**Exhibit 10.458**

 

**LOAN****AGREEMENT**

 

 

Dated as of December 16,2004

 

 

Between

 

 

**INLANDWESTERN PHOENIX 31st****AVENUE,L.L.C.,**

 

 

as Borrower

 

 

and

 

 

**BANK OFAMERICA,****N.A.,**

as Lender

 

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TABLE OF 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 OF 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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LOAN AGREEMENT

 

THISLOAN AGREEMENT, dated as of December 16, 2004 (as amended, restated, replaced,supplemented or otherwise modified from time to time, this **“Agreement”**), between BANK OF AMERICA, N.A.,a national banking association, having an address at Bank of America CorporateCenter, 214 North Tryon Street, Charlotte, North Carolina 28255 (together withits successors and/or assigns, **“Lender”**)and Inland Western Phoenix 31st Avenue, L.L.C., a Delaware limitedliability company having an address at c/o Inland Real Estate InvestmentCorporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (together withits successors and/or assigns, **“Borrower”**).

 

**RECITALS:**

 

Borrowerdesires to obtain the Loan (defined below) from Lender.

 

Lender is willing to make the Loan to Borrower, subject to and inaccordance with the terms of this Agreement and the other Loan Documents(defined below).

 

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

 

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

 

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

 

For all purposes of this Agreement, except as otherwise expresslyrequired or unless the context clearly indicates 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 orotherwise payable in respect of, or in exchange for, any or all of theforegoing; and (iv) to the extent not covered by clauses (i) - (iii) above, all“proceeds” (as defined under the UCC as in effect in the State in which theAccounts are located) of any or all of the foregoing.

 

**“Accounts”**shall mean the Cash Management Account, theTax and Insurance Reserve Accounts, if any, and any other account orsub-account established by this Agreement, the Mortgage, or the other LoanDocuments.

 

**“Accredited Investor”**shall have the meaning set forth in theregulations promulgated 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 aparent, subsidiary or such other entity affiliated with Borrower or BorrowerPrincipal.

 

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

 

**“ALTA”**shall mean American Land Title Association, or any 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, Borrowerand Manager, as the same may be amended, restated, replaced, supplemented orotherwise modified from time to time.

 

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

 

**“Borrower Principal”** shall mean Inland Western Retail Real Estate Trust, Inc., a Marylandcorporation.

 

**“Business Day”** shall mean a day on which Lender is open for the conduct ofsubstantially all of its banking business at its office in the city in whichthe 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 the Loan.

 

**“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 relief withrespect to its debts or debtors.

 

**“Debt”**shall mean the outstanding principal amountset forth in, and evidenced by, this Agreement and the Note together with allinterest accrued and unpaid thereon and all other sums due to Lender in respectof the Loan under the Note, this Agreement, the Mortgage or any other LoanDocument.

 

**“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 eventhereunder or under any other Loan Document which, but for the giving of noticeor 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-1”by S&P, “P-1” by Moody’s and“F-l” by Fitch in the case of accounts in which funds are held for thirty (30)days or less (or, in the case of accounts in which funds are held for more thanthirty (30) days, the long term unsecured debt obligations of which are ratedat least “AA-” by Fitch and S&P (or “A-” by S&P, if such depository’sshort

 

3

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termunsecured debt rating is at least “A-l” by S&P) and “Aa2” by Moody’s).Notwithstanding the foregoing, prior to a Securitization, 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 or ExecutiveOrder 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 Section 12.5 hereof. 

 

**“Environmental Liens”** shall have the meaning set forth in Section 12.5 hereof. 

 

**“Environmental Report”** shall have the meaning set forth in Section 12.5 hereof.

 

**“ERISA”** shall mean the Employee Retirement IncomeSecurity Act of 1974, as amended from time to time and any successor statutesthereto and applicable regulations issued pursuant thereto in temporary orfinal form.

 

**“Event of Default”** shall have the meaning set forth in Section 11.1 hereof.

 

**“Exchange Act”** shall mean the Securities and Exchange Act of 1934, as amended.

 

**“Fitch”**shall mean Fitch, Inc.

 

**“GAAP”**shall mean generally accepted accounting principles in the United States ofAmerica 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 Section 12.5 hereof.

 

**“****Improvements****”** shall have themeaning set forth in the granting clause of the Mortgage.

 

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

 

4

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whohave held a full or partial interest in the Loan for the benefit of anyInvestor or other third party, (f) any receiver or other fiduciary appointed ina foreclosure or other Creditors Rights Laws proceeding, (g) any officers,directors, shareholders, partners, members, employees, agents, servants,representatives, contractors, subcontractors, affiliates or subsidiaries of anyand all of the foregoing, and (h) the heirs, legal representatives, successorsand assigns of any and all of the foregoing (including, without limitation, anysuccessors by merger, consolidation or acquisition of all or a substantialportion of the Indemnified Parties’ assets and business), in all cases whetherduring the term of**the Loan or aspart of or following a foreclosure of the Mortgage.

 

**“Independent Director”** shall have the meaning set forth in Section 6.4(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 Section 8.1 hereof.

 

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

 

**“Internal Revenue Code”** shall mean the Internal Revenue Code of 1986, as amended, as it may befurther amended from time to time, and any successor statutes thereto, andapplicable U.S. Department of Treasury regulations issued pursuant thereto intemporary or final form.

 

**“Investor”** shall have the meaning set forth in Section 13.3 hereof.

 

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

 

**“Legal Requirements”** shall mean all statutes, laws, rules, orders, regulations, ordinances,judgments, decrees and injunctions of Governmental Authorities affecting theProperty or any part thereof, or the construction, use, alteration or operationthereof, whether now or hereafter enacted and in force, and all permits,licenses, authorizations and regulations relating thereto, and all covenants,agreements, restrictions and encumbrances contained in any instruments, eitherof record or known to Borrower, at any time in force affecting the Property orany part thereof, including, without limitation, any which may (a) requirerepairs, modifications or alterations in or to the Property or any partthereof, or (b) in any way limit the use and enjoyment thereof.

 

**“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 Section 6.1(c).

 

5

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**“Loan”** shallmean the loan made by Lender to Borrower pursuant to this Agreement.

 

**“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, without limitation, strict liabilities), actions,proceedings, obligations, debts, damages, losses, costs, expenses, fines,penalties, charges, fees, judgments, awards, amounts paid in settlement ofwhatever kind or nature (including but not limited to legal fees and othercosts 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 Southwest Management LLC, aDelaware limited liability company or such other entity selected as the managerof the Property in accordance 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, isolatedactions occurring more than five (5) years prior to the date of a proposedtransfer shall not be deemed material provided that there is no indication offraud, intentional misrepresentation or intent to defraud creditors withrespect 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”** shallhave 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”** shallmean Moody’s Investor Services, Inc.

 

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**“Mortgage”** shallmean that certain first priority mortgage/deed of trust/deed to secure debt andsecurity agreement dated the date hereof, executed and delivered by Borrower assecurity for the Loan and encumbering the Property, as the same may be amended,restated, replaced, supplemented or otherwise modified from time to time.

 

**“Net****Proceeds****”** shallhave 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 $31,860,000, made by Borrower in favor of Lender, as the same may beamended, restated, replaced, supplemented or otherwise modified from time totime.

 

**“Note****Rate****”** shallhave the meaning set forth in the Note.

 

**“OFAC”** shallhave 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 amortisation, 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 Section13.1 hereof.

 

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

 

**“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, or obligations fullyguaranteed as to payment of principal and interest by, the United States or anyagency or instrumentality thereof provided such obligations are backed by thefull faith and credit of the United States of America including, without limitation,obligations of: the U.S. Treasury (all direct or fully guaranteed obligations),the Farmers Home Administration (certificates of beneficial ownership), theGeneral Services Administration (participation certificates), the U.S. MaritimeAdministration (guaranteed Title XI financing), the Small BusinessAdministration (guaranteed participation certificates and guaranteed poolcertificates), the U.S. Department of Housing and Urban Development (local authoritybonds) and the Washington Metropolitan Area Transit Authority (guaranteedtransit bonds); 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) be rated “AAA” or the equivalent by each ofthe Rating Agencies, (iii) if rated by S&P, must not have an “r”highlighter affixed to their rating, (iv) 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 (v) such investments must not be subject to liquidation prior totheir maturity;

 

(b)                                  Federal Housing Administration debentures;

 

(c)                                   obligations of the following United Statesgovernment sponsored agencies: Federal Home Loan Mortgage Corp. (debtobligations), the Farm Credit System (consolidated systemwide bonds and notes),the Federal Home Loan Banks (consolidated debt obligations), the FederalNational Mortgage Association (debt obligations), the Financing Corp. (debt obligations),and the Resolution Funding Corp. (debt obligations); *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;

 

(d)                                  federal funds, unsecured certificates ofdeposit, time deposits, bankers’ acceptances and repurchase agreements withmaturities of not more than 365 days of any bank, the short term obligations ofwhich at all times are rated in the highest short term rating category by eachRating Agency (or, if not rated by all Rating Agencies, rated by at least oneRating Agency in the highest short term rating category and otherwiseacceptable to each other Rating Agency, as confirmed in writing that suchinvestment would not, in and of itself, result in a downgrade, qualification orwithdrawal of the initial, or, if higher, then current ratings assigned

 

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tothe Securities); 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;

 

(e)                                fully Federal Deposit InsuranceCorporation-insured demand and time deposits in, or certificates of deposit of,or bankers’ acceptances with maturities of not more than 365 days and issuedby, any bank or trust company, savings and loan association or savings bank,the short term obligations of which at all times are rated in the highest 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 adowngrade, qualification or withdrawal of the initial, or, if higher, thencurrent ratings assigned to the Securities); 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 by S&P,must not have an “r” highlighter affixed to their rating, (iii) if suchinvestments have a variable rate of interest, such interest rate must be tiedto 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;

 

(f)                                  debt obligations with maturities of not morethan 365 days and at all times rated by each Rating Agency (or, if not rated byall Rating Agencies, rated by at least one Rating Agency and otherwiseacceptable to each other Rating Agency, as confirmed in writing that such investmentwould not, in and of itself, result in a downgrade, qualification or withdrawalof the initial, or, if higher, then current ratings assigned to the Securities)in its highest long-term unsecured rating category; 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;

 

(g)                               commercial paper (including bothnon-interest-bearing discount obligations and interest-bearing obligationspayable on demand or on a specified date not more than one year after the dateof issuance thereof) with maturities of not more than 365 days and that at alltimes is rated by each Rating Agency (or, if not rated by all Rating Agencies,rated by at least one Rating Agency and otherwise acceptable to each 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) in its highestshort-term unsecured debt rating; provided, however, that the investmentsdescribed in this clause must (i) have a predetermined fixed dollar ofprincipal due at maturity that cannot vary or change, (ii) if rated by S&P,must not have an “r” highlighter affixed to their rating, (iii) if suchinvestments have a variable rate of interest, such interest rate must be tiedto 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 taxable money market funds, withmaturities of not more than 365 days and which funds are regulated investmentcompanies, seek to maintain a constant net asset value per share and investsolely in obligations backed by the full faith and credit of the United States,which funds have the highest rating available from each Rating Agency (or, ifnot rated by all Rating Agencies, rated by at least one Rating Agency andotherwise acceptable to each other Rating Agency, as confirmed in writing thatsuch 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) for money market funds; and

 

(i)                                     any other security, obligation or investmentwhich has been approved as a Permitted Investment in writing by (i) Lender and(ii) each Rating Agency, as evidenced by a written confirmation that thedesignation of such security, obligation or investment as a PermittedInvestment will not, in and of itself, result in a downgrade, qualification orwithdrawal of the initial, or, if higher, then current ratings assigned to theSecurities by such Rating Agency;

 

*provided, however*,**thatno obligation or security shall be a Permitted Investment if (A) suchobligation or security evidences a right to receive only interest payments, (B)the right to receive principal and interest payments on such obligation orsecurity are derived from an underlying investment that provides a yield tomaturity in excess of one hundred twenty percent (120%) of the yield tomaturity at par of such underlying investment or (C) such obligation orsecurity has a remaining term to maturity in excess of one (1) year.

 

**“Person”**shall mean any individual, corporation, partnership, joint venture, limitedliability company, estate, trust, unincorporated association, any federal,state, county or municipal government or any bureau, department or agencythereof and any fiduciary acting in such capacity on behalf of any of theforegoing.

 

**“Personal Property”** shall have the meaning set forth in the granting clause of theMortgage.

 

**“Policies”** shall have the meaning set forth in Section 8.1 hereof.

 

**“Prohibited Transfer”** shall have the meaning set forth in Section 7.2 hereof.

 

**“Property”** shall mean the parcel of real property, the Improvements thereon andall Personal Property owned by Borrower and encumbered by the Mortgage,together with all rights pertaining to such property and Improvements, as moreparticularly described in the granting clause of the Mortgage and referred to thereinas the “Property”.

 

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

 

**“Qualified Manager”** shall mean (a) Manager or (b) a reputable and experienced professionalmanagement organization (i) which manages, together with its affiliates, atleast ten (10) first class office buildings totaling at least 3,500,000 squarefeet of gross leasable area, exclusive of the Property and (ii) approved byLender, which approval shall not have been unreasonably withheld and for whichLender shall have received written confirmation from the

 

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RatingAgencies that the employment of such manager will not result in a downgrade,withdrawal or qualification of the initial, or if higher, then current ratingsissued in connection with a Securitization, or if a Securitization has notoccurred, any ratings to be assigned in connection with a Securitization.

 

**“Ratine 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 andreciprocal casement agreement or similar agreement (including any separateagreement or other agreement between Borrower and one or more other parties toan REA with respect to 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 as nearlyas possible to the condition the Property was in immediately prior to suchCasualty or Condemnation, with such alterations as may be reasonably approvedby Lender.

 

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

 

**“Restoration Retainage”** shall have the meaning set forth in Section 8.4(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”** shallhave the meaning set forth in Section 13.1 hereof.

 

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

 

**“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”** shallmean the state in which the Property or any 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 9.6hereof.

 

**“Taxes”** shall mean all real estate and personalproperty taxes, assessments, water rates or sewer rents, now or hereafterlevied or assessed or imposed against the Property or part thereof.

 

**“Tenant”** shall mean any Person leasing, subleasing orotherwise occupying any portion of the Property under a Lease or otheroccupancy agreement with Borrower, including, without limitation, AmericanExpress, as tenant under the American 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”**shallmean the Uniform Commercial Code as in effect in the State where the applicableProperty is located.

 

**Section 1.2.****    Principles of Construction.**

 

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

 

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

 

**Section2.1.****    Loan Commitment:Disbursement to Borrower**

 

(a)                                Subject to and upon the terms and conditionsset forth herein, Lender hereby agrees to make and Borrower hereby agrees toaccept the Loan on the Closing Date.

 

(b)                               Borrower may request and receive only oneborrowing in respect of the Loan and any amount borrowed and repaid in respectof the Loan may not he reborrowed.

 

(c)                                The Loan shall be evidenced by the Note andsecured by the Mortgage and the other Loan Documents.

 

(d)                               Borrower shall use the proceeds of the Loanto (i) pay the purchase price for acquiring the Property, (ii) pay certaincosts and expenses incurred in connection with the closing of the Loan, asapproved by Lender, (iv) fund any working capital requirements of the Property,and (v) distribute the balance, if any, to its members.

 

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

 

(a)                                The Loan and interest shall be payablepursuant to the terms of the Note.

 

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

 

The Loan may not be prepaid, in whole or in part, except in strictaccordance with the express terms and conditions of the Note.

 

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

 

Theobligation of Lender to make the Loan hereunder is subject to the fulfillmentby Borrower or waiver by Lender of all the conditions precedent to closing setforth in the application or term sheet for the Loan delivered by Borrower toLender and any commitment rider to the application for the Loan issued byLender.

 

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

 

Borrower and, where specifically indicated, each Borrower Principalrepresents and warrants to Lender as of the Closing Date that:

 

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

 

Borrower and each Borrower Principal (when not an individual) (a) hasbeen duly organized and is validly existing and in good standing with requisitepower and authority to own its properties and to transact the businesses inwhich it is now engaged, (b) is duly qualified to do business and is in goodstanding in each jurisdiction where it is required to be so qualified in

 

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connection with itsproperties, businesses and operations, (c) possesses all rights, licenses,permits and authorizations, governmental or otherwise, necessary to entitle itto own its properties and to transact the businesses in which it is nowengaged, and the sole business of Borrower is the ownership, management andoperation of the Property, and (d) in the case of Borrower, has full power,authority and legal right to mortgage, grant, bargain, sell, pledge, assign,warrant, transfer and convey the Property pursuant to the terms of the LoanDocuments, and in the case of Borrower and each Borrower Principal, has fullpower, authority and legal right to keep and observe all of the terms of theLoan Documents to which it is a party. Borrower and each Borrower Principalrepresent and warrant that the chart attached hereto as Exhibit A sets forth anaccurate listing of the direct and indirect owners of the equity interests inBorrower, and each Borrower Principal (when not an individual).

 

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

 

Borrower’sexact legal name is correctly set forth on the first page of this Agreement, onthe Mortgage and on any UCC-1 Financing Statements filed in connection with theLoan. Borrower is an organization of the type specified on the first page ofthis Agreement. Borrower is organized under the laws of the State of Delaware.  Borrower’s principal place of business andchief executive office, and the place where Borrower keeps its books andrecords, including recorded data of any kind or nature, regardless of themedium of recording, including software, writings, plans, specifications andschematics, has been for the preceding four months (or, if less, the entireperiod of the existence of Borrower) the address of Borrower set forth on thefirst page of this Agreement. Borrower’s organizational identification number,if any, assigned by the state of incorporation or organization is correctly setforth on the first page of the Note.

 

**Section 4.3.****    Validity of Documents**

 

Borrower and Borrower Principal have taken all necessary action toauthorize the execution, delivery and performance of this Agreement and theother Loan Documents to which they are parties. This Agreement and such otherLoan Documents have been duly executed and delivered by or on behalf ofBorrower and Borrower Principal and constitute the legal, valid and bindingobligations of Borrower and Borrower Principal enforceable against Borrower andBorrower Principal in accordance with their respective terms, subject only toapplicable bankruptcy, insolvency and similar laws affecting rights ofcreditors generally, and subject, as to enforceability, to general principlesof equity (regardless of whether enforcement is sought in a proceeding inequity or at law).

 

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

 

The execution, delivery and performance of this Agreement and the otherLoan Documents by Borrower and Borrower Principal will not conflict with orresult in a breach of any of the terms or provisions of, or constitute adefault under, or result in the creation or imposition of any lien, charge orencumbrance (other than pursuant to the Loan Documents) upon any of theproperty or assets of Borrower or Borrower Principal pursuant to the terms ofany agreement or instrument to which Borrower or Borrower Principal is a partyor by which any of Borrower’s or Borrower Principal’s property or assets issubject, nor will such action result in any violation of the provisions of anystatute or any order, rule or regulation of any

 

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GovernmentalAuthority having jurisdiction over Borrower or Borrower Principal or any ofBorrower’s or Borrower Principal’s properties or assets, and any consent,approval, authorization, order, registration or qualification of or with anyGovernmental Authority required for the execution, delivery and performance byBorrower or Borrower Principal of this Agreement or any of the other LoanDocuments has been obtained and is in full force and effect.

 

**Section4.5.****    Litigation**

 

Thereare no actions, suits or proceedings at law or in equity by or before anyGovernmental Authority or other agency now pending or, to Borrower’s orBorrower Principal’s knowledge, threatened against or affecting Borrower,Borrower Principal, Manager or the Property, which actions, suits orproceedings, if determined against Borrower, Borrower Principal, Manager or theProperty, would materially adversely affect the condition (financial orotherwise) or business of Borrower or Borrower Principal or the condition orownership of the Property.

 

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

 

Borroweris not a party to any agreement or instrument or subject to any restrictionwhich would materially and adversely affect Borrower or the Property, orBorrower’s business, properties or assets, operations or condition, financialor otherwise. 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**

 

Borrowerand each Borrower Principal have (a) not entered into the transaction orexecuted the Note, this Agreement or any other Loan Documents with the actualintent to hinder, delay or defraud any creditor and (b) received reasonablyequivalent value in exchange for their obligations under such Loan Documents.Giving effect to the Loan, the fair saleable value of the assets of Borrowerand each Borrower Principal exceeds and will, immediately following the makingof the Loan, exceed the total liabilities of Borrower and Borrower Principal,including, without limitation, subordinated, unliquidated, disputed andcontingent liabilities. No petition in bankruptcy has been filed againstBorrower, Borrower Principal, or Affiliated Manager in the last ten (10) years,and neither Borrower nor Borrower Principal, or Affiliated Manager in the lastten (10) years has made an assignment for the benefit of creditors or takenadvantage of any Creditors Rights Laws. Neither Borrower nor BorrowerPrincipal, or Affiliated Manager is contemplating either the filing of apetition by it under any Creditors Rights Laws or the liquidation of all or amajor portion of Borrower’s assets or property, and Borrower has no knowledgeof any Person contemplating the filing of any such petition against Borrower orBorrower Principal, or Affiliated Manager.

 

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**Section4.8.****    Full and Accurate Disclosure**

 

No statement of fact made by or on behalf of Borrower or BorrowerPrincipal in this Agreement or in any of the other Loan Documents or in anyother document or certificate delivered by or on behalf of Borrower or BorrowerPrincipal contains any untrue statement of a material fact or omits to stateany material fact necessary to make statements contained herein or therein notmisleading. There is no material fact presently known to Borrower or BorrowerPrincipal which has not been disclosed to Lender which adversely affects, noras far as Borrower or Borrower Principal can reasonably foresee, mightadversely affect, the Property or the business, operations or condition(financial or otherwise) of Borrower or Borrower Principal.

 

**Section4.9.****   ****No****Plan****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.

 

**Section4.10.****  Not a ForeignPerson**

 

Neither Borrower nor Borrower Principal is a “foreignPerson” within the meaning of §1445(f)(3) of the Internal Revenue Code.

 

**Section4.11.****  Enforceability**

 

The Loan Documents are not subject to any right of rescission, set-off,counterclaim or defense by Borrower, including the defense of usury, nor wouldthe operation of any of the terms of the Loan Documents, or the exercise of anyright thereunder, render the Loan Documents unenforceable, and neither Borrowernor Borrower Principal has asserted any right of rescission, set-off, counterclaimor defense with respect thereto. No Default or Event of Default exists under orwith respect to any Loan Document.

 

**Section4.12.****  Business Purposes**

 

The Loan is solely for the business purpose of Borrower, and is not forpersonal, family, household, or agricultural purposes.

 

**Section4.13.****   Compliance**

 

Exceptas expressly disclosed by Borrower to Lender in writing in connection with theclosing of the Loan, to Borrower’s knowledge, Borrower and the Property, andthe use and operation thereof, comply in all material respects with all LegalRequirements, including, without limitation, building and zoning ordinances andcodes and the Americans with Disabilities Act. To Borrower’s knowledge,Borrower is not in default or violation of any order,

 

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writ,injunction, decree or demand of any Governmental Authority and Borrower hasreceived no written notice of any such default or violation. There has not beencommitted by Borrower or, to Borrower’s knowledge, any other Person inoccupancy of or involved with the operation or use of the Property any act oromission affording any Governmental Authority the right of forfeiture asagainst the Property or any part thereof or any monies paid in performance of Borrower’sobligations under any of the Loan Documents.

 

**Section 4.14.**** Financial Information**

 

All financial data, including, without limitation, the balance sheets,statements of cash flow, statements of income and operating expense and rentrolls, that have been delivered to Lender in respect of Borrower, BorrowerPrincipal and/or the Property (a) are true, complete and correct in allmaterial respects, (b) accurately represent the financial condition ofBorrower, Borrower Principal or the Property, as applicable, as of the date ofsuch reports, and (c) to the extent prepared or audited by an independentcertified public accounting firm, have been prepared in accordance with taxbasis accounting throughout the periods covered, except as disclosed therein. Borrowerdoes not have any contingent liabilities, liabilities for taxes, unusualforward or long-term commitments or unrealized or anticipated losses from anyunfavorable commitments that are known to Borrower and reasonably likely tohave a material adverse effect on the Property or the current and/or intendedoperation thereof, except as referred to or reflected in said financialstatements. Since the date of such financial statements, there has been nomaterially adverse change in the financial condition, operations or business ofBorrower or Borrower Principal from that set forth in said financialstatements.

 

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

 

No Condemnation or other proceeding has been commenced or, to Borrower’sbest knowledge, is threatened or contemplated with respect to all or anyportion of the Property or for the relocation of roadways providing access tothe Property.

 

**Section 4.16.**** Utilities and Public Access; Parking**

 

Tothe best of Borrower’s knowledge, the Property has adequate rights of access topublic ways and is served 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.**** Separate Lots**

 

The Property is assessed for real estate taxpurposes as one or more wholly independent tax lot or lots, separate from anyadjoining land or improvements not constituting a part of such

 

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lotor lots, and no other land or improvements is assessed and taxed together withthe Property or any portion thereof.

 

**Section4.18****.  Assessments**

 

To Borrower’s knowledge, there are no pending or proposed special orother assessments for public improvements or otherwise affecting the Property,nor are there any contemplated improvements to the Property that may result insuch special or other assessments.

 

**Section4.19****.  Insurance**

 

Borrower has obtained and has delivered to Lender either (a) certifiedcopies of all Policies or, to the extent such Policies are not available as ofthe Closing Date, certificates of insurance with respect to all such Policiesreflecting the insurance coverages, amounts and other requirements set forth inthis Agreement or (b) the certificate of American Express that American Expressis a 

self-insurerwith respect to the occurrences referred to in Section 8.1 and that the ratingof American Express by the Rating Agencies has not fallen below the TriggerRating.

 

**Section4.20.****  Use of Property**

 

The Property is used exclusively for general office purposes and otherappurtenant and related uses.

 

**Section4.21.****  Certificate ofOccupancy; Licenses**

 

All certificates of occupancy and to Borrower’sknowledge all certifications, permits, licenses and approvals, including,without limitation, certificates of completion and any applicable liquorlicense required for the legal use, occupancy and operation of the Property forthe purpose intended herein, have been obtained and are valid and in full forceand effect. Borrower shall keep and maintain (or require American Express tomaintain) all licenses necessary for the operation of the Property for thepurpose intended herein. The use being made of the Property is in conformitywith the final certificate of occupancy (or compliance, if applicable) and anyother permits or licenses issued for the Property.

 

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

 

Noneof the Improvements on the Property are located in an area identified by theFederal Emergency Management Agency as an area having special flood hazards,or, if any portion of the Improvements is located within such area, Borrowerwill obtain or cause American Express to obtain the insurance prescribed inSection 8.1(a)(i) at any time during the term of the Loan when American Expressceases to be a self-insurer or when the rating of American Express by theRating Agencies falls below the Trigger Rating.

 

**Section4.23.****  Physical Condition**

 

Exceptas set forth in the Property Condition Report, to Borrower’s knowledge, theProperty, including, without limitation, all buildings, improvements, parkingfacilities,

 

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sidewalks, storm drainagesystems, roofs, plumbing systems, HVAC systems, fire protection systems,electrical systems, equipment, elevators, exterior sidings and doors,landscaping, irrigation systems and all structural components, are in goodcondition, order and repair in all material respects. Except as set forth inthe Property Condition Report, to Borrower’s knowledge, there exist nostructural or other material defects or damages in the Property, as a result ofa Casualty or otherwise, and whether latent or otherwise. Borrower has notreceived notice from any insurance company or bonding company of any defects orinadequacies in the Property, or any part thereof, which would adversely affectthe insurability of the same or cause the imposition of extraordinary premiumsor charges thereon or of any termination or threatened termination of anypolicy of insurance or bond.

 

**Section4.24.**** Boundaries; Survey**

 

(a)                                    None of the Improvements which were includedin determining the appraised value of the Property lie outside the boundariesand building restriction lines of the Property to any material extent, and (b)no improvements on adjoining properties encroach upon the Property and noeasements or other encumbrances upon the Property encroach upon any of theImprovements so as to materially affect the value or marketability of theProperty.

 

**Section4.25.**** Leases**

 

The entire Property has been leased to AmericanExpress pursuant to the American Express Lease.  (a) The American Express Lease is in fullforce and effect; (b) the premises demised under the American Express Leasehave been completed and American Express has accepted possession of and is inoccupancy of the demised premises; (c) American Express has commenced thepayment of rent under the American Express Lease, there are no offsets, claimsor defenses to the enforcement thereof and Borrower has no monetary obligationsto American Express under the American Express Lease; (d) all Rents due andpayable under the American Express Lease have been paid and no portion thereofhas been paid for any period more than thirty (30) days in advance; (c) therent payable under the American Express Lease is the amount of fixed rent setforth in the American Express Lease, and there is no claim or basis for a claimby American Express thereunder for an adjustment to the Rent; (f) Borrower isthe sole owner of the entire landlord’s interest in the American Express Lease;(g) the American Express Lease is the valid, binding and enforceable obligationof Borrower and American Express thereunder and there are no agreements withAmerican Express with respect to the American Express Lease other than asexpressly set forth therein; (h) no Person has any possessory interest in, orright to occupy, the Property or any portion thereof except under the AmericanExpress Lease; (i) except for the right of first refusal set forth in Article 4and the right to offer to purchase the Property under Article 12, the AmericanExpress Lease does not contain any option or offer to purchase or right offirst refusal to purchase the Property or any part thereof; and (j) neither theAmerican Express Lease nor the Rents have been assigned or pledged except toLender, and no other Person has any interest therein.

 

**Section4.26.****  Filing andRecording Taxes**

 

All mortgage, mortgage recording, stamp, intangible or other similartax required to be paid by any Person under applicable Legal Requirementscurrently in effect in connection with

 

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theexecution, delivery, recordation, filing, registration, perfection orenforcement of any of the Loan Documents, including, without limitation, theMortgage, have been paid or will be paid, and, under current LegalRequirements, the Mortgage is enforceable in accordance with its terms byLender (or any subsequent holder thereof).

 

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

 

The Management Agreement is in full force and effect and there is nodefault thereunder by any party thereto and, to Borrower’s knowledge, no eventhas occurred that, with the passage of time and/or the giving of notice, wouldconstitute a default thereunder. No management fees under the ManagementAgreement are accrued and unpaid.

 

**Section4.28.****  Illegal Activity**

 

No portion of the Property has been or will be purchased with proceedsof any illegal activity, and no part of the proceeds of the Loan will be usedin connection with any illegal activity.

 

**Section4.29.****  ConstructionExpenses**

 

Allcosts and expenses of any and all labor, materials, supplies and equipment usedin the construction, maintenance or repair of the Improvements have been paidin full. To Borrower’s knowledge after due inquiry, there are no claims forpayment for work, labor or materials affecting the Property which are or maybecome a lien prior to, or of equal priority with, the Liens created by theLoan Documents.

 

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

 

Borrowerhas paid in full for, and is the owner of, all Personal Property (other thantenants’ property) used in connection with the operation of the Property, freeand clear of any and all security interests, liens or encumbrances, except forPermitted Encumbrances and the Lien and security interest created by the LoanDocuments.

 

**Section4.31.****  Taxes**

 

Borrowerand Borrower Principal have filed all federal, state, county, municipal, andcity income, personal property and other tax returns required to have beenfiled by them and have paid all taxes and related liabilities which have becomedue pursuant to such returns or pursuant to any assessments received by them.Neither Borrower nor Borrower Principal knows of any basis for any additionalassessment in respect of any such taxes and related liabilities for prioryears.

 

**Section4.32.****  PermittedEncumbrances**

 

None of the Permitted Encumbrances, individually or in the aggregate,materially interferes with the benefits of the security intended to be providedby the Loan Documents, materially and adversely affects the value of the Property,impairs the use or the operation of the Property or impairs Borrower’s abilityto pay its obligations in a timely manner.

 

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**Section****4.33.**** ****Federal Reserve Regulations**

 

Borrower will use the proceeds of the Loan for the purposes set forthin Section 2.1(d) hereof and not for any illegal activity. No part of theproceeds of the Loan will be used for the purpose of purchasing or acquiringany “margin stock” within the meaning of Regulation U of the Board of Governorsof the Federal Reserve System or for any other purpose which would beinconsistent with such Regulation U or any other Regulations of such Board ofGovernors, or for any purposes prohibited by Legal Requirements or prohibitedby the terms and conditions of this Agreement or the other Loan Documents.

 

**Section4.34.****  Investment CompanyAct**

 

Borrower is not (a) an “investment company” or a company “controlled”by an “investment company,” within the meaning of the Investment Company Act of1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holdingcompany” or an “affiliate” of either a “holding company” or a “subsidiarycompany” within the meaning of the Public Utility Holding Company Act of 1935,as amended; or (c) subject to any other federal or state law or regulationwhich purports to restrict or regulate its ability to borrow money.

 

**Section****4.35.**** ****Reciprocal Easement Agreements**

 

(a)                                Neither Borrower nor any other party iscurrently in default (nor has any notice been given or received with respect toan alleged or current default) under any of the terms and conditions of theREA, and the REA remains unmodified and in full force and effect;

 

(b)                               All easements granted pursuant to the REAwhich were to have survived the site preparation and completion of construction(to the extent that the same has been completed), remain in full force andeffect and have not been released, terminated, extinguished or discharged byagreement or otherwise;

 

(c)                                To the best of Borrower’s knowledge, all sumsdue and owing by Borrower to the other parties to the REA (or by the otherparties to the REA to the Borrower) pursuant to the terms of the REA, includingwithout limitation, all sums, charges, fees, assessments, costs, and expensesin connection with any taxes, site preparation and construction,non-shareholder contributions, and common area and other property managementactivities have been paid, are current, and no lien has attached on theProperty (or threat thereof been made) for failure to pay any of the foregoing;

 

(d)                               The terms, conditions, covenants, uses andrestrictions contained in the REA do not conflict in any manner with any terms,conditions, covenants, uses and restrictions contained in any Lease or in anyagreement between Borrower and 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; and

 

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

 

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occupantof any peripheral parcel, including without limitation, conditions aridrestrictions with respect to kiosk placement, tenant restrictions (type,location or exclusivity), sale of certain goods or services, and/or other userestrictions.

 

**Section4.36.**** ****No****Change in Facts orCircumstances; Disclosure**

 

Allinformation submitted by Borrower or its agents to Lender and in all financialstatements, reports, certificates and other documents submitted in connectionwith the Loan or in satisfaction of the terms thereof and all statements offact made by Borrower in this Agreement or in any other Loan Document, areaccurate, complete and correct in all material respects. There has been nomaterial adverse change in any condition, fact, circumstance or event that wouldmake any such information inaccurate, incomplete or otherwise misleading in anymaterial respect or that otherwise materially and adversely affects or mightmaterially and adversely affect the Property or the business operations or thefinancial condition of Borrower. Borrower has disclosed to Lender all materialfacts and has not failed to disclose any material fact, that could cause anyrepresentation or warranty made herein to be materially misleading.

 

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

 

Alltrademarks, trade names and service marks necessary to the business of Borroweras presently conducted or as Borrower contemplates conducting its business arein good standing and, to the extent of Borrower’s actual knowledge,uncontested. Borrower has not infringed, is not infringing, and has notreceived notice of infringement with respect to asserted trademarks, tradenames and service marks of others. To Borrower’s knowledge, there is noinfringement by others of trademarks, trade names and service marks ofBorrower.

 

**Section4.38.****  Compliance withAnti-Terrorism Laws**

 

None of Borrower, Borrower Principal or any Person who ControlsBorrower or Borrower Principal currently is identified by the Office of ForeignAssets Control, Department of the Treasury (**“OFAC”**)or otherwise qualifies as an Embargoed Person, and Borrower has implementedprocedures to ensure that no Person who now or hereafter owns a material director indirect equity interest in Borrower is an Embargoed Person or is Controlledby an Embargoed Person. To Borrower’s knowledge neither Borrower nor BorrowerPrincipal is in violation of any applicable law relating to anti-moneylaundering or anti-terrorism, including, without limitation, those related totransacting business with Embargoed Persons or the requirements of the Unitingand Strengthening America by Providing Appropriate Tools Required to Interceptand Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the relatedregulations issued thereunder, including temporary regulations (collectively,as the same may be amended from time to time, the **“Patriot****Act”**). To thebest of Borrower’s knowledge, no tenant at the Property is currently identifiedby OFAC or otherwise qualifies as an Embargoed Person, or is owned orControlled by an Embargoed Person.

 

**Section4.39.****  Patriot****Act**

 

Neither Borrower nor Borrower Principal shall (a) beor become subject at any time to any law, regulation, or list of any governmentagency (including, without limitation, the list maintained by OFAC andaccessible through the OFAC website) that prohibits or limits any

 

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lenderfrom making any advance or extension of credit to Borrower or from otherwiseconducting business with Borrower and Borrower Principal, or (b) fail toprovide documentary and other evidence of Borrower’s identity as may berequested by any lender at any time to enable any lender to verify Borrower’sidentity or to comply with any applicable law or regulation, including, withoutlimitation, the Patriot Act. In addition, Borrower hereby agrees to provide toLender any additional information that Lender deems necessary from time to timein order to ensure compliance with all applicable laws concerning moneylaundering and similar activities.

 

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

 

Borroweragrees that, unless expressly provided otherwise, all of the representationsand warranties of Borrower set forth in this Article 4 and elsewhere in thisAgreement and in the other Loan Documents shall survive for so long as anyportion of the Debt remains owing to Lender, All representations, warranties,covenants and agreements made in this Agreement or in the other Loan Documentsby Borrower shall be deemed to have been relied upon by Lender notwithstandingany investigation heretofore or hereafter made by Lender or on its behalf.

 

**ARTICLE 5**

**BORROWER COVENANTS**

 

From the date hereof and until repayment of the Debt in full andperformance in full of all obligations of Borrower under the Loan Documents orthe earlier release of the Lien of the Mortgage (and all related obligations)in accordance with the terms of this Agreement and the other Loan Documents,Borrower hereby covenants and agrees with Lender that:

 

**Section 5.1.****    Existence; Compliance with LegalRequirements**

 

(a)                                  Borrower shall do or cause to be done allthings necessary to preserve, renew and keep in full force and effect itsexistence, rights, licenses, permits and franchises and comply with all LegalRequirements applicable to it and the Property. Borrower hereby covenants and agreesnot to commit, permit or suffer to exist any act or omission affording anyGovernmental Authority the right of forfeiture as against the Property or anypart thereof or any monies paid in performance of Borrower’s obligations underany of the Loan Documents. Borrower shall at all times maintain, preserve andprotect all franchises and trade names used in connection with the operation ofthe Property. So long as American Express is in compliance with the terms ofthe American Express Lease with respect to the matters described in thisSection 5.1, Borrower shall be deemed in compliance with this Section 5.1.

 

(b)                                 Borrower, at its own expense, may contest orpermit American Express to contest by appropriate legal proceeding, promptlyinitiated and conducted in good faith and with due diligence, the LegalRequirements affecting the Property, provided that (i) no Default or Event of Defaulthas occurred and is continuing; (ii) such proceeding shall be permitted underand be conducted in accordance with the provisions of any other instrument towhich Borrower 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 notimpose civil or criminal liability on Borrower or Lender; (v) unless thecontest is initiated and conducted by American Express pursuant to the AmericanExpress Lease Borrower shall have furnished the security as may be required inthe proceeding or by Lender to ensure compliance by Borrower with the LegalRequirements; and (vi) if the contest is initiated and conducted by Borrower,Borrower shall have furnished to Lender all other items reasonably requested byLender. Borrower shall give written notice to Lender of any contest initiatedand conducted by Borrower promptly after initiation thereof and shall informLender of any contest initiated and conducted by American Express of whichBorrower is given notice by American Express.

 

**Section****5.2.****   ****Maintenance and Use of Property**

 

Borrower shall cause the Property to be maintained in a good and safecondition and repair. The Improvements and the Personal Property shall not beremoved, demolished or except as may be expressly permitted under the AmericanExpress Lease without the consent of the landlord thereunder, materiallyaltered (except for normal replacement of the Personal Property) without theprior written consent of Lender. So long as American Express is in compliancewith the terms of the American Express Lease with respect to the mattersdescribed in this Section 5.2, Borrower shall be deemed in compliance with thisSection 5.2. If under applicable zoning provisions the use of all or anyportion of the Property is or shall become a nonconforming use, Borrower willnot cause or permit the nonconforming use to be discontinued or thenonconforming Improvement to be abandoned without the express written consentof Lender.

 

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

 

Borrower shall not commit or suffer any waste of theProperty or make any change in the use of the Property which will in any waymaterially increase the risk of fire or other hazard arising out of theoperation of the Property, or take any action that might invalidate or givecause for cancellation of any Policy, or do or permit to be done thereonanything that may in any way impair the value of the Property or the securityfor the Loan. Borrower will not, without the prior written consent of Lender,permit any drilling or exploration for or extraction, removal, or production ofany minerals from the surface or the subsurface of the Property, regardless ofthe depth thereof or the method of mining or extraction thereof.

 

**Section****5.4.****   ****Taxes and Other Charges**

 

(a)                               Borrower shall pay or cause American Expressto pay all Taxes and Other Charges now or hereafter levied or assessed orimposed against the Property or any part thereof as the same become due andpayable. Borrower shall furnish or cause to be furnished to Lender suchreceipts for the payment of the Taxes and the Other Charges as are delivered toBorrower by American Express and, upon request by Lender, a certificate fromBorrower and Borrower Principal that as of the date of such certificate thereare no liens filed against the Property arising from the non-payment of Taxesor Other Charges. Borrower shall not suffer nor permit American Express tosuffer and shall promptly cause to be paid and discharged any Lien or chargewhatsoever which may be or become a Lien or charge against the Property, andshall promptly pay for all utility services provided to the Property. So longas American Express is in

 

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compliancewith the terms of the American Express Lease with respect to the mattersdescribed in this Section 5.4, Borrower shall be deemed in compliance with thisSection 5.4.

 

(b)                                 Borrower, at its own expense, may contest orpermit American Express to contest by appropriate legal proceeding, promptlyinitiated and conducted in good faith and with due diligence, the amount orvalidity or application in whole or in part of any Taxes or Other Charges,provided that (i) no Default or Event of Default has occurred and remainsuncured; (ii) such proceeding shall be permitted under and be conducted inaccordance with the provisions of any other instrument to which Borrower is subjectand shall not constitute a default thereunder and such proceeding shall beconducted in accordance with all applicable Legal Requirements; (iii) neitherthe Property nor any part thereof or interest therein will be in danger ofbeing sold, forfeited, terminated, canceled or lost; (iv) Borrower shallpromptly upon final determination thereof pay the amount of any such Taxes orOther Charges, together with all costs, interest and penalties which may bepayable in connection therewith; (v) such proceeding shall suspend thecollection of such contested Taxes or Other Charges from the Property; and (vi)Borrower shall furnish or cause American Express to Furnish (but only to theextent required to be furnished by American Express under the American ExpressLease) such security as may be required in the proceeding, or deliver to Lendersuch reserve deposits as may be requested by Lender, to insure the payment ofany such Taxes or Other Charges, together with all interest and penaltiesthereon (unless Borrower or American Express has paid all of the Taxes or OtherCharges under protest). Lender may pay over any such cash deposit or partthereof held by Lender to the claimant entitled thereto at any time when, inthe judgment of Lender, the entitlement of such claimant is established or theProperty (or part thereof or interest therein) shall be in danger of beingsold, forfeited, terminated, canceled or lost or there shall be any danger ofthe Lien of the Mortgage being primed by any related Lien.

 

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

 

Borrowershall give prompt written notice to Lender of any litigation or governmentalproceedings pending or threatened in writing against Borrower which mightmaterially adversely affect Borrower’s condition (financial or otherwise) or businessor the Property.

 

**Section5.6.****    Access to Property**

 

Borrower shall permit agents, representatives and employees of Lenderto inspect the Property or any part thereof at reasonable hours upon reasonableadvance notice, subject to the rights of American Express under the AmericanExpress Lease.

 

**Section****5.7.****   ****Notice of Default**

 

Borrower shall promptly advise Lender of any material adverse change inthe condition (financial or otherwise) of Borrower, any Borrower Principal orthe Property or of the occurrence of any Default or Event of Default of whichBorrower has knowledge and of any American Express Lease Default of whichBorrower has knowledge.

 

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**Section5.8.****    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**

 

Borrower shall in a timely manner observe, performand fulfill each and every covenant, term and provision to be observed andperformed by Borrower under this Agreement and the other Loan Documents and anyother agreement or instrument affecting or pertaining to the Property and anyamendments, modifications or changes thereto.

 

**Section5.10.****  Awards; InsuranceProceeds**

 

Borrower shall cooperate with Lender in obtainingfor Lender the benefits of any Awards or Insurance Proceeds lawfully orequitably payable to Borrower in connection with the Property, and Lender shallbe reimbursed for any expenses incurred in connection therewith (includingreasonable, actual attorneys’ fees and disbursements, and the payment byBorrower of the expense of an appraisal on behalf of Lender in case of aCasualty or Condemnation affecting the Property or any part thereof) out ofsuch Awards or Insurance Proceeds. The actual payment of any Awards shall begoverned by Section 8.4 hereof.

 

**Section5.11.****  FinancialReporting**

 

(a)          Borrower and Borrower Principal shall keepadequate books and records of account in accordance with federal tax basisaccounting, or in accordance with other methods acceptable to Lender in itssole discretion, 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 theprovisions of Section 5.11(a) hereof (e.g., GAAP accounting and audits shallnot be required ), Borrower and Borrower Principal shall furnish Lender withsuch other additional financial or management information (including state andfederal tax returns) as may, from time to time, be reasonably required byLender in form and substance satisfactory to Lender (including, withoutlimitation, any financial reports required to be delivered by any Tenant or anyguarantor of any Lease pursuant to the terms of such Lease), and shall furnishto Lender and its agents convenient facilities for the examination and audit ofany such books 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 promptly pay toLender a non-refundable charge in the amount of $500 for each such failure. Thepayment of such amount shall not be construed to relieve Borrower of any Eventof 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).

 

**Section5.12.****   Estoppel Statement**

 

(a)           After request by Lender, Borrower shall within ten (10) Business Daysfurnish Lender with a statement, duly acknowledged and certified, setting forth(i) the amount of the original principal amount of the Note, (ii) the rate ofinterest on the Note, (iii) the unpaid principal amount of the Note, (iv) thedate installments of interest and/or principal were last paid, (v) any offsetsor defenses to the payment of the Debt, if any, and (vi) that the Note, thisAgreement, the Mortgage and the other Loan Documents are valid, legal andbinding obligations and have not been modified or if modified, givingparticulars 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.

 

**Section5.13.****   LeasingMatters.**

 

(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.

 

**Section5.14.****   PropertyManagement**

 

(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 notice receivedby Borrower under the Management Agreement; (iv) promptly give notice to Lenderof any notice or information that Borrower receives which indicates thatManager is terminating the Management Agreement or that Manager is otherwisediscontinuing its management of the Property; and (v) promptly enforce theperformance and observance of all of the covenants required to be performed andobserved 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, conditionedor delayed): (i) surrender, terminate or cancel the Management Agreement orotherwise replace Manager or enter into any other management agreement withrespect to the Property; (ii) reduce or consent to the reduction of the term ofthe Management Agreement; (iii) increase or consent to the increase of theamount of any charges under the Management Agreement; or (iv) otherwise modify,change, supplement, alter or amend, or waive or release any of its rights andremedies under, the Management Agreement in any material respect. In the eventthat Borrower replaces Manager at any time during the term of Loan pursuant tothis 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 theManagement Agreement in effect as of the date hereof.

 

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

 

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

 

**Section5.16.****  Debt Cancellation**

 

Borrower shall not cancel or otherwise forgive or release any claim ordebt owed to Borrower by any Person, except for adequate consideration and inthe ordinary course of Borrower’s business.

 

**Section5.17.****  Zoning**

 

Borrower shall not initiate or consent to any zoning reclassificationof any portion of the Property or seek any variance under any existing zoningordinance or use or permit the use of any portion of the Property in any mannerthat could result in such use becoming a non-conforming use under any zoningordinance or any other applicable land use law, rule or regulation, without theprior written consent of Lender.

 

**Section5.18.****  ERISA**

 

(a)          Borrower shall not engage in any transaction which would cause anyobligation, or action taken or to be taken, hereunder (or the exercise byLender 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 underERISA.

 

(b)           Borrower further covenants and agrees to deliver to Lender suchcertifications or other evidence from time to time throughout the term of theLoan, as requested by Lender in its sole discretion, that (i) Borrower is notand does not maintain an “employee benefit plan” as defined in Section 3(3) ofERISA, which is subject to Title I of ERISA, or a “governmental plan” withinthe meaning of Section 3(3) of ERISA; (ii) Borrower is not subject to statestatutes regulating investments and fiduciary obligations with respect togovernmental plans; and (iii) one or more of the following circumstances istrue:

 

(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 (c).

 

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

 

Borrower shall not suffer, permit or initiate the joint assessment ofthe Property with (a) any other real property constituting a tax lot separatefrom the Property, or (b) any portion of the Property which may be deemed toconstitute personal property, or any other procedure whereby the Lien of anytaxes which may be levied against such personal property shall be assessed orlevied or charged to the Property.

 

**Section 5.20.****  Reciprocal Easement Agreements**

 

Borrower shall not enter into, terminate or modify any REA withoutLender’s prior written consent, which consent shall not be unreasonablywithheld, conditioned or delayed. Borrower shall enforce, comply with, andcause each of the parties to the REA to comply with all of the materialeconomic terms and conditions contained in the REA, provided that Borrower mayagree, without Lender’s consent, to modifications to any REA or to granteasements with respect to the Property which could not reasonably be expectedto have a material adverse effect on the use, value or operation of theProperty, on the ability of American Express to perform its obligations underthe American Express Lease or on Borrower’s ability to perform its obligationsunder the Loan Documents.

 

**ARTICLE6****ENTITY COVENANTS**

 

**Section 6.1.****    Single Purpose Entity/Separateness**

 

Until the Debt has been paid in full, Borrowerrepresents, warrants and covenants as follows:

 

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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) theProperty, and (B) such incidental Personal Property as may be necessary for theoperation of the Property;

 

(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 thebenefit of 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 of Borrower (the **“LLC Agreement”**) shall, provide that (i) upon the occurrenceof any event that causes the sole member of Borrower (**“Member”**)to cease to be the member of Borrower (other than (A) upon an assignment byMember of all of its limited liability company interest in Borrower and theadmission of the transferee in accordance with the Loan Documents and the LLCAgreement, or (B) the resignation of Member and the admission of an additionalmember of Borrower in accordance with the terms of the Loan Documents and theLLC Agreement), any person acting as Independent Director of Borrower shall,without any action of any other Person and simultaneously with the Memberceasing to be the member of Borrower, automatically be admitted to Borrower (**“Special Member”**) and shall continue Borrower withoutdissolution and (ii) Special Member may not resign from Borrower or transferits rights as Special Member unless (A) a successor Special Member has beenadmitted to Borrower as Special Member in accordance with requirements ofDelaware law and (B) such successor Special Member has also accepted itsappointment as an Independent Director. The LLC Agreement shall further providethat (i) Special Member shall automatically cease to be a member of Borrowerupon the admission to Borrower of a substitute Member, (ii) Special Membershall be a member of Borrower that has no interest in the profits, losses andcapital of Borrower and has no right to receive any distributions of Borrowerassets, (iii) pursuant to Section 18-301 of the Delaware Limited LiabilityCompany Act (the **“Act”**), Special Member shall notbe required to make any capital contributions to Borrower and shall not receivea limited liability company interest in Borrower, (iv) Special Member, in itscapacity as Special Member, may not bind Borrower and (v) except as required byany mandatory provision of the Act, Special Member, in its capacity as SpecialMember, shall have no right to vote on, approve or otherwise consent to anyaction by, or matter relating to, Borrower, including, without limitation, themerger, consolidation or conversion of Borrower; provided, however, suchprohibition shall not limit the obligations of Special Member, in its capacityas Independent Director, to vote on such matters required by the Loan Documentsor the LLC Agreement. In order to implement the admission to Borrower ofSpecial Member, Special Member shall execute a counterpart to the LLCAgreement. Prior to its admission to Borrower as Special Member, Special Membershall 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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**Section6.2.****    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, (c) 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 andSection 6.4 hereof.  Borrower authorizesLender to file any financing statement or financing statement amendmentrequired by Lender to establish or maintain the validity, perfection andpriority of the security interest granted herein.  At the request of Lender, Borrower shallexecute a certificate in form satisfactory to Lender listing the trade namesunder which Borrower intends to operate the Property, and representing andwarranting that Borrower does business under no other trade name with respectto the Property. If Borrower does not now have an organizational identificationnumber and later obtains one, or if the organizational identification numberassigned to Borrower subsequently changes, Borrower shall promptly notifyLender of such organizational identification number or change. Nothing in thisSection 6.2 shall be deemed to restrict any express rights granted to Borrowerunder Article 7 hereof.

 

**Section6.3.****    Business and Operations**

 

Borrower will qualify to do business and will remainin good standing under the laws of the State as and to the extent the same arerequired for the ownership, maintenance, management and operation of theProperty.

 

**Section6.4.****    Independent Director**

 

(a)          The organizational documents of Borrower shall provide that at alltimes there shall be, and Borrower shall cause there to be, at least one dulyappointed 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) ashareholder (or other equity owner) of, or an officer, director, partner,manager, member (other than as a Special Member in the case of single memberDelaware limited liability companies), employee, attorney or counsel of,Borrower, Borrower Principal or any of their respective shareholders, partners,members, subsidiaries or affiliates; (ii) a customer or creditor of, orsupplier to, Borrower or any of its respective shareholders, partners, members,subsidiaries or affiliates who derives any of its purchases or revenue from itsactivities with Borrower or any Affiliate of any of them; (iii) a Person whoControls or is under common Control with any such shareholder, officer,director, partner, manager, member, employee, supplier, creditor or customer;or (iv) a member of the 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**

 

**Section7.1.****    Transfer Definitions**

 

For purposes 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 anyother transfer or disposition of (directly or indirectly, voluntarily orinvoluntarily, by operation of law or otherwise, and whether or not forconsideration or of record) 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”**),****otherthan pursuant to the American Express Lease, without the prior written consentof 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,assignment or 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 Party is a corporation, any merger, consolidation or Sale orPledge of such corporation’s stock or the creation or issuance of new stock inone or a series of transactions; (iv) if a Restricted Party is a limited orgeneral partnership or joint venture, any merger or consolidation or thechange, removal, resignation or addition of a general partner or the Sale orPledge of the partnership interest of any general or limited partner or anyprofits or proceeds relating to such partnership interests or the creation orissuance of new partnership

 

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interests; (v) if a Restricted Party is alimited liability company, any merger or consolidation or the change, removal,resignation or addition of a managing member or non-member manager (or if nomanaging member, any member) or the Sale or Pledge of the membership interestof any member or any profits or proceeds relating to such membership interest;(vi) if a Restricted Party is a trust or nominee trust, any merger,consolidation or the Sale or Pledge of the legal or beneficial interest in aRestricted Party or the creation or issuance of new legal or beneficialinterests; or (vii) the removal or the resignation of the Manager (including,without limitation, an Affiliated Manager) other than in accordance with Section5.14.

 

**Section7.3.****    Permitted Transfers**

 

Notwithstandingthe provisions of Section 7.2, the following transfers shall not be deemed to bea Prohibited Transfer: (a) a transfer by devise or descent or by operation oflaw upon the death of a member, partner or shareholder of a Restricted Party,so long as Borrower delivers notice to Lender as soon as practicable thereafterand that such Restricted Party is promptly reconstituted, if applicable,following the death of such member, partner or shareholder and there is nochange in Control of such Restricted Party as a result of such transfer; (b)the Sale or Pledge, in one or a series of related transactions, of not morethan forty-nine percent (49%) of the stock, limited partnership interests ornon-managing membership interests (as the case may be) in a Restricted Party;provided, however, no such transfers shall result in a change in Control in theRestricted Party or change in control of the Property, and as a condition toeach such transfer, Lender shall receive not less than thirty (30) days priorwritten notice of such proposed transfer. Notwithstanding the foregoing, anyone or more of the transfers that results in any Person owning in excess offorty-nine percent (49%) of the ownership interest in a Restricted Party shallcomply 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, (c) a new manager for theProperty and a new management agreement satisfactory to Lender, and (f) thesatisfaction 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 thisArticle 7 results in any Person and its Affiliates owning in excess offorty-nine percent (49%) of the ownership interests in a Restricted Party,Borrower shall, prior to such transfer, and in addition to any otherrequirement for Lender consent contained herein, deliver a revised substantivenon-consolidation opinion letter to Lender reflecting such Prohibited Transfer,which opinion shall be in form, scope and substance acceptable in all respectsto Lender and the Rating Agencies.

 

**Section****7.5.****   ****Assumption**

 

Notwithstandingthe foregoing provisions of this Article 7, following the date which is six (6)months from the Closing Date, Lender shall not unreasonably withhold consent toa transfer of the Property in its entirety to, and the related assumption ofthe Loan by, any Person (a **“Transferee”**) provided that each of the followingterms and conditions are satisfied:

 

(a)           no Default or Event of Default hay 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 anon-refundable processing fee in the amount of $10,000. Lender shall have theright to approve or disapprove the proposed transfer based on its then currentunderwriting and credit requirements for similar loans secured by similarproperties which loans are sold in the secondary market, such approval not tobe unreasonably withheld.  In determiningwhether to give or withhold its approval of the proposed transfer, Lender shallconsider the experience and track record of Transferee and its principals inowning and operating facilities similar to the Property, the financial strengthof Transferee and its principals, the general business standing of Transfereeand its principals and Transferee’s and its principals’ relationships andexperience with contractors, vendors, tenants, lenders and other businessentities; provided, however, that, notwithstanding Lender’s agreement toconsider the foregoing factors in determining whether to give or withhold suchapproval, such approval shall be given or withheld based on what Lenderdetermines to be commercially reasonable and, if given, may be given subject tosuch conditions as Lender may deem reasonably appropriate;

 

(c)           Borrower shall have paid to Lender, concurrentlywith the closing of such transfer, (i) a non-refundable assumption fee in anamount equal to one percent (1.0%) of the then outstanding principal balance ofthe Note, and (ii) all out-of-pocket costs and expenses, including reasonableattorneys’ fees, inclined 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 15 hereofand, prior to or concurrently with the closing of such transfer, Transferee andits constituent partners, members or shareholders as Lender may require, shallhave 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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assumed the obligations ofBorrower Principal under the Loan Documents with respect to all acts and eventsoccurring or arising after the transfer of the Property pursuant to thisSection 7.5;

 

(c)           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 5.14 hereof andassign to Lender as additional security such new management agreement;

 

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

 

A consent by Lender withrespect to a transfer of the Property in its entirety to, and the relatedassumption of the Loan by, a Transferee pursuant to this Section 7.5 shall notbe construed to be a waiver of the right of Lender to consent to any subsequentSale or Pledge of the Property. Upon the transfer of the Property pursuant tothis Section 7.5, Borrower and Borrower Principal shall be relieved of allliability under the Loan Documents for acts, events, conditions, orcircumstances occurring or arising after the date of such transfer, except tothe extent that such acts, events, conditions, or circumstances are theproximate result of acts, events, conditions, or circumstances that existedprior to the date of such transfer, whether or not discovered prior orsubsequent to the date of such transfer.

 

**Section7.6.****    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 informationrequested by Lender for the preparation of, and shall authorize Lender to file,new financing statements and financing statement amendments and other documentsto the 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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insurance endorsements orcertificates and other similar materials as Lender may deem necessary at thetime of the transfer, all in form and substance satisfactory to 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 qualificationof the signers to execute the assumption of the Debt, which papers shallinclude certified copies of all documents relating to the organization andformation of Transferee and of the entities, if any, which are partners ormembers of Transferee. Transferee and such constituent partners, members orshareholders of Transferee (as the case may be), as Lender shall require, shallcomply with the covenants set forth in Article 6 hereof, provided, however,that, (i) if such Inland Permitted Transferee is a limited partnership or alimited liability company (with more than one member), Lender may require thatthe general partner or managing member of such Inland Permitted Transferee alsocomply with the covenants set forth in Article 6, as modified to state thatsuch 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 ofSection 5.14 hereof and assign to Lender as additional security such newmanagement agreement;

 

(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.

 

A consent by Lender withrespect to a transfer of the Property in its entirety to, and the relatedassumption of the Loan by, a Transferee pursuant to this Section 7.6 shall notbe construed to be a waiver of the right of Lender to consent to any subsequentSale or Pledge of the Property.

 

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**ARTICLE 8****INSURANCE; CASUALTY; CONDEMNATION; RESTORATION**

 

**Section8.1.****    Insurance**

 

(a)           Subject to the provisions of paragraph (g) ofthis Section 8.1, Borrower shall obtain and maintain, or cause American Expressto maintain, insurance for Borrower and the Property providing at least thefollowing 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 Properly or a waiver of allco-insurance provisions; (C) providing for no deductible in excess of $10,000 forall such insurance coverage; (D) at all times insuring against at least thosehazards that are commonly insured against under a “special causes of loss” formof policy, as the same shall exist on the date hereof, and together with anyincrease 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 thissubsection (i);

 

(ii)             commercial general liability insuranceagainst claims for personal injury, bodily injury, death or property damageoccurring upon, in or about the Property, with such insurance (A) to be on theso-called “occurrence” form with a general aggregate limit of not less than$2,000,000 and a per occurrence limit of not less than $1,000,000; (B) tocontinue at not less than the aforesaid limit until required to be changed byLender in writing by reason of changed economic conditions making suchprotection inadequate; and (C) to cover at least the following hazards; (1)premises and operations; (2) products and completed operations; (3) independentcontractors; (4) blanket contractual liability; and (5) contractual liabilitycovering the indemnities contained in Article 12 and Article 14 hereof to the extentthe same is available;

 

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(iii)            if the rating of American Express issued bythe Rating Agencies falls below the Trigger Rating, loss of rents insurance orbusiness income insurance, as applicable, (A) with loss payable to Lender; (B)covering all risks required to be covered by the insurance provided for insubsection (i) above; and (C) which provides that after the physical loss tothe Improvements and Personal Property occurs, the loss of rents or income, asapplicable, will be insured until such rents or income, as applicable, eitherreturns to the same level that existed prior to the loss or the expiration oftwelve (12) months, whichever first occurs, and notwithstanding that the policymay expire prior to the end of such period; and (D) which contains an extendedperiod of indemnity endorsement which provides that after the physical loss tothe Improvements and Personal Property has been repaired, the continued loss ofincome will be insured until such income either returns to the same level it wasat prior to the loss, or the expiration of twelve (12) months from the datethat the Property is repaired or replaced and operations are resumed, whicheverfirst occurs, and notwithstanding that the policy may expire prior to the endof such period. The amount of such loss of rents or business income insurance,as applicable, shall be determined prior to the date hereof and at least onceeach year thereafter based on Borrower’s reasonable estimate of the grossincome from the Property for the succeeding period of coverage required above.All proceeds 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 structuralconstruction, repairs or alterations are being made with respect to theImprovements, and only if the Property coverage form does not otherwise apply,(A) owner’s contingent or protective liability insurance covering claims notcovered by or under the terms or provisions of the above mentioned commercialgeneral liability insurance policy; and (B) the insurance provided for insubsection (i) above written in a so-called Builder’s Risk Completed Value form(1) on a non-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 thestatutory limits of the State, and employer’s liability insurance in respect ofany work or operations on or about the Property, or in connection with theProperty or its operation (if applicable);

 

(vi)            comprehensive boiler and machinery insurance,if applicable, in amounts as shall be reasonably required by Lender on termsconsistent with the commercial property insurance policy required undersubsection (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 of terrorism.

 

(b)          All insurance provided for in Section 8.1(a)shall be obtained under valid and enforceable policies (collectively, the **“Policies”**or in the singular, the **“Policy”**), and shall be subject to the approval of Lender as to insurancecompanies, amounts, deductibles, loss payees and insureds.  The Policies shall be issued by financiallysound and responsible insurance companies authorized to do business in theState and having a claims paying ability rating of “A-” or better by S&P(or such other ratings approved by Lender) and/or a general policy rating of “A”or better and a financial class of VIII or better by A.M. Best Company, Inc.The Policies described in Section 8.1(a) shall designate Lender and itssuccessors and assigns as additional insureds, mortgagees and/or loss payee asdeemed appropriate by Lender. To the extent such Policies are not available asof the Closing Date, Borrower shall deliver to Lender prior to the Closing Datean Acord 28 or similar certificate of insurance evidencing the coverages and amountsrequired hereunder and, upon request of Lender as soon as available after theClosing Date, certified copies of all Policies. Not less than ten (10) daysprior to the expiration dates of any insurance coverage in place with respectto the Property, Borrower shall deliver to Lender an Acord 28 or similarcertificate, accompanied by evidence satisfactory to Lender of payment of the premiumsdue in connection therewith (the **“InsurancePremiums”**),****and, as soon as available thereafter,certified copies of all renewal Policies.

 

(c)           Any blanket insurance Policy shallspecifically allocate to the Property the amount of coverage from time to timerequired hereunder and shall otherwise provide the same protection as would aseparate Policy insuring only the Property in compliance with the provisions ofSection 8.1(a).

 

(d)          All Policies provided for or contemplated bySection 8.1(a), except for the Policy referenced in Section 8.1(a)(v), shallname Borrower as the insured and Lender as the additional insured, as itsinterests may appear, and in the case of property damage, boiler and machinery,flood and earthquake 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 clauses or 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 increase the coverage provided thereby) or canceled by theinsurer without at least thirty (30) days’ (ten (10) days’ in the case ofnon-payment of premium) prior written notice to Lender and any other partynamed therein as an additional insured;

 

(iii)          the issuers thereof shall give written noticeto Lender if the Policies have not been renewed thirty (30) days prior to itsexpiration; and

 

(iv)          Lender shall not be liable for any InsurancePremiums thereon or subject 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 tothe contrary, Lender acknowledges that so long as no American Express LeaseDefault has occurred, Borrower shall not be required to obtain the insurancecoverages set forth in paragraphs (a)(i) through (viii) if (x) Guarantor (or AmericanExpress if there is no Guarantor) is a self-insurer and maintains a ratingissued by the Rating Agencies of not less than the Trigger Rating or (y)American Express maintains insurance with coverages and carriers in compliancewith the terms of the American Express Lease.

 

**Section8.2.****    Casualty**

 

If the Property shall bedamaged or destroyed, in whole or in part, by fire or other casualty (a **“Casualty”**), Borrower shall give prompt notice of suchdamage to Lender and shall promptly commence and diligently prosecute theRestoration of the Property in accordance with Section 8.4, whether or notLender makes any Net Proceeds available pursuant to Section 8.4. Borrower shallpay all costs of such Restoration whether or not such costs are covered by insurance.Lender may, but shall not be obligated to make proof of loss if not madepromptly by Borrower. Borrower shall adjust all claims for Insurance Proceedsin consultation with, and approval of, Lender; provided, however, if an Eventof Default has occurred and is continuing, Lender shall have the exclusiveright to participate in the adjustment of all claims for Insurance Proceeds.

 

**Section8.3.****    Condemnation**

 

Borrowershall promptly give Lender notice of the actual or threatened commencement ofany proceeding for the Condemnation of the Property of which Borrower hasknowledge and shall deliver to Lender copies of any and all papers served inconnection 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 ofSection 8.4, whether or not Lender makes any Net Proceeds available pursuant toSection 8.4. If the Property is sold, through foreclosure or otherwise, priorto the receipt by Lender of the Award, Lender shall have the right, whether ornot a deficiency judgment on the Note shall have been sought, recovered ordenied, to receive the Award, or a portion thereof sufficient to pay the Debt.So long as no American Express Lease Default has occurred, the payment andallocation of any Awards shall be governed by the American Express Lease.

 

**Section8.4.****    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”**forpurposes of this Section 8.4 shall mean: (i) the net amount of all insurance proceedsreceived by Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (viii) as aresult of a Casualty, after deduction of its reasonable costs and expenses(including, but not limited to, reasonable counsel fees), if any, in collectingthe same (**“Insurance Proceeds”**),****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”**),****whichever the 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 arcCondemnation 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 in fullforce 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) days aftersuch Casualty or Condemnation, whichever the case may be, occurs) and shalldiligently 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 completedby Borrower in an expeditious and diligent fashion and in compliance with allapplicable Legal Requirements;

 

(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 orcash equivalent deposited by Borrower with Lender are sufficient in Lender’sreasonable judgment to cover the cost of the Restoration.

 

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(ii)            The Net Proceeds shall be held by Lenderuntil disbursements commence, and, until disbursed in accordance with theprovisions of this Section 8.4, shall constitute additional security for theDebt and other obligations under the Loan Documents. The Net Proceeds shall bedisbursed by Lender to, or as directed by, Borrower from time to time duringthe course of the Restoration, upon receipt of evidence satisfactory to Lenderthat (A) all the conditions precedent to such advance, including those setforth in Section 8.4(b)(i), have been satisfied, (B) all materials installedand work and labor performed (except to the extent that they are to be paid forout of the requested disbursement) in connection with the related Restorationitem have been paid for in full, and (C) there exist no notices of pendency,stop orders, mechanic’s or materialman’s liens or notices of intention to filesame, or any other liens or encumbrances of any nature whatsoever on theProperty which have not either been fully bonded to the satisfaction of Lenderand discharged of record or in the alternative fully insured to thesatisfaction of Lender by the title company issuing the Title Insurance Policy.Notwithstanding the foregoing, Business Interruption Proceeds required to bemaintained by Borrower pursuant to section 8.1(a)(iii) shall be controlled byLender at all times, shall not be subject to the provisions of this Section 8.4and shall be used solely for the payment of the obligations under the LoanDocuments and Operating Expenses.

 

(iii)          All plans and specifications required inconnection with the Restoration shall be subject to prior review and acceptancein all respects by Lender and by an independent consulting engineer selected byLender (the **“Restoration Consultant”**).****Lendershall have the use of the plans and specifications and all permits, licensesand approvals required or obtained 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 obligatedto make disbursements of the Net Proceeds in excess of an amount equal to thecosts actually incurred from time to time for work in place as part of theRestoration, as certified by the Restoration Consultant, minus the RestorationRetainage. The term **“Restoration Retainage”**shallmean an amount equal to ten percent (10%) of the costs actually incurred forwork in place as part of the Restoration, as certified by the RestorationConsultant, until the Restoration has been completed. The Restoration Retainageshall be reduced to five percent (5%) of the costs incurred upon receipt byLender of satisfactory evidence that fifty percent (50%) of the Restoration hasbeen completed. The Restoration Retainage shall in no event, andnotwithstanding anything to the contrary set forth above in this Section8.4(b), be less than the amount actually held back by Borrower fromcontractors, subcontractors and materialmen engaged in the Restoration. TheRestoration Retainage shall not be released until the Restoration Consultant certifiesto Lender that the Restoration has been completed in accordance with theprovisions of 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 Insurance Policyinsuring the continued priority of the lien of the Mortgage and evidence ofpayment of any premium payable for such endorsement. If required by Lender, therelease of any such portion of the Restoration Retainage shall be approved bythe surety company, if any, which has issued a payment or performance bond withrespect 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 theundisbursed balance thereof shall not, in the reasonable opinion of Lender inconsultation with the Restoration Consultant, be sufficient to pay in full thebalance of the costs which are estimated by the Restoration Consultant to beincurred in connection with the completion of the Restoration, Borrower shalldeposit the deficiency (the **“Net Proceeds Deficiency”**)with Lender before any further disbursement of the Net Proceeds shall be made.The Net Proceeds Deficiency deposited with Lender shall be held by Lender andshall be disbursed for costs actually incurred in connection with theRestoration on the same conditions applicable to the disbursement of the NetProceeds, and until so disbursed pursuant to this Section 8.4(b) shallconstitute additional security for the Debt and other obligations under theLoan 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 madeavailable for the Restoration or (ii) to be returned to Borrower as excess NetProceeds pursuant to Section 8.4(b)(vii) may (x) be retained and applied byLender toward the payment of the Debt whether or not then due and payable insuch order, priority and proportions as Lender in its sole discretion shalldeem proper, or, (y) at the sole discretion of Lender, the same may be paid, eitherin whole or in part, to Borrower for such purposes and upon such conditions asLender shall designate.

 

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(d)          In the event of foreclosure of the Mortgage,or other transfer of title to the Property in extinguishment in whole or inpart of the Debt, all right, title and interest of Borrower in and to thePolicies then in force concerning the Property and all proceeds payable thereundershall thereupon vest in the purchaser at such foreclosure, Lender or othertransferee in the event of such other transfer of title.

 

(e)          Notwithstanding the foregoing, so long as noAmerican Express Lease Default has occurred, the Net Proceeds shall be used forrestoration of the Property in accordance with the provisions of the AmericanExpress Lease.

 

**ARTICLE 9**

**REPLACEMENTS; RESERVE****FUNDS**

 

**Section9.1.****    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 AmericanExpress Lease Default shall have occurred, the compliance by American Expresswith its obligations For maintenance of the Property as set forth in theAmerican Express Lease shall be deemed compliance by Borrower with theprovisions of this Section 9.1.

 

**Section 9.2.****    Tax and Insurance Reserve Funds**

 

Ifrequired by Lender following a default by American Express under the AmericanExpress Lease Borrower shall establish an Eligible Account with Lender orLender’s agent sufficient to discharge Borrower’s obligations for the paymentof Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof(the **“Tax and Insurance Reserve Account”**)****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 withSection 8.1(c), one-twelfth of the Insurance Premiums that Lender estimateswill be payable during the next ensuing twelve (12) months for the renewal ofthe coverage afforded by the Policies upon the expiration thereof or suchhigher amount necessary to accumulate with Lender sufficient funds to pay allsuch Insurance Premiums at least thirty (30) days prior to the expiration ofthe Policies (said amounts in (a) and (b) above hereinafter called the **“Tax and Insurance Reserve Funds”**).****Lenderwill apply the Tax and Insurance Reserve Funds to payments of Taxes andInsurance Premiums required to be made by Borrower pursuant to Section 5.4 andSection 8.1 hereof. In making any disbursement from the Tax and InsuranceReserve Account, Lender may do so according to any bill, statement or estimateprocured from the appropriate public office or tax lien service (with respectto Taxes) or insurer or agent (with respect to Insurance Premiums), without inquiryinto the accuracy of such bill, statement or estimate or into the validity ofany tax, assessment, sale, forfeiture, tax lien or title or claim

 

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thereof. If the amount of the Tax andInsurance Reserve Funds shall exceed the amounts due for Taxes and InsurancePremiums pursuant to Section 5.4 and Section 8.1 hereof, Lender shall, in itssole discretion, return any excess to Borrower or credit such excess againstfuture payments to be made to the Tax and Insurance Reserve Account. Inallocating any such excess, Lender may deal with the person shown on Lender’srecords as being the owner of the Property. Any amount remaining in the Tax andInsurance Reserve Account after the Debt has been paid in full shall bereturned to Borrower or the person shown on Lender’s records as being the ownerof the Property and no other party shall have any right or claim thereto.  If at any time Lender reasonably determinesthat the Tax and Insurance Reserve Funds are not or will not be sufficient topay Taxes and Insurance Premiums by the dates set forth in (a) and (b) above,Lender shall notify Borrower of such determination and Borrower shall pay toLender any amount necessary to make up the deficiency within ten (10) daysafter notice from Lender to Borrower requesting payment thereof.

 

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

 

(a)           No earnings or interest on the ReserveAccounts shall be payable to Borrower. Neither Lender nor any loan servicerthat at any time holds or maintains the Reserve Accounts shall have anyobligation to keep or maintain such Reserve Accounts or any funds deposited thereinin interest-bearing accounts. If Lender or any such loan servicer elects in itssole and absolute discretion to keep or maintain any Reserve Accounts or anyfunds deposited therein in an interest-bearing account (i) the account shall bean Eligible Account, (ii) such funds shall not be invested except in PermittedInvestments, and (iii) all interest earned or accrued thereon shall be for theaccount of and be retained by Lender or such loan servicer.

 

(b)          Borrower grants to Lender a first-priorityperfected security interest in, and assigns and pledges to Lender, each of theReserve Accounts and any and all funds hereafter deposited therein asadditional security for payment of the Debt. Until expended or applied in accordanceherewith, the Reserve Accounts and the Reserve Funds shall constituteadditional security for the Debt. The provisions of this Section 9.9 areintended to give Lender or any subsequent holder of the Loan “control” of theReserve Accounts within the meaning of the UCC.

 

(c)           The Reserve Accounts and any and all ReserveFunds deposited therein shall be subject to the exclusive dominion and controlof Lender, which shall hold the Reserve Accounts and any or all Reserve Fundsnow or hereafter deposited therein subject to the terms and conditions of thisAgreement.  Borrower shall have no rightof withdrawal from the Reserve Accounts or any other right or power with respectto the Reserve Accounts or any or all of the Reserve Funds hereinafterdeposited therein, except as expressly provided in this Agreement.

 

(d)          Lender shall furnish or cause to be furnishedto Borrower, without charge, an annual accounting of each Reserve Account inthe normal format of Lender or its loan servicer, showing credits and debits tosuch Reserve Account and the purpose for which each debit to such ReserveAccount was made.

 

(e)           As long as no Event of Default has occurred,Lender shall make disbursements from the Reserve Accounts in accordance withthis Agreement.  All such disbursementsshall be

 

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deemed to have beenexpressly pre-authorized by Borrower, and shall not be deemed to constitute theexercise by Lender of any remedies against Borrower unless an Event of Defaulthas occurred and is continuing and Lender has expressly stated in writing itsintent to proceed to exercise its remedies as a secured party, pledgee orlienholder 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 Agreement concerningReserve Accounts in no way supersede, limit or waive any other rights orobligations of the parties under any of the Loan Documents or under applicablelaw.

 

(g)           Borrower shall not, without obtaining theprior written consent of Lender, further pledge, assign or grant any securityinterest in the Reserve Accounts or the Reserve Funds deposited therein orpermit any Lien to attach thereto, except for the security interest granted in thisSection 9.9, or any levy to be made thereon, or any UCC Financing Statements,except those naming Lender as the secured party, to be filed with respectthereto.

 

(h)           Borrower will maintain the security interestcreated by this Section 9.9 as a first priority perfected security interest andwill defend the right, title and interest of Lender in and to the ReserveAccounts and the Reserve Funds against the claims and demands of all Personswhomsoever. At any time and from time to time, upon the written request ofLender, and at the sole expense of Borrower, Borrower will promptly and dulyexecute and deliver such further instruments and documents and will take suchfurther actions as Lender reasonably may request for the purpose of obtainingor preserving the full benefits of this Agreement and of the rights and powersherein granted.

 

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**ARTICLE 10****CASH****MANAGEMENT**

 

**Section10.1.****  Cash ManagementAccount**

 

(a)           Borrower acknowledges and confirms thatBorrower has established, and Borrower covenants that it shall maintain anEligible Account into which Borrower shall, and shall cause Manager to, depositor cause to be deposited all Rents and other revenue from the Property duringthe Cash Management Period or upon the occurrence of an Event of Default priorto the commencement of the Cash Management Period pursuant to the terms ofSection 10.2 hereof (such account, the sub-accounts thereof, all funds at anytime on deposit therein and any proceeds, replacements or substitutions of suchaccount or funds therein, are referred to herein as the **“Cash Management****Account”**).

 

(b)           The Cash Management Account shall be in thename of Borrower for the benefit of Lender, provided that Borrower shall be theowner of all funds on deposit in such accounts for federal and applicable stateand local tax purposes (except to the extent Lender retains any interest earnedon the Cash Management Account for its own account following the occurrence andduring the continuance 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 no liability for any lossresulting from the investment of funds in Permitted Investments in accordancewith the terms and conditions of this Agreement.

 

(c)           The Cash Management Account shall be subjectto the exclusive dominion and control of Lender during the Cash ManagementPeriod or the continuance of an Event of Default and, except as otherwiseexpressly provided herein, neither Borrower, Manager nor any other partyclaiming on behalf of, or through, Borrower or Manager, shall have any right ofwithdrawal therefrom or any other right or power with respect thereto.

 

(d)           Borrower agrees to pay the customary fees andexpenses incurred in connection with maintaining the Cash Management Account.

 

(e)           Lender shall be responsible for theperformance only of such duties with respect to the Cash Management Account as arespecifically set forth herein, and no duty shall be implied from any provisionhereof. Lender shall not be under any obligation or duty to perform any actwhich would involve it in expense or liability or to institute or defend anysuit in respect hereof, or to advance any of its own monies. Borrower shallindemnify and hold Lender and its directors, employees, officers and agentsharmless from and against any loss, cost or damage (including, withoutlimitation, reasonable attorneys’ fees and disbursements) incurred by such partiesin connection with the Cash Management Account other than such as result fromthe gross negligence or willful misconduct of Lender or intentionalnonperformance by Lender of its obligations under this Agreement.

 

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

 

(a)           Borrower represents, warrants and covenantsthat:

 

(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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an Event of Default or uponcommencement of the Cash Management Period, Lender or Lender’s agent shall havethe right to deliver the Tenant Direction Letter to American Express and allpayments of Rent and other items payable under the American Express Lease shallthereafter be sent directly to the Cash Management Account;

 

(ii)                                  On the occurrence of an Event of Default orthe commencement of the Cash Management Period Borrower shall, and shall causeManager to, instruct all Persons that maintain open accounts with Borrower orManager with respect to the Property or with whom Borrower or Manager doesbusiness on an “accounts receivable” basis with respect to the Property todeliver all payments due under such accounts to the Cash Management Account.Neither Borrower nor Manager shall direct any such Person to make payments dueunder such accounts in any other manner;

 

(iii)                               All Rents or other income from the Propertyreceived after the commencement of the Cash Management Period or the occurrenceof an Event of Default shall (A) be deemed additional security for payment ofthe Debt and shall be held in trust for the benefit, and as the property, ofLender, (B) not be commingled with any other funds or property of Borrower orManager, and (C) if received by Borrower or Manager notwithstanding thedelivery of the Tenant Direction Letter, be deposited in the Cash ManagementAccount within one (1) Business Day of receipt;

 

(iv)                              Without the prior written consent of Lender,so long as any portion of the Debt remains outstanding, during the CashManagement Period or the continuance of an Event of Default neither Borrowernor Manager shall terminate, amend, revoke or modify the Tenant DirectionLetter in any manner whatsoever or direct or cause American Express to pay anyamount in any manner other than as provided in the Tenant Direction Letter; and

 

(v)                                 So long as any portion of the Debt remainsoutstanding, during the Cash Management Period or during the continuance of anEvent of Default neither Borrower, Manager nor any other Person shall open ormaintain any accounts other than the Cash Management Account into whichrevenues from the ownership and operation of the Property are deposited.

 

(b)                                 Intentionally Omitted.

 

(c)                                  If an Event of Default shall have occurredand be continuing or during a Cash Management Period, on each Scheduled PaymentDate (and if such day is not a Business Day, then the immediately preceding daywhich is a Business Day) commencing the month immediately following the monthduring which the Cash Management Period commences, Borrower hereby irrevocablyauthorizes Lender to withdraw or allocate to the sub-accounts of the CashManagement Account, as the case may be, amounts received in the Cash ManagementAccount, in each case to the extent that sufficient funds 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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Account shall be allocatedto the Tax and Insurance Reserve Account to be held and disbursed in accordancewith Section 9.2;

 

(ii)                                  funds sufficient to pay the Monthly PaymentAmount shall be withdrawn and paid to Lender;

 

(iii)                               funds sufficient to pay any interest accruingat the Default Rate, late payment charges, if any, and any other sums due andpayable to Lender under any of the Loan Documents, shall be withdrawn and paidto Lender and applied against such items;

 

(iv)                              funds sufficient to pay Operating Expenses (tothe extent actually incurred) for the following month shall be allocated to theOperating Expense Reserve Account to be held and disbursed to pay OperatingExpenses;

 

(v)                                 funds in an amount equal to the balance (ifany) remaining on deposit in the Cash Management Account after the foregoingwithdrawals and allocations shall be withdrawn and paid to Lender to be appliedto the principal amount of the Loan until the principal amount of the Loan ispaid 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 ondeposit in the Cash Management Account is insufficient to make all of thewithdrawals and allocations described in Section 10.2(c)(i) through (v) above,Borrower shall deposit such deficiency into the Cash Management Account within five(5) days (provided that such five day period shall not constitute a graceperiod for any default or Event of Default under this Agreement or any otherLoan Document based on a failure to satisfy any monetary obligation provided inany 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 asstated herein shall be in addition to all other rights and remedies provided toLender under this Agreement, the Note, the Mortgage and the other LoanDocuments.

 

**Section 10.3****   SecurityInterest**

 

(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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interest created by this Section 10.3(a) as afirst priority perfected security interest and will defend the right, title andinterest of Lender in and to each of the Accounts and the Account Collateralagainst the claims and demands of all Persons whomsoever.

 

(b)                                 Borrower authorizes Lender to file any financingstatement or statements required by Lender to establish or maintain thevalidity, perfection and priority of the security interest granted herein inconnection with the Cash Management Account.  Borrower agrees that at any time and from timeto time, at the expense of Borrower, Borrower will promptly and duly executeand deliver all further instruments and documents, and take all further action,that may be necessary or desirable, or that Lender may reasonably request, inorder to perfect and protect any security interest granted or purported to begranted hereby (including, without limitation, any security interest in and toany Permitted Investments) or to enable Lender to exercise and enforce itsrights 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 limitingany other provisions hereof, each of the remedial actions described in theimmediately preceding sentence shall be deemed to be a commercially reasonableexercise of Lender’s rights and remedies as a secured party with respect to theAccounts and the Account Collateral and shall not in any event be deemed toconstitute a setoff or a foreclosure of a statutory banker’s lien.  Nothing in this Agreement shall obligate Lenderto apply all or any portion of the Accounts and the Account Collateral toeffect a cure of any Event of Default, or to pay the Debt, or in any specificorder of priority. The exercise of any or all of Lender’s rights and remediesunder this Agreement or under any of the other Loan Documents shall not in anyway prejudice or affect Lender’s right to initiate and complete a foreclosure under the Mortgage.

 

**ARTICLE 11**

**EVENTS****OF DEFAULT; REMEDIES**

 

**Section 11.1.**** Event ofDefault**

 

The occurrence of any one or more of the following events shallconstitute 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 a self-insureror if the rating of American express issued by the Rating Agencies falls belowthe Trigger Rating, if (i) the Policies are not kept in full force and effect,or (ii) the Accord 28 (or similar) certificate is not delivered to Lender inaccordance 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 the Loanor 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 any mechanic’s,materialman’s or other Lien other than a Lien for any Taxes or Other Chargesnot then due and payable and the Lien shall remain undischarged of record (bypayment, 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;

 

(l)                                     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 Default described in Section 11.1(f) above) and at anytime thereafter Lender may, in addition to any other rights or remediesavailable to it pursuant to this Agreement and the other Loan Documents or atlaw or in equity, take such action, without notice or demand, that Lender deemsadvisable to protect and enforce its rights against Borrower and in theProperty, including, without limitation, declaring the Debt to be immediatelydue and payable, and Lender may enforce or avail itself of any or all rights orremedies provided in the Loan Documents against Borrower and the Property.

 

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including, without limitation, all rights orremedies available at law or in equity; and upon any Event of Default describedin Section 11.1(f) above, the Debt and all other obligations of Borrowerhereunder and under the other Loan Documents shall immediately andautomatically become due and payable, without notice or demand, and Borrowerhereby expressly waives any such notice or demand, anything contained herein orin any other Loan Document to the contrary notwithstanding.

 

(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**

 

Borrower represents and warrants, except as disclosed in anEnvironmental Report of the Property and information that Borrower knows that:(a) there are no Hazardous Materials or underground storage tanks in, on, orunder the Property, except those that are both (i) in compliance withEnvironmental Laws and with permits issued pursuant thereto (if such permitsare required), if any, and (ii) either (A) in the case of Hazardous Materials,in amounts not in excess of that necessary to operate the Property for thepurposes set forth herein or (B) fully disclosed to and approved by Lender inwriting pursuant to an Environmental Report; (b) there are no past, present orthreatened Releases of Hazardous Materials in violation of any EnvironmentalLaw or which would require remediation by a Governmental Authority in, on,under or from the Property except as described in the Environmental Report; (c)there is no threat of any Release of Hazardous Materials migrating to theProperty except as described in the Environmental Report; (d) there is no pastor present non-compliance with Environmental Laws, or with permits issuedpursuant thereto, in connection with the Property except as described in theEnvironmental Report; (c) 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.**** EnvironmentalCovenants**

 

Borrower covenants and agrees that so long as Borrower owns, managesand is in possession of the operation of the Property: (a) all uses andoperations on or of the Property, whether by Borrower or any other Person,shall be in compliance with all Environmental Laws and permits issued pursuantthereto; (b) there shall be no Releases of Hazardous Materials in, on, under orfrom the Property; (c) there shall be no Hazardous Materials in, on, or underthe Property, except those that are both (i) in compliance with allEnvironmental Laws and with permits issued pursuant thereto, if and to theextent required, and (ii) (A) in amounts not in excess of that necessary tooperate the Property for the purposes set forth herein or (B) fully disclosedto and approved by Lender in writing or (C) with respect to Mold, not in acondition, location, or of a type which may pose a risk to human health orsafety or the environment or which may result in damage to or would adverselyaffect or impair the value or marketability of the Property; (d) Borrower shallkeep the Property free and clear of all Environmental Liens; (e) Borrowershall, at its sole cost and expense, fully and expeditiously cooperate in allactivities pursuant to Section 12.4 below, including but not limited toproviding all relevant information and making knowledgeable persons availablefor interviews; (f) Borrower shall, at its sole cost and expense, perform anyenvironmental site assessment or other investigation of environmentalconditions in connection with the Property, pursuant to any reasonable writtenrequest of Lender, upon Lender’s reasonable belief that the Property is not infull compliance with all Environmental Laws, and share with Lender the reportsand other results thereof, and Lender and other Indemnified Parties shall beentitled to rely on such reports and other results thereof; (g) Borrower shallkeep the Property free of Mold; and (h) Borrower shall, at its sole cost andexpense, comply with all reasonable written requests of Lender to (i)reasonably effectuate remediation of any Hazardous Materials in, on, under orfrom the Property; and (ii) comply with any Environmental Law; (i) Borrowershall not allow any tenant or other user of the Property to violate anyEnvironmental Law; and (j) Borrower shall immediately notify Lender in writingafter it has become aware of (A) any presence or Release or threatened Releaseof Hazardous Materials in, on, under, from or migrating towards the Property;(B) any non-compliance with any Environmental Laws related in any way to theProperty; (C) any actual or potential Environmental Lien against the Property;(D) any required or proposed remediation of environmental conditions relating tothe Property; and (E) any written or oral notice or other communication ofwhich Borrower becomes aware from any source whatsoever (including but notlimited to a Governmental Authority) relating in any way to HazardousMaterials. Any failure of Borrower to perform its obligations pursuant to thisSection 12.2 shall constitute bad faith waste with respect to the Property.

 

**Section 12.3.****  Lender’sRights**

 

Lender and any other Person designated by Lender, including but notlimited to any representative of a Governmental Authority, and anyenvironmental consultant, and any receiver appointed by any court of competentjurisdiction, shall have the right, but not the obligation, to enter upon theProperty at all reasonable times to assess any and all aspects of theenvironmental condition of the Property and its use, including but not limitedto conducting any environmental assessment or audit (the scope of which shallbe determined in Lender’s sole discretion) and taking samples of soil,groundwater or other water, air, or building materials, and conducting

 

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other invasive testing. Borrower shallcooperate with and provide access to Lender and any such person or entitydesignated by Lender.

 

**Section 12.4.****  Operationsand Maintenance Programs**

 

If recommended by the Environmental Report or any other environmentalassessment or audit of the Property, Borrower shall establish and comply withan operations 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 futurebe detected 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.**** EnvironmentalDefinitions**

 

**“Environmental Law”**means any present and future federal, stateand local laws, statutes, ordinances, rules, regulations, standards, policiesand other government directives or requirements, as well as common law,including but not limited to the Comprehensive Environmental Response,Compensation and Liability Act and the Resource Conservation and Recovery Act,that apply to Borrower or the Property and relate to Hazardous Materials orprotection of human health or the environment. **“Environmental Liens”**means all Liens and other encumbrancesimposed pursuant to any Environmental Law, whether due to any act or omissionof 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 any substance;any substance the presence of which on the Property is prohibited by anyfederal, 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 Hazardous Materials.

 

**ARTICLE 13**

**SECONDARY MARKET**

 

**Section 13.1.****  Transfer ofLoan**

 

Lender may, at any time, sell, transfer or assign the Loan Documents,or grant participations therein (**“Participations”**)****or syndicate the Loan (**“Syndication”**)****or issue mortgage pass-throughcertificates or other securities evidencing a beneficial interest in a rated orunrated public offering or private placement (**“Securities”**)****(a Syndication or the issuance ofParticipations and/or Securities, a **“Securitization”**)**.**

 

**Section 13.2.****  Delegationof Servicing**

 

At the option of Lender, the Loan may be serviced by a servicer/trusteeselected by Lender and Lender may delegate all or any portion of itsresponsibilities under this Agreement and the other Loan Documents to suchservicer/trustee pursuant to a servicing agreement between Lender and suchservicer/trustee.

 

**Section 13.3.****  Disseminationof Information**

 

Lender may forward to each purchaser, transferee, assignee, or servicerof, and each participant, or investor in, the Loan, or any Participationsand/or Securities or any of their respective successors (collectively, the **“Investor”**)****or any Rating Agency rating the Loan, or anyParticipations and/or Securities, each prospective Investor, and anyorganization maintaining databases on the underwriting and performance ofcommercial mortgage loans, all documents and information which Lender now hasor may hereafter acquire relating to the Debt and to Borrower, any managingmember or general partner thereof, Borrower Principal, and the Property,including financial statements, whether furnished by Borrower or otherwise, asLender determines necessary or desirable. Borrower irrevocably waives any andall rights it may have under applicable Legal Requirements to prohibit suchdisclosure, including but not limited to any right of privacy.

 

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

 

Borrower and Borrower Principal agree to cooperate with Lender inconnection with any sale or transfer of the Loan or any Participation and/orSecurities created pursuant to this Article 13, including, without limitation,(a) the delivery of an estoppel certificate required in accordance with Section5.12(a) and such other documents as may be reasonably requested by Lender, (b)the execution of such amendments to the Loan Documents as may be requested bythe holder 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 abifurcation of the Loan which may result in varying fixed interest rates andamortization schedules, but which shall

 

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have the same initial weighted average couponof the original Note, or (ii) in the reasonable judgment of Borrower, modify oramend any other material economic term of the Loan, or (iii) in the reasonablejudgment of Borrower, materially increase Borrower’s obligations andliabilities under the Loan Documents, and (c) make changes to theorganizational documents of Borrower and its principals and/or use its bestefforts to cause changes to the legal opinions delivered by Borrower inconnection with the Loan, provided, that such changes shall not result in amaterial adverse economic effect to Borrower. Borrower shall also furnish andBorrower and Borrower Principal consent to Lender furnishing to such Investorsor such prospective Investors or such Rating Agency any and all informationconcerning the Property, the American Express Lease, the financial condition ofBorrower or 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 nor Borrower Principal shallbe responsible for any costs incurred by Lender in connection with a Securitization.

 

**ARTICLE 14**

**INDEMNIFICATIONS**

 

**Section 14.1.****  GeneralIndemnification**

 

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, that Borrower shall not have any obligation to Lender hereunder to theextent that such 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.****  Mortgageand Intangible Tax Indemnification**

 

Borrower shall, at its sole cost and expense, protect, defend,indemnify, release and hold harmless the Indemnified Parties from and againstany and all Losses imposed upon or incurred by or asserted against anyIndemnified Parties and directly or indirectly arising out of or in any

 

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way relating to any tax on the making and/orrecording of the Mortgage, the Note or any of the other Loan Documents, butexcluding any income, franchise or other similar taxes.

 

**Section 14.3.**** ERISAIndemnification**

 

Borrower shall, at its sole cost and expense, protect, defend,indemnify, release and hold harmless the Indemnified Parties from and againstany and all Losses (including, without limitation, reasonable attorneys’ feesand costs incurred in the investigation, defense, and settlement of Lossesincurred in correcting any prohibited transaction or in the sale of aprohibited loan, and in obtaining any individual prohibited transactionexemption under ERISA that may be required, in Lender’s sole discretion) thatLender may incur, directly or indirectly, as a result of a default underSection 4.9 or Section 5.18 of this Agreement.

 

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

 

The obligations and liabilities of Borrower and Borrower Principalunder this Article 14 shall fully survive indefinitely notwithstanding anytermination, satisfaction, assignment, entry of a judgment of foreclosure,exercise of any power of sale, or delivery of a deed in lieu of foreclosure ofthe 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 ordemand any deficiency judgment against Borrower or Borrower Principal in anysuch action or proceeding, under or by reason of or under or in connection withthis Agreement, the Note, the Mortgage or the other Loan Documents.  The provisions of this Section 15.1 shall not,however, (i) constitute a waiver, release or impairment of any obligationevidenced or secured by this Agreement, the Note, the Mortgage or the otherLoan Documents; (ii) impair the right of Lender to name Borrower or BorrowerPrincipal as a party defendant in any action or suit, for judicial foreclosureand sale under this Agreement and the Mortgage; (iii) affect the validity orenforceability of any indemnity (including, without limitation, those containedin Section 12.6

 

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and Article 14 of this Agreement),environmental indemnity, guaranty, master lease or similar instrument made inconnection with this Agreement, the Note, the Mortgage and the other LoanDocuments; (iv) impair the right of Lender to obtain the appointment of areceiver; (v) impair the enforcement of the assignment of leases provisionscontained in the Mortgage; or (vi) impair the right of Lender to obtain adeficiency judgment or other judgment on the Note against Borrower or BorrowerPrincipal if necessary to obtain any Insurance Proceeds or Awards to whichLender would otherwise be entitled under this Agreement; provided however,Lender shall only enforce such judgment to the extent of the Insurance Proceedsand/or Awards.

 

(b)                                 Notwithstanding the provisions of thisSection 15.1 to the contrary, Borrower and Borrower Principal shall bepersonally liable to Lender 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 misappropriationof Rents received by Borrower after the occurrence of an Event of Default;

 

(iii)                               Borrower’s misapplication or misappropriationof tenant security deposits or Rents collected in advance;

 

(iv)                              the misapplication or the misappropriation ofInsurance Proceeds or Awards;

 

(v)                                 Borrower’s failure to pay Taxes, OtherCharges (except to the extent that sums sufficient to pay such amounts havebeen deposited in escrow with Lender pursuant to the terms hereof and thereexists no impediment to Lender’s utilization thereof), charges for labor ormaterials or other charges that can create liens on the Property beyond anyapplicable notice and cure periods specified herein;

 

(vi)                              Borrower’s failure to return or to reimburse Lender forall Personal Property taken from the Property by or on behalf of Borrower andnot replaced with Personal Property of the same utility and of the same orgreater value;

 

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

 

(viii)                        Borrower’s failure following any Event ofDefault to deliver to Lender upon demand all Rents and books and recordsrelating to the Property.

 

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

 

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Principal on a joint and several basis in theevent (i) of a breach by Borrower or Borrower Principal of any of the covenantsset forth in Article 6 hereof, to the extent that such breach is (A) materialand (B) is not cured within fifteen (15) days of the earlier to occur of noticefrom Lender or Borrower’s knowledge of such breach, (ii) of a breach of any ofthe covenants set forth in Article 7 hereof, (iii) the Property or any partthereof shall become an asset in a voluntary bankruptcy or insolvencyproceeding of Borrower, (iv) Borrower, Borrower Principal or any Affiliate,officer, director, or representative which controls, directly or indirectly,Borrower or Borrower Principal files, or joins in the filing of, an involuntarypetition against Borrower under any Creditors Rights Laws, or solicits orcauses to be solicited petitioning creditors for any involuntary petitionagainst Borrower from any Person; (v) Borrower files an answer consenting to orotherwise acquiescing in or joining in any involuntary petition filed againstit, by any other Person under any Creditors Rights Laws, or solicits or causesto be solicited petitioning creditors for any involuntary petition from anyPerson; or (vi) any Affiliate, officer, director, or representative whichcontrols Borrower consents to or acquiesces in or joins in an application forthe appointment of a custodian, receiver, trustee, or examiner for Borrower orany 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 anyother provision of the U.S. Bankruptcy Code to file a claim for the full amountof the indebtedness secured by the Mortgage or to require mat all collateralshall continue to secure all of the indebtedness owing to Lender in accordancewith this Agreement, the Note, the Mortgage or the other Loan Documents.

 

**ARTICLE 16**

**NOTICES**

 

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

 

All notices, consents, approvals and requests required or permittedhereunder or under any other Loan Document shall be given in writing and shallbe effective for all purposes if hand delivered or sent by (a) certified orregistered United States mail, postage prepaid, return receipt requested, (b)expedited prepaid overnight delivery service, either commercial or UnitedStates Postal Service, with proof of attempted delivery, or by (c) telecopier(with answer back acknowledged provided an additional notice is given pursuantto subsection (b) above), addressed as follows (or at such other address andPerson as shall be designated from time to time by any party hereto, as thecase may be, in a written notice to the other parties hereto in the mannerprovided for in this Section):

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

 

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| If to Borrower:           | Inland Western Phoenix 31st  Avenue, L.L.C.c/o Inland Real Estate  Investment Corporation2901 Butterfield RoadOak Brook, Illinois 60523Attention: Roberta Matlin, Vice  PresidentFacsimile 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                                                               |

 

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

 

**ARTICLE****17**

**FURTHER****ASSURANCES**

 

**Section 17.1.****  ReplacementDocuments**

 

Upon receipt of an affidavit of an officer of Lender as to the loss,theft, destruction or mutilation of the Note or any other Loan Document whichis not of 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.****  Recordingof Mortgage, etc.**

 

Borrower forthwith upon the execution and delivery of the Mortgage andthereafter, from time to time, will cause the Mortgage and any of the otherLoan Documents creating a lien or security interest or evidencing the lienhereof upon the Property and each instrument of further

 

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assurance to be filed, registered or recordedin such manner and in such places as may be required by any present or futurelaw in order to publish notice of and fully to protect and perfect the lien orsecurity interest hereof upon, and the interest of Lender in, the Property.Borrower will pay all taxes, filing, registration or recording fees, and allexpenses incident to the preparation, execution, acknowledgment and/orrecording of the Note, the Mortgage, the other Loan Documents, any note, deedof trust or mortgage supplemental hereto, any security instrument with respectto the Property and any instrument of further assurance, and any modificationor amendment of the foregoing documents, and all federal, state, county andmunicipal taxes, duties, imposts, assessments and charges arising out of or inconnection with the execution and delivery of the Mortgage, any deed of trustor mortgage supplemental hereto, any security instrument with respect to theProperty or any instrument of further assurance, and any modification oramendment of the foregoing documents, except where prohibited by law so to do.

 

**Section 17.3.****  FurtherActs, Etc.**

 

Borrower will, at the costof Borrower (except with respect to costs incurred by Lender, for which Lendershall be responsible), do, execute, acknowledge and deliver all and. everyfurther acts, deeds, conveyances, deeds of trust, mortgages, assignments,security agreements, control agreements, notices of assignments, transfers andassurances as Lender shall, from time to time, reasonably require, for thebetter assuring, conveying, assigning, transferring, and confirming unto Lenderthe property and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed,confirmed, pledged, assigned, warranted and transferred or intended now orhereafter so to be, or which Borrower may be or may hereafter become bound toconvey or assign to Lender, or for carrying out the intention or facilitatingthe performance of the terms of this Agreement or for filing, registering orrecording the Mortgage, or for complying with all Legal Requirements. Borrower,on demand, will execute and deliver, and in the event it shall fail to soexecute and deliver, hereby authorizes Lender to execute in the name ofBorrower or without the signature of Borrower to the extent Lender may lawfullydo so, one or more financing statements and financing statement amendments toevidence more effectively, perfect and maintain the priority of the securityinterest of Lender in the Property. Borrower grants to Lender an irrevocablepower of attorney coupled with an interest for the purpose of exercising andperfecting any and all rights and remedies available to Lender at law and inequity, including without limitation, such rights and remedies available toLender pursuant to this Section 17.3.

 

**Section****17.4.**  **Changes in Tax, Debt, Credit and 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 one hundredeighty (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 by law, Lender shall have the option, bywritten notice of not less than one hundred eighty (80) days, to declare theDebt immediately due and payable.

 

If at any time the United States of America, any State thereof or anysubdivision of any such State shall require revenue or other stamps to beaffixed to the Note, the Mortgage, or any of the other Loan Documents or imposeany other tax or charge on the same, Borrower will pay for the same, withinterest and penalties thereon, if any.

 

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

 

Borrower covenants and agrees to pay or, if Borrower fails to pay, toreimburse, Lender upon receipt of written notice from Lender for all reasonablecosts and expenses (including reasonable, actual attorneys’ fees anddisbursements and the allocated costs of internal legal services and all actualdisbursements of internal counsel) reasonably incurred by Lender in accordancewith this Agreement in connection with (a) the preparation, negotiation,execution and delivery of this Agreement and the other Loan Documents and theconsummation of the transactions contemplated hereby and thereby and all thecosts of furnishing all opinions by counsel for Borrower (including withoutlimitation any opinions requested by Lender as to any legal matters arisingunder this Agreement 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 thisAgreement, the other Loan Documents or with respect to the Property or inconnection with any refinancing or restructuring of the credit arrangementsprovided under this Agreement in the nature of a “work-out” or of anyinsolvency or bankruptcy proceedings; provided, however, that Borrower shallnot be liable for the payment of any such costs and expenses to the extent thesame arise by reason of the gross negligence, illegal acts, fraud or willfulmisconduct of Lender.

 

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**ARTICLE 18**

**WAIVERS**

 

**Section 18.1.****  RemediesCumulative; Waivers**

 

The rights, powers and remedies of Lender under this Agreement shall becumulative and not exclusive of any other right, power or remedy which Lendermay have against Borrower or Borrower Principal pursuant to this Agreement orthe other Loan Documents, or existing at law or in equity or otherwise. Lender’srights, powers and remedies may be pursued singularly, concurrently orotherwise, at such time and in such order as Lender may determine in Lender’ssole discretion. 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 in Writing**

 

No modification, amendment, extension, discharge, termination or waiverof any provision of this Agreement, or of the Note, or of any other LoanDocument, nor consent to any departure by Borrower therefrom, shall in anyevent be effective unless the same shall be in a writing signed by the partyagainst whom enforcement is sought, and then such waiver or consent shall beeffective only in the specific instance, and for the purpose, for which given.Except as otherwise expressly provided herein, no notice to, or demand onBorrower, shall entitle Borrower to any other or future notice or demand in thesame, similar or other circumstances.

 

**Section 18.3.****  Delay Not aWaiver**

 

Neither any failure nor any delay on the part of Lender in insistingupon strict performance of any term., condition, covenant or agreement, orexercising any right, power, remedy or privilege hereunder, or under the Noteor under any other Loan Document, or any other instrument given as security therefor,shall operate as or constitute a waiver thereof, nor shall a single or 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 byJury**

 

**BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBYAGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, ANDWAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALLNOW OR HEREAFTER EXIST WITH**

 

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**REGARD TOTHE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING INCONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLYAND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND LENDER, AND IS INTENDED TOENCOMPASS INDIVIDUALLY EACH****INSTANCE AND****EACH****ISSUEAS****TOWHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER,BORROWER PRINCIPAL AND BORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THISPARAGRAPH****INANY****PROCEEDINGAS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER, BORROWER PRINCIPAL ANDLENDER.**

 

**Section 18.5.**** Waiver ofNotice**

 

Borrower shall not be entitled to any notices of any nature whatsoeverfrom Lender except with respect to matters for which this Agreement or theother Loan Documents specifically and expressly provide for the giving ofnotice by Lender to Borrower and except with respect to matters for whichBorrower is not, pursuant to applicable Legal Requirements, permitted to waivethe giving of notice. Borrower hereby expressly waives the right to receive anynotice from Lender with respect to any matter for which this Agreement or theother Loan Documents do not specifically and expressly provide for the givingof notice by Lender to Borrower.

 

**Section 18.6.**** Remedies ofBorrower**

 

In the event that a claim or adjudication is made that Lender or its agentshave acted unreasonably or unreasonably delayed acting in any case where by lawor under this Agreement or the other Loan Documents, Lender or such agent, asthe case may be, has an obligation to act reasonably or promptly, Borroweragrees that neither Lender nor its agents shall be liable for any monetarydamages, and Borrower’s sole remedies shall be limited to commencing an actionseeking injunctive relief or declaratory judgment. The parties hereto agreethat any action or proceeding to determine whether Lender has acted reasonablyshall be determined by an action seeking declaratory judgment. Lender agreesthat, in such event, it shall cooperate in expediting any action seekinginjunctive relief or declaratory judgment.

 

**Section 18.7.****  Waiver of Marshallingof Assets**

 

To the fullest extent permitted by law, Borrower, for itself and itssuccessors and assigns, waives all rights to a marshalling of the assets ofBorrower, Borrower’s partners and others with interests in Borrower, and of theProperty, and agrees not to assert any right under any laws pertaining to themarshalling of assets, the sale in inverse order of alienation, homesteadexemption, the administration of estates of decedents, or any other matterswhatsoever to defeat, reduce or affect the right of Lender under the LoanDocuments to a sale of the Property for the collection of the Debt without anyprior or different resort for collection or of the right of Lender to thepayment of the Debt out of the net proceeds of the Property in preference toevery other claimant whatsoever.

 

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**Section 18.8.**** Waiver ofStatute of Limitations**

 

Borrower hereby expressly waives and releases, to the fullest extentpermitted by law, the pleading of any statute of limitations as a defense topayment of the Debt or performance of its Other Obligations.

 

**Section 18.9.**** Waiver ofCounterclaim**

 

Borrower hereby waives the right to assert a counterclaim, other than acompulsory counterclaim, in any action or proceeding brought against it byLender or its agents.

 

**ARTICLE 19**

**GOVERNING LAW**

 

**Section 19.1.****  Choice ofLaw**

 

This Agreement shall be deemed to be a contract entered into pursuantto the laws of the State and shall in all respects be governed, construed, appliedand enforced in accordance with the laws of the State and applicable laws ofthe United States of America, provided, however, that with respect to thesecurity interest in each of the Reserve Accounts, and the Cash ManagementAccount, the laws of the state where each such account is located shall apply.

 

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

 

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

 

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

 

Lender shall have the continuing and exclusive right to apply orreverse and reapply any and all payments by Borrower to any portion of theobligations of Borrower hereunder. To the extent Borrower makes a payment orpayments to Lender, which payment or proceeds or any part thereof aresubsequently invalidated, declared to be fraudulent or preferential, set asideor required to be repaid to a trustee, receiver or any other party under anyCreditors Rights Laws, state or federal law, common law or equitable cause,then, to the extent of such payment or proceeds received, the obligationshereunder or part thereof intended to be satisfied shall be revived andcontinue in full force and effect, as if such payment or proceeds had not beenreceived by Lender.

 

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**ARTICLE 20**

**MISCELLANEOUS**

 

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

 

This Agreement and all covenants, agreements, representations andwarranties made herein and in the certificates delivered pursuant hereto shallsurvive the making by Lender of the Loan and the execution and delivery toLender of the Note, and shall continue in full force and effect so long as allor any of the Debt is outstanding and unpaid unless a longer period isexpressly set forth herein or in the other Loan Documents. Whenever in thisAgreement any of the parties hereto is referred to, such reference shall bedeemed to include the legal representatives, successors and assigns of suchparty. All covenants, promises and agreements in this Agreement, by or onbehalf of Borrower, shall inure to the benefit of the legal representatives,successors and assigns of Lender.

 

**Section 20.2.****  Lender’sDiscretion**

 

Whenever pursuant to this Agreement, Lender exercises any right givento it to approve or disapprove, or any arrangement or term is to besatisfactory to Lender, the decision of Lender to approve or disapprove or todecide whether arrangements or terms are satisfactory or not satisfactory shall(except as is otherwise specifically herein provided) be in the sole discretionof Lender and shall be final and conclusive.

 

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

 

The Article 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 ofEnforcement**

 

In the event (a) that the Mortgage is foreclosed in whole or in part,(b) of the bankruptcy, insolvency, rehabilitation or other similar proceedingin respect of Borrower or any of its constituent Persons or an assignment byBorrower or any of its constituent Persons for the benefit of its creditors, or(c) Lender exercises any of its other remedies under this Agreement or any ofthe other Loan Documents, Borrower shall be chargeable with and agrees to payall costs of collection and defense, including attorneys’ fees and costs,incurred by Lender or Borrower in connection therewith and in connection withany appellate proceeding or post-judgment action involved therein, togetherwith all required service or use taxes.

 

**Section 20.5.****  SchedulesIncorporated**

 

The Schedules annexed hereto arc hereby incorporated herein as a partof this Agreement with the same effect as if set forth in the body hereof.

 

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**Section 20.6.****  Offsets.Counterclaims and Defenses**

 

Any assignee of Lender’s interest in and to this Agreement, the Noteand the other Loan Documents shall take the same free and clear of all offsets,counterclaims or defenses which arc unrelated to such documents which Borrowermay otherwise have against any assignor of such documents, and no suchunrelated counterclaim or defense shall be interposed or asserted by Borrowerin any action or proceeding brought by any such assignee upon such documentsand any such right to interpose or assert any such unrelated offset,counterclaim or defense in any such action or proceeding is hereby expresslywaived by Borrower.

 

**Section 20.7.****  No JointVenture 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.  Nothingherein or therein is intended to create a joint venture, partnership,tenancy-in-common, or joint tenancy relationship between Borrower and Lendernor to grant Lender any interest in the Property other than that 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 such agreements,contracts, certificates, instruments, franchises, permits, trademarks, licensesand 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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effectiveness of same, and such acceptance orapproval thereof shall not constitute any warranty or affirmation with respectthereto 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 Agreement withoutany 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 andrepresentations as set forth in Article 4 of this Agreement.

 

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

 

All news releases, publicity or advertising by Borrower or itsAffiliates through any media intended to reach the general public which refersto the Loan, Lender, Banc of America Securities LLC, or any of their Affiliatesshall be subject to the prior written approval of Lender, not to beunreasonably withheld. Lender shall be permitted to make any news, releases,publicity or advertising by Lender or its Affiliates through any media intendedto reach the general public which refers to the Loan, the Property, Borrower,Borrower Principal and their respective Affiliates without the approval ofBorrower or any such Persons. Borrower also agrees that Lender may share anyinformation pertaining to the Loan with Bank of America Corporation, includingits bank subsidiaries, Banc of America Securities LLC and any other Affiliatesof the foregoing, in connection with the sale or transfer of the Loan or anyParticipations and/or Securities created.

 

**Section 20.9.****  Conflict;Construction of Documents; Reliance**

 

In the event of any conflict between the provisions of this Agreementand any of the other Loan Documents, the provisions of this Agreement shallcontrol. The parties hereto acknowledge that they were represented by competentcounsel in connection with the negotiation, drafting and execution of the LoanDocuments and that such Loan Documents shall not be subject to the principle ofconstruing their meaning against the party which drafted same. Borrower acknowledgesthat, with respect to the Loan, Borrower shall rely solely on its own judgmentand advisors in entering into the Loan without relying in any manner on anystatements, 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****.  EntireAgreement**

 

This Agreement and the other Loan Documents contain the entireagreement of the parties hereto and thereto in respect of the transactionscontemplated hereby and thereby, and all prior agreements among or between suchparties, whether oral or written between Borrower and Lender are superseded bythe terms of this Agreement and the other Loan Documents.

 

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

 
|   | BORROWER:                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                             |
|   |                                                                                                                                             |
|   | INLAND WESTERN PHOENIX  31ST 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. |
|        |                                                                                                                                                  |  |  |  |  |  |

 

[ADDITIONALSIGNATURE 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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EXHIBITABorrower Equity Ownership Structure

 

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EXHIBITB

 

Tenant Direction Letter

 

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