**Exhibit 10.464**

 

**LOAN AGREEMENT**

 

 

Dated as of December 16, 2004

 

 

Between

 

 

INLAND WESTERN DE PERE, L.L.C.,

 

 

as Borrower

 

 

and

 

 

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

as Lender

 

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TABLEOF CONTENTS

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

 

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| SECTION 4.37.  INTELLECTUAL PROPERTY                          |   |
|---------------------------------------------------------------|--------|
| SECTION  4.38. COMPLIANCE WITH ANTI-TERRORISM LAWS            |   |
| SECTION 4.39. PATRIOT ACT                                     |   |
| SECTION 4.40. SURVIVAL                                        |   |
|                                                          |   |
| **ARTICLE 5 BORROWER  COVENANTS**                             |   |
|                                                          |   |
| SECTION 5.1. EXISTENCE; COMPLIANCE WITH  LEGAL REQUIREMENTS   |   |
| SECTION 5.2. MAINTENANCE AND USE OF  PROPERTY                 |   |
| SECTION 5.3. WASTE                                            |   |
| SECTION 5.4. TAXES AND OTHER CHARGES                          |   |
| SECTION 5.5. LITIGATION                                       |   |
| SECTION 5.6. ACCESS TO PROPERTY                               |   |
| SECTION 5.7. NOTICE OF DEFAULT                                |   |
| SECTION 5.8. COOPERATE IN LEGAL PROCEEDINGS                   |   |
| SECTION 5.9. PERFORMANCE BY BORROWER                          |   |
| SECTION 5.10. AWARDS; INSURANCE PROCEEDS                      |   |
| SECTION 5.11. FINANCIAL REPORTING                             |   |
| SECTION 5.12. ESTOPPEL STATEMENT                              |   |
| SECTION 5.13. LEASING MATTERS                                 |   |
| SECTION 5.14. PROPERTY MANAGEMENT                             |   |
| SECTION 5.15. LIENS                                           |   |
| SECTION 5.16. DEBT CANCELLATION                               |   |
| SECTION  5.17. ZONING                                         |   |
| SECTION  5.18. ER1SA                                          |   |
| 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. INTENTIONALLY OMITTED                            |   |
|                                                          |   |
| **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                                              |   |
|                                                                         |   |
| **ARTICLE 21 OUT PARCEL  RELEASE**                                           |   |

 

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LOANAGREEMENT

 

THISLOAN AGREEMENT, dated as of December 16, 2004 (as amended, restated, replaced,supplemented or otherwise modified from time to time, this **“Agreement”**),****between BANK OFAMERICA, N.A., a national banking association, having an address at Bank ofAmerica Corporate Center, 214 North Tryon Street, Charlotte, North Carolina28255 (together with its successors and/or assigns, **“Lender”)**and INLAND WESTERN DE PERE, L.L.C., a Delawarelimited liability company having an address at c/o Inland Real EstateInvestment Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523(together with its successors and/or assigns, **“Borrower”).**

 

**RECITALS:**

 

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

 

Lenderis willing to make the Loan to Borrower, subject to and in accordance with theterms of this Agreement and the other Loan Documents (defined below).

 

Inconsideration 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 1DEFINITIONS; PRINCIPLES OF CONSTRUCTION**

 

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

 

Forall purposes of this Agreement, except as otherwise expressly required orunless 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, the Tax and Insurance ReserveAccounts, if any, and any other account or sub-account established by thisAgreement, the Mortgage, or the other Loan Documents.

 

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

 

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

 

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**“Affiliate”**shallmean, as to any Person, any other Person that, directly or indirectly, is incontrol of, is controlled by or is under common control with such Person or isa director or officer of such Person or of an Affiliate of such Person.

 

**“Affiliated Loans”**shallmean a loan made by Lender to a parent, subsidiary or such other entityaffiliated with Borrower or Borrower Principal.

 

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

 

**“ALTA”**shallmean American Land Title Association, or any successorthereto.

 

**“American Express”**shallmean IDS Property Casualty Insurance Company, a Wisconsin corporation.

 

**“American Express Lease”**shallmean that certain Lease Agreement dated as of December 16, 2004 betweenBorrower, as landlord, and American Express, as tenant, with respect to theProperty.

 

**“American Express Lease Default”**shallmean (i) a default, after the expiration of any applicable notice or cureperiods, under the American Express Lease or (ii) the cancellation, terminationor surrender of the American Express Lease.

 

**“Assignment of Management Agreement”**shallmean that certain Assignment and Subordination of Management Agreement datedthe date hereof among Lender, Borrower and Manager, as the same may be amended,restated, replaced, supplemented or otherwise modified from time to time.

 

**“Award”**shallmean any compensation paid by any Governmental Authority in connection with aCondemnation in respect of all or any part of the Property.

 

**“Borrower Principal”**shallmean Inland Western Retail Real Estate Trust, Inc., a Maryland corporation.

 

**“Business Day”**shallmean a day on which Lender is open for the conduct of substantially all of itsbanking business at its office in the city in which the Note is payable(excluding Saturdays and Sundays).

 

**“Cash Management Account”**shall havethe meaning set forth in Section 10.1(a) hereof.

 

**“Cash Management Period”**shallmean the period commencing on the 45th day prior to the OptionalPrepayment Date.

 

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

 

**“Closing Date”**shallmean the date of the funding of the Loan.

 

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

 

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**“Condemnation”**shallmean a temporary or permanent taking by any Governmental Authority as theresult, in lieu or in anticipation, of the exercise of the right ofcondemnation or eminent domain, of all or any part of the Property, or anyinterest therein or right accruing thereto, including any right of accessthereto or any change of grade affecting the Property or any part thereof.

 

**“Condemnation Proceeds”**shallhave the meaning set forth in Section 8.4(b)

 

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

 

**“Debt”**shallmean the outstanding principal amount set forth in, and evidenced by, thisAgreement and the Note together with all interest accrued and unpaid thereonand all other sums due to Lender in respect of the Loan under the Note, thisAgreement, the Mortgage or any other Loan Document.

 

**“Debt Service”**shallmean, with respect to any particular period of time, scheduled principal and/orinterest payments under the Note.

 

**“Default”**shallmean the occurrence of any event hereunder or under any other Loan Documentwhich, but for the giving of notice or passage of time, or both, would be anEvent of Default.

 

**“Default Rate”**shallmean, with respect to the Loan, a rate per annum equal to the lesser of (a) themaximum rate permitted by applicable law, or (b) four percent (4%) above theNote Rate.

 

**“Eligible Account”**shallmean a separate and identifiable account from all other funds held by theholding institution that is either (a) an account or accounts maintained with afederal or state chartered depository institution or trust company whichcomplies with the definition of Eligible Institution or (b) a segregated trustaccount or accounts maintained with the corporate trust department of a federalor state chartered depository institution or trust company acting in itsfiduciary capacity which, in the case of a federally chartered depositoryinstitution or trust company acting in its fiduciary capacity is subject to theregulations regarding adversary funds on deposit therein under 12 CFR §9.10(b),and in the case of a state chartered depository institution or trust company,is subject to regulations substantially similar to 12 C.F.R. §9.10(b), havingin either case a combined capital surplus of at least $50,000,000 and subjectto supervision or examination by federal and state authority. An EligibleAccount will not be evidenced by a certificate of deposit, passbook or otherinstrument.

 

**“Eligible Institution”**shallmean a depository institution or trust company insured by the Federal DepositInsurance Corporation, the short term unsecured debt obligations or commercialpaper of which are rated at least “A-1” by S&P, “P-l” by Moody’s and “F-l”by Fitch in the case of accounts in which funds are held for thirty (30) daysor 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-1” 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”**shallmean any person identified by OFAC or any other Person with whom a Personresident in the United States of America may not conduct business ortransactions by prohibition of federal law or Executive Order of the Presidentof the United States of America.

 

**“Environmental Indemnity”**shallmean that certain Environmental Indemnity Agreement, dated as of the datehereof, executed by Borrower and Borrower Principal in connection with the Loanfor the benefit of Lender, as the same may be amended, restated, replaced,supplemented or otherwise modified from time to time.

 

**“Environmental Law”**shallhave the meaning set forth in Section 12.5 hereof.

 

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

 

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

 

**“ERISA”**shallmean the Employee Retirement Income Security Act of 1974, as amended from timeto time and any successor statutes thereto and applicable regulations issuedpursuant thereto in temporary or final form.

 

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

 

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

 

**“Fitch”**shallmean Fitch, Inc.

 

**“GAAP”**shallmean generally accepted accounting principles in the United States of Americaas of the date of the applicable financial report.

 

**“Governmental Authority”**shallmean any court, board, agency, department, commission, office or otherauthority of any nature whatsoever for any governmental unit (federal, state,county, municipal, city, town, special district or otherwise) whether now orhereafter in existence.

 

**“Guarantor”**shallmean any Person, having a long-term unsecured debt rating above the TriggerRating that may, from time to time, at the option of American Express, executea guaranty in favor of landlord under the American Express Lease.

 

**“Hazardous Materials”**shallhave the meaning set forth in Section 12.5 hereof.

 

**“Improvements”**shallhave the meaning set forth in the granting clause of the Mortgage.

 

**“Indemnified Parties”**shallmean (a) Lender, (b) any prior owner or holder of the Loan or Participations inthe Loan, (c) any servicer or prior servicer of the Loan, (d) any Investor orany prior Investor in any Securities, (e) any trustees, custodians or otherfiduciaries who hold or

 

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who have held a full orpartial interest in the Loan for the benefit of any Investor or other thirdparty, (f) any receiver or other fiduciary appointed in a foreclosure or otherCreditors Rights Laws proceeding, (g) any officers, directors, shareholders,partners, members, employees, agents, servants, representatives, contractors,subcontractors, affiliates or subsidiaries of any and all of the foregoing, and(h) the heirs, legal representatives, successors and assigns of any and all ofthe foregoing (including, without limitation, any successors by merger,consolidation or acquisition of all or a substantial portion of the IndemnifiedParties’ assets and business), in all cases whether during the term of the Loanor as part of or following a foreclosure of the Mortgage.

 

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

 

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

 

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

 

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

 

**“Investor”**shall have the meaning set forth in 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 GovernmentalAuthorities affecting the Property or any part thereof, or the construction,use, alteration or operation thereof, whether now or hereafter enacted and inforce, and all permits, licenses, authorizations and regulations relatingthereto, and all covenants, agreements, restrictions and encumbrances containedin any instruments, either of record or known to Borrower, at any time in forceaffecting the Property or any part thereof, including, without limitation, anywhich may (a) require repairs, modifications or alterations in or to theProperty or any part thereof, or (b) in any way limit the use and enjoyment thereof.

 

**“Lien”** shall mean any mortgage, deed of trust,lien, pledge, hypothecation, assignment, security interest, or any otherencumbrance, charge or transfer of, on or affecting Borrower, the Property, anyportion thereof or any interest therein, including, without limitation, anyconditional sale or other title retention agreement, any financing lease havingsubstantially the same economic effect as any of the foregoing, the filing ofany financing statement, and mechanic’s, materialmen’s and other similar liensand encumbrances.

 

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

 

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

 

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**“Loan Documents”**shallmean, collectively, this Agreement, the Note, the Mortgage, the EnvironmentalIndemnity, the Assignment of Management Agreement and any and all otherdocuments, agreements and certificates executed and/or delivered in connectionwith the Loan, as the same may be amended, restated, replaced, supplemented orotherwise modified from time to time.

 

**“Lockout Period”**shallmean the period commencing on the date hereof and ending on the date of thesecond anniversary hereof.

 

**“Losses”**shallmean 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, amountspaid in settlement of whatever kind or nature (including but not limited tolegal fees and other costs of defense).

 

**“Management Agreement”**shallmean the management agreement entered into by and between Borrower and Manager,pursuant to which Manager is to provide management and other services with respectto the Property, as the same may be amended, restated, replaced, supplementedor otherwise modified in accordance with the terms of this Agreement.

 

**“Manager”**shallmean Inland US Management LLC, a Delaware limited liability company or suchother entity selected as the manager of the Property in accordance with theterms of this Agreement.

 

**“Material Litigation”**shallmean, with respect to any Person, any material conviction, indictment (that isnot dismissed before trial), judgment, litigation or regulatory action. Forpurposes of this definition, a matter shall be deemed material if it isreasonably foreseeable that a prudent institutional commercial real estatemortgage lender would consider such matter as a material adverse factor in itsunderwriting of the Person in question. With respect to non-criminal matters,isolated actions occurring more than five (5) years prior to the date of aproposed transfer shall not be deemed material provided that there is noindication of fraud, intentional misrepresentation or intent to defraudcreditors with respect to such actions.

 

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

 

**“Maximum Legal Rate”**shallmean the maximum nonusurious interest rate, if any, that at any time or fromtime to time may be contracted for, taken, reserved, charged or received on theindebtedness evidenced by the Note and as provided for herein or the other LoanDocuments, under the laws of such state or states whose laws are held by anycourt of competent jurisdiction to govern the interest rate provisions of theLoan.

 

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

 

**“Monthly Payment Amount”**shallmean the monthly payment of interest due on each Scheduled Payment Date as setforth in the Note.

 

**“Moody’s”**shallmean Moody’s Investor Services, Inc.

 

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**“Mortgage”** shall mean that certainfirst priority mortgage/deed of trust/deed to secure debt and securityagreement dated the date hereof, executed and delivered by Borrower as securityfor the Loan and encumbering the Property, as the same may be amended,restated, replaced, supplemented or otherwise modified from time to time.

 

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

 

**“Net Proceeds Deficiency”** shall havethe meaning set forth in Section 8.4(b)(vi) hereof.

 

**“Note”** shall mean that certainpromissory note of even date herewith in the principal amount of $11,623,000,made by Borrower in favor of Lender, as the same may be amended, restated,replaced, supplemented or otherwise modified from time to time.

 

**“Note Rate”** shall have the meaning setforth in the Note.

 

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

 

**“Operating Expenses”** shall mean, withrespect to any period of time, the total of all expenses actually paid orpayable, computed in accordance with federal tax basis accounting, or inaccordance with other methods acceptable to Lender in its sole discretion, ofwhatever kind relating to the operation, maintenance and management of theProperty, including, without limitation, utilities, ordinary repairs andmaintenance, Insurance Premiums, license fees, Taxes and Other Charges,advertising expenses, payroll and related taxes, computer processing charges,management fees equal to the greater of 4% of the Operating Income and themanagement fees actually payable under the Management Agreement for such periodof time, operational equipment or other lease payments as approved by Lender,normalized capital expenditures but specifically excluding depreciation andamortization, income taxes, Debt Service, any incentive fees due under theManagement Agreement, any item of expense that in accordance with federal taxbasis accounting should be capitalized, any item of expense that wouldotherwise be covered by the provisions hereof but which is paid by AmericanExpress under the American Express Lease and deposits into the ReserveAccounts.

 

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

 

**“Other Charges”** shall mean all groundrents, maintenance charges, impositions other than Taxes, and any othercharges, including, without limitation, vault charges and license fees for theuse of vaults, chutes and similar areas adjoining the Property, now orhereafter levied or assessed or imposed against the Property or any partthereof.

 

**“Participations”** shall have the meaningset forth in Section 13.1 hereof.

 

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

 

**“Permitted Encumbrances”** shall mean collectively,(a) the Lien and security interests created by the Loan Documents, (b) allLiens, encumbrances and other matters disclosed in the Title Insurance Policy,(c) Liens, if any, for Taxes imposed by any Governmental Authority not yet dueor delinquent, and (d) such other title and survey exceptions as Lender hasapproved or may approve in writing in Lender’s sole discretion.

 

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**“Permitted Investments”**shallmean to the extent available from Lender or Lender’s servicer for deposits inthe Reserve Accounts and the Lockbox Account, any one or more of the followingobligations or securities acquired at a purchase price of not greater than par,including those issued by a servicer of the Loan, the trustee under anysecuritization or any of their respective Affiliates, payable on demand orhaving a maturity date not later than the Business Day immediately prior to thedate on which the funds used to acquire such investment are required to be usedunder this Agreement and meeting one of the appropriate standards set forthbelow:

 

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

 

(b)           Federal Housing Administrationdebentures;

 

(c)           obligations of thefollowing United States government sponsored agencies: Federal Home LoanMortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwidebonds and notes), the Federal Home Loan Banks (consolidated debt obligations),the Federal National Mortgage Association (debt obligations), the FinancingCorp. (debt obligations), and the Resolution Funding Corp. (debt obligations); *provided, however,*that the investmentsdescribed in this clause must (i) have a predetermined fixed dollar ofprincipal 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 be tiedto a single interest rate index plus a fixed spread (if any) and must move proportionatelywith that index, and (iv) such investments must not be subject to liquidationprior to their maturity;

 

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

 

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to theSecurities); provided, however, that the investments described in this clausemust (i) have a predetermined fixed dollar of principal due at maturity thatcannot 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 DepositInsurance Corporation-insured demand and time deposits in, or certificates ofdeposit of, or bankers’ acceptances with maturities of not more than 365 daysand issued by, any bank or trust company, savings and loan association orsavings bank, the short term obligations of which at all times are rated in thehighest short term rating category by each Rating Agency (or, if not rated byall Rating Agencies, rated by at least one Rating Agency in the highest shortterm rating category and otherwise acceptable to each other Rating Agency, asconfirmed in writing that such investment would not, in and of itself, resultin a downgrade, qualification or withdrawal of the initial, or, if higher, thencurrent ratings assigned to the Securities); 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;

 

(f)            debt obligations withmaturities of not more than 365 days and at all times rated by each RatingAgency (or, if not rated by all Rating Agencies, rated by at least one RatingAgency 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) in its highest long-term unsecuredrating category; 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;

 

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

 

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

 

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

 

*provided, however,*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”**shallmean any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporatedassociation, any federal, state, county or municipal government or any bureau,department or agency thereof and any fiduciary acting in such capacity onbehalf of any of the foregoing.

 

**“Personal Property”**shallhave the meaning set forth in the granting clause of the Mortgage.

 

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

 

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

 

**“Property”**shallmean the parcel of real property, the Improvements thereon and all PersonalProperty owned by Borrower and encumbered by the Mortgage, together with allrights pertaining to such property and Improvements, as more particularlydescribed in the granting clause of the Mortgage and referred to therein as the“Property”.

 

**“Property Condition Report”**shallmean a report prepared by a company satisfactory to Lender regarding thephysical condition of the Property, satisfactory in form and substance toLender in its sole discretion.

 

**“Qualified Manager”**shallmean (a) Manager or (b) a reputable and experienced professional managementorganization (i) which manages, together with its affiliates, at least ten (10)first class office buildings totaling at least 3,500,000 square feet of grossleasable area, exclusive of the Property and (ii) approved by Lender, whichapproval shall not have been unreasonably withheld and for which Lender shallhave 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.

 

**“Rating Agencies”**shallmean each of S&P, Moody’s and Fitch, or any other nationally-recognizedstatistical rating agency which has been approved by Lender.

 

“**REA**” shall mean anyconstruction, operation and reciprocal easement agreement or similar agreement(including any separate agreement or other agreement between Borrower and oneor more other parties to an REA with respect to such REA) affecting theProperty or portion thereof.

 

**“Release”**shallhave the meaning set forth in Section 12.5 hereof.

 

**“REMIC Trust”**shallmean a “real estate mortgage investment conduit” (within the meaning of Section860D, or applicable successor provisions, of the Code) that holds the Note.

 

**“Rents”**shallhave the meaning set forth in the Mortgage.

 

**“Replacements”**shallhave the meaning set forth in Section 9.2(a) hereof.

 

**“Required Repairs”**shallhave the meaning set forth in Section 9.1(a) hereof.

 

**“Reserve Accounts”**shallmean the Tax and Insurance Reserve Account.

 

**“Reserve Funds”**shallmean the Tax and Insurance Reserve Funds.

 

**“Restoration”**shallmean, following the occurrence of a Casualty or a Condemnation which is of atype necessitating the repair of the Property, the completion of the repair andrestoration of the Property as nearly as possible to the condition the Propertywas in immediately prior to such Casualty or Condemnation, with suchalterations as may be reasonably approved by Lender.

 

**“Restoration Consultant”**shallhave the meaning set forth in Section 8.4(b)(iii)hereof.

 

**“Restoration Retainage”**shallhave the meaning set forth in Section 8.4(b)(iv)hereof.

 

**“Restricted Party”**shallhave the meaning set forth in Section 7.1 hereof.

 

**“Sale or Pledge”**shallhave the meaning set forth in Section 7.1 hereof.

 

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

 

**“Securities”**shallhave the meaning set forth in Section 13.1 hereof.

 

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

 

**“Securities Liabilities”**shallhave the meaning set forth in Section 13.5 hereof.

 

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**“Securitization”**shallhave the meaning set forth in Section 13.1 hereof.

 

**“Special Member”**shallhave the meaning set forth in Section 6.1(c).

 

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

 

**“State”**shallmean the state in which the Property or any part thereof is located.

 

**“Tax and Insurance Reserve Account”**shallhave the meaning set forth in Section 9.6 hereof.

 

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

 

**“Taxes”**shallmean all real estate and personal property taxes, assessments, water rates orsewer rents, now or hereafter levied or assessed or imposed against theProperty or part thereof.

 

**“Tenant”**shallmean any Person leasing, subleasing or otherwise occupying any portion of theProperty under a Lease or other occupancy agreement with Borrower, including,without limitation, American Express, as tenant under the American ExpressLease.

 

**“Tenant Direction Letter”**shallhave the meaning set forth in Section 10.2(a)(i)hereof.

 

**“Title Insurance Policy”**shallmean that certain ALTA mortgagee title insurance policy issued with respect tothe Property and insuring the lien of the Mortgage.

 

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

 

**“Trigger Rating”**shallmean the long-term unsecured debt rating of Guarantor (or American Express ifthere is no Guarantor) below BBB as issued by S&P or below Baa2 as issuedby Moody’s.

 

**“UCC”** or **“UniformCommercial Code”**shall mean the Uniform Commercial Code as ineffect in the State where the applicable Property 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 2GENERAL TERMS**

 

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

 

(a)           Subject to and upon theterms and conditions set forth herein, Lender hereby agrees to make andBorrower hereby agrees to accept the Loan on the Closing Date.

 

(b)           Borrower may requestand receive only one borrowing in respect of the Loan and any amount borrowedand repaid in respect of the Loan may not be reborrowed.

 

(c)           The Loan shall beevidenced by the Note and secured by the Mortgage and the other Loan Documents.

 

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

 

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

 

(a)           The Loan andinterest shall be payable pursuant 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 3CONDITIONS PRECEDENT**

 

The obligation of Lender to make the Loan hereunder is subject to thefulfillment by Borrower or waiver by Lender of all the conditions precedent toclosing set forth in the application or term sheet for the Loan delivered byBorrower to Lender and any commitment rider to the application for the Loanissued by Lender.

 

**ARTICLE 4REPRESENTATIONS 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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connectionwith its properties, businesses and operations, (c) possesses all rights,licenses, permits and authorizations, governmental or otherwise, necessary toentitle it to own its properties and to transact the businesses in which it isnow engaged, 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 full power,authority and legal right to keep and observe all of the terms of the LoanDocuments 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 ofBorrower**

 

Borrower’s exact legal name is correctly set forth on the first page ofthis Agreement, on the Mortgage and on any UCC-l Financing Statements filed inconnection with the Loan. Borrower is an organization of the type specified onthe first page of this Agreement. Borrower is organized under the laws of theState of Delaware. Borrower’s principal place of business and chief executiveoffice, and the place where Borrower keeps its books and records, includingrecorded data of any kind or nature, regardless of the medium of recording,including software, writings, plans, specifications and schematics, has beenfor the preceding four months (or, if less, the entire period of the existenceof Borrower) the address of Borrower set forth on the first page of thisAgreement. Borrower’s organizational identification number, if any, assigned bythe state of incorporation or organization is correctly set forth on the firstpage of the Note.

 

**Section 4.3.****  Validity ofDocuments**

 

Borrower and Borrower Principal have takenall necessary action to authorize the execution, delivery and performance ofthis Agreement and the other Loan Documents to which they are parties. ThisAgreement and such other Loan Documents have been duly executed and deliveredby or on behalf of Borrower and Borrower Principal and constitute the legal,valid and binding obligations of Borrower and Borrower Principal enforceableagainst Borrower and Borrower Principal in accordance with their respectiveterms, subject only to applicable bankruptcy, insolvency and similar lawsaffecting rights of creditors generally, and subject, as to enforceability, togeneral principles of equity (regardless of whether enforcement is sought in aproceeding in equity 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.

 

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

 

There are no actions, suits or proceedings at law or in equity by orbefore any Governmental Authority or other agency now pending or, to Borrower’sor Borrower 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**

 

Borrower is not a party to any agreement or instrument or subject toany restriction which would materially and adversely affect Borrower or theProperty, or Borrower’s business, properties or assets, operations orcondition, financial or otherwise. Borrower is not in default in any materialrespect in the performance, observance or fulfillment of any of theobligations, covenants or conditions contained in any agreement or instrumentto which it is a party or by which Borrower or the Property is bound. Borrowerhas no material financial obligation under any agreement or instrument to whichBorrower is a party or by which Borrower or the Property is otherwise bound,other than (a) obligations incurred in the ordinary course of the operation ofthe Property and (b) obligations under the Loan Documents.

 

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

 

Borrower and each Borrower Principal have (a) not entered into thetransaction or executed the Note, this Agreement or any other Loan Documentswith the actual intent to hinder, delay or defraud any creditor and (b)received reasonably equivalent value in exchange for their obligations undersuch Loan Documents. Giving effect to the Loan, the fair saleable value of theassets of Borrower and each Borrower Principal exceeds and will, immediatelyfollowing the making of the Loan, exceed the total liabilities of Borrower andBorrower Principal, including, without limitation, subordinated, unliquidated,disputed and contingent liabilities. No petition in bankruptcy has been filedagainst Borrower, Borrower Principal, or Affiliated Manager in the last ten(10) years, and neither Borrower nor Borrower Principal, or Affiliated Managerin the last ten (10) years has made an assignment for the benefit of creditorsor taken advantage 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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**Section 4.8.****  Full andAccurate 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.

 

**Section 4.9.****  No Plan Assets**

 

Borrower is not an “employee benefit plan,” as defined in Section 3(3)of ERISA, subject to Title I of ERISA, and none of the assets of Borrowerconstitutes or will constitute “plan assets” of one or more such plans withinthe meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) Borrower is not a“governmental plan” within the meaning of Section 3(32) of ERISA and (b)transactions by or with Borrower are not subject to state statutes regulatinginvestment of, and fiduciary obligations with respect to, governmental planssimilar to the provisions of Section 406 of ERISA or Section 4975 of theInternal Revenue Code currently in effect, which prohibit or otherwise restrictthe transactions contemplated by this Agreement.

 

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

 

Neither Borrower nor Borrower Principal is a “foreign Person” withinthe meaning of §1445(f)(3) of the Internal RevenueCode.

 

**Section 4.11.****  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,counterclaim or defense with respect thereto. No Default or Event of Defaultexists under or with respect to any Loan Document.

 

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

 

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

 

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

 

Except as expressly disclosed by Borrower to Lender in writing inconnection with the closing of the Loan, to Borrower’s knowledge, Borrower andthe Property, and the use and operation thereof, comply in all materialrespects with all Legal Requirements, including, without limitation, buildingand zoning ordinances and codes and the Americans with Disabilities Act. ToBorrower’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 ofBorrower’s obligations under any of the Loan Documents.

 

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

 

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.Borrower does not have any contingent liabilities, liabilities for taxes,unusual forward or long-term commitments or unrealized or anticipated lossesfrom any unfavorable commitments that are known to Borrower and reasonablylikely to have 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.****  Utilitiesand Public Access; Parking**

 

To the best of Borrower’s knowledge, the Property has adequate rightsof access to public ways and is served by water,sewer, sanitary sewer and storm drain facilities adequate to service theProperty for full utilization of the Property for its intended uses. All publicutilities necessary to the full use and enjoyment of the Property as currentlyused and enjoyed are located either in the public right-of-way abutting theProperty (which are connected so as to serve the Property without passing overother property) or in recorded easements serving the Property and such easementsare set forth in and insured by the Title Insurance Policy. All roads necessaryfor the use of the Property for its current purposes have been completed anddedicated to public use and accepted by all Governmental Authorities. TheProperty has, or is served by, parking to the extent required to comply with allLegal Requirements.

 

**Section 4.17.****  Separate Lots**

 

The Property is assessed for real estate tax purposes as one or morewholly independent tax lot or lots, separate from any adjoining land orimprovements 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.

 

**Section 4.18.****  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.

 

**Section 4.19.****  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-insurer with respect to the occurrences referred to in Section 8.1and that the rating of American Express by the Rating Agencies has not fallenbelow the Trigger Rating.

 

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

 

The Propertyis used exclusively for general office purposes and other appurtenant and relateduses.

 

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

 

All certificates of occupancy and to Borrower’s knowledge allcertifications, permits, licenses and approvals, including, without limitation,certificates of completion and any applicable liquor license required for thelegal use, occupancy and operation of the Property for the purpose intendedherein, have been obtained and are valid and in full force and effect. Borrowershall keep and maintain (or require American Express to maintain) all licensesnecessary for the operation of the Property for the purpose intended herein.The use being made of the Property is in conformity with the final certificateof occupancy (or compliance, if applicable) and any other permits or licensesissued for the Property.

 

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

 

None of the Improvements on the Property are located in an areaidentified by the Federal Emergency Management Agency as an area having specialflood hazards, or, if any portion of the Improvements is located within sucharea, Borrower will obtain or cause American Express to obtain the insuranceprescribed in Section 8.1(a)(i) at any time during the term of the Loan whenAmerican Express ceases to be a self-insurer or when the rating of AmericanExpress by the Rating Agencies falls below the Trigger Rating.

 

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

 

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

 

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sidewalks,storm drainage systems, roofs, plumbing systems, HVAC systems, fire protectionsystems, 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.

 

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

 

(a)           None of theImprovements which were included in determining the appraised value of theProperty lie outside the boundaries and building restriction lines of the Propertyto any material extent, and (b) no improvements on adjoining propertiesencroach upon the Property and no easements or other encumbrances upon theProperty encroach upon any of the Improvements so as to materially affect thevalue or marketability of the Property.

 

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

 

The entire Property has been leased to American Express pursuant to theAmerican Express Lease. (a) The American Express Lease is in full force andeffect; (b) the premises demised under the American Express Lease have beencompleted and American Express has accepted possession of and is in occupancyof the demised premises; (c) American Express has commenced the payment of rentunder the American Express Lease, there are no offsets, claims or defenses tothe enforcement thereof and Borrower has no monetary obligations to AmericanExpress under the American Express Lease; (d) all Rents due and payable underthe American Express Lease have been paid and no portion thereof has been paidfor any period more than thirty (30) days in advance; (e) the rent payableunder the American Express Lease is the amount of fixed rent set forth in theAmerican Express Lease, and there is no claim or basis for a claim by AmericanExpress thereunder for an adjustment to the Rent; (f) Borrower is the soleowner of the entire landlord’s interest in the American Express Lease; (g) theAmerican Express Lease is the valid, binding and enforceable obligation ofBorrower 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 not the Rents have been assigned or pledged except toLender, and no other Person has any interest therein.

 

**Section 4.26.****  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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the execution,delivery, recordation, filing, registration, perfection or enforcement of anyof the Loan Documents, including, without limitation, the Mortgage, have beenpaid or will be paid, and, under current Legal Requirements, the Mortgage isenforceable in accordance with its terms by Lender (or any subsequent holderthereof).

 

**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.

 

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

 

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.

 

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

 

All costs and expenses of any and all labor, materials, supplies andequipment used in the construction, maintenance or repair of the Improvementshave been paid in full. To Borrower’s knowledge after due inquiry, there are noclaims for payment for work, labor or materials affecting the Property whichare or may become a lien prior to, or of equal priority with, the Liens createdby the Loan Documents.

 

**Section 4.30.****  PersonalProperty**

 

Borrower has paid in full for, and is the owner of, all PersonalProperty (other than tenants’ property) used in connection with the operationof the Property, free and clear of any and all security interests, liens orencumbrances, except for Permitted Encumbrances and the Lien and securityinterest created by the Loan Documents.

 

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

 

Borrower and Borrower Principal have filed all federal, state, county,municipal, and city income, personal property and other tax returns required tohave been filed by them and have paid all taxes and related liabilities whichhave become due pursuant to such returns or pursuant to any assessmentsreceived by them. Neither Borrower nor Borrower Principal knows of any basisfor any additional assessment in respect of any such taxes and relatedliabilities for prior years.

 

**Section 4.32.****  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 theProperty, impairs the use or the operation of the Property or impairs Borrower’sability to pay its obligations in a timely manner.

 

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**Section 4.33.****  FederalReserve 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.

 

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

 

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.**** ReciprocalEasement Agreements**

 

(a)           Neither Borrower norany other party is currently in default (nor has any notice been given orreceived with respect to an alleged or current default) under any of the termsand conditions of the REA, and the REA remains unmodified and in full force andeffect;

 

(b)           All easements grantedpursuant to the REA which were to have survived the site preparation andcompletion of construction (to the extent that the same has been completed), remainin full force and effect and have not been released, terminated, extinguishedor discharged by agreement or otherwise;

 

(c)           To the best of Borrower’sknowledge, all sums due and owing by Borrower to the other parties to the REA(or by the other parties to the REA to the Borrower) pursuant to the terms ofthe REA, including without limitation, all sums, charges, fees, assessments,costs, and expenses in connection with any taxes, site preparation andconstruction, non-shareholder contributions, and common area and other propertymanagement activities have been paid, are current, and no lien has attached onthe Property (or threat thereof been made) for failure to pay any of theforegoing;

 

(d)           The terms, conditions,covenants, uses and restrictions contained in the REA do not conflict in anymanner with any terms, conditions, covenants, uses and restrictions contained inany Lease or in any agreement between Borrower and occupant of any peripheralparcel, including without limitation, conditions and restrictions with respectto kiosk placement, tenant restrictions (type, location or exclusivity), saleof certain goods or services, and/or other use restrictions; and

 

(e)           The terms, conditions,covenants, uses and restrictions contained in the American Express Lease do notconflict in any manner with any terms, conditions, covenants, uses and restrictionscontained in the REA, any other lease or in any agreement between Borrower and

 

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

 

**Section 4.36.****  No Changein Facts or Circumstances; Disclosure**

 

All information submitted by Borrower or its agents to Lender and inall financial statements, reports, certificates and other documents submittedin connection with the Loan or in satisfaction of the terms thereof and allstatements of fact made by Borrower in this Agreement or in any other LoanDocument, are accurate, complete and correct in all material respects. Therehas been no material adverse change in any condition, fact, circumstance orevent that would make any such information inaccurate, incomplete or otherwisemisleading in any material respect or that otherwise materially and adverselyaffects or might materially and adversely affect the Property or the businessoperations or the financial condition of Borrower. Borrower has disclosed toLender all material facts and has not failed to disclose any material fact thatcould cause any representation or warranty made herein to be materiallymisleading.

 

**Section 4.37.****  IntellectualProperty**

 

All trademarks, trade names and service marks necessary to the businessof Borrower as presently conducted or as Borrower contemplates conducting itsbusiness are in good standing and, to the extent of Borrower’s actualknowledge, uncontested. Borrower has not infringed, is not infringing, and hasnot received 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.

 

**Section 4.38.****  Compliancewith Anti-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 the best of Borrower’s knowledge, no tenant at the Property is currentlyidentified by OFAC or otherwise qualifies as an Embargoed Person, or is ownedor Controlled by an Embargoed Person.

 

**Section 4.39.****  Patriot Act**

 

Neither Borrower nor Borrower Principal shall (a) be or become subjectat any time to any law, regulation, or list of any government agency(including, without limitation, the list maintained by OFAC and accessiblethrough the OFAC website) that prohibits or limits any

 

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lender frommaking 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**

 

Borrower agrees that, unless expressly provided otherwise, all of therepresentations and warranties of Borrower set forth in this Article 4 andelsewhere in this Agreement and in the other Loan Documents shall survive forso long as any portion of the Debt remains owing to Lender. All representations,warranties, covenants and agreements made in this Agreement or in the otherLoan Documents by Borrower shall be deemed to have been relied upon by Lendernotwithstanding any investigation heretofore or hereafter made by Lender or onits 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) inaccordance with the terms of this Agreement and the other Loan Documents,Borrower hereby covenants and agrees with Lender that:

 

**Section 5.1.****  Existence; Compliance withLegal Requirements**

 

(a)           Borrower shall do orcause to be done all things necessary to preserve, renew and keep in full forceand effect its existence, rights, licenses, permitsand franchises and comply with all Legal Requirements applicable to it and theProperty.  Borrower hereby covenants and agreesnot to commit, permit or suffer to exist any act oromission affording any Governmental Authority the right of forfeiture asagainst the Property or any part thereof or any monies paid in performance ofBorrower’s obligations under any of the Loan Documents. Borrower shall at all timesmaintain, preserve and protect all franchises and trade names used inconnection with the operation of the Property. So long as American Express is in compliance with the terms of the AmericanExpress Lease with respect to the matters described in this Section 5.1,Borrower shall be deemed in compliance with this Section 5.1.

 

(b)           Borrower, at its ownexpense, may contest or permit American Express to contest by appropriate legalproceeding, promptly initiated and conducted in good faith and with due diligence,the Legal Requirements affecting the Property, provided that (i) no Default orEvent of Default has occurred and is continuing; (ii) such proceeding shall bepermitted under and be conducted in accordance with the provisions of any otherinstrument to which Borrower or the Property is subject and shall notconstitute a default thereunder; (iii) neither the Property, any part thereofor interest therein, any of the tenants or occupants thereof, nor Borrowershall be affected in any material adverse way as a result of such proceeding;(iv) non-compliance with the

 

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LegalRequirements shall not impose civil or criminal liability on Borrower orLender; (v) unless the contest is initiated and conducted by American Expresspursuant to the American Express Lease Borrower shall have furnished thesecurity as may be required in the proceeding or by Lender to ensure complianceby Borrower with the Legal Requirements; and (vi) if the contest is initiatedand conducted by Borrower, Borrower shall have furnished to Lender all otheritems reasonably requested by Lender. Borrower shall give written notice toLender of any contest initiated and conducted by Borrower promptly afterinitiation thereof and shall inform Lender of any contest initiated andconducted by American Express of which Borrower is given notice by AmericanExpress.

 

**Section 5.2.****  Maintenance and Use ofProperty**

 

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.

 

**Section5.3.****  Waste**

 

Borrower shall not commit or suffer any waste of the Property or makeany change in the use of the Property which will in any way materially increasethe risk of fire or other hazard arising out of the operation of the Property,or take any action that might invalidate or give cause for cancellation of anyPolicy, or do or permit to be done thereon anything that may in any way impairthe value of the Property or the security for the Loan. Borrower will not,without the prior written consent of Lender, permit any drilling or explorationfor or extraction, removal, or production of any minerals from the surface orthe subsurface of the Property, regardless of the depth thereof or the methodof mining or extraction thereof.

 

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

 

(a)           Borrower shall pay orcause American Express to pay all Taxes and Other Charges now or hereafterlevied or assessed or imposed against the Property or any part thereof as thesame become due and payable. Borrower shall furnish or cause to be furnished toLender such receipts for the payment of the Taxes and the Other Charges as aredelivered to Borrower by American Express and, upon request by Lender, acertificate from Borrower and Borrower Principal that as of the date of suchcertificate there are no liens filed against the Property arising from thenon-payment of Taxes or Other Charges. Borrower shall not suffer nor permitAmerican Express to suffer and shall promptly cause to be paid and dischargedany Lien or charge whatsoever which may be or become a Lien or charge againstthe Property, and shall promptly pay for all utility services provided to theProperty. So long as 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 ownexpense, may contest or permit American Express to contest by appropriate legalproceeding, promptly initiated and conducted in good faith and with duediligence, the amount or validity or application in whole or in part of anyTaxes or Other Charges, provided that (i) no Default or Event of Default hasoccurred and remains uncured; (ii) such proceeding shall be permitted under andbe conducted in accordance with the provisions of any other instrument to whichBorrower is subject and shall not constitute a default thereunder and suchproceeding shall be conducted in accordance with all applicable LegalRequirements; (iii) neither the Property nor any part thereof or interesttherein will be in danger of being sold, forfeited, terminated, canceled orlost; (iv) Borrower shall promptly upon final determination thereof pay theamount of any such Taxes or Other Charges, together with all costs, interestand penalties which may be payable in connection therewith; (v) such proceedingshall suspend the collection of such contested Taxes or Other Charges from theProperty; and (vi) Borrower shall furnish or cause American Express to furnish(but only to the extent required to be furnished by American Express under theAmerican Express Lease) such security as may be required in the proceeding, ordeliver to Lender such reserve deposits as may be requested by Lender, toinsure the payment of any such Taxes or Other Charges, together with allinterest and penalties thereon (unless Borrower or American Express has paidall of the Taxes or Other Charges under protest). Lender may pay over any suchcash deposit or part thereof held by Lender to the claimant entitled thereto atany time when, in the judgment of Lender, the entitlement of such claimant isestablished or the Property (or part thereof or interest therein) shall be indanger of being sold, forfeited, terminated, canceled or lost or there shall beany danger of the Lien of the Mortgage being primed by any related Lien.

 

**Section5.5.**** Litigation**

 

Borrower shall give prompt written notice to Lender of any litigationor governmental proceedings pending or threatened in writing against Borrowerwhich might materially adversely affect Borrower’s condition (financial orotherwise) or business or the Property.

 

**Section 5.6.****  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 Properly 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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**Section 5.8.****  Cooperate in**LegalProceedings**

 

Borrower shall at Borrower’s expense cooperate fully with Lender withrespect to any proceedings before any court, board or other GovernmentalAuthority which may in any way affect the rights of Lender hereunder or anyrights obtained by Lender under any of the other Loan Documents and, inconnection therewith, permit Lender, at its election, to participate in anysuch proceedings.

 

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

 

Borrower shall in a timely manner observe, perform and fulfill each andevery covenant, term and provision to be observed and performed by Borrowerunder this Agreement and the other Loan Documents and any other agreement orinstrument affecting or pertaining to the Property and any amendments, modificationsor changes thereto.

 

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

 

Borrower shall cooperate with Lender in obtaining for Lender thebenefits of any Awards or Insurance Proceeds lawfully or equitably payable toBorrower in connection with the Property, and Lender shall be reimbursed forany expenses incurred in connection therewith (including reasonable, actualattorneys’ fees and disbursements, and the payment by Borrower of the expenseof an appraisal on behalf of Lender in case of a Casualty or Condemnationaffecting the Property or any part thereof) out of such Awards or InsuranceProceeds. The actual payment of any Awards shall be governed by Section 8.4hereof.

 

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

 

(a)           Borrower and BorrowerPrincipal shall keep adequate books and records of account in accordance withfederal tax basis accounting, or in accordance with other methods acceptable toLender in its sole discretion, consistently applied and shall furnish toLender:

 

(i)            priorto a Securitization, at the request of Lender, monthly, and following aSecuritization, quarterly and annual certificates signed and dated by Borrower,certifying that the American Express Lease is in full force and effect, whetherany defaults (or any matter that, with the passage of time or the giving ofnotice, could become a default) exist thereunder and any other information asis reasonably required by Lender, within twenty (20) days after the end of eachcalendar month, thirty (30) days after the end of each fiscal quarter or onehundred twenty (120) days after the close of each fiscal year of Borrower, asapplicable;

 

(ii)           priorto a Securitization, at the request of Lender, monthly, and following aSecuritization, quarterly and annual operating statements of the Property, preparedand certified by Borrower in the form required by Lender, detailing therevenues received, the expenses incurred and the net operating income beforeand after debt service (principal and interest) and major capital improvements(including, without limitation, any capital improvements planned by AmericanExpress of which Borrower has notice) for the period of calculation andcontaining appropriate year-to-date information, within twenty (20) days afterthe end of each calendar month, thirty (30) days after the end of each

 

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fiscal quarter or one hundred (120) daysafter the close of each fiscal year of Borrower, as applicable;

 

(iii)          annualbalance sheets, profit and loss statements, statements of cash flows, andstatements of change in financial position of Borrower and Borrower Principalin the form required by Lender prepared and certified by Borrower and BorrowerPrincipal within one hundred twenty (120) days after the close of each fiscalyear of Borrower and Borrower Principal, as the case may be (provided that withrespect to Borrower, such statements may be delivered by the holder(s) ofbeneficial interests in Borrower in accordance with Section 6.1(a)(viii); and

 

(iv)          all financial statements, operating statements, budgets,capital repair estimates or projections and certifications of any kind withrespect to the foregoing delivered to Borrower by American Express under theAmerican Express Lease.

 

(b)           To the extent notinconsistent with the provisions of Section 5.11(a) hereof (e.g., GAAPaccounting and audits shall not be required ), Borrower and Borrower Principalshall furnish Lender with such other additional financial or managementinformation (including state and federal tax returns) as may, from time totime, be reasonably required by Lender in form and substance satisfactory toLender (including, without limitation, any financial reports required to bedelivered by any Tenant or any guarantor of any Lease pursuant to the terms ofsuch Lease), and shall furnish to Lender and its agents convenient facilitiesfor the examination and audit of any such books and records

 

(c)           Without limiting anyother rights available to Lender under this Loan Agreement or any of the otherLoan Documents, in the event Borrower shall fail to timely furnish Lender anyfinancial document or statement in accordance with this Section 5.11, Borrowershall promptly pay to Lender a non-refundable charge in the amount of $500 foreach such failure. The payment of such amount shall not be construed to relieveBorrower of any Event of Default hereunder arising from such failure.

 

(d)           All items requiring thecertification of Borrower shall, except where Borrower is an individual,require a certificate executed by the general partner, managing member or chiefexecutive officer of Borrower, as applicable (and the same rules shall apply toany sole shareholder, general partner or managing member which is not anindividual).

 

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

 

(a)           After request byLender, Borrower shall within ten (10) Business Days furnish Lender with astatement, duly acknowledged and certified, setting forth (i) the amount of theoriginal principal amount of the Note, (ii) the rate of interest on the Note,(iii) the unpaid principal amount of the Note, (iv) the date installments ofinterest and/or principal were last paid, (v) any offsets or defenses to thepayment of the Debt, if any, and (vi) that the Note, this Agreement, theMortgage and the other Loan Documents are valid, legal and binding obligationsand have not been modified or if modified, giving particulars of suchmodification.

 

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(b)           Borrower shall use itsbest efforts to deliver to Lender, promptly upon request, a duly executedestoppel certificate from American Express on the form attached to the AmericanExpress Lease as an exhibit.

 

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

 

(a)           Borrower (i) shallobserve and perform all the obligations imposed on the landlord under the AmericanExpress Lease and shall not do or permit to be done anything to impair thevalue of the American Express Lease as security for the Debt; (ii) shallpromptly send copies to Lender of all notices of default which Borrower shallsend or receive thereunder; (iii) shall enforce all of the material terms,covenants and conditions contained in the American Express Lease on the part ofthe tenant thereunder to be observed or performed; (iv) shall not collect anyof the Rents more than one (1) month in advance; (v) shall not execute anyother assignment of the landlord’s interest in the American Express Lease orthe Rents; and (vi) shall not consent to any assignment of or subletting underthe American Express Lease not in accordance with its terms without the priorwritten consent of Lender.

 

(b)           Borrower shall not,without the prior written consent of Lender, enter into, renew, extend, amend,modify, waive any provisions of, terminate, reduce Rents under, accept a surrenderof space under or shorten the term of the American Express Lease.

 

**Section 5.14.****  PropertyManagement**

 

(a)           Borrower shall (i)promptly perform and observe all of the covenants required to be performed andobserved by it under the Management Agreement and do all things necessary topreserve and to keep unimpaired its material rights thereunder; (ii) promptlynotify Lender of any default under the Management Agreement of which it isaware; (iii) promptly deliver to Lender a copy of any notice of default orother material notice received by Borrower under the Management Agreement; (iv)promptly give notice to Lender of any notice or information that Borrowerreceives which indicates that Manager is terminating the Management Agreementor that Manager is otherwise discontinuing its management of the Property; and(v) promptly enforce the performance and observance of all of the covenantsrequired to be performed and observed by Manager under the ManagementAgreement.

 

(b)           If at any time, (i)Manager shall become insolvent or a debtor in a bankruptcy proceeding; (ii) anEvent of Default has occurred and is continuing; or (iii) a default hasoccurred and is continuing after the expiration of any applicable cure periodsunder the Management Agreement, Borrower shall, at the request of Lender,terminate the Management Agreement upon thirty (30) days prior notice toManager and replace Manager with a Qualified Manager, it being understood andagreed that the management fee for such replacement manager shall not exceedthen prevailing market rates.

 

(c)           In addition to theforegoing, in the event that Lender, in Lender’s reasonable discretion, at anytime prior to the termination of the Assignment of Management Agreement, determinesthat the Property 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 theconditions specified in Lender’s notice are not remedied to Lender’s reasonablesatisfaction by Borrower or Manager within thirty (30) days from the date ofsuch notice or that Borrower or Manager has failed to diligently undertakecorrecting such conditions within such thirty (30) day period, Lender maydirect Borrower to terminate the Management Agreement and to replace Managerwith a Qualified Manager on terms and conditions satisfactory to Lender, it beingunderstood and agreed that the management fee for such replacement managershall not exceed then prevailing market rates.

 

(d)           Borrower shall not, without the prior writtenconsent of Lender (which consent shall not be unreasonably withheld,conditioned or delayed): (i) surrender, terminate or cancel the ManagementAgreement or otherwise replace Manager or enter into any other managementagreement with respect to the Property; (ii) reduce or consent to the reductionof the term of the Management Agreement; (iii) increase or consent to theincrease of the amount of any charges under the Management Agreement; or (iv)otherwise modify, change, supplement, alter or amend, or waive or release anyof its rights and remedies under, the Management Agreement in any materialrespect. In the event that Borrower replaces Manager at any time during theterm of Loan pursuant to this subsection, such Manager shall be a QualifiedManager.

 

(c)           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**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Note, thisAgreement or the other Loan Documents) to be a non-exempt (under a statutory oradministrative class exemption) prohibited transaction under ERISA.

 

(b)           Borrower furthercovenants and agrees to deliver to Lender such certifications or other evidencefrom time to time throughout the term of the Loan, as requested by Lender inits sole discretion, that (i) Borrower is not and does not maintain an “employeebenefit plan” as defined in Section 3(3) of ERISA, which is subject to Title 1of ERISA, or a “governmental plan” within the meaning of Section 3(3) of ERISA;(ii) Borrower is not subject to state statutes regulating investments andfiduciary obligations with respect to governmental plans; and (iii) one or moreof the following circumstances is true:

 

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

 

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

 

(C)           Borrowerqualifies as an “operating company” or a “real estate operating company” withinthe meaning of 29 C.F.R. §2510.3-10l(c) or (e).

 

**Section 5.19.**** ****No JointAssessment**

 

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.****  ReciprocalEasement 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.

 

**ARTICLE 6ENTITY COVENANTS**

 

**Section 6.1.****  SinglePurpose Entity/Separateness**

 

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

 

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(a)           Borrower has not andwill not:

 

(i)            engagein any business or activity other than the ownership, operation and maintenanceof the Property, and activities incidental thereto;

 

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

 

(iii)          exceptas expressly provided in Article 7 hereof, merge into or consolidate with anyPerson, or dissolve, terminate, liquidate in whole or in part, transfer orotherwise dispose of all or substantially all of its assets or change its legalstructure;

 

(iv)          failto observe all organizational formalities, or fail to preserve its existence asan entity duly organized, validly existing and in good standing (if applicable)under the applicable Legal Requirements of the jurisdiction of its organizationor formation, or amend, modify, terminate or fail to comply with the provisionsof 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, orpermit any Affiliate or constituent party independent access to its bankaccounts;

 

(vii)         incurany debt, secured or unsecured, direct or contingent (including guaranteeingany obligation), other than (A) the Debt, (B) trade and operationalindebtedness incurred in the ordinary course of business with trade creditors,provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3)on commercially reasonable terms and conditions, and (4) due not more thansixty (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 three percent(3%) of the outstanding principal amount of the Note;

 

(viii)        permitits records, books of account, bank accounts, financial statements andaccounting records (including with respect to financial position, assets,liabilities, net worth and operating results) to be shown on the financialstatements of any holder of a beneficial interest in Borrower unless suchfinancial statements shall contain a footnote indicating that Borrower is aseparate legal entity and the assets of Borrower are not available as collateralto creditors of such holder;

 

(ix)           enterinto any contract or agreement with any general partner, member, shareholder,principal, guarantor of the obligations of Borrower, or any Affiliate of theforegoing, except upon terms and conditions that are intrinsically fair,commercially reasonable and substantially similar to those that would beavailable on an arm’s-length basis with unaffiliated third parties;

 

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(x)            maintain its assets in such a manner that it will be costlyor difficult to segregate, ascertain or identify its individual assets fromthose of any other Person;

 

(xi)           assumeor guarantee the debts of any other Person, hold itself out to be responsiblefor the debts of any other Person, or otherwise pledge its assets for thebenefit of any other Person or hold out its credit as being available tosatisfy the obligations of any other Person;

 

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

 

(xiii)         failto file its own tax returns or files a consolidated federal income tax returnwith any Person (unless prohibited or required, as the case may be, byapplicable Legal Requirements);

 

(xiv)        faileither to hold itself out to the public as a legal entity separate and distinctfrom any other Person or to conduct its business solely in its own name or failto correct any known misunderstanding regarding its separate identity;

 

(xv)         failto maintain adequate capital for the normal obligations reasonably foreseeablein a business of its size and character and in light of its contemplatedbusiness operations (provided that Borrower’s failure to do so solely becauseof a shortfall in cash flow derived from the operation of the Property shallnot, by itself, constitute a breach of this covenant);

 

(xvi)        Withoutthe unanimous written consent of all of its members, as applicable, and thewritten consent of 100% of the managers of Borrower (a) file or consent to thefiling of any petition, either voluntary or involuntary, to take advantage ofany 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, withoutlimitation, shared office space and services performed by an employee of anAffiliate) among the Persons sharing such expenses and to use separatestationery, invoices and checks;

 

(xviii)      failto remain solvent or pay its own liabilities (including, without limitation,salaries of its own employees) only from its own funds (provided that Borrower’sfailure to do so solely because of a shortfall in cash flow derived from theoperation of the Property shall not, by itself, constitute a breach of thiscovenant);

 

(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 to Borrower,Manager (if applicable) and their respective direct and/or indirect owners inany opinion letter pertaining to substantive consolidation delivered to Lenderin connection with the Loan; or

 

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(xxi)         fail to maintain a sufficient number of employees in lightof its contemplated business operations.

 

(b)           The limited liabilitycompany agreement of Borrower (the **“LLC Agreement”**)shall provide that (i) upon the occurrence of any event that causes the solemember of Borrower (**“Member”**) tocease to be the member of Borrower (other than (A) upon an assignment by Memberof all of its limited liability company interest in Borrower and the admissionof the transferee in accordance with the Loan Documents and the LLC Agreement,or (B) the resignation of Member and the admission of an additional member ofBorrower in accordance with the terms of the Loan Documents and the LLCAgreement), any such Person acting as additional member of Borrower inaccordance with the terms of the Loan Documents and the LLC Agreement ofBorrower shall, without any action of any other Person and simultaneously withthe Member ceasing to be the member of Borrower, automatically be admitted toBorrower (**“Special Member”**) and shall continueBorrower without dissolution and (ii) Special Member may not resign fromBorrower or transfer its rights as Special Member unless a successor SpecialMember has been admitted to Borrower as Special Member in accordance withrequirements of Delaware law. The LLC Agreement shall further provide that (i)Special Member shall automatically cease to be a member of Borrower upon theadmission to Borrower of a substitute Member, (ii) Special Member shall be amember of Borrower that has no interest in the profits, losses and capital ofBorrower and has no right to receive any distributions of Borrower assets,(iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act(the **“Act”**), Special Member shall not berequired to make any capital contributions to Borrower and shall not receive alimited 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 to vote on suchmatters required by the Loan Documents or the LLC Agreement.  In order to implement the admission toBorrower of Special Member, Special Member shall execute a counterpart to theLLC Agreement. Prior to its admission to Borrower as Special Member, SpecialMember shall not be a member of Borrower.

 

Upon the occurrence of any event that causes the Member to cease to bea member of Borrower, to the fullest extent permitted by law, the personalrepresentative of Member shall, within ninety (90) days after the occurrence ofthe event that terminated the continued membership of Member in Borrower, agreein writing (i) to continue Borrower and (ii) to the admission of the personalrepresentative or its nominee or designee, as the case may be, as a substitutemember of Borrower, effective as of the occurrence of the event that terminatedthe continued membership of Member of Borrower in Borrower. Any actioninitiated by or brought against Member or Special Member under any CreditorsRights Laws shall not cause Member or Special Member to cease to be a member ofBorrower and upon the occurrence of such an event, the business of Borrowershall continue without dissolution. The LLC Agreement shall provide that eachof Member and Special Member waives any right it might have to agree in writingto dissolve Borrower upon the occurrence of any action initiated by or broughtagainst Member or Special Member under any Creditors Rights Laws, or theoccurrence of an event that causes Member or Special Member to cease to be amember of Borrower.

 

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**Section 6.2.****  Change ofName, Identity or Structure**

 

Borrower shall not change or permit to be changed (a) Borrower’s name,(b) Borrower’s identity (including its trade name or names), (c) Borrower’sprincipal place of business set forth on the first page of this Agreement, (d)the corporate, partnership or other organizational structure of Borrower, orBorrower Principal, (e) Borrower’s state of organization, or (f) Borrower’sorganizational identification number, without in each case notifying Lender ofsuch change in writing at least thirty (30) days prior to the effective date ofsuch change and, in the case of a change in Borrower’s structure, without firstobtaining the prior written consent of Lender.  In addition, Borrower shall not change orpermit to be changed any organizational documents of Borrower if such changewould adversely impact the covenants set forth in Section 6.1 and Section 6.4hereof.  Borrower authorizes Lender tofile any financing statement or financing statement amendment required byLender to establish or maintain the validity, perfection and priority of thesecurity interest granted herein.  At therequest of Lender, Borrower shall execute a certificate in form satisfactory toLender listing the trade names under which Borrowerintends to operate the Property, and representing and warranting that Borrower doesbusiness under no other trade name with respect to the Property. If Borrowerdoes not now have an organizational identification number and later obtainsone, or if the organizational identification number assigned to Borrowersubsequently changes, Borrower shall promptly notify Lender of suchorganizational identification number or change. Nothing in this Section 6.2 shall be deemed to restrict any expressrights granted to Borrower under Article 7 hereof.

 

**Section 6.3.**** Businessand Operations**

 

Borrower will qualify to do business and will remain in good standingunder the laws of the State as and to the extent the same are required for theownership, maintenance, management and operation of the Property.

 

**Section 6.4.**** Intentionally Omitted.**

 

**ARTICLE 7NO SALE OR ENCUMBRANCE**

 

**Section 7.1.****  TransferDefinitions**

 

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”**shallmean Borrower, Borrower Principal, any Affiliated Manager, or any shareholder,partner, member or non-member manager, or any direct or indirect legal orbeneficial owner of Borrower, Borrower Principal, any Affiliated Manager or anynon-member manager; and a **“Sale or Pledge”**shallmean a 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.

 

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**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 interests; (v) if a Restricted Party is a limitedliability 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 beneficial interests;or (vii) the removal or the resignation of the Manager (including, withoutlimitation, an Affiliated Manager) other than in accordance with Section 5.14.

 

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

 

Notwithstandingthe provisions of Section 7.2, the following transfers shall not be deemed tobe a Prohibited Transfer: (a) a transfer by devise or descent or by operationof law upon the death of a member, partner or shareholder of a RestrictedParty, so long as Borrower delivers notice to Lender as soon as practicablethereafter and that such Restricted Party is promptly reconstituted, ifapplicable, following the death of such member, partner or shareholder andthere is no change in Control of such Restricted Party as a result of suchtransfer; (b) the Sale or Pledge, in one or a series of related transactions,of not more than forty-nine percent (49%) of the stock, limited partnership interestsor non-managing membership interests (as the case may be) in a RestrictedParty; provided, however, no such transfers shall result in a change in Controlin the Restricted Party or change in control of the Property, and as acondition to each such transfer, Lender shall receive not less than thirty (30)days prior written notice of such proposed transfer. Notwithstanding theforegoing, any one or more of the transfers that results in any Person owningin excess of forty-nine percent (49%) of the ownership interest in a RestrictedParty shall comply with the requirements of Section 7.4.

 

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**Section 7.4.**  **Lender’s Rights**

 

Lender reserves the right to condition the consent to a ProhibitedTransfer requested hereunder upon (a) a modification of the terms hereof and anassumption of the Note and the other Loan Documents as so modified by theproposed Prohibited Transfer, (b) receipt of payment of a transfer fee equal toone percent (1%) of the outstanding principal balance of the Loan and all ofLender’s expenses incurred in connection with such Prohibited Transfer, (c)receipt of written confirmation from the Rating Agencies that the ProhibitedTransfer will not result in a downgrade, withdrawal or qualification of theinitial, or if higher, then current ratings issued in connection with aSecuritization, or if a Securitization has not occurred, any ratings to beassigned in connection with a Securitization, (d) the proposed transferee’scontinued compliance with the covenants set forth in this Agreement (including,without limitation, the covenants in Article 6) and the other Loan Documents,(e) a new manager for the Property and a new management agreement satisfactoryto Lender, and (f) the satisfaction of such other conditions and/or legalopinions as Lender shall determine in its sole discretion to be in the interestof Lender. All expenses incurred by Lender shall be payable by Borrower whetheror not Lender consents to the Prohibited Transfer. Lender shall not be requiredto demonstrate any actual impairment of its security or any increased risk ofdefault hereunder in order to declare the Debt immediately due and payable upona Prohibited Transfer made without Lender’s consent. This provision shall applyto each and every Prohibited Transfer, whether or not Lender has consented toany previous Prohibited Transfer. In the event an opinion letter pertaining tosubstantive consolidation was delivered to Lender and the Rating Agencies inconnection with the closing of the Loan, and if any Sale or Pledge permittedunder this Article 7 results in any Person and its Affiliates owning in excessof forty-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**

 

Notwithstanding the foregoing provisions of this Article 7, followingthe date which is six (6) months from the Closing Date, Lender shall notunreasonably withhold consent to a transfer of the Property in its entirety to, and the related assumption of the Loan by, any Person (a **“Transferee****”**) providedthat each of the following terms and conditions are satisfied:

 

(a)           noDefault or Event of Default has occurred;

 

(b)           Borrower shall have (i)delivered written notice to Lender of the terms of such prospective transfernot less than forty-five (45) days before the date on which such transfer is scheduledto close and, concurrently therewith, all such information concerning theproposed Transferee as Lender shall reasonably require and (ii) paid to Lendera non-refundable processing fee in the amount of $10,000.  Lender shall have the right to approve ordisapprove the proposed transfer based on its then current underwriting andcredit requirements for similar loans secured by similar properties which loansare sold in the secondary market, such approval not to be unreasonablywithheld. In determining whether to give or withhold its approval of the proposedtransfer, Lender shall consider the experience and track record of Transfereeand its principals in owning and operating facilities similar to the Property,the financial strength of Transferee and its principals, the general businessstanding of Transferee and its principals and

 

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Transferee’sand its principals’ relationships and experience with contractors, vendors,tenants, lenders and other business entities; provided, however, that,notwithstanding Lender’s agreement to consider the foregoing factors indetermining whether to give or withhold such approval, such approval shall begiven or withheld based on what Lender determines to be commercially reasonableand, if given, may be given subject to such conditions as Lender may deemreasonably appropriate;

 

(c)           Borrower shall havepaid to Lender, concurrently with the closing of such transfer, (i) anon-refundable assumption fee in an amount equal to one percent (1.0%) of the thenoutstanding principal balance of the Note, and (ii) all out-of-pocket costs andexpenses, including reasonable attorneys’ fees, incurred by Lender inconnection with the transfer;

 

(d)           (i) Transferee shallhave assumed and agreed to pay the Debt as and when due subject to theprovisions of Article 15 hereof and, prior to or concurrently with the closingof such transfer, Transferee and its constituent partners, members orshareholders as Lender may require, shall have executed, without any cost orexpense to Lender, such documents and agreements as Lender shall reasonablyrequire to evidence and effectuate said assumption and (ii) if required byLender, a Person affiliated with Transferee and acceptable to Lender shall haveassumed the obligations of Borrower Principal under the Loan Documents withrespect to all acts and events occurring or arising after the transfer of theProperty pursuant to this Section 7.5;

 

(e)           Borrower andTransferee, without any cost to Lender, shall furnish any information requestedby Lender for the preparation of, and shall authorize Lender to file, new financingstatements and financing statement amendments and other documents to thefullest extent permitted by applicable law, and shall execute any additionaldocuments reasonably requested by Lender;

 

(f)            Borrower shall havedelivered to Lender, without any cost or expense to Lender, such endorsementsto Lender’s Title Insurance Policy insuring that fee simple or leasehold title tothe Property, as applicable, is vested in Transferee (subject to PermittedEncumbrances), hazard insurance endorsements or certificates and other similarmaterials as Lender may deem necessary at the time of the transfer, all in formand substance satisfactory to Lender;

 

(g)           Transferee shall havefurnished to Lender, if Transferee is a corporation, partnership, limitedliability company or other entity, all appropriate papers evidencing Transferee’sorganization and good standing, and the qualification of the signers to executethe assumption of the Debt, which papers shall include certified copies of alldocuments relating to the organization and formation of Transferee and of theentities, if any, which are partners 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 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;

 

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(i)            Transferee shallfurnish an opinion of counsel satisfactory to Lender and its counsel (A) thatTransferee’s formation documents provide for the matters described insubparagraph (g) above, (B) that the assumption of the Debt has been dulyauthorized, executed and delivered, and that the Note, the Mortgage, thisAgreement, the assumption agreement and the other Loan Documents are valid,binding and enforceable against Transferee in accordance with their terms, (C)that Transferee and any entity which is a controlling stockholder, member orgeneral partner of Transferee, have been duly organized, and are in existence andgood standing, and (E) with respect to such other matters as Lender mayreasonably request;

 

(j)            if required by Lender,Lender shall have received confirmation in writing from the Rating Agenciesthat rate the Securities to the effect that the transfer will not result in aqualification, downgrade or withdrawal of any rating initially assigned or tobe assigned to the Securities;

 

(k)           Borrower’s obligationsunder the contract of sale pursuant to which the transfer is proposed to occurshall expressly be subject to the satisfaction of the terms and conditions ofthis Section 7.5; and

 

(1)           Transferee shall, priorto such transfer, deliver a substantive non-consolidation opinion to Lender,which opinion shall be in form, scope and substance acceptable in all respectsto Lender and the Rating Agencies.

 

A consentby Lender with respect to a transfer of the Property in its entirety to, andthe related assumption of the Loan by, a Transferee pursuant to this Section 7.5shall not be construed to be a waiver of the right of Lender to consent to anysubsequent Sale or Pledge of the Property. Upon the transfer of the Propertypursuant to this Section 7.5, Borrower and Borrower Principal shall be relievedof all liability 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.

 

**Section 7.6.****  Assumptionby Inland Permitted Transferee**

 

Notwithstanding the foregoing provisions of this Article 7, Borrowershall be permitted to transfer the Property in its entirety to, provided theLoan is simultaneously assumed by, an Inland Permitted Transferee, and providedfurther that each of the following terms and conditions is satisfied:

 

(a)           noDefault or Event of Default has occurred;

 

(b)           Borrower shall havedelivered written notice to Lender of the terms of such prospective transfernot less than forty-five (45) days before the date on which such transfer is scheduledto close and, concurrently therewith, all such information concerning theproposed Transferee as Lender shall reasonably require;

 

(c)           Borrower shall havepaid to Lender all out-of-pocket costs and expenses, including reasonableattorneys’ fees, incurred by Lender in connection with the transfer;

 

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(d)           such Inland PermittedTransferee assumes and agrees to pay the Debt as and when due subject to theprovisions of Article 15 hereof and, prior to or concurrently with the closingof such transfer, such Inland Permitted Transferee and its constituentpartners, members or shareholders as Lender may require, shall execute, withoutany cost or expense to Lender, such documents and agreements as Lender shallreasonably require to evidence and effectuate said assumption;

 

(c)           Borrower and such InlandPermitted Transferee, 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 havedelivered to Lender, without any cost or expense to Lender, endorsements toLender’s Title Insurance Policy insuring that fee simple title to the Propertyis vested in such Inland Permitted Transferee  (subject to Permitted Encumbrances),hazard insurance endorsements or certificates and other similar materials asLender may deem necessary at the time of the transfer, all in form andsubstance satisfactory to Lender;

 

(g)           such Inland PermittedTransferee shall have furnished to Lender, if such Inland Permitted Transfereeis a corporation, partnership, limited liability company or other entity, all appropriatepapers evidencing Transferee’s organization and good standing, and thequalification of the signers to execute the assumption of the Debt, whichpapers 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.  Transfereeand such constituent partners, members or shareholders of Transferee (as thecase may be), as Lender shall require, shall comply with the covenants setforth in Article 6 hereof, provided, however, that, (i) if such InlandPermitted Transferee is a limited partnership or a limited liability company(with more than one member), Lender may require that the general partner ormanaging member of such Inland Permitted Transferee also comply with thecovenants set forth in Article 6, as modified to state that such generalpartner or managing member holds an interest in the Inland Permitted Transfereerather than an interest in the Property or (ii) if such Inland PermittedTransferee is a single member limited liability company, the state oforganization of such entity must he Delaware and the organizational documentsmust provide for a springing member upon the bankruptcy or dissolution of thesole member;

 

(h)           such Inland PermittedTransferee shall assume the obligations of Borrower under any ManagementAgreement or provide a new management agreement with a new manager which meetswith the requirements of Section 5.14 hereof and assign to Lender as additionalsecurity such new management agreement;

 

(i)            Transferee shallfurnish an opinion of counsel satisfactory to Lender and its counsel (A) thatTransferee’s formation documents provide for the matters described insubparagraph (g) above, (B) that the assumption of the Debt has been duly authorized,executed and delivered, and that the Note, the Mortgage, this Agreement, theassumption agreement and the other Loan Documents are valid, binding andenforceable against Transferee in accordance with their terms, (C) thatTransferee and any entity which is a controlling stockholder, member

 

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or generalpartner of Transferee, have been duly organized, and are in existence and goodstanding, and (E) with respect to such other matters as Lender may reasonablyrequest, including, without limitation, customary single member limitedliability company opinions in the event that suchInland Permitted Transferee is a Delaware limited liability company; and

 

(j)            inthe event a substantive non-consolidation opinion was required in connectionwith the closing of the Loan, Transferee shall, prior to such transfer, delivera substantive non-consolidation opinion to Lender, which opinion shall be inform, scope and substance acceptable in all respects to Lender and the RatingAgencies.

 

A consentby Lender with respect to a transfer of the Property in its entirety to, andthe related assumption of the Loan by, a Transferee pursuant to this Section7.6 shall not be construed to be a waiver of the right of Lender to consent toany subsequent Sale or Pledge of the Property.

 

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

 

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

 

(a)           Subject to theprovisions of paragraph (g) of this Section 8.1, Borrower shall obtain andmaintain, or cause American Express to maintain, insurance for Borrower and theProperty providing at least the following coverages:

 

(i)            comprehensive“special causes of loss” form of insurance (or its equivalent) on theImprovements and the Personal Property (A) in an amount equal to not less thanone hundred percent (100%) of the “Full Replacement Cost,” which for purposesof this Agreement shall mean actual replacement value (exclusive of costs ofexcavations, foundations, underground utilities and footings) with a waiver ofdepreciation; (B) written on a replacement cost basis and containing either anagreed amount endorsement with respect to the Improvements and PersonalProperty or a waiver of all co-insurance provisions; (C) providing for nodeductible in excess of $10,000 for all such insurance coverage; (D) at alltimes insuring against at least those hazards that are commonly insured againstunder a “special causes of loss” form of policy, as the same shall exist on thedate hereof, and together with any increase in the scope of coverage providedunder such form after the date hereof; and (E) if any of the Improvements orthe use of the Property shall at any time constitute legal non-conformingstructures or uses, providing coverage for contingent liability from Operationof Building Laws, Demolition Costs and Increased Cost of ConstructionEndorsements and containing an “Ordinance or Law Coverage” or “Enforcement”endorsement. In addition, Borrower shall obtain: (y) if any portion of theImprovements is currently or at any time in the future located in a “specialflood hazard area” designated by the Federal Emergency Management Agency, floodhazard insurance in an amount equal to the maximum amount of such insuranceavailable under the National Flood Insurance Act of 1968, the Flood DisasterProtection Act of 1973 or the National Flood Insurance Reform Act of 1994, aseach may be amended; and (Z) earthquake insurance in amounts and in form andsubstance reasonably satisfactory to Lender in the event the Property is locatedin an area with a high degree of seismic risk, provided that the insurancepursuant to

 

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clauses (y) and (z) hereof shall be onterms consistent with the special causes of loss form required under this subsection(i);

 

(ii)           commercialgeneral liability insurance against claims for personal injury, bodily injury,death or property damage occurring upon, in or about the Property, with suchinsurance (A) to be on the so-called “occurrence” form with a general aggregatelimit of not less than $2,000,000 and a per occurrence limit of not less than$1,000,000; (B) to continue at not less than the aforesaid limit until requiredto be changed by Lender in writing by reason of changed economic conditionsmaking such protection inadequate; and (C) to cover at least the followinghazards: (1) premises and operations; (2) products and completed operations;(3) independent contractors; (4) blanket contractual liability; and (5)contractual liability covering the indemnities contained in Article 12 andArticle 14 hereof to the extent the same is available;

 

(iii)          ifthe rating of American Express issued by the Rating Agencies falls below theTrigger Rating, loss of rents insurance or business income insurance, asapplicable, (A) with loss payable to Lender; (B) covering all risks required tobe covered by the insurance provided for in subsection (i) above; and (C) whichprovides that after the physical loss to the Improvements and Personal Propertyoccurs, the loss of rents or income, as applicable, will be insured until suchrents or income, as applicable, cither returns to the same level that existedprior to the loss or the expiration of twelve (12) months, whichever firstoccurs, and notwithstanding that the policy may expire prior to the end of suchperiod; and (D) which contains an extended period of indemnity endorsementwhich provides that after the physical loss to the Improvements and PersonalProperty has been repaired, the continued loss of income will be insured untilsuch income either returns to the same level it was at prior to the loss, orthe expiration of twelve (12) months from the date that the Property isrepaired or replaced and operations are resumed, whichever first occurs, andnotwithstanding that the policy may expire prior to the end of such period. Theamount of such loss of rents or business income insurance, as applicable, shallbe determined prior to the date hereof and at least once each year thereafterbased on Borrower’s reasonable estimate of the gross income from the Propertyfor the succeeding period of coverage required above. All proceeds payable toLender pursuant to this subsection shall be held by Lender and shall be appliedto the obligations secured by the Loan Documents from time to time due andpayable hereunder and under the Note; provided, however, that nothing hereincontained shall be deemed to relieve Borrower of its obligations to pay theobligations secured by the Loan Documents on the respective dates of paymentprovided for in the Note, this Agreement and the other Loan Documents except tothe extent such amounts are actually paid out of the proceeds of such loss ofrents or business income insurance, as applicable;

 

(iv)          atall times during which structural construction, repairs or alterations arebeing made with respect to the Improvements, and only if the Property coverageform does not otherwise apply, (A) owner’s contingent or protective liabilityinsurance covering claims not covered by or under the terms or provisions ofthe above mentioned commercial general liability insurance policy; and (B) theinsurance provided for in subsection (i) above written in a so-called Builder’sRisk Completed Value form (1) on a non-reporting basis, (2) against “specialcauses of loss” insured against pursuant to

 

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subsection (i) above, (3) includingpermission to occupy the Property, and (4) with an agreed amount endorsementwaiving co-insurance provisions;

 

(v)           workers’compensation, subject to the statutory limits of the State, and employer’sliability insurance in respect of any work or operations on or about theProperty, or in connection with the Property or its operation (if applicable);

 

(vi)          comprehensiveboiler and machinery insurance, if applicable, in amounts as shall bereasonably required by Lender on terms consistent with the commercial propertyinsurance policy required under subsection (i) above;

 

(vii)         excessliability insurance in an amount not less than $75,000,000 per occurrence onterms consistent with the commercial general liability insurance required undersubsection (ii) above; and

 

(viii)        upon sixty (60) days’ written notice, such other reasonableinsurance and in such reasonable amounts as Lender from time to time mayreasonably request against such other insurable hazards which at the time arecommonly insured against for property similar to the Property located in oraround the region in which the Property is located.

 

With respect to the policies required to be maintained pursuant toclauses (i) through (viii) above, Borrower shall use commercially reasonableefforts, consistent with those of prudent owners of institutional qualitycommercial real estate, to maintain insurance against Losses resulting fromacts of terrorism.

 

(b)           All insurance providedfor in Section 8.1(a) shall be obtained under valid and enforceable policies(collectively, the **“Policies”** orin the singular, the **“Policy”**), andshall be subject to the approval of Lender as to insurance companies, amounts,deductibles, loss payees and insureds. The Policies shall be issued by financially sound and responsibleinsurance companies authorized to do business in the State and having a claimspaying ability rating of “A-” or better by S&P (or such other ratingsapproved by Lender) and/or a general policy rating of “A” or better and afinancial class of VIII or better by A.M. Best Company, Inc.  The Policies described in Section 8.1(a)shall designate Lender and its successors and assigns as additional insureds,mortgagees and/or loss payee as deemed appropriate by Lender. To the extentsuch Policies are not available as of the Closing Date, Borrower shall deliverto Lender prior to the Closing Date an Acord 28 or similar certificate ofinsurance evidencing the coverages and amounts required hereunder and, uponrequest of Lender as soon as available after the Closing Date, certified copiesof all Policies.  Not less than ten (10)days prior 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 **“Insurance Premiums”**),and, as soon as available thereafter, certified copies of all renewal Policies.

 

(c)           Any blanket insurancePolicy shall specifically allocate to the Property the amount of coverage fromtime to time required hereunder and shall otherwise provide the same protectionas would a separate Policy insuring only the Property in compliance with the provisionsof Section 8.1 (a).

 

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(d)           All Policies providedfor or contemplated by Section 8.1(a), except for the Policy referenced inSection 8.l(a)(v), shall name Borrower as the insuredand Lender as the additional insured, as its interests may appear, and in thecase of property damage, boiler and machinery, flood and earthquake insurance,shall contain a so-called New York standard non-contributing mortgagee clausein favor of Lender providing that the loss thereunder shall be payable to Lender.

 

(e)           All Policies providedfor in Section 8.1(a) shall contain clauses or endorsements to the effect that:

 

(i)            noact or negligence of Borrower, or anyone acting for Borrower, or of any Tenantor other occupant, or failure to comply with the provisions of any Policy,which might otherwise result in a forfeiture of the insurance or any partthereof, shall in any way affect the validity or enforceability of the insuranceinsofar as Lender is concerned;

 

(ii)           thePolicies shall not be materially changed (other than to increase the coverageprovided thereby) or canceled by the insurer without at least thirty (30) days’(ten (10) days’ in the case of non-payment of premium) prior written notice toLender and any other party named therein as an additional insured;

 

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

 

(iv)          Lendershall not be liable for any Insurance Premiums thereon or subject to anyassessments thereunder.

 

(f)            If at any time Lenderis not in receipt of written evidence that all insurance required hereunder isin full force and effect, Lender shall have the right, without notice to Borrower,to take such action as Lender deems necessary to protect its interest in theProperty, including, without limitation, obtaining such insurance coverage asLender in its sole discretion 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 anyother provision hereof to the contrary, Lender acknowledges that so long as noAmerican Express Lease Default has occurred, Borrower shall not be required toobtain the insurance coverages set forth in paragraphs (a)(i) through (viii) if(x) Guarantor (or American Express if there is no Guarantor) is a self-insurerand maintains a rating issued by the Rating Agencies of not less than theTrigger Rating or (y) American Express maintains insurance with coverages andcarriers in compliance with the terms of the American Express Lease.

 

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

 

If the Property shall be damaged or destroyed, in whole or in part, byfire or other casualty (a **“Casualty”**),Borrower shall give prompt notice of such damage to Lender and shall promptlycommence and diligently prosecute the Restoration of the Property in accordancewith

 

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Section 8.4,whether or not Lender makes any Net Proceeds available pursuant to Section 8.4.Borrower shall pay all costs of such Restoration whether or not such costs arecovered by insurance. Lender may, but shall not be obligated to make proof ofloss if not made promptly by Borrower. Borrower shall adjust all claims forInsurance Proceeds in consultation with, and approval of, Lender; provided,however, if an Event of Default has occurred and is continuing, Lender shall have the exclusive right to participate inthe adjustment of all claims for Insurance Proceeds.

 

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

 

Borrower shall promptly give Lender notice of the actual or threatenedcommencement of any proceeding for the Condemnation of the Property of whichBorrower has knowledge and shall deliver to Lender copies of any and all papersserved in connection with such proceedings. Lender may participate in any such proceedings, and Borrower shall fromtime to time deliver to Lender all instruments requested by it to permit suchparticipation. Borrower shall, at its expense, diligently prosecute any suchproceedings, and shall consult with Lender, its attorneys and experts, andcooperate with them in the carrying on or defense of any such proceedings.Notwithstanding any taking by any public or quasi-public authority throughCondemnation or otherwise (including but not limited to any transfer made inlieu of or in anticipation of the exercise of such taking), Borrower shallcontinue to pay the Debt at the time and in the manner provided for its paymentin the Note and in this Agreement and the Debt shall not be reduced until anyAward shall have been actually received and applied by Lender, after thededuction of expenses of collection, to the reduction or discharge of the Debt.Lender shall not be limited to the interest paid on the Award by the condemningauthority but shall be entitled to receive out of the Award interest at therate or rates provided herein or in the Note. If the Property or any portionthereof is taken by a condemning authority, Borrower shall promptly commenceand diligently prosecute the Restoration of the Property and otherwise complywith the provisions of Section 8.4, whether or not Lender makes any NetProceeds available pursuant to Section 8.4. If the Property is sold, throughforeclosure or otherwise, prior to the receipt by Lender of the Award, Lendershall have the right, whether or not a deficiency judgment on the Note shallhave been sought, recovered or denied, to receive the Award, or a portionthereof sufficient to pay the Debt.  Solong as no American Express Lease Default has occurred, the payment andallocation of any Awards shall be governed by the American Express Lease.

 

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

 

The following provisions shall apply in connection with the Restorationof the Property:

 

(a)           If the Net Proceedsshall be less than $50,000 and the costs of completing the Restoration shall beless than $50,000, the Net Proceeds will be disbursed by Lender to Borrower uponreceipt, provided that all of the conditions set forth in Section 8.4(b)(i) are met and Borrower delivers to Lender a writtenundertaking to expeditiously commence and to satisfactorily complete with duediligence the Restoration in accordance with the terms of this Agreement.

 

(b)           If the Net Proceeds areequal to or greater than $50,000 or the costs of completing the Restoration areequal to or greater than $50,000, Lender shall make the Net Proceeds

 

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available for the Restoration in accordance with theprovisions of this Section 8.4. The term **“Net Proceeds”**for purposes of thisSection 8.4 shall mean: (i) the net amount of all insurance proceeds receivedby Lender pursuant to Section 8.1(a)(i), (iv), (vi) and (viii) as a result of aCasualty, after deduction of its reasonable costs and expenses (including, butnot limited to, reasonable counsel fees), if any, in collecting the same (**“InsuranceProceeds”**)**,**or(ii) the net amount of the Award as a result of a Condemnation, after deductionof its reasonable costs and expenses (including, but not limited to, reasonablecounsel fees), if any, in collecting the same (**“Condemnation Proceeds”**),****whichever the case may be.

 

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

 

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

 

(B)           (1) in the event the Net Proceeds are Insurance Proceeds, less thanthirty percent (30%) of the total floor area of the Improvements on theProperty has been damaged, destroyed or rendered unusable as a result of aCasualty, or (2) in the event the Net Proceeds are Condemnation Proceeds, lessthan ten percent (10%) of the land constituting the Property is taken, suchland is located along the perimeter or periphery of the Property, and noportion of the Improvements is located on such land;

 

(C)           The American Express Lease shall remain in full force and effect duringand after completion of the Restoration without abatement of Rent;

 

(D)          Borrower shall commence the Restoration as soon as reasonably practicable(but in no event later than sixty (60) days after such Casualty or Condemnation,whichever the case may be, occurs) and shall diligently pursue the same tosatisfactory completion;

 

(E)           Lender shall be satisfied that any operating deficits, including all scheduledpayments under the Note, which will be incurred with respect to the Property asa result of the occurrence of any such Casualty or Condemnation, whichever thecase may be, will be covered out of the insurance coverage referred to inSection 8.1(a)(iii) above;

 

(F)           Lender shall be satisfied that the Restoration will be completed on orbefore the earliest to occur of (1) six (6) months prior to the Maturity Date, (2)the earliest date required for such completion under the terms of any Leases ormaterial agreements affecting the Property, (3) such time as may be required underapplicable zoning law, ordinance, rule or regulation, or (4) the expiration of theinsurance coverage referred to in Section 8.1(a)(iii);

 

(G)           the Property and the use thereof after the Restoration will be in compliancewith and permitted under all Legal Requirements;

 

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(H)          the Restoration shall be done and completed by Borrower in an expeditiousand diligent fashion and in compliance with all applicable 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 or cash equivalent deposited byBorrower with Lender are sufficient in Lender’s reasonable judgment to coverthe cost of the Restoration.

 

(ii)           The Net Proceeds shall be held by Lender until disbursements commence,and, until disbursed in accordance with the provisions of this Section 8.4,shall constitute additional security for the Debt and other obligations underthe Loan Documents. The Net Proceeds shall be disbursed by Lender to, or asdirected by, Borrower from time to time during the course of the Restoration,upon receipt of evidence satisfactory to Lender that (A) all the conditions precedentto such advance, including those set forth in Section 8.4(b)(i), have beensatisfied, (B) all materials installed and work and labor performed (except tothe extent that they are to be paid for out of the requested disbursement) inconnection with the related Restoration item have been paid for in full, and(C) there exist no notices of pendency, stop orders, mechanic’s or materialman’sliens or notices of intention to file same, or any other liens or encumbrancesof any nature whatsoever on the Property which have not either been fullybonded to the satisfaction of Lender and discharged of record or in thealternative fully insured to the satisfaction of Lender by the title companyissuing the Title Insurance Policy. Notwithstanding the foregoing, BusinessInterruption Proceeds required to be maintained by Borrower pursuant to section8.1(a)(iii) shall be controlled by Lender at all times, shall not be subject tothe provisions of this Section 8.4 and shall be used solely for the payment ofthe obligations under the Loan Documents and Operating Expenses.

 

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

 

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(iv)          Inno event shall Lender he obligated to make disbursements of the Net Proceeds inexcess of an amount equal to the costs actually incurred from time to time forwork in place as part of the Restoration, as certified by the RestorationConsultant, minus the Restoration Retainage. The term **“Restoration Retainage”**shall mean anamount equal to ten percent (10%) of the costs actually incurred for work inplace as part of the Restoration, as certified by the Restoration Consultant,until the Restoration has been completed. The Restoration Retainage shall bereduced to five percent (5%) of the costs incurred upon receipt by Lender ofsatisfactory evidence that fifty percent (50%) of the Restoration has beencompleted. The Restoration Retainage shall in no event, and notwithstandinganything to the contrary set forth above in this Section 8.4(b), be lessthan the amount actually held back by Borrower from contractors, subcontractorsand materialmen engaged in the Restoration. The Restoration Retainage shall notbe released until the Restoration Consultant certifies to Lender that theRestoration has been completed in accordance with the provisions of thisSection 8.4(b) and that all approvals necessary for the re-occupancy and use ofthe Property have been obtained from all appropriate Governmental Authorities,and Lender receives evidence satisfactory to Lender that the costs of theRestoration have been paid in full or will be paid in full out of theRestoration Retainage; provided, however, that Lender will release the portionof the Restoration Retainage being held with respect to any contractor,subcontractor or materialman engaged in the Restoration as of the date uponwhich the Restoration Consultant certifies to Lender that the contractor,subcontractor or materialman has satisfactorily completed all work and hassupplied all materials in accordance with the provisions of the contractor’s,subcontractor’s or materialman’s contract, the contractor, subcontractor ormaterialman delivers the lien waivers and evidence of payment in full of allsums due to the contractor, subcontractor or materialman as may be reasonablyrequested by Lender or by the title company issuing the Title Insurance Policy,and Lender receives an endorsement to the Title Insurance Policy insuring thecontinued priority of the lien of the Mortgage and evidence of payment of anypremium payable for such endorsement. If required by Lender, the release of anysuch portion of the Restoration Retainage shall be approved by the surety company,if any, which has issued a payment or performance bondwith respect to the contractor, subcontractor or materialman.

 

(v)           Lendershall not he obligated to make disbursements of the Net Proceeds morefrequently than once every calendar month.

 

(vi)          Ifat any time the Net Proceeds or the undisbursed balance thereof shall not, inthe reasonable opinion of Lender in consultation with the RestorationConsultant, be sufficient to pay in full the balance of the costs which areestimated by the Restoration Consultant to be incurred in connection with thecompletion of the Restoration, Borrower shall deposit the deficiency (the **“Net****Proceeds Deficiency”**) with Lender before any further disbursement of the Net Proceedsshall be made. The Net Proceeds Deficiency deposited with Lender shall be heldby Lender and shall be disbursed for costs actually incurred in connection withthe Restoration on the same conditions applicable to the disbursement of theNet Proceeds, and until so disbursed pursuant to this Section 8.4(b) shallconstitute additional security for the Debt and other obligations under theLoan Documents.

 

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(vii)         Theexcess, if any, of the Net Proceeds and the remaining balance, if any, of theNet Proceeds Deficiency deposited with Lender after the Restoration Consultantcertifies to Lender that the Restoration has been completed in accordance withthe provisions of this Section 8.4(b), and the receipt by Lender of evidencesatisfactory to Lender that all costs incurred in connection with theRestoration have been paid in full, shall be remitted by Lender to Borrower,provided no Event of Default shall have occurred and shall be continuing underthe Note, this Agreement or any of the other Loan Documents.

 

(c)           All Net Proceeds notrequired (i) to be made available for the Restoration or (ii) to be returned toBorrower as excess Net Proceeds pursuant to Section 8.4(b)(vii) may (x) be retainedand applied by Lender toward the payment of the Debt whether or not then dueand payable in such order, priority and proportions as Lender in its solediscretion shall deem proper, or, (y) at the sole discretion of Lender, thesame may be paid, either in whole or in part, to Borrower for such purposes andupon such conditions as Lender shall designate.

 

(d)           In the event offoreclosure of the Mortgage, or other transfer of title to the Property inextinguishment in whole or in part of the Debt, all right, title and interestof Borrower in and to the Policies then in force concerning the Property andall proceeds payable thereunder shall thereupon vest in the purchaser at suchforeclosure, Lender or other transferee in the event of such other transfer oftitle.

 

(e)           Notwithstanding theforegoing, so long as no American Express Lease Default has occurred, the NetProceeds shall be used for restoration of the Property in accordance with theprovisions of the American Express Lease.

 

**ARTICLE 9REPLACEMENTS; RESERVE FUNDS**

 

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

 

On an ongoing basis throughout the term of the Loan, Borrower shallmake capital repairs, replacements and improvements necessary to keep theProperty in good order and repair and in a good marketable condition or preventdeterioration of the Property. So long as no American Express Lease Defaultshall have occurred, the compliance by American Express with its obligationsfor maintenance of the Property as set forth in the American Express Leaseshall be deemed compliance by Borrower with the provisions of this Section 9.1.

 

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

 

If required by Lender following a default by American Express under theAmerican Express Lease Borrower shall establish an Eligible Account with Lenderor Lender’s agent sufficient to discharge Borrower’s obligations for thepayment of Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1hereof (the **“Tax and Insurance Reserve Account”**)Borrower shall deposit into the Tax and Insurance Reserve Account on eachScheduled Payment Date (a) one-twelfth of the Taxes that Lender estimates willbe payable during the next ensuing twelve (12) months or such higher amountnecessary to accumulate with Lender sufficient funds to pay all such Taxes atleast thirty (30) days prior to the earlier of (i) the date that the same will

 

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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.l(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”**), Lender will apply theTax and Insurance Reserve Funds to payments of Taxes and Insurance Premiumsrequired to be made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.In making any disbursement from the Tax and Insurance Reserve Account, Lendermay do so according to any bill, statement or estimate procured from theappropriate public office or tax lien service (with respect to Taxes) orinsurer or agent (with respect to Insurance Premiums), without inquiry into theaccuracy of such bill, statement or estimate or into the validity of any tax,assessment, sale, forfeiture, tax lien or title or claim thereof. If the amountof the Tax and Insurance Reserve Funds shall exceed the amounts due for Taxesand Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof, Lendershall, in its sole discretion, return any excess to Borrower or credit suchexcess against future payments to be made to the Tax and Insurance ReserveAccount. In allocating any such excess, Lender may deal with the person shownon Lender’s records as being the owner of the Property. Any amount remaining inthe Tax and Insurance Reserve Account after the Debt has been paid in fullshall be returned to Borrower or the person shown on Lender’s records as beingthe owner of the Property and no other party shall have any right or claimthereto.  If at any time Lenderreasonably determines that the Tax and Insurance Reserve Funds are not or willnot be sufficient to pay Taxes and Insurance Premiums by the dates set forth in(a) and (b) above, Lender shall notify Borrower of such determination andBorrower shall pay to Lender any amount necessary to make up the deficiencywithin ten (10) days after notice from Lender to Borrower requesting paymentthereof.

 

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

 

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

 

(b)           Borrower grants toLender a first-priority perfected security interest in, and assigns and pledgesto Lender, each of the Reserve Accounts and any and all funds hereafter depositedtherein as additional 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.  Theprovisions of this Section 9.9 are intended to give Lender or any subsequentholder of the Loan “control” of the Reserve Accounts within the meaning of the UCC.

 

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(c)           The Reserve Accountsand any and all Reserve Funds deposited therein shall be subject to theexclusive dominion and control of Lender, which shall hold the Reserve Accountsand any or all Reserve Funds now or hereafter deposited therein subject to theterms and conditions of this Agreement. Borrower shall have no right of withdrawal from the Reserve Accounts orany other right or power with respect to the Reserve Accounts or any or all ofthe Reserve Funds hereinafter deposited therein, except as expressly providedin this Agreement.

 

(d)           Lender shall furnish orcause to be furnished to Borrower, without charge, an annual accounting of eachReserve Account in the normal formal of Lender or its loan servicer, showingcredits and debits to such Reserve Account and the purpose for which each debitto such Reserve Account was made.

 

(e)           As long as no Event ofDefault has occurred, Lender shall make disbursements from the Reserve Accountsin accordance with this Agreement. All such disbursements shall be deemed tohave been expressly pre-authorized by Borrower, and shall not be deemed to constitutethe exercise by Lender of any remedies against Borrower unless an Event ofDefault has occurred and is continuing and Lender has expressly stated inwriting its intent to proceed to exercise its remedies as a secured party,pledgee or lienholder with respect to the Reserve Accounts.

 

(f)            The Reserve Fundsshall not constitute escrow or trust funds and may be commingled with othermonies held by Lender. Notwithstanding anything else herein to the contrary,Lender may commingle in one or more Eligible Accounts any and all fundscontrolled by Lender, including, without limitation, funds pledged in favor ofLender by other borrowers, whether for the same purposes as the ReserveAccounts or otherwise. Without limiting any other provisions of this Agreementor any other Loan Document, the Reserve Accounts may be established and held insuch name or names as Lender or its loan servicer, as agent for Lender, shalldeem appropriate, including, without limitation, in the name of Lender or suchloan servicer as agent for Lender. In the case of any Reserve Account which isheld in 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 thereimbursement or payment of the costs and expenses for which such accounts wereestablished in accordance with their terms. Upon assignment of the Loan byLender, any Reserve Funds shall be turned over to the assignee and anyresponsibility of Lender as assignor shall terminate. The requirements of thisAgreement concerning Reserve Accounts in no way supersede, limit or waive anyother rights or obligations of the parties under any of the Loan Documents orunder applicable law.

 

(g)           Borrower shall not,without obtaining the prior written consent of Lender, further pledge, assignor grant any security interest in the Reserve Accounts or the Reserve Fundsdeposited therein or permit any Lien to attach thereto, except for the securityinterest granted in this Section 9.9, or any levy to be made thereon, or anyUCC Financing Statements, except those naming Lender as the secured party, tobe filed with respect thereto.

 

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(h)            Borrower will maintainthe security interest created by this Section 9.9 as a first priority perfectedsecurity interest and will defend the right, title and interest of Lender inand to the Reserve Accounts and the Reserve Funds against the claims anddemands of all Persons whomsoever. At any time and from time to time, upon thewritten request of Lender, and at the sole expense of Borrower, Borrower willpromptly and duly execute and deliver such further instruments and documentsand will take such further actions as Lender reasonably may request for thepurpose of obtaining or preserving the full benefits of this Agreement and ofthe rights and powers herein granted.

 

**ARTICLE 10**

**CASH MANAGEMENT**

 

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

 

(a)           Borrower acknowledgesand confirms that Borrower has established, and Borrower covenants that itshall maintain an Eligible Account into which Borrower shall, and shall causeManager to, deposit or cause to be deposited all Rents and other revenue fromthe Property during the Cash Management Period or upon the occurrence of anEvent of Default prior to the commencement of the Cash Management Periodpursuant to the terms of Section 10.2 hereof (such account, the sub-accountsthereof, all funds at any time on deposit therein and any proceeds,replacements or substitutions of such account or funds therein, are referred toherein as the **“Cash Management Account”**).

 

(b)           The Cash ManagementAccount shall be in the name of Borrower for the benefit of Lender, providedthat Borrower shall be the owner of all funds on deposit in such accounts forfederal and applicable state and local tax purposes (except to the extentLender retains any interest earned on the Cash Management Account for its ownaccount following the occurrence and during the continuance of an Event ofDefault), Sums on deposit in the Cash Management Account shall not he investedexcept in such Permitted Investments as determined and directed by Lender andall income earned thereon shall be the income of Borrower and be applied to andbecome part of the Cash Management Account, to be disbursed in accordance withthis Article 10.  Lender shall have noliability for any loss resulting from the investment of funds in PermittedInvestments in accordance with the terms and conditions of this Agreement.

 

(c)           The Cash ManagementAccount shall be subject to the exclusive dominion and control of Lender duringthe Cash Management Period or the continuance of an Event of Default and,except as otherwise expressly provided herein, neither Borrower, Manager norany other party claiming on behalf of, or through, Borrower or Manager, shall haveany right of withdrawal therefrom or any other right or power with respectthereto.

 

(d)           Borrower agrees to paythe customary fees and expenses incurred in connection with maintaining theCash Management Account.

 

(e)           Lender shall beresponsible for the performance only of such duties with respect to the CashManagement Account as are specifically set forth herein, and no duty shall be impliedfrom any provision hereof.  Lender shallnot be under any obligation or duty to perform any act which would involve itin expense or liability or to institute or defend any suit in respect

 

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hereof,or to advance any of its own monies. Borrower shall indemnify and hold Lenderand its directors, employees, officers and agents harmless from and against anyloss, cost or damage (including, without limitation, reasonable attorneys’ feesand disbursements) incurred by such parties in connection with the CashManagement Account other than such as result from the gross negligence orwillful misconduct of Lender or intentional nonperformance by Lender of itsobligations under this Agreement.

 

**Section 10.2.****  Depositsand Withdrawals**

 

(a)           Borrower represents, warrants and covenants that:

 

(i)            Concurrentlywith the execution of this Agreement Borrower has executed and delivered toLender an instruction letter in the form of Exhibit B attached hereto addressedto American Express (the “Tenant Direction Letter”).  Upon the occurrence of an Event of Default orupon commencement of the Cash Management Period, Lender or Lender’s agent shallhave the right to deliver the Tenant Direction Letter to American Express andall payments of Rent and other items payable under the American Express Leaseshall thereafter 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)          AllRents or other income from the Property received after the commencement of theCash Management Period or the occurrence of an Event of Default shall (A) bedeemed additional security for payment of the Debt and shall be held in trustfor the benefit, and as the property, of Lender, (B) not be commingled with anyother funds or property of Borrower or Manager, and (C) if received by Borroweror Manager notwithstanding the delivery of the Tenant Direction Letter, bedeposited in the Cash Management Account within one (1) Business Day ofreceipt;

 

(iv)          Withoutthe prior written consent of Lender, so long as any portion of the Debt remainsoutstanding, during the Cash Management Period or the continuance of an Eventof Default neither Borrower nor Manager shall terminate, amend, revoke ormodify the Tenant Direction Letter in any manner whatsoever or direct or causeAmerican Express to pay any amount in any manner other than as provided in theTenant Direction Letter; and

 

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

 

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(b)           Intentionally Omitted.

 

(c)           If an Event of Defaultshall have occurred and be continuing or during a Cash Management Period, oneach Scheduled Payment Date (and if such day is not a Business Day, then theimmediately preceding day which is a Business Day) commencing the month immediatelyfollowing the month during which the Cash Management Period commences, Borrowerhereby irrevocably authorizes Lender to withdraw or allocate to thesub-accounts of the Cash Management Account, as the case may be, amountsreceived in the Cash Management Account, in each case to the extent thatsufficient funds remain therefor:

 

(i)            following a default by American Express under the AmericanExpress Lease, funds sufficient to pay the monthly deposits to the Tax andInsurance Reserve Account shall be allocated to the Tax and Insurance Reserve Accountto be held and disbursed in accordance with Section 9.2;

 

(ii)           funds sufficient to pay the Monthly Payment Amount shall bewithdrawn and paid to Lender;

 

(iii)          fundssufficient to pay any interest accruing at the Default Rate, late paymentcharges, if any, and any other sums due and payable to Lender under any of theLoan Documents, shall be withdrawn and paid to Lender and applied against suchitems;

 

(iv)          funds sufficient to pay Operating Expenses (to the extentactually incurred) for the following month shall be allocated to the OperatingExpense Reserve Account to be held and disbursed to pay Operating Expenses;

 

(v)           fundsin an amount equal to the balance (if any) remaining on deposit in the CashManagement Account after the foregoing withdrawals and allocations shall bewithdrawn and paid to Lender to be applied to the principal amount of the Loanuntil the principal amount of the Loan is paid in full.

 

(d)           Notwithstandinganything to the contrary herein, Borrower acknowledges that Borrower is responsiblefor monitoring the sufficiency of funds deposited in the Cash ManagementAccount and that Borrower is liable for any deficiency in available funds, irrespectiveof whether Borrower has received any account statement, notice or demand from Lenderor Lender’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 Defaultshall have occurred and be continuing, Borrower hereby irrevocably authorizesLender to make any and all withdrawals from the Cash Management Account andtransfers between any Reserve Account as Lender shall determine in Lender’ssole and absolute discretion and Lender may use all funds contained in any suchaccounts for any purpose, including but not limited to repayment of the Debt insuch order, proportion and priority as Lender may determine in its sole and absolutediscretion.  Lender’s right to withdrawand

 

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apply funds as stated hereinshall be in addition to all other rights and remedies provided to Lender underthis Agreement, the Note, the Mortgage and the other Loan Documents.

 

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

 

(a)           To secure the full and punctual payment ofthe Debt and performance of all obligations of Borrower now or hereafterexisting under this Agreement and the other Loan Documents, Borrower herebygrants to Lender a first-priority perfected security interest in each of theAccounts and the Account Collateral.  Furthermore, Borrower shall not, withoutobtaining the prior written consent of Lender, further pledge, assign or grantany security interest in any of the foregoing or permit any Lien to attachthereto or any levy to be made thereon or any UCC Financing Statements to befiled with respect thereto.  Borrowerwill maintain the security interest created by this Section 10.3(a) as a firstpriority 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 anyfinancing statement or statements required by Lender to establish or maintainthe validity, perfection and priority of the security interest granted hereinin connection with the Cash Management Account. Borrower agrees that at any time and from time to time, at the expenseof Borrower, Borrower will promptly and duly execute and deliver all furtherinstruments and documents, and take all further action, that may be necessaryor desirable, or that Lender may reasonably request, in order to perfect andprotect any security interest granted or purported to be granted hereby(including, without limitation, any security interest in and to any PermittedInvestments) or to enable Lender to exercise and enforce its rights andremedies 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 AccountCollateral.  Without limitation of theforegoing, upon any Event of Default, Lender may use the Accounts and theAccount Collateral for any of the following purposes: (A) repayment of theDebt, including, but not limited to, principal prepayments and the prepayment premiumapplicable to such full or partial prepayment (as applicable); (B)reimbursement of Lender for all losses, fees, costs and expenses (including,without limitation, reasonable legal fees) suffered or incurred by Lender as aresult of such Event of Default; (C) payment of any amount expended inexercising any or all rights and remedies available to Lender at law or in equityor under this Agreement or under any of the other Loan Documents; (D) paymentof any item as required or permitted under this Agreement; or (E) any otherpurpose permitted by applicable law; provided, however, that any suchapplication of funds shall not cure or be deemed to cure any Event ofDefault.  Without limiting any otherprovisions hereof, each of the remedial actions described in the immediatelypreceding sentence shall be deemed to be a commercially reasonable exercise ofLender’s rights and remedies as a secured party with respect to the Accountsand the Account Collateral and shall not in any event be deemed to constitute asetoff 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 to effect a cure of any Event of Default, or to pay the Debt,or in any specific order of priority. The exercise of any or all of Lender’srights and remedies under this Agreement or under any of the other Loan

 

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Documentsshall not in any way prejudice or affect Lender’s right to initiate andcomplete a foreclosure under the Mortgage.

 

**ARTICLE 11****EVENTS****OF DEFAULT; REMEDIES**

 

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

 

The occurrence of any one or more of the following events shallconstitute an **“Event of Default”**:

 

(a)           ifany portion of the Debt is not paid on or prior to the tenth day following the datethe same is due or if the entire Debt is not paid on or before the MaturityDate;

 

(b)           except as otherwiseexpressly provided in the Loan Documents, if any of the Taxes or Other Chargesare not paid when the same are due and payable, unless there is sufficientmoney in the Tax and Insurance Reserve Account for payment of amounts then due andpayable and Lender’s access to such money has not been constrained orrestricted in any manner;

 

(c)           should American Expresscease to be a self-insurer or if the rating of American express issued by theRating Agencies falls below the Trigger Rating, if (i) the Policies are not keptin full force and effect, or (ii) the Accord  28 (or similar) certificate is not deliveredto Lender in accordance with Section 8.1;

 

(d)           if Borrower breachesany covenant with respect to itself contained in Article 6 or any covenantcontained in Article 7 hereof;

 

(e)           if any representationor warranty of, or with respect to, Borrower or Borrower Principal, or anymember, general partner, principal or beneficial owner of any of the foregoing,made herein, in any other Loan Document, or in any certificate, report,financial statement or other instrument or document furnished to Lender at thetime of the closing of the Loan or during the term of the Loan shall have beenfalse or misleading in any material respect when made;

 

(f)            if (i) Borrower, orany managing member or general partner of Borrower, Borrower Principal, orAmerican Express shall commence any case, proceeding or other action (A) underany Creditors Rights Laws, seeking to have an order for relief entered withrespect to it, or seeking to adjudicate it a bankrupt or insolvent, or seekingreorganization, or (B) seeking appointment of a receiver, trustee, custodian,conservator or other similar official for it or for all or any substantial partof its assets, or Borrower, any managing member or general partner of Borrower,Borrower Principal, or American Express shall make a general assignment for thebenefit of its creditors; or (ii) there shall be commenced against Borrower,any managing 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 commencedagainst Borrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express any case, proceeding or other action seekingissuance of a warrant of

 

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attachment,execution, distraint or similar process against all or any substantial part ofits assets which results in the entry of any order for any such relief whichshall not have been vacated, discharged, or stayed or bonded pending appealwithin sixty (60) days from the entry thereof; or (iv) Borrower, any managingmember or general partner of Borrower, Borrower Principal, or American Expressshall take any action in furtherance of, or indicating its consent to, approvalof, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)above; or (v) Borrower, any managing member or general partner of Borrower,Borrower Principal, or American Express shall generally not, or shall be unableto, or shall admit in writing its inability to, pay its debts as they becomedue;

 

(g)           if Borrower shall be indefault beyond applicable notice and grace periods under any other mortgage,deed of trust, deed to secure debt or other security agreement covering anypart of the Property, whether it be superior or junior in lien to the Mortgage;

 

(h)           if the Property becomessubject to any mechanic’s, materialman’s or other Lien other than a Lien forany Taxes or Other Charges not then due and payable and the Lien shall remainundischarged of record (by payment, bonding or otherwise) for a period ofthirty (30) days;

 

(i)            if any federal incometax lien is filed against Borrower, any member or general partner of Borrower,Borrower Principal, or the Property and same is not discharged of record (orbonded or insured to Lender’s satisfaction) within thirty (30) days after sameis filed;

 

(j)            ifan uninsured judgment is filed against the Borrower in excess of $20,000 whichis not vacated or discharged (or bonded or insured to Lender’s satisfaction)within 30 days;

 

(k)           ifany default occurs under any guaranty or indemnity executed in connectionherewith and such default continues after the expiration of applicable graceperiods, if any;

 

(l)            if Borrower shallpermit any event within its control to occur that would cause any REA toterminate without notice or action by any party thereto or would entitle anyparty to terminate any REA and the term thereof by giving notice to Borrower;or any REA shall be surrendered, terminated or canceled for any reason or underany circumstance whatsoever except as provided for in such REA; or any term ofany REA shall be modified or supplemented unless permitted by the AmericanExpress Lease; or Borrower shall fail, within ten (10) Business Days after demandby Lender, to exercise its option to renew or extend the term of any REA orshall fail or neglect to pursue diligently all actions necessary to exercisesuch renewal rights pursuant to such REA except as provided for in such REA; or

 

(m)          ifan American Express Lease Default shall occur under the American Express Lease;or

 

(n)           if Borrower shallcontinue to be in default under any other term, covenant or condition of thisAgreement or any of the Loan Documents for more than ten (10) days after noticefrom Lender in the case of any default which can be cured by the payment of asum of money or for thirty (30) days after notice from Lender in the case ofany other default, provided that if such default cannot reasonably be curedwithin such thirty (30) day period and Borrower shall have commenced to curesuch default within such thirty (30) day period and thereafter

 

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diligently andexpeditiously proceeds to cure the same, such thirty (30) day period shall beextended for so long as it shall require Borrower in the exercise of duediligence to cure such default, it being agreed that no such extension shall befor a period in excess of one hundred twenty (120) days.

 

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

 

(a)           Upon the occurrence ofan Event of Default (other than an Event of Default described in Section11.l(f) above) and at any time thereafter Lender may, in addition to any otherrights or remedies available to it pursuant to this Agreement and the otherLoan Documents or at law or in equity, take such action, without notice ordemand, that Lender deems advisable to protect and enforce its rights againstBorrower and in the Property, including, without limitation, declaring the Debtto be immediately due and payable, and Lender may enforce or avail itself of anyor all rights or remedies provided in the Loan Documents against Borrower andthe Property, including, without limitation, all rights or remedies availableat law or in equity; and upon any Event of Default described in Section 11.l(f)above, the Debt and all other obligations of Borrower hereunder and under theother Loan Documents shall immediately and automatically become due andpayable, without notice or demand, and Borrower hereby expressly waives any suchnotice or demand, anything contained herein or in any other Loan Document tothe contrary notwithstanding.

 

(b)           Upon the occurrence ofan Event of Default, all or any one or more of the rights, powers, privilegesand other remedies available to Lender against Borrower under this Agreement orany of the other Loan Documents executed and delivered by, or applicable to, Borroweror at law or in equity may be exercised by Lender at any time and from time totime, whether or not all or any of the Debt shall be declared due and payable,and whether or not Lender shall have commenced any foreclosure proceeding orother action for the enforcement of its rights and remedies under any of theLoan Documents with respect to the Property. Any such actions taken by Lendershall be 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 12ENVIRONMENTAL 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 permits arerequired), if any, and (ii) either (A) in the case of Hazardous Materials, inamounts not in excess of that necessary to operate the Property for the purposesset forth herein or (B) fully disclosed to and approved by Lender in writingpursuant to an Environmental Report; (b) there are no past, present orthreatened Releases of Hazardous Materials in violation of any

 

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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; (e) Borrower does not know of, and has not received, anywritten or oral notice or other communication from any Person relating toHazardous Materials in, on, under or from the Property; (f) the Property isfree of Mold; and (g) Borrower has truthfully and fully provided to Lender, inwriting, any and all information relating to environmental conditions in, on,under or from the Property known to Borrower or contained in Borrower’s filesand records, including but not limited to any reports relating to HazardousMaterials in, on, under or migrating to or from the Property and/or to theenvironmental condition of or the presence of Mold at the Property.

 

**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 and operations on or of theProperty, whether by Borrower or any other Person, shall be in compliance withall Environmental Laws and permits issued pursuant thereto; (b) there shall beno Releases of Hazardous Materials in, on, under or from the Property; (c)there shall be no Hazardous Materials in, on, or under the Property, exceptthose that are both (i) in compliance with all Environmental Laws and withpermits issued pursuant thereto, if and to the extent required, and (ii) (A) inamounts 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 or (C) with respect to Mold, not in a condition, location, or of a typewhich may pose a risk to human health or safety or the environment or which mayresult in damage to or would adversely affect or impair the value ormarketability of the Property; (d) Borrower shall keep the Property free andclear of all Environmental Liens; (e) Borrower shall, at its sole cost andexpense, fully and expeditiously cooperate in all activities pursuant toSection 12.4 below, including but not limited to providing all relevantinformation and making knowledgeable persons available for interviews; (f)Borrower shall, at its sole cost and expense, perform any environmental siteassessment or other investigation of environmental conditions in connectionwith the Property, pursuant to any reasonable written request of Lender, uponLender’s reasonable belief that the Property is not in full compliance with allEnvironmental Laws, and share with Lender the reports and other resultsthereof, and Lender and other Indemnified Parties shall be entitled to rely onsuch reports and other results thereof; (g) Borrower shall keep the Propertyfree of Mold; and (h) Borrower shall, at its sole cost and expense, comply withall reasonable written requests of Lender to (i) reasonably effectuateremediation of any Hazardous Materials in, on, under or from the Property; and(ii) comply with any Environmental Law; (i) Borrower shall not allow any tenantor other user of the Property to violate any Environmental Law; and (j)Borrower shall immediately notify Lender in writing after it has become awareof (A) any presence or Release or threatened Release of Hazardous Materials in,on, under, from or migrating towards the Property; (B) any non-compliance withany Environmental Laws related in any way to the Property; (C) any actual orpotential Environmental Lien against the Property; (D) any required or proposedremediation of environmental conditions relating to the Property; and (E) anywritten or oral notice or other communication of which Borrower becomes awarefrom any source whatsoever (including but

 

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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 otherinvasive testing. Borrower shall cooperate with and provide access to Lenderand any such person or entity designated 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 the operationsand maintenance program in response to the reports provided by any suchconsultants.

 

**Section 12.5.****  EnvironmentalDefinitions**

 

**“Environmental Law”**meansany present and future federal, state and local laws, statutes, ordinances,rules, regulations, standards, policies and other government directives orrequirements, as well as common law, including but not limited to theComprehensive Environmental Response, Compensation and Liability Act and theResource Conservation and Recovery Act, that apply to Borrower or the Propertyand relate to Hazardous Materials or protection of human health or theenvironment. **“Environmental Liens”**meansall Liens and other encumbrances imposed pursuant to any Environmental Law,whether due to any act or omission of Borrower or any other Person. **“Environmental Report”**means the writtenreports resulting from the environmental site assessments of the Propertydelivered to Lender in connection with the Loan. **“Hazardous Materials”**shall mean petroleum and petroleumproducts and compounds containing them, including gasoline, diesel fuel andoil; explosives, flammable materials; radioactive materials; polychlorinatedbiphenyls and compounds

 

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containingthem; lead and lead-based paint; asbestos or asbestos-containing materials inany form that is or could become friable; underground or above-ground storagetanks, whether empty or containing any substance; any substance the presence ofwhich on the Property is prohibited by any federal, state or local authority;any substance that requires special handling; and any other material orsubstance now or in the future defined as a “hazardous substance,” “hazardousmaterial”, “hazardous waste”, “toxic substance”, “toxic pollutant”, “contaminant”,or “pollutant” within the meaning of any Environmental Law. **“Mold”**shall mean any mold, fungi,bacterial or microbial matter present at or in the Property, including, withoutlimitation, building materials which is in a condition, location or a typewhich may pose a risk to human health or safety or the environment, may resultin damage to or would adversely affect or impair the value or marketability ofthe Property. **“Release”**of anyHazardous Materials includes but is not limited to any release, deposit,discharge, emission, leaking, spilling, seeping,migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposingor other movement of Hazardous Materials.

 

**ARTICLE****13SECONDARY 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 theLoan (**“Syndication”**)or issue mortgage pass-through certificates or other securitiesevidencing a beneficial interest in a rated or unrated public offering orprivate placement (**“Securities”**)****(a Syndication or the issuance of Participationsand/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 any Participationsand/or Securities, each prospective Investor, and any organization maintainingdatabases on the underwriting and performance of commercial mortgage loans, alldocuments and information which Lender now has or may hereafter acquirerelating to the Debt and to Borrower, any managing member or general partnerthereof, Borrower Principal, and the Property, including financial statements,whether furnished by Borrower or otherwise, as Lender determines necessary ordesirable. Borrower irrevocably waives any and all rights it may have underapplicable Legal Requirements to prohibit such disclosure, including but notlimited to any right of privacy.

 

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**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 have the same initial weighted averagecoupon of the original Note, or (ii) in the reasonable judgment of Borrower,modify or amend any other material economic term of the Loan, or (iii) in thereasonable judgment 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 Investors orsuch 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 norBorrower Principal shall be responsible for any costs incurred by Lender inconnection with a Securitization.

 

**ARTICLE 14INDEMNIFICATIONS**

 

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

 

Borrower shall indemnify, defend and hold harmless the IndemnifiedParties from and against any and all Losses imposed upon or incurred by orasserted against any Indemnified Parties and directly or indirectly arising outof or in any way relating to any one or more of the following: (a) anyaccident, injury to or death of persons or loss of or damage to propertyoccurring in, on or about the Property or any part thereof or on the adjoiningsidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;(b) any use, nonuse or condition in, on or about the Property or any partthereof or on the adjoining sidewalks, curbs, adjacent property or adjacentparking areas, streets or ways; (c) performance of any labor or services or thefurnishing of any materials or other property in respect of the Property or anypart thereof; (d) any failure of the Property to be in compliance with anyapplicable Legal Requirements; (e) any and all claims and demands whatsoeverwhich may be asserted against Lender by reason of any alleged obligations orundertakings on its part to perform or discharge any of the terms, covenants,or agreements contained in any Lease; (f) the holding or investing of theReserve Accounts, or (g) the payment of any commission, charge or brokerage feeto anyone which may be payable in connection with the funding of the Loan(collectively, the **“Indemnified Liabilities”**);provided, however, that Borrower shall not have any obligation to Lender hereunderto the extent that such Indemnified Liabilities arise from the grossnegligence, illegal

 

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

 

**Section 14.3.**** 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 15EXCULPATION**

 

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

 

(a)           Except as otherwiseprovided herein or in the other Loan Documents, Lender shall not enforce theliability and obligation of Borrower or Borrower Principal, as applicable, toperform and observe the obligations contained herein or in the other LoanDocuments by any action or proceeding wherein a money judgment shall be soughtagainst Borrower or Borrower Principal, except that Lender may bring a foreclosureaction, action for specific performance or other appropriate action orproceeding to enable Lender to enforce and realize upon this Agreement, theNote, the Mortgage and the other Loan Documents, and the interest in theProperty, the Rents (following an Event of Default) and any other collateralgiven to Lender created by this Agreement, the Note, the Mortgage and the otherLoan Documents; provided, however, that any judgment in any such action orproceeding shall be enforceable against Borrower or Borrower Principal, asapplicable, only to the extent of Borrower’s or Borrower Principal’s interestin the Property, in the Rents and in any other collateral given to Lender.

 

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Lender, byaccepting this Agreement, the Note, the Mortgage and the other Loan Documents,agrees that it shall not, except as otherwise provided in this Section 15.1,sue for, seek or demand any deficiency judgment against Borrower or BorrowerPrincipal in any such action or proceeding, under or by reason of or under orin connection with this Agreement, the Note, the Mortgage or the other LoanDocuments. The provisions of this Section 15.1 shall not, however, (i)constitute a waiver, release or impairment of any obligation evidenced orsecured by this Agreement, the Note, the Mortgage or the other Loan Documents;(ii) impair the right of Lender to name Borrower or Borrower Principal as aparty defendant in any action or suit for judicial foreclosure and sale underthis Agreement and the Mortgage; (iii) affect the validity or enforceability ofany indemnity (including, without limitation, those contained in Section 12.6and Article 14 of this Agreement), environmental indemnity, guaranty, masterlease or similar instrument made in connection with this Agreement, the Note,the Mortgage and the other Loan Documents; (iv) impair the right of Lender toobtain the appointment of a receiver; (v) impair the enforcement of theassignment of leases provisions contained in the Mortgage; or (vi) impair theright of Lender to obtain a deficiency judgment or other judgment on the Noteagainst Borrower or Borrower Principal if necessary to obtain any InsuranceProceeds or Awards to which Lender would otherwise be entitled under thisAgreement; provided however, Lender shall only enforce such judgment to theextent of the Insurance Proceeds and/or Awards.

 

(b)           Notwithstanding theprovisions of this Section 15.1 to the contrary, Borrower and BorrowerPrincipal shall be personally liable to Lender on a joint and several basis forLosses due to:

 

(i)            fraudor intentional misrepresentation by Borrower, Borrower Principal or any otherAffiliate of Borrower or Borrower Principal in connection with the executionand the delivery of this Agreement, the Note, the Mortgage, any of the otherLoan Documents, or any certificate, report, financial statement or otherinstrument or document furnished to Lender at the time of the closing of theLoan or during the term of the Loan;

 

(ii)           Borrower’smisapplication or misappropriation of Rents received by Borrower after theoccurrence of an Event of Default;

 

(iii)          Borrower’smisapplication or misappropriation of tenant security deposits or Rentscollected in advance;

 

(iv)          the misapplication or the misappropriation of InsuranceProceeds or Awards;

 

(v)           Borrower’sfailure to pay Taxes, Other Charges (except to the extent that sums sufficientto pay such amounts have been deposited in escrow with Lender pursuant to theterms hereof and there exists no impediment to Lender’s utilization thereof),charges for labor or materials or other charges that can create liens on theProperty beyond any applicable notice and cure periods specified herein;

 

(vi)          Borrower’sfailure to return or to reimburse Lender for all Personal Property taken fromthe Property by or on behalf of Borrower and not replaced with PersonalProperty of the same utility and of the same or greater value;

 

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

 

(viii)        Borrower’sfailure following any Event of Default to deliver to Lender upon demand all Rents and books and records relating to theProperty.

 

(c)           Notwithstanding theforegoing, the agreement of Lender not to pursue recourse liability as setforth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of nofurther force and effect and the Debt shall be fully recourse to Borrower andBorrower Principal on a joint and several basis in the event (i) of a breach byBorrower or Borrower Principal of any of the covenants set forth in Article 6hereof, to the extent that such breach is (A) material and (B) is not curedwithin fifteen (15) days of the earlier to occur of notice from Lender orBorrower’s knowledge of such breach, (ii) of a breach of any of the covenantsset forth in Article 7 hereof, (iii) the Property or any part thereof shallbecome an asset in a voluntary bankruptcy or insolvency proceeding of Borrower,(iv) Borrower, Borrower Principal or any Affiliate, officer, director, orrepresentative which controls, directly or indirectly, Borrower or BorrowerPrincipal files, or joins in the filing of, an involuntary petition againstBorrower under any Creditors Rights Laws, or solicits or causes to be solicitedpetitioning creditors for any involuntary petition against Borrower from anyPerson; (v) Borrower files an answer consenting to or otherwise acquiescing inor joining in any involuntary petition filed against it, by any other Personunder any Creditors Rights Laws, or solicits or causes to be solicitedpetitioning creditors for any involuntary petition from any Person;  or (vi) any Affiliate, officer, director, or representative which controlsBorrower consents to or acquiesces in or joins in an application for theappointment of a custodian, receiver, trustee, or examiner for Borrower or anyportion of the Property.

 

(d)           Nothing herein shall bedeemed to be a waiver of any right which Lender may have under Section 506(a),506(b), 1111(b) or any other provision of the U.S. Bankruptcy Code to file aclaim for the full amount of the indebtedness secured by the Mortgage or torequire that all collateral shall continue to secure all of the indebtednessowing to Lender in accordance with this Agreement, the Note, the Mortgage orthe other Loan Documents.

 

**ARTICLE16NOTICES**

 

**Section16.1.****  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):

 

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| If to  Lender:             | Bank of  America, N.A.                          |
|----------------------------|-------------------------------------------------|
|                       | Capital  Markets Servicing Group                |
|                       | 900 West  Trade Street, Suite 650               |
|                       | NC1-026-06-01                                   |
|                       | Charlotte,  North Carolina 28255                |
|                       | Attn:  Servicing Manager                        |
|                       | Telephone  No: (866) 531-0957                   |
|                       |                                            |
| If to  Borrower:           | Inland  Western De Pere, L.L.C.                 |
|                       | c/o Inland  Real Estate Investment Corporation  |
|                       | 2901  Butterfield Road                          |
|                       | Oak Brook,  Illinois 60523                      |
|                       | Attention:  Roberta Matlin, Vice President      |
|                       | Facsimile  No.: 630-218-4965                    |
|                       |                                            |
| With a copy  to:           | The Inland  Real Estate Group, Inc.             |
|                       | 2901  Butterfield Road                          |
|                       | Oak Brook,  Illinois 60523                      |
|                       | Attention:  General Counsel                     |
|                       | Facsimile  No.: 630-218-4900                    |
|                       |                                            |
| If to  Borrower Principal: | Inland  Western Retail Real Estate Trust., Inc. |
|                       | 2901  Butterfield Road                          |
|                       | Oak Brook,  Illinois 60523                      |
|                       | Roberta  Matlin, Vice President                 |
|                       | Facsimile  No.: 630-218-4965                    |
|                       |                                            |
| With a copy  to:           | The Inland  Real Estate Group, Inc.             |
|                       | 2901  Butterfield Road                          |
|                       | Oak Brook,  Illinois 60523                      |
|                       | Attention:  General Counsel                     |
|                       | Facsimile  No.: 630-218-4900                    |

 

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

 

**ARTICLE 17FURTHER ASSURANCES**

 

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

 

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,

 

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Borrower willissue in lieu thereof a replacement Note or other Loan Document, dated the dateof such lost, stolen, destroyed or mutilated Note or other Loan Document in thesame principal amount thereof and otherwise of like tenor.

 

**Section 17.2.****  Recording of 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 assurance to be filed,registered or recorded in such manner and in such places as may be required byany present or future law in order to publish notice of and fully to protectand perfect the lien or security interest hereof upon, and the interest ofLender in, the Property. Borrower will pay all taxes, filing, registration orrecording fees, and all expenses incident to the preparation, execution,acknowledgment and/or recording of the Note, the Mortgage, the other LoanDocuments, any note, deed of trust or mortgage supplemental hereto, any securityinstrument with respect to the Property and any instrument of furtherassurance, and any modification or amendment of the foregoing documents, andall federal, state, county and municipal taxes, duties, imposts, assessmentsand charges arising out of or in connection with the execution and delivery ofthe Mortgage, any deed of trust or mortgage supplemental hereto, any securityinstrument with respect to the Property or any instrument of further assurance,and any modification or amendment of the foregoing documents, except whereprohibited by law so to do.

 

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

 

Borrower will, at the cost of Borrower (except with respect to costsincurred by Lender, for which Lender shall be responsible), do, execute,acknowledge and deliver all and every further acts, deeds, conveyances, deedsof trust, mortgages, assignments, security agreements, control agreements,notices of assignments, transfers and assurances as Lender shall, from time totime, reasonably require, for the better assuring, conveying, assigning,transferring, and confirming unto Lender the property and rights herebymortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged,assigned, warranted and transferred or intended now or hereafter so to be, or whichBorrower may be or may hereafter become bound to convey or assign to Lender, orfor carrying out the intention or facilitating the performance of the terms ofthis Agreement or for filing, registering or recording the Mortgage, or forcomplying with all Legal Requirements. Borrower, on demand, will execute anddeliver, and in the event it shall fail to so execute and deliver, herebyauthorizes Lender to execute in the name of Borrower or without the signatureof Borrower to the extent Lender may lawfully do so, one or more financingstatements and financing statement amendments to evidence more effectively,perfect and maintain the priority of the security interest of Lender in theProperty. Borrower grants to Lender an irrevocable power of attorney coupledwith an interest for the purpose of exercising and perfecting any and allrights and remedies available to Lender at law and in equity, including withoutlimitation, such rights and remedies available to Lender pursuant to thisSection 17.3.

 

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**Section 17.4.****  Changes inTax, Debt, Credit and Documentary Stamp Laws**

 

(a)           If any law is enactedor adopted or amended after the date of this Agreement which deducts the Debtfrom the value of the Property for the purpose of taxation or which imposes atax, either directly or indirectly, on the Debt or Lender’s interest in theProperty, Borrower will pay the tax, with interest and penalties thereon, ifany.  If Lender is advised by counselchosen by it that the payment of tax by Borrower would be unlawful or taxableto Lender or unenforceable or provide the basis for a defense of usury thenLender shall have the option by written notice of not less than one hundredeighty (80) days to declare the Debt immediately due and payable.

 

(b)           Borrower will not claimor demand or be entitled to any credit or credits on account of the Debt forany part of the Taxes or Other Charges assessed against the Property, or anypart thereof, and no deduction shall otherwise be made or claimed from theassessed value of the Property, or any part thereof, for real estate taxpurposes by reason of the Mortgage or the Debt. If such claim, credit or deduction shall be required by law, Lendershall have the option, by written notice of not less than one hundred eighty(80) days, to declare the Debt 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.

 

**Section17.5.****  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

 

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third partyclaims or the prosecuting or defending of any action or proceeding or otherlitigation, in each case against, under or affecting Borrower, this Agreement,the other Loan Documents, the Property, or any other security given for theLoan; and (h) enforcing any obligations of or collecting any payments due fromBorrower under this Agreement, the other Loan Documents or with respect to theProperty or in connection with any refinancing or restructuring of the creditarrangements provided under this Agreement in the nature of a “work-out” or ofany insolvency or bankruptcy proceedings; provided, however, that Borrowershall not be liable for the payment of any such costs and expenses to the extentthe same arise by reason of the gross negligence, illegal acts, fraud orwillful misconduct of Lender.

 

**ARTICLE18WAIVERS**

 

**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, or exercisingany right, power, remedy or privilege hereunder, or under the Note or under anyother Loan Document, or any other instrument given as security therefor, shalloperate as or constitute a waiver thereof, nor shall a single or partialexercise thereof preclude any other future exercise, or the exercise of anyother right, power, remedy or privilege. In particular, and not by way oflimitation, by accepting payment after the due date of any amount payable underthis Agreement, the Note or any other

 

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

 

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

 

**BORROWER, BORROWER PRINCIPAL AND LENDER EACHHEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF****ANY ISSUE TRIABLE OFRIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENTTHAT ANY SUCH RIGHT SHALL NOW ORHEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIMOR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIALBY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL ANDLENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO ATRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH OF LENDER, BORROWER PRINCIPAL ANDBORROWER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THISWAIVER BY BORROWER, BORROWER PRINCIPAL AND LENDER.**

 

**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 itsagents have acted unreasonably or unreasonably delayed acting in any case whereby law or under this Agreement or the other Loan Documents, Lender or suchagent, as the case may be, has an obligation to act reasonably or promptly,Borrower agrees that neither Lender nor its agents shall be liable for anymonetary damages, and Borrower’s sole remedies shall be limited to commencingan action seeking injunctive relief or declaratory judgment. The parties heretoagree that any action or proceeding to determine whether Lender has actedreasonably shall be determined by an action seeking declaratory judgment. Lenderagrees that, in such event, it shall cooperate in expediting any action seekinginjunctive relief or declaratory judgment.

 

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**Section 18.7.****  Waiver ofMarshalling of 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.

 

**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 19GOVERNING LAW**

 

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

 

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,applied and enforced in accordance with the laws of the State and applicablelaws of the United States of America, provided, however, that with respect tothe security 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

 

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proceedsreceived, the obligations hereunder or part thereof intended to be satisfiedshall be revived and continue in full force and effect, as if such payment orproceeds had not been received by Lender.

 

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**ARTICLE 20MISCELLANEOUS**

 

**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.****  Schedules Incorporated**

 

The Schedules annexed hereto are 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 are 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 Lenderintend that the relationships created hereunder and under the other LoanDocuments be solely that of borrower and lender.  Nothing herein or therein is intended tocreate a joint venture, partnership, tenancy-in-common, or joint tenancyrelationship between Borrower and Lender nor to grantLender any interest in the Property other than that of mortgagee, beneficiaryor lender.

 

(b)           This Agreement and theother Loan Documents are solely for the benefit of Lender and Borrower andnothing contained in this Agreement or the other Loan Documents shall be deemedto confer upon anyone other than Lender and Borrower any right to insist upon orto enforce the performance or observance of any of the obligations containedherein or therein. All conditions to the obligations of Lender to make the Loanhereunder are imposed solely and exclusively for the benefit of Lender and noother Person 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 Borrowerare experienced in the ownership and operation of properties similar to the Property,and Borrower and Lender are relying solely upon such expertise and businessplan in connection with the ownership and operation of the Property.  Borrower is not relying on Lender’sexpertise, business acumen or advice in connection with the Property.

 

(d)           Notwithstandinganything to the contrary contained herein, Lender is not undertaking theperformance of (i) any obligations under the Leases; or (ii) any obligationswith respect to such agreements, contracts, certificates, instruments, franchises,permits, trademarks, licenses and other documents.

 

(e)           By accepting orapproving anything required to be observed, performed or fulfilled or to begiven to Lender pursuant to this Agreement, the Mortgage, the Note or the otherLoan Documents, including, without limitation, any officer’s certificate,balance sheet, statement of profit and loss or other financial statement,survey, appraisal, or insurance policy, Lender shall not be deemed to havewarranted, consented to, or affirmed the sufficiency, the legality or

 

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

 

(f)            Borrower recognizesand acknowledges that in accepting this Agreement, the Note, the Mortgage andthe other Loan Documents, Lender is expressly and primarily relying on thetruth and accuracy of the representations and warranties set forth in Article 4of this Agreement without any obligation to investigate the Property andnotwithstanding any investigation of the Property by Lender; that such relianceexisted on the part of Lender prior to the date hereof, that the warranties andrepresentations are a material inducement to Lender in making the Loan; andthat Lender would not be willing to make the Loan and accept this Agreement,the Note, the Mortgage and the other Loan Documents in the absence of thewarranties and representations 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, including itsbank subsidiaries, Banc of America Securities LLC and any other Affiliates ofthe 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. Borroweracknowledges that, with respect to the Loan, Borrower shall rely solely on itsown judgment and advisors in entering into the Loan without relying in anymanner on any statements, representations or recommendations of Lender or anyparent, 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**

 

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

 

**ARTICLE****21OUT PARCEL RELEASE**

 

**Section 21.1.**** Out Parcel Release.**Provided no Event of Defaultexists and is continuing, Borrower shall be entitled to a release from the lienof the Mortgage of a portion of the Property (the “Out Parcel”) moreparticularly described on Exhibit C hereof upon the following terms andconditions:

 

(a)           Borrower shall deliver evidence reasonablysatisfactory to Lender that (i) the Property remaining encumbered by the lienof the Mortgage shall comply with all Legal Requirements (including, withoutlimitation, all zoning and building codes), (ii) the Property remainingencumbered by the lien of the Security Instrument shall constitute a separatelot for tax and assessment purposes by no later than the earliest datepermitted under applicable Legal Requirements, (iii) the Out Parcel, at thetime of release, remains an unimproved parcel of land (exclusive of parkingareas contained thereon), (iv) such release shall not adversely affect ingressor egress to or from the Property, (v) the documents with respect to suchrelease shall not impose any obligations or otherwise burden the Property inany way, (vi) Borrower has obtained or caused to be obtained all necessaryapprovals, consents or permits with respect to such release and (vii) the OutParcel has been transferred to an entity other than Borrower.

 

(b)           Borrower shall (i) deliver to Lender (A) acurrent title survey for the Out Parcel certified to the title company andLender, their successors and assigns, in form and content satisfactory toLender and prepared by a professional and properly licensed land survey orsatisfactory to Lender in accordance with the 1999 Minimum Standard DetailRequirements for ALTA/ACSM Land Title Surveys and reflecting the same metes andbounds legal description contained in the Title Insurance Policy referred to insubsection (B) of this paragraph (b) and certified in form and substancesatisfactory to Lender, (B) a revised, updated Title Insurance Policy (or anendorsement to the existing Title Insurance Policy) reasonably acceptable toLender in all respects reflecting the release of the Out Parcel and containingsuch endorsements as Lender shall reasonably require (including, withoutlimitation, a “date-down” or similar endorsement), and (C) such amendments ormodifications to the Loan Documents as Lender may reasonably require to reflectthe release of the Out Parcel (including, without limitation, an amendment tothe Mortgage substituting a revised legal description reflecting the release ofthe Out Parcel), and (ii) pay all of Lender’s reasonable costs and expenses inconnection with a release of the Out Parcel, including, without limitation,reasonable counsel fees and disbursements and all recording fees and titlecharges.

 

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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 DEPERE 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. Secretary |   |
|   |                                                                                                                                              |
|   |                                                                                                                                              |
|   | 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., Maryland corporation, its                                                                         |
|   |                                                                                                                                              |
|   | By:                                                                                                                                               |  /s/ Debra A. Palmer |   |
|   |                                                                                                                                              | Name: |  Debra A. Palmer |   |
|   |                                                                                                                                              | Title: |  Asst. Secretary |   |
|        |                                                                                                                                                   |  |  |  |  |  |  |  |  |

 

[ADDITIONAL SIGNATURE PAGE TO FOLLOW]

 

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

 

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EXHIBIT A

 

Borrower Equity Ownership Structure

 

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EXHIBIT B

 

Tenant Direction Letter

 

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EXHIBIT C

 

Description of Out Parcel

 

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