Insurance Proceeds and/or Awards.

 

(b)           Notwithstanding the provisions of this Section 15.1to the contrary, Borrower and Borrower Principal shall be personally liable toLender on a joint and several basis for Losses due to:

 

(i)            fraud or intentional misrepresentation byBorrower, Borrower Principal or any other Affiliate of Borrower or BorrowerPrincipal in connection with the execution and the delivery of this Agreement,the Note, the Mortgage, any of the other Loan Documents, or any certificate,report, financial statement or other instrument or document furnished to Lenderat the time of the closing of the Loan or during the term of the Loan;

 

(ii)           Borrower’s misapplication or misappropriation of Rents received byBorrower after the occurrence of an Event of Default;

 

(iii)          Borrower’s misapplication or misappropriation of tenant securitydeposits or Rents collected in advance;

 

(iv)          the misapplication or the misappropriation of Insurance Proceeds or Awards;

 

(v)           Borrower’s failure to pay Taxes, Other Charges (except to the extentthat sums sufficient to pay such amounts have been deposited in escrow withLender pursuant to the terms hereof and there exists no impediment to Lender’sutilization thereof), charges for labor or materials or other charges that cancreate liens on the Property beyond any applicable notice and cure periodsspecified herein;

 

(vi)          Borrower’s failure to return or to reimburse Lender for all PersonalProperty taken from the Property by or on behalf of Borrower and not replacedwith Personal Property of the same utility and of the same or greater value;

 

(vii)         any act of actual waste or arson by Borrower, any principal, Affiliate,member or general partner thereof or by Borrower Principal, any principal,Affiliate, member or general partner thereof; or

 

(viii)        Borrower’s failure following any Event of Default to deliver to Lenderupon demand all Rents and books and records relating to the Property.

 

(c)           Notwithstanding the foregoing, the agreementof Lender not to pursue recourse liability as set forth in subsection (a)above SHALL BECOME NULL AND VOID and shall be of no further force and effectand the Debt shall be fully recourse to Borrower and Borrower

 

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Principalon a joint and several basis in the event (i) of a breach by Borrower orBorrower Principal of any of the covenants set forth in Article 6 hereof,to the extent that such breach is (A) material and (B) is not cured withinfifteen (15) days of the earlier to occur of notice from Lender or Borrower’sknowledge of such breach, (ii) of a breach of any of the covenants set forth inArticle 7 hereof, (iii) the Property or any part thereof shall become anasset in a voluntary bankruptcy or insolvency proceeding of Borrower, (iv)Borrower, Borrower Principal or any Affiliate, officer, director, or representativewhich controls, directly or indirectly, Borrower or Borrower Principal files,or joins in the filing of, an involuntary petition against Borrower under anyCreditors Rights Laws, or solicits or causes to be solicited petitioningcreditors for any involuntary petition against Borrower from any Person; (v)Borrower files an answer consenting to or otherwise acquiescing in or joiningin any involuntary petition filed against it, by any other Person under anyCreditors Rights Laws, or solicits or causes to be solicited petitioningcreditors for any involuntary petition from any Person; or (vi) any Affiliate,officer, director, or representative which controls Borrower consents to oracquiesces in or joins in an application for the appointment of a custodian,receiver, trustee, or examiner for Borrower or any portion of the Property.

 

(d)           Nothing herein shall be deemed to be a waiverof any right which Lender may have under Section 506(a), 506(b), 1111(b)or any other provision of the U.S. Bankruptcy Code to file a claim for the fullamount of the indebtedness secured by the Mortgage or to require that allcollateral shall continue to secure all of the indebtedness owing to Lender inaccordance with this Agreement, the Note, the Mortgage or the other LoanDocuments.

 

**ARTICLE 16**

**NOTICES**

 

**Section 16.1.****       ****Notices**

 

Allnotices, consents, approvals and requests required or permitted hereunder orunder any other Loan Document shall be given in writing and shall be effectivefor all purposes if hand delivered or sent by (a) certified or registeredUnited States mail, postage prepaid, return receipt requested, (b) expeditedprepaid overnight delivery service, either commercial or United States PostalService, with proof of attempted delivery, or by (c) telecopier (with answerback acknowledged provided an additional notice is given pursuant to subsection (b)above), addressed as follows (or at such other address and Person as shall bedesignated from time to time by any party hereto, as the case may be, in a writtennotice to the other parties hereto in the manner provided for in this Section):

 
| If  to Lender: |   | Bank  of America, N.A.            |
|----------------|--------|-----------------------------------|
|           |   | Capital  Markets Servicing Group  |
|           |   | 900  West Trade Street, Suite 650 |
|           |   | NC1-026-06-01                     |
|           |   | Charlotte,  North Carolina 28255  |
|           |   | Attn:  Servicing Manager          |
|           |   | Telephone  No: (866) 531-0957     |

 

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| If  to Borrower:           |   | Inland  Western Minneapolis 3rd Avenue, L.L.C. |
|----------------------------|--------|------------------------------------------------|
|                       |   | c/o  Inland Real Estate Investment Corporation |
|                       |   | 2901  Butterfield Road                         |
|                       |   | Oak  Brook, Illinois 60523                     |
|                       |   | Attention:  Roberta Matlin, Vice President     |
|                       |   | Facsimile  No.: 630-218-4965                   |
|                       |   |                                           |
| With  a copy to:           |   | The  Inland Real Estate Group, Inc.            |
|                       |   | 2901  Butterfield Road                         |
|                       |   | Oak  Brook, Illinois 60523                     |
|                       |   | Attention:  General Counsel                    |
|                       |   | Facsimile  No.: 630-218-4900                   |
|                       |   |                                           |
| If to Borrower  Principal: |   | Inland  Western Retail Real Estate Trust, Inc. |
|                       |   | 2901  Butterfield Road                         |
|                       |   | Oak  Brook, Illinois 60523                     |
|                       |   | Roberta  Matlin, Vice President                |
|                       |   | Facsimile  No.: 630-218-4965                   |
|                       |   |                                           |
| With  a copy to:           |   | The  Inland Real Estate Group, Inc.            |
|                       |   | 2901  Butterfield Road                         |
|                       |   | Oak  Brook, Illinois 60523                     |
|                       |   | Attention:  General Counsel                    |
|                       |   | Facsimile  No.: 630-218-4900                   |

 

Anotice shall be deemed to have been given: in the case of hand delivery, at thetime of delivery; in the case of registered or certified mail, when deliveredor the first attempted delivery on a Business Day; or in the case of expeditedprepaid delivery and telecopy, upon the first attempted delivery on a BusinessDay.

 

**ARTICLE ****17**

**FURTHER****ASSURANCES**

 

**Section ****17.1.****       ****Replacement Documents**

 

Uponreceipt of an affidavit of an officer of Lender as to the loss, theft,destruction or mutilation of the Note or any other Loan Document which is notof public record and, in the case of such mutilation upon surrender andcancellation of such Note or other Loan Document, Borrower will issue in lieuthereof a replacement Note or other Loan Document, dated the date of such lost,stolen, destroyed or mutilated Note or other Loan Document in the sameprincipal amount thereof and otherwise of like tenor.

 

**Section 17.2.****       ****Recording of Mortgage, etc.**

 

Borrowerforthwith upon the execution and delivery of the Mortgage and thereafter, fromtime to time, will cause the Mortgage and any of the other Loan Documentscreating a lien or security interest or evidencing the lien hereof upon theProperty and each instrument of further

 

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assuranceto be filed, registered or recorded in such manner and in such places as may berequired by any present or future law in order to publish notice of and fullyto protect and perfect the lien or security interest hereof upon, and theinterest of Lender in, the Property. Borrower will pay all taxes, filing,registration or recording fees, and all expenses incident to the preparation, execution,acknowledgment and/or recording of the Note, the Mortgage, the other LoanDocuments, any note, deed of trust or mortgage supplemental hereto, anysecurity instrument with respect to the Property and any instrument of furtherassurance, and any modification or amendment of the foregoing documents, andall federal, state, county and municipal taxes, duties, imposts, assessmentsand charges arising out of or in connection with the execution and delivery ofthe Mortgage, any deed of trust or mortgage supplemental hereto, any securityinstrument with respect to the Property or any instrument of further assurance,and any modification or amendment of the foregoing documents, except whereprohibited by law so to do.

 

**Section 17.3.****       ****Further Acts, Etc.**

 

Borrowerwill, at the cost of Borrower (except with respect to costs incurred by Lender,for which Lender shall be responsible), do, execute, acknowledge and deliverall and every further acts, deeds, conveyances, deeds of trust, mortgages,assignments, security agreements, control agreements, notices of assignments,transfers and assurances as Lender shall, from time to time, reasonablyrequire, for the better assuring, conveying, assigning, transferring, andconfirming unto Lender the property and rights hereby mortgaged, deeded,granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted andtransferred or intended now or hereafter so to be, or which Borrower may be ormay hereafter become bound to convey or assign to Lender, or for carrying outthe intention or facilitating the performance of the terms of this Agreement orfor filing, registering or recording the Mortgage, or for complying with allLegal Requirements. Borrower, on demand, will execute and deliver, and in theevent it shall fail to so execute and deliver, hereby authorizes Lender toexecute in the name of Borrower or without the signature of Borrower to theextent Lender may lawfully do so, one or more financing statements andfinancing statement amendments to evidence more effectively, perfect andmaintain the priority of the security interest of Lender in the Property.Borrower grants to Lender an irrevocable power of attorney coupled with aninterest for the purpose of exercising and perfecting any and all rights andremedies available to Lender at law and in equity, including withoutlimitation, such rights and remedies available to Lender pursuant to this Section 17.3.

 

**Section ****17.4.****       ****Changes in Tax, Debt, Creditand Documentary Stamp Laws**

 

(a)           If any law is enacted or adopted or amendedafter the date of this Agreement which deducts the Debt from the value of theProperty for the purpose of taxation or which imposes a tax, either directly orindirectly, on the Debt or Lender’s interest in the Property, Borrower will paythe tax, with interest and penalties thereon, if any. If Lender is advised bycounsel chosen by it that the payment of tax by Borrower would be unlawful ortaxable to Lender or unenforceable or provide the basis for a defense of usurythen Lender shall have the option by written notice of not less than onehundred eighty (80) days to declare the Debt immediately due and payable.

 

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(b)           Borrower will not claim or demand or beentitled to any credit or credits on account of the Debt for any part of theTaxes or Other Charges assessed against the Property, or any part thereof, andno deduction shall otherwise be made or claimed from the assessed value of theProperty, or any part thereof, for real estate tax purposes by reason of theMortgage or the Debt. If such claim, credit or deduction shall be required bylaw, Lender shall have the option, by written notice of not less than onehundred eighty (80) days, to declare the Debt immediately due and payable.

 

Ifat any time the United States of America, any State thereof or any subdivisionof any such State shall require revenue or other stamps to be affixed to theNote, the Mortgage, or**any of theother Loan Documents or impose any other tax or charge on the same, Borrowerwill pay for the same, with interest and penalties thereon, if any.

 

**Section 17.5.****       ****Expenses**

 

Borrowercovenants and agrees to pay or, if Borrower fails to pay, to reimburse, Lenderupon receipt of written notice from Lender for all reasonable costs and expenses(including reasonable, actual attorneys’ fees and disbursements and theallocated costs of internal legal services and all actual disbursements ofinternal counsel) reasonably incurred by Lender in accordance with thisAgreement in connection with (a) the preparation, negotiation, execution anddelivery of this Agreement and the other Loan Documents and the consummation ofthe transactions contemplated hereby and thereby and all the costs offurnishing all opinions by counsel for Borrower (including without limitationany opinions requested by Lender as to any legal matters arising under thisAgreement or the other Loan Documents with respect to the Property); (b)Borrower’s ongoing performance of and compliance with Borrower’s respectiveagreements and covenants contained in this Agreement and the other LoanDocuments on its part to be performed or complied with after the Closing Date,including, without limitation, confirming compliance with environmental andinsurance requirements; (c) following a request by Borrower, Lender’s ongoingperformance and compliance with all agreements and conditions contained in thisAgreement and the other Loan Documents on its part to be performed or compliedwith after the Closing Date; (d) the negotiation, preparation, execution,delivery and administration of any consents, amendments, waivers or othermodifications to this Agreement and the other Loan Documents and any otherdocuments or matters requested by Lender; (e) securing Borrower’s compliancewith any requests made pursuant to the provisions of this Agreement; (f) thefiling and recording fees and expenses, title insurance and reasonable fees andexpenses of counsel for providing to Lender all required legal opinions, andother similar expenses incurred in creating and perfecting the Lien in favor ofLender pursuant to this Agreement and the other Loan Documents; (g) enforcingor preserving any rights, in response to third party claims or the prosecutingor defending of any action or proceeding or other litigation, in each caseagainst, under or affecting Borrower, this Agreement, the other Loan Documents,the Property, or any other security given for the Loan; and (h) enforcing anyobligations of or collecting any payments due from Borrower under this Agreement,the other Loan Documents or with respect to the Property or in connection withany refinancing or restructuring of the credit arrangements provided under thisAgreement in the nature of a “work-out” or of any insolvency or bankruptcyproceedings; provided, however, that Borrower shall not be liable for thepayment of any such costs and expenses to the extent the same arise by reasonof the gross negligence, illegal acts, fraud or willful misconduct of Lender.

 

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**ARTICLE 18**

**WAIVERS**

 

**Section 18.1.****       ****Remedies Cumulative; Waivers**

 

Therights, powers and remedies of Lender under this Agreement shall be cumulativeand not exclusive of any other right, power or remedy which Lender may haveagainst Borrower or Borrower Principal pursuant to this Agreement or the otherLoan Documents, or existing at law or in equity or otherwise. Lender’s rights,powers and remedies may be pursued singularly, concurrently or otherwise, atsuch time and in such order as Lender may determine in Lender’s solediscretion. No delay or omission to exercise any remedy, right or poweraccruing upon an Event of Default shall impair any such remedy, right or poweror shall be construed as a waiver thereof, but any such remedy, right or powermay be exercised from time to time and as often as may be deemed expedient. Awaiver of one Default or Event of Default with respect to Borrower shall not beconstrued to be a waiver of any subsequent Default or Event of Default byBorrower or to impair any remedy, right or power consequent thereon.

 

**Section 18.2.****       ****Modification, Waiver inWriting**

 

Nomodification, amendment, extension, discharge, termination or waiver of anyprovision of this Agreement, or of the Note, or of any other Loan Document, norconsent to any departure by Borrower therefrom, shall in any event be effectiveunless the same shall be in a writing signed by the party against whomenforcement is sought, and then such waiver or consent shall be effective only inthe specific instance, and for the purpose, for which given. Except asotherwise expressly provided herein, no notice to, or demand on Borrower, shallentitle Borrower to any other or future notice or demand in the same, similaror other circumstances.

 

**Section 18.3.****       ****Delay Not a Waiver**

 

Neitherany failure nor any delay on the part of Lender in insisting upon strictperformance of any term, condition, covenant or agreement, or exercising anyright, power, remedy or privilege hereunder, or under the Note or under anyother Loan Document, or any other instrument given as security therefor, shalloperate as or constitute a waiver thereof, nor shall a single or partialexercise thereof preclude any other future exercise, or the exercise of anyother right, power, remedy or privilege. In particular, and not by way oflimitation, by accepting payment after the due date of any amount payable underthis Agreement, the Note or any other Loan Document, Lender shall not be deemedto have waived any right either to require prompt payment when due of all otheramounts due under this Agreement, the Note or the other Loan Documents, or todeclare a default for failure to effect prompt payment of any such otheramount.

 

**Section 18.4.****       ****Trial by Jury**

 

**BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREESNOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVESANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW ORHEREAFTER EXIST WITH**

 

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**REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OROTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BYJURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL ANDLENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH****INSTANCE****AND EACH ISSUE AS TO WHICHTHE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER, BORROWERPRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH INANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER, BORROWERPRINCIPAL AND LENDER.**

 

**Section 18.5.****       ****Waiver of Notice**

 

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

 

**Section 18.6.****       ****Remedies of Borrower**

 

Inthe event that a claim or adjudication is made that Lender or its agents haveacted unreasonably or unreasonably delayed acting in any case where by law orunder this Agreement or the other Loan Documents, Lender or such agent, as thecase may be, has an obligation to act reasonably or promptly, Borrower agreesthat neither Lender nor its agents shall be liable for any monetary damages,and Borrower’s sole remedies shall be limited to commencing an action seekinginjunctive relief or declaratory judgment. The parties hereto agree that anyaction or proceeding to determine whether Lender has acted reasonably shall bedetermined by an action seeking declaratory judgment. Lender agrees that, insuch event, it shall cooperate in expediting any action seeking injunctiverelief or declaratory judgment.

 

**Section 18.7.****       ****Waiver of Marshalling ofAssets**

 

Tothe fullest extent permitted by law, Borrower, for itself and its successorsand 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,and agrees not to assert any right under any laws pertaining to the marshallingof assets, the sale in inverse order of alienation, homestead exemption, theadministration of estates of decedents, or any other matters whatsoever todefeat, reduce or affect the right of Lender under the Loan Documents to a saleof the Property for the collection of the Debt without any prior or differentresort for collection or of the right of Lender to the payment of the Debt out ofthe net proceeds of the Property in preference to every other claimantwhatsoever.

 

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**Section 18.8.****       ****Waiver of Statute ofLimitations**

 

Borrowerhereby expressly waives and releases, to the fullest extent permitted by law,the pleading of any statute of limitations as a defense to payment of the Debtor performance of its Other Obligations.

 

**Section 18.9.****       ****Waiver of Counterclaim**

 

Borrowerhereby waives the right to assert a counterclaim, other than a compulsorycounterclaim, in any action or proceeding brought against it by Lender or itsagents.

 

**ARTICLE 19**

**GOVERNING LAW**

 

**Section 19.1.****       ****Choice of Law**

 

ThisAgreement shall be deemed to be a contract entered into pursuant to the laws ofthe State and shall in all respects be governed, construed, applied andenforced in accordance with the laws of the State and applicable laws of theUnited States of America, provided, however, that with respect to the securityinterest in each of the Reserve Accounts, and the Cash Management Account, thelaws of the state where each such account is located shall apply.

 

**Section 19.2.****       ****Severability**

 

Whereverpossible, each provision of this Agreement shall be interpreted in such manneras to be effective and valid under applicable law, but if any provision of thisAgreement shall be prohibited by or invalid under applicable law, suchprovision shall be ineffective to the extent of such prohibition or invalidity,without invalidating the remainder of such provision or the remaining provisionsof this Agreement.

 

**Section 19.3.****       ****Preferences**

 

Lendershall have the continuing and exclusive right to apply or reverse and reapplyany 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 orproceeds or any part thereof are subsequently invalidated, declared to befraudulent or preferential, set aside or required to be repaid to a trustee,receiver or any other party under any Creditors Rights Laws, state or federallaw, common law or equitable cause, then, to the extent of such payment orproceeds received, the obligations hereunder or part thereof intended to besatisfied shall be revived and continue in full force and effect, as if such paymentor proceeds had not been received by Lender.

 

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**ARTICLE 20MISCELLANEOUS**

 

**Section 20.1.****       ****Survival**

 

ThisAgreement and all covenants, agreements, representations and warranties madeherein and in the certificates delivered pursuant hereto shall survive themaking by Lender of the Loan and the execution and delivery to Lender of theNote, and shall continue in full force and effect so long as all or any of theDebt is outstanding and unpaid unless a longer period is expressly set forthherein or in the other Loan Documents. Whenever in this Agreement any of theparties hereto is referred to, such reference shall be deemed to include thelegal representatives, successors and assigns of such party. All covenants,promises and agreements in this Agreement, by or on behalf of Borrower, shallinure to the benefit of the legal representatives, successors and assigns ofLender.

 

**Section 20.2.****       ****Lender’s Discretion**

 

Wheneverpursuant to this Agreement, Lender exercises any right given to it to approveor disapprove, or any arrangement or term is to be satisfactory to Lender, thedecision of Lender to approve or disapprove or to decide whether arrangementsor terms are satisfactory or not satisfactory shall (except as is otherwisespecifically herein provided) be in the sole discretion of Lender and shall befinal and conclusive.

 

**Section 20.3.****       ****Headings**

 

TheArticle and/or Section headings and the Table of Contents in thisAgreement are included herein for convenience of reference only and shall notconstitute a part of this Agreement for any other purpose.

 

**Section 20.4.****       ****Cost of Enforcement**

 

Inthe event (a) that the Mortgage is foreclosed in whole or in part, (b) of thebankruptcy, insolvency, rehabilitation or other similar proceeding in respectof Borrower or any of its constituent Persons or an assignment by Borrower orany of its constituent Persons for the benefit of its creditors, or (c) Lenderexercises any of its other remedies under this Agreement or any of the otherLoan Documents, Borrower shall be chargeable with and agrees to pay all costsof collection and defense, including attorneys’ fees and costs, incurred byLender or Borrower in connection therewith and in connection with any appellateproceeding or post-judgment action involved therein, together with all requiredservice or use taxes.

 

**Section 20.5.****       ****Schedules Incorporated**

 

TheSchedules annexed hereto are hereby incorporated herein as a part of thisAgreement with the same effect as if set forth in the body hereof.

 

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**Section 20.6.****       ****Offsets, Counterclaimsand Defenses**

 

Anyassignee of Lender’s interest in and to this Agreement, the Note and the otherLoan Documents shall take the same free and clear of all offsets, counterclaimsor defenses which are unrelated to such documents which Borrower may otherwisehave against any assignor of such documents, and no such unrelated counterclaimor defense shall be interposed or asserted by Borrower in any action or proceedingbrought by any such assignee upon such documents and any such right tointerpose or assert any such unrelated offset, counterclaim or defense in anysuch action or proceeding is hereby expressly waived by Borrower.

 

**Section 20.7.****       ****No Joint Venture or Partnership;No Third Party Beneficiaries**

 

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

 

(b)           This Agreement and the other Loan Documentsare solely for the benefit of Lender and Borrower and nothing contained in thisAgreement or the other Loan Documents shall be deemed to confer upon anyoneother than Lender and Borrower any right to insist upon or to enforce theperformance or observance of any of the obligations contained herein ortherein. All conditions to the obligations of Lender to make the Loan hereunderare imposed solely and exclusively for the benefit of Lender and no otherPerson shall have standing to require satisfaction of such conditions inaccordance with their terms or be entitled to assume that Lender will refuse tomake the Loan in the absence of strict compliance with any or all thereof andno other Person shall under any circumstances be deemed to be a beneficiary ofsuch conditions, any or all of which may be freely waived in whole or in partby Lender if, in Lender’s sole discretion, Lender deems it advisable ordesirable to do so.

 

(c)           The general partners, members, principals and(if Borrower is a trust) beneficial owners of Borrower are experienced in theownership and operation of properties similar to the Property, and Borrower andLender are relying solely upon such expertise and business plan in connectionwith the ownership and operation of the Property. Borrower is not relying on Lender’sexpertise, business acumen or advice in connection with the Property.

 

(d)           Notwithstanding anything to the contrarycontained herein, Lender is not undertaking the performance of (i) anyobligations under the Leases; or (ii) any obligations with respect to suchagreements, contracts, certificates, instruments, franchises, permits,trademarks, licenses and other documents.

 

(e)           By accepting or approving anything requiredto be observed, performed or fulfilled or to be given to Lender pursuant tothis Agreement, the Mortgage, the Note or the other Loan Documents, including,without limitation, any officer’s certificate, balance sheet, statement ofprofit and loss or other financial statement, survey, appraisal, or insurancepolicy, Lender shall not be deemed to have warranted, consented to, or affirmedthe sufficiency, the legality or

 

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effectivenessof same, and such acceptance or approval thereof shall not constitute anywarranty or affirmation with respect thereto by Lender.

 

(f)            Borrower recognizes and acknowledges that inaccepting this Agreement, the Note, the Mortgage and the other Loan Documents,Lender is expressly and primarily relying on the truth and accuracy of therepresentations and warranties set forth in Article 4 of this Agreementwithout any obligation to investigate the Property and notwithstanding anyinvestigation of the Property by Lender; that such reliance existed on the partof Lender prior to the date hereof, that the warranties and representations area material inducement to Lender in making the Loan; and that Lender would notbe willing to make the Loan and accept this Agreement, the Note, the Mortgageand the other Loan Documents in the absence of the warranties and representationsas set forth in Article 4 of this Agreement.

 

**Section 20.8.****       ****Publicity**

 

Allnews releases, publicity or advertising by Borrower or its Affiliates throughany media intended to reach the general public which refers to the Loan,Lender, Banc of America Securities LLC, or any of their Affiliates shall besubject to the prior written approval of Lender, not to be unreasonablywithheld. Lender shall be permitted to make any news, releases, publicity oradvertising by Lender or its Affiliates through any media intended to reach thegeneral public which refers to the Loan, the Property, Borrower, BorrowerPrincipal and their respective Affiliates without the approval of Borrower orany such Persons. Borrower also agrees that Lender may share any informationpertaining to the Loan with Bank of America Corporation, including its banksubsidiaries, Banc of America Securities LLC and any other Affiliates of theforegoing, in connection with the sale or transfer of the Loan or anyParticipations and/or Securities created.

 

**Section 20.9.****       ****Conflict; Construction ofDocuments; Reliance**

 

Inthe event of any conflict between the provisions of this Agreement and any ofthe other Loan Documents, the provisions of this Agreement shall control. Theparties hereto acknowledge that they were represented by competent counsel inconnection with the negotiation, drafting and execution of the Loan Documentsand that such Loan Documents shall not be subject to the principle ofconstruing their meaning against the party which drafted same. Borroweracknowledges that, with respect to the Loan, Borrower shall rely solely on itsown judgment and advisors in entering into the Loan without relying in anymanner on any statements, representations or recommendations of Lender or any parent,subsidiary or Affiliate of Lender. Lender shall not be subject to anylimitation whatsoever in the exercise of any rights or remedies available to itunder any of the Loan Documents or any other agreements or instruments whichgovern the Loan by virtue of the ownership by it or any parent, subsidiary orAffiliate 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 takeany action on the basis of the foregoing with respect to Lender’s exercise ofany such rights or remedies. Borrower acknowledges that Lender engages in thebusiness of real estate financings and other real estate transactions andinvestments which may be viewed as adverse to or competitive with the businessof Borrower or its Affiliates.

 

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**Section 20.10.****     ****Entire Agreement**

 

ThisAgreement and the other Loan Documents contain the entire agreement of theparties hereto and thereto in respect of the transactions contemplated herebyand thereby, and all prior agreements among or between such parties, whetheroral or written between Borrower and Lender are superseded by the terms of thisAgreement and the other Loan Documents.

 

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INWITNESS WHEREOF, the parties hereto have caused this Agreement to be dulyexecuted by their duly authorized representatives, all as of the day and yearfirst above written.

 
|   | BORROWER:                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                      |
|   |                                                                                                                                                                      |
|   | INLAND  WESTERN MINNEAPOLIS 3RD AVENUE, L.L.C., a Delaware limited liability company                                                                                      |
|   |                                                                                                                                                                      |   |
|   | By:                                                                                                                                                                       | Inland  Western Retail Real Estate Trust, Inc., a Maryland corporation, its sole  member |
|   |                                                                                                                                                                      |   |
|   |                                                                                                                                                                      | By |  /s/ Debra A. Palmer |   |
|   |                                                                                                                                                                      | Name: | Debra  A. Palmer |   |
|   |                                                                                                                                                                      | Its: | Asst.  Sec. |   |
|   |                                                                                                                                                                      |   |
|   |                                                                                                                                                                      |   |
|   | BORROWER  PRINCIPAL:                                                                                                                                                      |
|   |                                                                                                                                                                      |   |
|   |                                                                                                                                                                      |   |
|   | Acknowledged  and agreed to with respect to its obligations set forth in Article 4, Section 12.6,  Article 13, Article 15 and Article 18 hereof: |
|   |                                                                                                                                                                      |   |
|   |                                                                                                                                                                      |   |
|   | INLAND  WESTERN RETAIL REAL ESTATE TRUST INC., a Maryland corporation, its                                                                                                |
|   |                                                                                                                                                                      |
|   | By:                                                                                                                                                                       |  /s/ Debra A. Palmer |   |
|   |                                                                                                                                                                      | Name: | Debra  A. Palmer |   |
|   |                                                                                                                                                                      | Title: | Asst. Sec. |   |
|        |                                                                                                                                                                           |  |  |  |  |  |  |  |

 

[ADDITIONAL SIGNATURE PAGE TO FOLLOW]

 

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|   | LENDER:                                                |              |
|--------|--------------------------------------------------------|-------------------|
|   |                                                   |              |
|   | BANK  OF AMERICA, N.A., a national banking association |
|   |                                                   |              |
|   |                                                   |              |
|   | By:                                                    | /s/ Lisa K. McGee |   |
|   |                                                   | Name:             |   | Lisa K. McGee |   |
|   |                                                   | Title:            |   | Vice President |   |
|        |                                                        |                   |  |  |  |  |  |

 

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EXHIBIT A

 

Borrower Equity Ownership Structure

 

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EXHIBIT B

 

Tenant Direction Letter

 

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