**Exhibit10.460**

** **

** **

** **

** **

**LOANAGREEMENT**

** **

 

 

Dated as of December 16, 2004

 

 

 

Between

 

 

 

**INLANDWESTERN PHOENIX 19TH AVENUE, L.L.C.,**

** **

 

 

as Borrower

 

 

 

and

 

 

 

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

as Lender

 

 

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TABLE OF CONTENTS

 

 
| **ARTICLE 1 DEFINITIONS; PRINCIPLES OF  CONSTRUCTION** |            |
|--------------------------------------------------------|-----------------|
|                                                   |            |   |
|                                                   | SECTION 1.1.    | DEFINITIONS |   |
|                                                   | SECTION 1.2.    | PRINCIPLES OF  CONSTRUCTION |   |
|                                                   |            |   |
| **ARTICLE 2 GENERAL TERMS**                            |            |
|                                                   |            |   |
|                                                   | SECTION  2.1.   | LOAN  COMMITMENT; DISBURSEMENT TO BORROWER |   |
|                                                   | SECTION 2.2.    | LOAN PAYMENTS |   |
|                                                   | SECTION 2.3.    | PREPAYMENT |   |
|                                                   |            |   |
| **ARTICLE 3 CONDITIONS PRECEDENT**                     |            |
|                                                   |            |   |
| **ARTICLE 4 REPRESENTATIONS AND WARRANTIES**           |            |
|                                                   |            |   |
|                                                   | SECTION 4.1.    | ORGANIZATION |   |
|                                                   | SECTION 4.2.    | STATUS OF BORROWER |   |
|                                                   | SECTION 4.3.    | VALIDITY OF  DOCUMENTS |   |
|                                                   | SECTION 4.4.    | NO CONFLICTS |   |
|                                                   | SECTION 4.5.    | LITIGATION |   |
|                                                   | SECTION 4.6.    | AGREEMENTS |   |
|                                                   | SECTION  4.7.   | SOLVENCY |   |
|                                                   | SECTION  4.8.   | FULL  AND ACCURATE DISCLOSURE |   |
|                                                   | SECTION  4.9.   | NO  PLAN ASSETS |   |
|                                                   | SECTION  4.10.  | NOT  A FOREIGN PERSON |   |
|                                                   | SECTION  4.11.  | ENFORCEABILITY |   |
|                                                   | SECTION  4.12.  | BUSINESS  PURPOSES |   |
|                                                   | SECTION  4.13.  | COMPLIANCE |   |
|                                                   | SECTION 4.14.   | FINANCIAL  INFORMATION |   |
|                                                   | SECTION 4.15.   | CONDEMNATION |   |
|                                                   | SECTION  4.16.  | UTILITIES AND PUBLIC ACCESS; PARKING |   |
|                                                   | SECTION 4.17.   | SEPARATE LOTS |   |
|                                                   | SECTION 4*.*18. | ASSESSMENTS |   |
|                                                   | SECTION 4.19.   | INSURANCE |   |
|                                                   | SECTION 4.20.   | USE OF PROPERTY |   |
|                                                   | SECTION  4.21.  | CERTIFICATE OF OCCUPANCY; LICENSES |   |
|                                                   | SECTION 4.22.   | FLOOD ZONE |   |
|                                                   | SECTION 4.23.   | PHYSICAL CONDITION |   |
|                                                   | SECTION 4.24.   | BOUNDARIES; SURVEY |   |
|                                                   | SECTION  4.25.  | LEASES |   |
|                                                   | SECTION 4.26.   | FILING AND RECORDING  TAXES |   |
|                                                   | SECTION 4.27.   | MANAGEMENT AGREEMENT |   |
|                                                   | SECTION 4.28.   | ILLEGAL ACTIVITY |   |
|                                                   | SECTION 4.29.   | CONSTRUCTION  EXPENSES |   |
|                                                   | SECTION 4.30.   | PERSONAL PROPERTY |   |
|                                                   | SECTION 4.31.   | TAXES |   |
|                                                   | SECTION 4.32.   | PERMITTED  ENCUMBRANCES |   |
|                                                   | SECTION 4.33.   | FEDERAL  RESERVE REGULATIONS |   |
|                                                   | SECTION 4.34.   | INVESTMENT COMPANY  ACT |   |
|                                                   | SECTION  4.35.  | RECIPROCAL  EASEMENT AGREEMENTS |   |
|                                                   | SECTION  4.36.  | NO  CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE |   |

 

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|                                                          | SECTION 4.37.  | INTELLECTUAL  PROPERTY                         |   |
|---------------------------------------------------------------|----------------|------------------------------------------------|--------|
|                                                          | SECTION  4.38. | COMPLIANCE  WITH ANTI-TERRORISM LAWS           |   |
|                                                          | SECTION 4.39.  | PATRIOT ACT                                    |   |
|                                                          | SECTION 4.40.  | SURVIVAL                                       |   |
|                                                          |           |                                           |
| **ARTICLE 5 BORROWER COVENANTS**                              |
|                                                          |           |                                           |
|                                                          | SECTION  5.1.  | EXISTENCE;  COMPLIANCE WITH LEGAL REQUIREMENTS |   |
|                                                          | SECTION  5.2.  | MAINTENANCE  AND USE OF PROPERTY               |   |
|                                                          | SECTION  5.3.  | WASTE                                          |   |
|                                                          | SECTION 5.4.   | TAXES AND OTHER  CHARGES                       |   |
|                                                          | SECTION 5.5.   | LITIGATION                                     |   |
|                                                          | SECTION 5.6.   | ACCESS TO PROPERTY                             |   |
|                                                          | SECTION 5.7.   | NOTICE OF DEFAULT                              |   |
|                                                          | SECTION  5.8.  | COOPERATE  IN LEGAL PROCEEDINGS                |   |
|                                                          | SECTION 5.9.   | PERFORMANCE BY  BORROWER                       |   |
|                                                          | SECTION 5.10.  | AWARDS;  INSURANCE PROCEEDS                    |   |
|                                                          | SECTION 5.11.  | FINANCIAL REPORTING                            |   |
|                                                          | SECTION 5.12.  | ESTOPPEL STATEMENT                             |   |
|                                                          | SECTION 5.13.  | LEASING MATTERS                                |   |
|                                                          | SECTION 5.14.  | PROPERTY MANAGEMENT                            |   |
|                                                          | SECTION 5.15.  | LIENS                                          |   |
|                                                          | SECTION 5.16.  | DEBT CANCELLATION                              |   |
|                                                          | SECTION 5.17.  | ZONING                                         |   |
|                                                          | SECTION 5.18.  | ERISA                                          |   |
|                                                          | SECTION 5.19.  | NO JOINT ASSESSMENT                            |   |
|                                                          | SECTION 5.20.  | RECIPROCAL  EASEMENT AGREEMENTS                |   |
|                                                          |           |                                           |
| **ARTICLE 6 ENTITY COVENANTS**                                |           |
|                                                          |           |                                           |
|                                                          | SECTION  6.1.  | SINGLE  PURPOSE ENTITY/SEPARATENESS            |   |
|                                                          | SECTION  6.2.  | CHANGE  OF NAME, IDENTITY OR STRUCTURE         |   |
|                                                          | SECTION 6.3.   | BUSINESS AND  OPERATIONS                       |   |
|                                                          | SECTION 6.4.   | 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.l.  | 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 OR  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.  | WAIVES 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.l.  | SURVIVAL |   |
|                                        | SECTION 20.2.  | LENDER’S DISCRETION |   |

 

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

 

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LOAN AGREEMENT

 

THIS LOAN 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 Phoenix 19thAvenue, L.L.C., a Delaware limited liability company having an address at c/o InlandReal Estate Investment Corporation, 2901 Butterfield Road, Oak Brook, Illinois60523 (together with its successors and/or assigns, **“Borrower”**).

 

**RECITALS:**

 

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

 

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

 

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

 

**ARTICLE 1DEFINITIONS; PRINCIPLES OF CONSTRUCTION**

 

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

 

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

 

**“Account Collateral”**shall mean (i) the Accounts, and all cash,checks, drafts, certificates and instruments, if any, from time to timedeposited or held in the Accounts; (ii) any and all amounts in or credited tothe Accounts invested in Permitted Investments; (iii) all interest, dividends,cash, instruments and other property from time to time received, receivable 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 Section 6.1(c).

 

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**“Affiliate”**shallmean, as to any Person, any other Person that, directly or indirectly, is in controlof, is controlled by or is under common control with such Person or is adirector 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 entity affiliatedwith Borrower or Borrower Principal.

 

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

 

“**ALTA**” shall meanAmerican Land Title Association, or any successor thereto.

 

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

 

**“AmericanExpress Lease”**shall mean that certain LeaseAgreement dated as of December 16, 2004 between Borrower, as landlord, andAmerican Express, as tenant, with respect to the Property.

 

**“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”**shallhave the 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”**shall mean with respect to any Person any existing or future law of anyjurisdiction, 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-1”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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term unsecured debt rating is at least “A-l”by S&P) and “Aa2” by Moody’s). Notwithstanding the foregoing, prior to aSecuritization, 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 or transactionsby prohibition of federal law or Executive Order of the President of the UnitedStates 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”**shall mean (a) Lender, (b) any prior owner or holder of the Loan orParticipations in the Loan, (c) any servicer or prior servicer of the Loan, (d)any Investor or any prior Investor in any Securities, (e) any trustees,custodians or other fiduciaries who hold or

 

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

 

**“Inland Permitted Transferee”**shallmean a newly-formed special purpose entity that is wholly-owned (directly orindirectly) by Inland Retail Real Estate Trust, Inc., a Maryland corporation;Inland Real Estate Corporation, a Maryland corporation, Inland Real EstateCorporation, a Delaware corporation or Borrower Principal.

 

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

 

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

 

**“Internal Revenue Code”**shallmean the Internal Revenue Code of 1986, as amended, as it may be furtheramended from time to time, and any successor statutes thereto, and applicableU.S. Department of Treasury regulations issued pursuant thereto in temporary orfinal form.

 

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

 

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

 

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

 

**“Lien”**shallmean any mortgage, deed of trust, lien, pledge, hypothecation, assignment,security interest, or any other encumbrance, charge or transfer of, on oraffecting Borrower, the Property, any portion thereof or any interest therein,including, without limitation, any conditional sale or other title retentionagreement, any financing lease having substantially the same economic effect asany of the foregoing, the filing of any financing statement, and mechanic’s,materialmen’s and other similar liens and encumbrances.

 

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

 

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

 

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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 withrespect to the Property, as the same may be amended, restated, replaced,supplemented or otherwise modified in accordance with the terms of thisAgreement.

 

**“Manager”**shallmean Inland Southwest Management LLC, a Delaware limited liability company orsuch other entity selected as the manager of the Property in accordance withthe terms 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.l(c).

 

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

 

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

 

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

 

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

 

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

 

**“Note”**shallmean that certain promissory note of even date herewith in the principal amountof $8,260,000, 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 set forth in the Note.

 

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

 

**“Operating Expenses”**shallmean, with respect to any period of time, the total of all expenses actuallypaid or payable, computed in accordance with federal tax basis accounting, orin accordance with other methods acceptable to Lender in its sole discretion,of whatever 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”**shallhave the meaning set forth in the Note.

 

**“Other Charges”**shallmean all ground rents, maintenance charges, impositions other than Taxes, andany other charges, including, without limitation, vault charges and licensefees for the use of vaults, chutes and similar areas adjoining the Property,now or hereafter levied or assessed or imposed against the Property or any partthereof.

 

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

 

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

 

**“Permitted Encumbrances”**shallmean collectively, (a) the Lien and security interests created by the LoanDocuments, (b) all Liens, encumbrances and other matters disclosed in the TitleInsurance Policy, (c) Liens, if any, for Taxes imposed by any GovernmentalAuthority not yet due or delinquent, and (d) such other title and surveyexceptions as Lender has approved or may approve in writing in Lender’s solediscretion.

 

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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 their rating,(iv) if such investments have a variable rate of interest, such interest ratemust be tied to a single interest rate index plus a fixed spread (if any) andmust move proportionately with that index, and (v) such investments must not besubject to liquidation prior to their maturity;

 

(b)           Federal HousingAdministration debentures;

 

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

 

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

 

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to the Securities); provided, however, that the investments describedin this clause must (i) have a predetermined fixed dollar of principal due atmaturity that 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 avariable rate of interest, such interest rate must be tied to a single interestrate index 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 days andissued by, any bank or trust company, savings and loan association or savingsbank, the short term obligations of which at all times are rated in the highestshort term rating category by eachRating Agency (or, if not rated by all Rating Agencies, rated by at least oneRating Agency in the highest short term rating category and 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);provided, however, that the investments described in this clause must (i) havea predetermined fixed dollar of principal due at maturity that cannot vary orchange, (ii) if rated by S&P, must not have an “r” highlighter affixed totheir rating, (iii) if such investments have a variable rate of interest, suchinterest rate must be tied to a single interest rate index plus a fixed spread(if any) and must move proportionately with that index, and (iv) suchinvestments must not be subject to liquidation prior to their maturity;

 

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

 

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

 

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(h)           unitsof taxable money market funds, with maturities of not more than 365 days andwhich funds are regulated investment companies, seek to maintain a constant netasset value per share and invest solely in obligations backed by the full faithand credit of the United States, which funds have the highest rating availablefrom each Rating Agency (or, if not rated by all Rating Agencies, rated by atleast one Rating Agency and otherwise acceptable to each other Rating Agency,as confirmed in writing that such investment would not, in and of itself,result in a downgrade, qualification or withdrawal of the initial, or, ifhigher, then current ratings assigned to the Securities) for money marketfunds; and

 

(i)            anyother security, obligation or investment which has been approved as a PermittedInvestment in writing by (i) Lender and (ii) each Rating Agency, as evidencedby a written confirmation that the designation of such security, obligation orinvestment as a Permitted Investment will not, in and of itself, result in adowngrade, qualification or withdrawal of the initial, or, if higher, thencurrent ratings assigned 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 liabilitycompany, estate, trust, unincorporated association, any federal, state, countyor municipal government or any bureau, department or agency thereof and anyfiduciary acting in such capacity on behalf 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 to Lenderin 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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Rating Agencies that the employment of suchmanager will not result in a downgrade, withdrawal or qualification of theinitial, or if higher, then current ratings issued in connection with aSecuritization, or if a Securitization has not occurred, any ratings to beassigned 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”**shallmean any construction, operation and reciprocal easement agreement or similaragreement (including any separate agreement or other agreement between Borrowerand one or 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”**shall have the meaning set forth inSection 9.2(a) hereof.

 

**“Required Repairs”**shallhave the meaning set forth in Section 9. l(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 a type necessitating the repair ofthe Property, the completion of the repair and restoration of the Property asnearly as possible to the condition the Property was in immediately prior tosuch Casualty or Condemnation, with such alterations as may be reasonablyapproved by Lender.

 

**“Restoration Consultant”**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”**shallmean the Securities 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. l(c).

 

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

 

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

 

**“Tax and Insurance Reserve Account”**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 **“Uniform Commercial Code”**shall mean theUniform Commercial Code as in effect in the State where the applicable Propertyis located.

 

**Section 1.2.     Principlesof Construction.**

 

All references to sections and schedules areto sections and schedules in or to this Agreement unless otherwise specified.All uses of the word “including” shall mean “including, without limitation”unless the context shall indicate otherwise. Unless otherwise specified, thewords “hereof,” “herein” and “hereunder” and words of similar import, when usedin this Agreement shall refer to this Agreement as a whole and not to anyparticular provision of this Agreement. Unless otherwise specified, allmeanings attributed to defined terms herein shall be equally applicable to boththe singular and plural forms of the terms so defined.

 

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**ARTICLE 2GENERAL TERMS**

 

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

 

(a)           Subjectto and upon the terms and conditions set forth herein, Lender hereby agrees tomake and Borrower 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,

 

**Section2.2.     Loan Payments**

 

(a)           The Loan and interestshall be payable pursuant to the terms of the Note.

 

**S****ection 2.3.     Prepayment**

 

The Loan may not be prepaid, in whole or inpart, except in strict accordance with the express terms and conditions of theNote.

 

**ARTICLE3CONDITIONS PRECEDENT**

 

The obligation of Lender to make the Loanhereunder is subject to the fulfillment by Borrower or waiver by Lender of allthe conditions precedent to closing set forth in the application or term sheetfor the Loan delivered by Borrower to Lender and any commitment rider to theapplication for the Loan issued by Lender.

 

**ARTICLE 4REPRESENTATIONS AND WARRANTIES**

 

Borrower and, where specifically indicated,each Borrower Principal represents and warrants to Lender as of the ClosingDate that:

 

**Section4.1.     Organization**

 

Borrower and each Borrower Principal (whennot an individual) (a) has been duly organized and is validly existing and ingood standing with requisite power and authority to own its properties and totransact the businesses in which it is now engaged, (b) is duly qualified to dobusiness and is in good standing in each jurisdiction where it is required tobe so qualified in

 

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

 

**Section4.2.     Statusof Borrower**

 

Borrower’s exact legal name is correctly set forth on the first page ofthis Agreement, on the Mortgage and on any UCC-1 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.     Validityof Documents**

 

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

 

**Section4.4.     NoConflicts**

 

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

 

**Section 4.5.     Litigation**

 

There are no actions, suits or proceedings atlaw or in equity by or before any Governmental Authority or other agency nowpending or, to Borrower’s or Borrower Principal’s knowledge, threatened againstor affecting Borrower, Borrower Principal, Manager or the Property, whichactions, suits or proceedings, if determined against Borrower, BorrowerPrincipal, Manager or the Property, would materially adversely affect thecondition (financial or otherwise) or business of Borrower or BorrowerPrincipal or the condition or ownership of the Property.

 

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

 

Borrower is not a party to any agreement orinstrument or subject to any restriction which would materially and adverselyaffect Borrower or the Property, or Borrower’s business, properties or assets,operations or condition, financial or otherwise. Borrower is not in default inany material respect in the performance, observance or fulfillment of any ofthe obligations, covenants or conditions contained in any agreement orinstrument to which it is a party or by which Borrower or the Property isbound. Borrower has no material financial obligation under any agreement orinstrument to which Borrower is a party or by which Borrower or the Property isotherwise bound, other than (a) obligations incurred in the ordinary course ofthe operation of the Property and (b) obligations under the Loan Documents.

 

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

 

Borrower and each Borrower Principal have (a)not entered into the transaction or executed the Note, this Agreement or anyother Loan Documents with the actual intent to hinder, delay or defraud anycreditor and (b) received reasonably equivalent value in exchange for theirobligations under such Loan Documents. Giving effect to the Loan, the fairsaleable value of the assets of Borrower and each Borrower Principal exceedsand will, immediately following the making of the Loan, exceed the totalliabilities of Borrower and Borrower Principal, including, without limitation,subordinated, unliquidated, disputed and contingent liabilities. No petition inbankruptcy has been filed against Borrower, Borrower Principal, or AffiliatedManager in the last ten (10) years, and neither Borrower nor BorrowerPrincipal, or Affiliated Manager in the last ten (10) years has made anassignment for the benefit of creditors or taken advantage of any CreditorsRights Laws. Neither Borrower nor Borrower Principal, or Affiliated Manager iscontemplating either the filing of a petition by it under any Creditors RightsLaws or the liquidation of all or a major portion of Borrower’s assets orproperty, and Borrower has no knowledge of any Person contemplating the filingof any such petition against Borrower or Borrower Principal, or AffiliatedManager.

 

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**Section****4.8.     Full andAccurate Disclosure**

 

No statement or fact made by or on behalf ofBorrower or Borrower Principal in this Agreement or in any of the other LoanDocuments or in any other document or certificate delivered by or on behalf ofBorrower or Borrower Principal contains any untrue statement of a material factor omits to state any material fact necessary to make statements containedherein or therein not misleading.  Thereis no material fact presently known to Borrower or Borrower Principal which hasnot been disclosed to Lender which adversely affects, nor as far as Borrower orBorrower Principal can reasonably foresee, might adversely affect, the Propertyor the business, operations or condition (financial or otherwise) of Borroweror Borrower Principal.

 

**Section****4.9.     No PlanAssets**

 

Borrower is not an "employee benefitplan," as defined in Section 3(3) of ERISA, subject to Title 1 of ERISA,and none of the assets of Borrower constitutes or will constitute "planassets" of one or more such plans within the meaning of 29 C.F.R. Section2510.3-101.  In addition, (a) Borrower isnot a "governmental plan" within the meaning of Section 3(32) ofERISA and (b) transactions by or with Borrower are not subject to state statutesregulating investment of, and fiduciary obligations with respect to,governmental plans similar to the provisions of Section 406 of ERISA or Section4975 of the Internal Revenue Code currently in effect, which prohibit orotherwise restrict the transactions contemplated by this Agreement.

 

**Section 4.10.     Nota Foreign Person**

 

Neither borrower nor Borrower Principal is a"foreign Person" within the meaning of §1445(1)(3) of the InternalRevenue Code.

 

**Section 4.11.     Enforceability**

 

The Loan Documents are not subject to anyright of rescission, set-off, counterclaim or defense by Borrower, includingthe defense of usury, nor would the operation of any of the terms of the LoanDocuments, or the exercise of any right thereunder, render the Loan Documentsunenforceable, and neither Borrower nor Borrower Principal has asserted anyright of rescission, set-off, counterclaim or defense with respectthereto.  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 purposeof Borrower, and is not for personal, family, household, or agriculturalpurposes.

 

**Section 4.13.     Compliance**

 

Except as expressly disclosed by Borrower toLender in writing in connection with the closing of the Loan, to Borrower'sknowledge, Borrower and the Property, and the use and operation thereof, complyin all material respects with all Legal Requirements, including, withoutlimitation, building and zoning ordinances and codes and the Americans withDisabilities Act.  To Borrower'sknowledge, Borrower is not in default or violation of any order,

 

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writ, injunction, decree or demand of any Governmental Authority andBorrower has received no written notice of any such default or violation. Therehas not been committed by Borrower or, to Borrower’s knowledge, any otherPerson in occupancy of or involved with the operation or use of the Propertyany act or omission affording any Governmental Authority the right offorfeiture as against the Property or any part thereof or any monies paid inperformance of Borrower’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/orintended operation thereof, except as referred to or reflected in saidfinancial statements. Since the date of such financial statements, there hasbeen no materially adverse change in the financial condition, operations orbusiness of Borrower or Borrower Principal from that set forth in saidfinancial statements.

 

**Section4.15.     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 andstorm drain facilities adequate to service the Property for full utilization ofthe Property for its intended uses. All public utilities necessary to the fulluse and enjoyment of the Property as currently used and enjoyed are locatedeither in the public right-of-way abutting the Property (which are connected soas to serve the Property without passing over other property) or in recordedeasements serving the Property and such casements are set forth in and insuredby the Title Insurance Policy. All roads necessary for the use of the Propertyfor its current purposes have been completed and dedicated to public use andaccepted by all Governmental Authorities. The Property has, or is served by,parking to the extent required to comply with all Legal Requirements.

 

**Section4.17.     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**

 

ToBorrower’s knowledge, there are no pending or proposed special or otherassessments for public improvements or otherwise affecting the Property, norare there any contemplated improvements to the Property that may result in suchspecial or other assessments.

 

**S****ection 4.19.     ****Insurance**

 

Borrowerhas obtained and has delivered to Lender either (a) certified copies of allPolicies or, to the extent such Policies are not available as of the ClosingDate, certificates of insurance with respect to all such Policies reflectingthe insurance coverages, amounts and other requirements set forth in thisAgreement or (b) the certificate of American Express that American Express is aself-insurer with respect to the occurrences referred to in Section 8.1 andthat the rating of American Express by the Rating Agencies has not fallen belowthe Trigger Rating.

 

**Section 4.20.     ****Use of Property**

 

TheProperly is used exclusively for general office purposes and other appurtenantand related uses.

 

**Section4.21.     ****Certificate of Occupancy;Licenses**

 

Allcertificates of occupancy and to Borrower’s knowledge all certifications,permits, licenses and approvals, including, without limitation, certificates ofcompletion and any applicable liquor license required for the legal use,occupancy and operation of the Property for the purpose intended herein, havebeen obtained and are valid and in full force and effect. Borrower shall keepand maintain (or require American Express to maintain) all licenses necessaryfor the operation of the Property for the purpose intended herein. The usebeing made of the Property is in conformity with the final certificate ofoccupancy (or compliance, if applicable) and any other permits or licensesissued for the Property.

 

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

 

Noneof the Improvements on the Property are located in an area identified by theFederal Emergency Management Agency as an area having special flood hazards,or, if any portion of the Improvements is located within such area, Borrowerwill obtain or cause American Express to obtain the insurance prescribed inSection 8.l(a)(i) at any time during the term of the Loan when American Expressceases to be a self-insurer or when the rating of American Express by theRating Agencies falls below the Trigger Rating.

 

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

 

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

 

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sidewalks, storm drainage systems, roofs, plumbing systems, HVACsystems, fire protection systems, electrical systems, equipment, elevators,exterior sidings and doors, landscaping, irrigation systems and all structuralcomponents, are in good condition, order and repair in all material respects.Except as set forth in the Property Condition Report, to Borrower’s knowledge,there exist no structural or other material defects or damages in the Property,as a result of a Casualty or otherwise, and whether latent or otherwise.Borrower has not received notice from any insurance company or bonding companyof any defects or inadequacies in the Property, or any part thereof, whichwould adversely affect the insurability of the same or cause the imposition ofextraordinary premiums or charges thereon or of any termination or threatenedtermination of any policy of insurance or bond.

 

**Section4.24.     Boundaries; Survey**

 

(a)           Noneof the Improvements which were included in determining the appraised value ofthe Property lie outside the boundaries and building restriction lines of theProperty to any material extent, and (b) no improvements on adjoiningproperties encroach upon the Property and no casements or other encumbrancesupon the Property encroach upon any of the Improvements so as to materiallyaffect the value or marketability of the Property.

 

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

 

The entire Property has been leased to American Express pursuant to theAmerican Express Lease.  (a) The AmericanExpress Lease is in full force and effect; (b) the premises demised under theAmerican Express Lease have been completed and American Express has acceptedpossession of and is in occupancy of the demised premises; (c) American Expresshas commenced the payment of rent under the American Express Lease, there areno offsets, claims or defenses to the enforcement thereof and Borrower has nomonetary obligations to American Express under the American Express Lease; (d)all Rents due and payable under the American Express Lease have been paid andno portion thereof has been paid for any period more than thirty (30) days inadvance; (c) the rent payable under the American Express Lease is the amount offixed rent set forth in the American Express Lease, and there is no claim orbasis for a claim by American Express thereunder for an adjustment to the Rent;(f) Borrower is the sole owner of the entire landlord’s interest in theAmerican Express Lease; (g) the American Express Lease is the valid, bindingand enforceable obligation of Borrower and American Express thereunder andthere are no agreements with American Express with respect to the AmericanExpress Lease other than as expressly set forth therein; (h) no Person has anypossessory interest in, or right to occupy, the Property or any portion thereofexcept under the American Express Lease; (i) except for the right of firstrefusal set forth in Article 4 and the right to offer to purchase the Propertyunder Article 12, the American Express Lease does not contain any option oroffer to purchase or right of first refusal to purchase the Property or anypart, thereof; and (j) neither the American Express Lease nor the Rents havebeen assigned or pledged except to Lender, and no other Person has any interesttherein.

 

**S****ection 4.26.     Filingand Recording Taxes**

 

All mortgage, mortgage recording, stamp,intangible or other similar tax required to be paid by any Person underapplicable Legal Requirements currently in effect in connection with

 

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

 

**Section****4.27.     ManagementAgreement**

 

The Management Agreement is in full force andeffect and there is no default thereunder by any party thereto and, to Borrower’sknowledge, no event has occurred that, with the passage of time and/or thegiving of notice, would constitute a default thereunder. No management feesunder the Management Agreement are accrued and unpaid.

 

**Section 4.28.     IllegalActivity**

 

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

 

**Section 4.29.     ConstructionExpenses**

 

All costs and expenses of any and all labor,materials, supplies and equipment used in the construction, maintenance orrepair of the Improvements have been paid in full. To Borrower’s knowledgeafter due inquiry, there are no claims for payment for work, labor or materialsaffecting the Property which are or may become a lien prior to, or of equalpriority with, the Liens created by the Loan Documents.

 

**Section 4.30.     PersonalProperty**

 

Borrower has paid in full for, and is theowner of, all Personal Property (other than tenants’ property) used inconnection with the operation of the Property, free and clear of any and allsecurity interests, liens or encumbrances, except for Permitted Encumbrancesand the Lien and security interest created by the Loan Documents.

 

**S****ection 4.31.     Taxes**

 

Borrower and Borrower Principal have filedall federal, state, county, municipal, and city income, personal property andother tax returns required to have been filed by them and have paid all taxesand related liabilities which have become due pursuant to such returns orpursuant to any assessments received by them. Neither Borrower nor BorrowerPrincipal knows of any basis for any additional assessment in respect of anysuch taxes and related liabilities for prior years.

 

**Section 4.32.     PermittedEncumbrances**

 

None of the Permitted Encumbrances,individually or in the aggregate, materially interferes with the benefits ofthe security intended to be provided by the Loan Documents, materially andadversely affects the value of the Property, impairs the use or the operationof the Property or impairs Borrower’s ability to pay its obligations in atimely manner.

 

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

 

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

 

**Section 4.34.     ****Investment Company Act**

 

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

 

**Section****4.35.     ****Reciprocal EasementAgreements**

 

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

 

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

 

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

 

(d)           The terms, conditions, covenants, uses andrestrictions contained in the REA do not conflict in any manner with any terms,conditions, covenants, uses and restrictions contained in any Lease or in anyagreement between Borrower and occupant of any peripheral parcel, includingwithout limitation, conditions and restrictions with respect to kioskplacement, tenant restrictions (type, location or exclusivity), sale of certaingoods or services, and/or other use restrictions; and

 

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

 

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occupant of any peripheral parcel, including without limitation,conditions and restrictions with respect to kiosk placement, tenantrestrictions (type, location or exclusivity), sale of certain goods orservices, and/or other use restrictions.

 

**Section 4.36.     NoChange in Facts or Circumstances; Disclosure**

 

All information submitted by Borrower or itsagents to Lender and in all financial statements, reports, certificates andother documents submitted in connection with the Loan or in satisfaction of theterms thereof and all statements of fact made by Borrower in this Agreement orin any other Loan Document, are accurate, complete and correct in all materialrespects. There has been no material adverse change in any condition, fact,circumstance or event that would make any such information inaccurate,incomplete or otherwise misleading in any material respect or that otherwisematerially and adversely affects or might materially and adversely affect theProperty or the business operations or the financial condition of Borrower.  Borrower has disclosed to Lender all materialfacts and has not failed to disclose any material fact that could cause anyrepresentation or warranty made herein to be materially misleading.

 

**Section 4.37.     IntellectualProperty**

 

All trademarks, trade names and service marksnecessary to the business of Borrower as presently conducted or as Borrowercontemplates conducting its business are in good standing and, to the extent ofBorrower’s actual knowledge, uncontested. Borrower has not infringed, is notinfringing, and has not received notice of infringement with respect toasserted trademarks, trade names and service marks of others. To Borrower’sknowledge, there is no infringement by others of trademarks, trade names andservice marks of Borrower.

 

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

 

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

 

**Section 4.39.     PatriotAct**

 

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

 

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lender from making any advance or extension of credit to Borrower orfrom otherwise conducting business with Borrower and Borrower Principal, or (b)fail to provide 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 expresslyprovided otherwise, all of the representations and warranties of Borrower setforth in this Article 4 and elsewhere in this Agreement and in the other LoanDocuments shall survive for so long as any portion of the Debt remains owing toLender. All representations, warranties, covenants and agreements made in thisAgreement or in the other Loan Documents by Borrower shall be deemed to havebeen relied upon by Lender notwithstanding any investigation heretofore orhereafter made by Lender or on its behalf.

 

**ARTICLE 5BORROWER COVENANTS**

 

From the date hereof and until repayment ofthe Debt in full and performance in full of all obligations of Borrower underthe Loan Documents or the earlier release of the Lien of the Mortgage (and allrelated obligations) in accordance with the terms of this Agreement and theother Loan Documents, Borrower hereby covenants and agrees with Lender that:

 

**Section 5.1.     Existence;Compliance with Legal 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, permits and franchises and comply withall Legal Requirements applicable to it and the Property. Borrower herebycovenants and agrees not to commit, permit or suffer to exist any act or omissionaffording any Governmental Authority the right of forfeiture as against theProperty or any part thereof or any monies paid in performance of Borrower’sobligations 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 isin compliance with the terms of the American Express Lease with respect to thematters described in this Section 5.1, Borrower shall be deemed in compliancewith this Section 5.1.

 

(b)           Borrower, at its 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 longas American Express is in compliance with the terms of the American ExpressLease with respect to the matters described in this Section 5.2, Borrower shallbe deemed in compliance with this Section 5.2. If under applicable zoningprovisions the use of all or any portion of the Property is or shall become anonconforming use, Borrower will not cause or permit the nonconforming use tobe discontinued or the nonconforming Improvement to be abandoned without theexpress written consent of Lender.

 

**Section****5.3.     ****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 writtenconsent of Lender, permit any drilling or exploration for or extraction,removal, or production of any minerals from the surface or the subsurface ofthe Property, regardless of the depth thereof or the method of mining orextraction thereof.

 

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

 

(a)           Borrower shall payor cause 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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compliance with the terms of the American Express Lease with respect tothe matters described in this Section 5.4, Borrower shall be deemed incompliance with this Section 5.4.

 

(b)           Borrower,at its own expense, may contest or permit American Express to contest byappropriate legal proceeding, promptly initiated and conducted in good faithand with due diligence, the amount or validity or application in whole or inpart of any Taxes or Other Charges, provided that (i) no Default or Event of Defaulthas occurred and remains uncured; (ii) such proceeding shall be permitted underand be conducted in accordance with the provisions of any other instrument towhich Borrower is subject and shall not constitute a default thereunder andsuch proceeding 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.

 

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

 

Borrower shall give prompt written notice toLender of any litigation or governmental proceedings pending or threatened inwriting against Borrower which might materially adversely affect Borrower’scondition (financial or otherwise) or business or the Property.

 

**Section 5.6.     Accessto Property**

 

Borrower shall permit agents, representativesand employees of Lender to inspect the Property or any part thereof atreasonable hours upon reasonable advance notice, subject to the rights ofAmerican Express under the American Express Lease.

 

**Section****5.7.     Noticeof Default**

 

Borrower shall promptly advise Lender of anymaterial adverse change in the condition (financial or otherwise) of Borrower,any Borrower Principal or the Property or of the occurrence of any Default orEvent of Default of which Borrower has knowledge and of any American ExpressLease Default of which Borrower has knowledge.

 

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**Section 5.8.     Cooperatein Legal Proceedings**

 

Borrower shall at Borrower’s expensecooperate fully with Lender with respect to any proceedings before any court,board or other Governmental Authority which may in any way affect the rights ofLender hereunder or any rights obtained by Lender under any of the other LoanDocuments and, in connection therewith, permit Lender, at its election, toparticipate in any such proceedings.

 

**Section 5.9.     Performanceby Borrower**

 

Borrower shall in a timely manner observe,perform and fulfill each and every covenant, term and provision to be observedand performed by Borrower under this Agreement and the other Loan Documents andany other agreement or instrument affecting or pertaining to the Property andany amendments, modifications or changes thereto.

 

**Section 5.10.     Awards;Insurance Proceeds**

 

Borrower shall cooperate with Lender inobtaining for Lender the benefits of any Awards or Insurance Proceeds lawfullyor equitably payable to Borrower in connection with the Property, and Lendershall be reimbursed for any expenses incurred in connection therewith(including reasonable, actual attorneys’ fees and disbursements, and thepayment by Borrower of the expense of an appraisal on behalf of Lender in caseof a Casualty or Condemnation affecting the Property or any part thereof) outof such Awards or Insurance Proceeds. The actual, payment of any Awards shallbe governed by Section 8.4 hereof.

 

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

 

(a)           Borrowerand Borrower Principal shall keep adequate books and records of account inaccordance with federal tax basis accounting, or in accordance with othermethods acceptable to Lender in its sole discretion, consistently applied andshall furnish to Lender:

 

(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,prepared and certified by Borrower in the form required by Lender, detailingthe revenues received, the expenses incurred and the net operating incomebefore and after debt service (principal and interest) and major capitalimprovements (including, without limitation, any capital improvements plannedby American Express of which Borrower has notice) for the period of calculationand containing appropriate year-to-date in formation, within twenty (20) daysafter the 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)          allfinancial statements, operating statements, budgets, capital repair estimatesor projections and certifications of any kind with respect to the foregoingdelivered to Borrower by American Express under the American Express Lease.

 

(b)           To the extent notinconsistent with the provisions of Section 5.1 l(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.     EstoppelStatement**

 

(a)           Afterrequest by Lender, Borrower shall within ten (10) Business Days furnish Lenderwith a statement, duly acknowledged and certified, setting forth (i) the amountof the original principal amount of the Note, (ii) the rate of interest on theNote, (iii) the unpaid principal amount of the Note, (iv) the date installmentsof interest 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)           Borrowershall use its best efforts to deliver to Lender, promptly upon request, a dulyexecuted estoppel certificate from American Express on the form attached to theAmerican Express Lease as an exhibit.

 

**Section 5.13.     LeasingMatters.**

 

(a)           Borrower (i) shallobserve and perform all the obligations imposed on the landlord under theAmerican Express Lease and shall not do or permit to be done anything to impairthe value of the American Express Lease as security for the Debt; (ii) shallpromptly send copies to Lender of all notices of default which Borrower shall sendor receive thereunder; (iii) shall enforce all of the material terms, covenantsand conditions contained in the American Express Lease on the part of thetenant thereunder to be observed or performed; (iv) shall not collect any ofthe Rents more than one (1) month in advance; (v) shall not execute any other assignmentof the landlord’s interest in the American Express Lease or the Rents; and (vi)shall not consent to any assignment of or subletting under the American ExpressLease not in accordance with its terms without the prior written consent ofLender.

 

(b)           Borrower shall not,without the prior 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)           Borrowershall (i) promptly perform and observe all of the covenants required to beperformed and observed by it under the Management Agreement and do all thingsnecessary to preserve and to keep unimpaired its material rights thereunder;(ii) promptly notify Lender of any default under the Management Agreement ofwhich it is aware; (iii) promptly deliver to Lender a copy of any notice ofdefault or other material notice received by Borrower under the ManagementAgreement; (iv) promptly give notice to Lender of any notice or informationthat Borrower receives which indicates that Manager is terminating theManagement Agreement or that Manager is otherwise discontinuing its managementof the Property; and (v) promptly enforce the performance and observance of allof the covenants required to be performed and observed by Manager under theManagement Agreement.

 

(b)           Ifat any time, (i) Manager shall become insolvent or a debtor in a bankruptcyproceeding: (ii) an Event of Default has occurred and is continuing; or (iii) adefault has occurred and is continuing after the expiration of any applicablecure periods under the Management Agreement, Borrower shall, at the request ofLender, terminate the Management Agreement upon thirty (30) days prior noticeto Manager and replace Manager with a Qualified Manager, it being understoodand agreed that the management fee for such replacement manager shall notexceed then prevailing market rates.

 

(c)           Inaddition to the foregoing, in the event that Lender, in Lender’s reasonable discretion,at any time prior to the termination of the Assignment of Management Agreement,determines that the Property is not being managed in accordance with generallyaccepted management practices for projects similarly situated, Lender maydeliver written notice thereof to Borrower and Manager, which notice shallspecify with particularity the grounds for Lender’s

 

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determination. If Lender reasonably determines that the conditionsspecified 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, itbeing understood and agreed that the management fee for such replacementmanager shall not exceed then prevailing market rates.

 

(d)           Borrower shall not,without the prior written consent of Lender (which consent shall not beunreasonably withheld, conditioned or delayed): (i) surrender, terminate orcancel the Management Agreement or otherwise replace Manager or enter into anyother management agreement with respect to the Property; (ii) reduce or consentto the reduction of the term of the Management Agreement; (iii) increase orconsent to the increase of the amount of any charges under the ManagementAgreement; or (iv) otherwise modify, change, supplement, alter or amend, orwaive or release any of its rights and remedies under, the Management Agreementin any material respect. In the event that Borrower replaces Manager at anytime during the term of Loan pursuant to this subsection, such Manager shall bea Qualified Manager.

 

(e)           Notwithstanding the foregoing,Borrower shall be permitted to transfer the management of the Property to an Affiliateof Manager provided that the terms of the management contract between Borrowerand such entity provides for fees no greater than, is on terms that aresubstantially similar to and is no less favorable to Borrower than theManagement Agreement in effect as of the date hereof.

 

**Section 5.15.     Liens**

 

Borrower shall not, without the prior writtenconsent of Lender, create, incur, assume or suffer to exist any Lien on anyportion of the Property or permit any such action to be taken, except PermittedEncumbrances.

 

**Section 5.16.     Debt Cancellation**

 

Borrower shall not cancel or otherwiseforgive or release any claim or debt owed to Borrower by any Person, except foradequate consideration and in the ordinary course of Borrower’s business.

 

**Section 5.17.     Zoning**

 

Borrower shall not initiate or consent to anyzoning reclassification of any portion of the Property or seek any varianceunder any existing zoning ordinance or use or permit the use of any portion ofthe Property in any manner that could result in such use becoming anon-conforming use under any zoning ordinance or any other applicable land uselaw, rule or regulation, without the prior written consent of Lender.

 

**Section 5.18.     ERISA**

 

(a)           Borrowershall not engage in any transaction which would cause any obligation, or actiontaken or to be taken, hereunder (or the exercise by Lender of any of its rightsunder the

 

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

 

(b)           Borrowerfurther covenants and agrees to deliver to Lender such certifications or otherevidence from time to time throughout the term of the Loan, as requested byLender in its sole discretion, that (i) Borrower is not and does not maintainan “employee benefit plan” as defined in Section 3(3) of ERISA, which issubject to Title I of ERISA, or a “governmental plan” within the meaning ofSection 3(3) of ERISA; (ii) Borrower is not subject to state statutesregulating investments and fiduciary obligations with respect to governmentalplans; and (iii) one or more of 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- §2510.3-101 (c) or (e).

 

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

 

Borrower shall not suffer, permit or initiatethe joint assessment of the Property with (a) any other real propertyconstituting a tax lot separate from the Property, or (b) any portion of theProperty which may be deemed to constitute personal property, or any otherprocedure whereby the Lien of any taxes which may be levied against suchpersonal property shall be assessed or levied or charged to the Property.

 

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

 

Borrower shall not enter into, terminate ormodify any REA without Lender’s prior written consent, which consent shall notbe unreasonably withheld, conditioned or delayed. Borrower shall enforce,comply with, and cause each of the parties to the REA to comply with all of thematerial economic terms and conditions contained in the REA, provided thatBorrower may agree, without Lender’s consent, to modifications to any REA or togrant easements with respect to the Property which could not reasonably beexpected to have a material adverse effect on the use, value or operation ofthe Property, on the ability of American Express to perform its obligationsunder the American Express Lease or on Borrower’s ability to perform itsobligations under the Loan Documents.

 

**ARTICLE 6****ENTITY COVENANTS**

 

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

 

Until the Debt has been paid in full, Borrower represents, warrants andcovenants 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)           acquireor own any assets other than (A) the Property, and (B) such incidental PersonalProperty as may be necessary for the operation of the 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)           ownany subsidiary, or make any investment in, any Person;

 

(vi)          commingleits assets with the assets of any other Person, or permit any Affiliate orconstituent party independent access to its bank accounts;

 

(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 the ordinarycourse of business relating to Personal Property on commercially reasonableterms and conditions; provided however, the aggregate amount of theindebtedness described in (B) and (C) shall not exceed at any time threepercent (3%) of the outstanding principal amount of the Note;

 

(viii)        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 ascollateral to 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 the foregoing,except upon terms and conditions that are intrinsically fair, commerciallyreasonable and substantially similar to those that would be available on an arm’s-lengthbasis with unaffiliated third parties;

 

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(x)            maintainits assets in such a manner that it will be costly or difficult to segregate,ascertain or identify its individual assets from those 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)          makeany 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 the benefitof creditors;

 

(xvii)       failto allocate shared expenses (including, without limitation, shared office spaceand services performed by an employee of an Affiliate) among the Personssharing such expenses and to use separate stationery, 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)         acquireobligations or securities of its partners, members, shareholders or otheraffiliates, as applicable;

 

(xx)          violateor cause to be violated the assumptions made with respect to Borrower, Manager(if applicable) and their respective direct and/or indirect owners in anyopinion letter pertaining to substantive consolidation delivered to Lender inconnection with the Loan; or

 

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(xxi)         failto maintain a sufficient number of employees in light of its contemplatedbusiness operations.

 

(b)           Thelimited liability company agreement of Borrower (the **“LLC Agreement”**)****shall provide that (i) upon theoccurrence of any event that causes the sole member of Borrower (**“Member”**)****to cease to be the member ofBorrower (other than (A) upon an assignment by Member of all of its limitedliability company interest in Borrower and the admission of the transferee inaccordance with the Loan Documents and the LLC Agreement, or (B) theresignation of Member and the admission of an additional member of Borrower inaccordance with the terms of the Loan Documents and the LLC Agreement), anysuch Person acting as additional member of Borrower in accordance with theterms of the Loan Documents and the LLC Agreement shall, without any action ofany other Person and simultaneously with the Member ceasing to be the member ofBorrower, automatically be admitted to Borrower (**“Special Member”**)****and shall continue Borrower withoutdissolution and (ii) Special Member may not resign from Borrower or transferits rights as Special Member unless a successor Special Member has beenadmitted to Borrower as Special Member in accordance with requirements ofDelaware law. The LLC Agreement shall further provide that (i) Special Membershall automatically cease to be a member of Borrower upon the admission toBorrower of a substitute Member, (ii) Special Member shall be a member ofBorrower that has no interest in the profits, losses and capital of Borrowerand 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 be required to make anycapital contributions to Borrower and shall not receive a limited liabilitycompany interest in Borrower, (iv) Special Member, in its capacity as SpecialMember, may not bind Borrower and (v) except as required by any mandatoryprovision of the Act, Special Member, in its capacity as Special Member, shallhave no right to vote on, approve or otherwise consent to any action by, ormatter relating to, Borrower, including, without limitation, the merger,consolidation or conversion of Borrower; provided, however, such prohibitionshall not limit the obligations of Special Member to vote on such mattersrequired 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 causesthe Member to cease to be a member of Borrower, to the fullest extent permittedby law, the personal representative of Member shall, within ninety (90) daysafter the occurrence of the event that terminated the continued membership ofMember in Borrower, agree in writing (i) to continue Borrower and (ii) to theadmission of the personal representative or its nominee or designee, as thecase may be, as a substitute member of Borrower, effective as of the occurrenceof the event that terminated the continued membership of Member of Borrower inBorrower. Any action initiated by or brought against Member or Special Memberunder any Creditors Rights Laws shall not cause Member or Special Member tocease to be a member of Borrower and upon the occurrence of such an event, thebusiness of Borrower shall continue without dissolution. The LLC Agreement shallprovide that each of Member and Special Member waives any right it might haveto agree in writing to dissolve Borrower upon the occurrence of any actioninitiated by or brought against Member or Special Member under any CreditorsRights Laws, or the occurrence of an event that causes Member or Special Memberto cease to be a member of Borrower.

 

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**Section 6.2.     Changeof Name, Identity or Structure**

 

Borrower shall not change or permit to bechanged (a) Borrower’s name, (b) Borrower’s identity (including its trade nameor names), (c) Borrower’s principal place of business set forth on the firstpage of this Agreement, (d) the corporate, partnership or other organizationalstructure of Borrower, or Borrower Principal, (e) Borrower’s state oforganization, or (f) Borrower’s organizational identification number, withoutin each case notifying Lender of such change in writing at least thirty (30)days prior to the effective date of such change and, in the case of a**change in Borrower’s structure, withoutfirst obtaining 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 to file any financing statement or financingstatement amendment required by Lender to establish or maintain the validity, perfectionand priority of the security interest granted herein. At the request of Lender,Borrower shall execute a certificate in form satisfactory to Lender listing thetrade names under which Borrower intends to operate the Property, andrepresenting and warranting that Borrower does business under no other tradename with respect to the Property. If Borrower does not now have anorganizational identification number and later obtains one, or if the organizationalidentification number assigned to Borrower subsequently changes, Borrower shallpromptly notify Lender of such organizational identification number or change. Nothingin this Section 6.2 shall be deemed to restrict, any express rights granted to Borrowerunder Article 7 hereof.

 

**Section 6.3.     Businessand Operations**

 

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

 

**Section 6.4.     IntentionallyOmitted**

 

**ARTICLE 7NO SALE OR ENCUMBRANCE**

 

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

 

For purposes of this Article 7 an **“Affiliated Manager”**shall mean anymanaging agent in which Borrower, Borrower Principal, or any affiliate of suchentities has, directly or indirectly, any legal, beneficial or economicinterest; **“Control”**shall mean thepower to direct the management and policies of a Restricted Party, directly orindirectly, whether through the ownership of voting securities or otherbeneficial interests, by contract or otherwise; **“Restricted Party”**shall mean Borrower, Borrower Principal,any Affiliated Manager, or any shareholder, partner, member or non-membermanager, or any direct or indirect legal or beneficial owner of Borrower,Borrower Principal, any Affiliated Manager or any non-member manager; and a **“Sale or Pledge”**shall mean a voluntary orinvoluntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,assignment, grant of any options with respect to, or any other transfer ordisposition of (directly or indirectly, voluntarily or involuntarily, byoperation of law or otherwise, and whether or not for consideration or ofrecord) of a legal or beneficial interest.

 

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**Section****7.2.     NoSale/Encumbrance**

 

(a)           Borrower shall notcause or permit a Sale or Pledge of the Property or any part thereof or anylegal or beneficial interest therein nor permit a Sale or Pledge of an interestin any Restricted Party (in each case, a **“ProhibitedTransfer”**),****other than pursuant to the AmericanExpress Lease, without the prior written consent of Lender.

 

(b)           A Prohibited Transfershall include, but not be limited to, (i) an installment sales agreementwherein Borrower agrees to sell the Property or any part thereof for a price tobe paid in installments; (ii) an agreement by Borrower leasing all or asubstantial part of the Property for other than actual occupancy by a spacetenant thereunder or a sale, assignment or other transfer of, or the grant of asecurity interest in, Borrower’s right, title and interest in and to any Leasesor any Rents; (iii) if a Restricted Party is a corporation, any merger,consolidation or Sale or Pledge of such corporation’s stock or the creation orissuance of new stock in one or a series of transactions; (iv) if a RestrictedParty is a limited or general partnership or joint venture, any merger orconsolidation or the change, removal, resignation or addition of a generalpartner or the Sale or Pledge of the partnership interest of any general orlimited partner or any profits or proceeds relating to such partnershipinterests or the creation or issuance of new partnership interests; (v) if aRestricted Party is a limited liability company, any merger or consolidation orthe change, removal, resignation or addition of a managing member or non-membermanager (or if no managing member, any member) or the Sale or Pledge of themembership interest of any member or any profits or proceeds relating to suchmembership interest; (vi) if a Restricted Party is a trust or nominee trust,any merger, consolidation or the Sale or Pledge of the legal or beneficialinterest in a Restricted Party or the creation or issuance of new legal orbeneficial interests; or (vii) the removal or the resignation of the Manager(including, without limitation, an Affiliated Manager) other than in accordancewith Section 5.14.

 

**Section****7.3.     PermittedTransfers**

 

Notwithstanding the provisions of Section7.2, the following transfers shall not be deemed to be a Prohibited Transfer:(a) a transfer by devise or descent or by operation of law upon the death of amember, partner or shareholder of a Restricted Party, so long as Borrowerdelivers notice to Lender as soon as practicable thereafter and that suchRestricted Party is promptly reconstituted, if applicable, following the deathof such member, partner or shareholder and there is no change in Control ofsuch Restricted Party as a**resultof such transfer; (b) the Sale or Pledge, in one or a series of relatedtransactions, of not more than forty-nine percent (49%) of the stock, limitedpartnership interests or non-managing membership interests (as the case may be)in a Restricted Party; provided, however, no such transfers, shall result in achange in Control in the Restricted Party or change in control of the Property,and as a condition to each such transfer, Lender shall receive not less thanthirty (30) days prior written notice of such proposed transfer.Notwithstanding the foregoing, any one or more of the transfers that results inany Person owning in excess of forty-nine percent (49%) of the ownershipinterest in a Restricted Party shall comply with the requirements of Section7.4.

 

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**Section****7.4.     Lender’sRights**

 

Lender reserves the right to condition theconsent to a Prohibited Transfer requested hereunder upon (a) a modification ofthe terms hereof and an assumption of the Note and the other Loan Documents asso modified by the proposed Prohibited Transfer, (b) receipt of payment of atransfer fee equal to one percent (1%) of the outstanding principal balance ofthe Loan and all of Lender’s expenses incurred in connection with suchProhibited Transfer, (c) receipt of written confirmation from the RatingAgencies that the Prohibited Transfer 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, (d)the proposed transferee’s continued compliance with the covenants set forth inthis Agreement (including, without limitation, the covenants in Article 6) andthe other Loan Documents, (e) a new manager for the Property and a newmanagement agreement satisfactory to Lender, and (f) the satisfaction of suchother conditions and/or legal opinions as Lender shall determine in its solediscretion to be in the interest of Lender.  All expenses incurred by Lender shall bepayable by Borrower whether or not Lender consents to the Prohibited Transfer.Lender shall not be required to demonstrate any actual impairment of itssecurity or any increased risk of default hereunder in order to declare theDebt immediately due and payable upon a Prohibited Transfer made without Lender’sconsent. This provision shall apply to each and every Prohibited Transfer,whether or not Lender has consented to any previous Prohibited Transfer. In theevent an opinion letter pertaining to substantive consolidation was deliveredto Lender and the Rating Agencies in connection with the closing of the Loan,and if any Sale or Pledge permitted under this Article 7 results in any Personand its Affiliates owning in excess of forty-nine percent (49%) of theownership interests in a Restricted Party, Borrower shall, prior to suchtransfer, and in addition to any other requirement for Lender consent containedherein, deliver a revised substantive non-consolidation opinion letter toLender reflecting such Prohibited Transfer, which opinion shall be in form,scope and substance acceptable in all respects to Lender and the RatingAgencies.

 

**Section7.5.     ****Assumption**

 

Notwithstanding the foregoing provisions ofthis Article 7, following the date which is six (6) months from the ClosingDate, Lender shall not unreasonably withhold consent to a transfer of theProperty in its entirety to, and the related assumption of the Loan by, anyPerson (a **“Transferee”**) providedthat each of the following terms and conditions are satisfied:

 

(a)           noDefault or Event of Default has occurred;

 

(b)           Borrowershall have (i) delivered written notice to Lender of the terms of suchprospective transfer not less than forty-five (45) days before the date onwhich such transfer is scheduled to close and, concurrently therewith, all suchinformation concerning the proposed Transferee as Lender shall reasonablyrequire and (ii) paid to Lender a non-refundable processing fee in the amountof $10,000. Lender shall have the right to approve or disapprove the proposedtransfer based on its then current underwriting and credit requirements forsimilar loans secured by similar properties which loans are sold in thesecondary market, such approval not to be unreasonably withheld. In determiningwhether to give or withhold its approval of the proposed transfer, Lender shallconsider the experience and track record of Transferee and its principals inowning and operating facilities similar to the Property, the financial strengthof Transferee and its principals, the general business standing of Transfereeand its principals and

 

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Transferee’s and its principals’ relationships and experience withcontractors, vendors, tenants, lenders and other business entities; provided,however, that, notwithstanding Lender’s agreement to consider the foregoingfactors in determining whether to give or withhold such approval, such approvalshall be given or withheld based on what Lender determines to be commerciallyreasonable and, if given, may be given subject to such conditions as Lender maydeem reasonably 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 and Transferee,without any cost to Lender, shall furnish any information requested by Lenderfor 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 have furnishedto Lender, if Transferee is a corporation, partnership, limited liability companyor other entity, all appropriate papers evidencing Transferee’s organizationand good standing, and the qualification of the signers to execute the assumptionof the Debt, which papers shall include certified copies of all documentsrelating to the organization and formation of Transferee and of the entities,if any, which are partners or members of Transferee. Transferee and suchconstituent partners, members or shareholders of Transferee (as the case maybe), as Lender shall require, shall comply with the covenants set forth inArticle 6 hereof;

 

(h)           Transfereeshall assume the obligations of Borrower under any Management Agreement orprovide a new management agreement with a new manager which meets with therequirements of Section 5.14 hereof and assign to Lender as additional securitysuch new management, agreement;

 

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(i)            Transfereeshall furnish an opinion of counsel satisfactory to Lender and its counsel (A)that Transferee’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 existenceand good standing, and (E) with respect to such other matters as Lender mayreasonably request;

 

(j)            ifrequired by Lender, Lender shall have received confirmation in writing from theRating Agencies that rate the Securities to the effect that the transfer willnot result in a qualification, downgrade or withdrawal of any rating initiallyassigned or to be assigned to the Securities;

 

(k)           Borrower’sobligations under the contract of sale pursuant to which the transfer isproposed to occur shall expressly be subject to the satisfaction of the termsand conditions of this Section 7.5; and

 

(l)            Transfereeshall, prior to such transfer, deliver a substantive non-consolidation opinionto Lender, which opinion shall be in form, scope and substance acceptable inall respects to Lender and the Rating Agencies.

 

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

 

**Section 7.6.     Assumptionby Inland Permitted Transferee**

 

Notwithstanding the foregoing provisions ofthis Article 7, Borrower shall be permitted to transfer the Property in itsentirety to, provided the Loan is simultaneously assumed by, an InlandPermitted Transferee, and provided further that each of the following terms andconditions is satisfied:

 

(a)           no Default or Event ofDefault 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 have paidto Lender all out-of-pocket costs and expenses, including reasonable attorneys’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;

 

(e)           Borrower and suchInland Permitted Transferee, without any cost to Lender, shall furnish anyinformation requested by Lender for the preparation of, and shall authorizeLender to file, new financing statements and financing statement amendments andother documents to the fullest extent permitted by applicable law, and shall executeany additional 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 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)           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. Transferee and such constituent partners, membersor shareholders of Transferee (as the case may be), as Lender shall require,shall comply with the covenants set forth in Article 6 hereof, provided,however, that, (i) if such Inland Permitted Transferee is a limited partnershipor a limited liability company (with more than one member), Lender may requirethat the general partner or managing member of such Inland Permitted Transfereealso comply with the covenants set Forth in Article 6, as modified to statethat such general partner or managing member holds an interest in the InlandPermitted Transferee rather than an interest in the Property or (ii) if suchInland Permitted Transferee is a single member limited liability company, thestate of organization of such entity must be Delaware and the organizationaldocuments must provide for a springing member upon the bankruptcy or dissolutionof the sole member;

 

(h)           suchInland Permitted Transferee shall assume the obligations of Borrower under anyManagement Agreement or provide a new management agreement with a new managerwhich meets with the requirements of Section 5.14 hereof and assign to Lenderas additional security such new management agreement;

 

(i)            Transfereeshall furnish an opinion of counsel satisfactory to Lender and its counsel (A)that Transferee’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

 

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or general partner of Transferee, have been duly organized, and are inexistence and good standing, and (E) with respect to such other matters asLender may reasonably request, including, without limitation, customary singlemember limited liability company opinions in the event that such InlandPermitted 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 consent by Lender with respect to a transfer of the Property in itsentirety to, and the related assumption of the Loan by, a Transferee pursuantto this Section 7.6 shall not be construed to be a waiver of the right ofLender to consent to any subsequent Sale or Pledge of the Property.

 

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

 

**Section 8.1.     Insurance**

 

(a)           Subjectto the provisions of paragraph (g) of this Section 8.1, Borrower shall obtainand maintain, or cause American Express to maintain, insurance for Borrower andthe Property 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 islocated in an area with a high degree of seismic risk, provided that theinsurance pursuant to

 

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clauses (y) and (z) hereof shall be on termsconsistent 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, either 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 endorsement waivingco-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)        uponsixty (60) days’ written notice, such other reasonable insurance and in suchreasonable amounts as Lender from time to time may reasonably request againstsuch other insurable hazards which at the time are commonly insured against forproperty similar to the Property located in or around the region in which theProperty is located.

 

With respect to the policies required to bemaintained pursuant to clauses (i) through (viii) above, Borrower shall usecommercially reasonable efforts, consistent with those of prudent owners ofinstitutional quality commercial real estate, to maintain insurance againstLosses resulting from acts 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”**),and shall be subject to the approval of Lender as to insurance companies,amounts, deductibles, loss payees and insureds. The Policies shall be issued byfinancially sound and responsible insurance companies authorized to do businessin the State and having a claims paying ability rating of “A-” or better byS&P (or such other ratings approved by Lender) and/or a general policyrating of “A” or better and a financial class of VIII or better by A.M. BestCompany, Inc. The Policies described in Section 8.1(a) shall designate Lenderand its successors and assigns as additional insureds, mortgagees and/or losspayee as deemed appropriate by Lender. To the extent such Policies are notavailable as of the Closing Date, Borrower shall deliver to Lender prior to theClosing Date an Acord 28 or similar certificate of insurance evidencing thecoverages and amounts required hereunder and, upon request of Lender as soon asavailable after the Closing Date, certified copies of all Policies.  Not less than ten (10) days prior to the expirationdates of any insurance coverage in place with respect to the Property, Borrowershall deliver to Lender an Acord 28 or similar certificate, accompanied byevidence satisfactory to Lender of payment of the premiums due in connectiontherewith (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 8.1(a)(v), shall name Borrower as the insured and Lender as theadditional insured, as its interests may appear, and in the case of propertydamage, boiler and machinery, flood and earthquake insurance, shall contain aso-called New York standard non-contributing mortgagee clause in favor ofLender 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 theinsurance insofar 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)          theissuers thereof shall give written notice to Lender if the Policies have notbeen 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 byLender in connection with such action or in obtaining such insurance andkeeping it in effect shall be paid by Borrower to Lender upon demand and, untilpaid, shall be secured by the 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.

 

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

 

If the Property shall be damaged ordestroyed, in whole or in part, by fire or other casualty (a **“Casualty”**),****Borrower shallgive prompt notice of such damage to Lender and shall promptly commence anddiligently prosecute the Restoration of the Property in accordance with

 

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Section 8.4, whether or not Lender makes any Net Proceeds availablepursuant to Section 8.4. Borrower shall pay all costs of such Restorationwhether or not such costs are covered by insurance. Lender may, but shall notbe obligated to make proof of loss if not made promptly by Borrower.  Borrower shall adjust all claims for InsuranceProceeds in consultation with, and approval of, Lender; provided, however, ifan Event of Default has occurred and is continuing, Lender shall have theexclusive right to participate in the adjustment of all claims for InsuranceProceeds.

 

**Section 8.3.     Condemnation**

 

Borrower shall promptly give Lender notice ofthe actual or threatened commencement of any proceeding for the Condemnation ofthe Property of which Borrower has knowledge and shall deliver to Lender copiesof any and all papers served in connection with such proceedings. Lender mayparticipate in any such proceedings, and Borrower shall from time to timedeliver to Lender all instruments requested by it to permit such participation.Borrower shall, at its expense, diligently prosecute any such proceedings, andshall consult with Lender, its attorneys and experts, and cooperate with themin the carrying on or defense of any such proceedings. Notwithstanding anytaking by any public or quasi-public authority through Condemnation orotherwise (including but not limited to any transfer made in lieu of or inanticipation of the exercise of such taking), Borrower shall continue to paythe Debt at the time and in the manner provided for its payment in the Note andin this Agreement and the Debt shall not be reduced until any Award shall havebeen actually received and applied by Lender, after the deduction of expensesof collection, to the reduction or discharge of the Debt. Lender shall not belimited to the interest paid on the Award by the condemning authority but shallbe entitled to receive out of the Award interest at the rate or rates providedherein or in the Note. If the Property or any portion thereof is taken by acondemning authority, Borrower shall promptly commence and diligently prosecutethe Restoration of the Property and otherwise comply with the provisions ofSection 8.4, whether or not Lender makes any Net Proceeds available pursuant toSection 8.4. If the Property is sold, through foreclosure or otherwise, priorto the receipt by Lender of the Award, Lender shall have the right, whether ornot a deficiency judgment on the Note shall have been sought, recovered ordenied, to receive the Award, or a portion thereof sufficient to pay the Debt.So long as no American Express Lease Default has occurred, the payment andallocation of any Awards shall be governed by the American Express Lease.

 

**Section 8.4.     Restoration**

 

The following provisions shall apply inconnection with the Restoration of 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) aremet and Borrower delivers to Lender a written undertaking to expeditiously commenceand to satisfactorily complete with due diligence the Restoration in accordancewith 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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availablefor the Restoration in accordance with the provisions of this Section 8.4. Theterm **“Net Proceeds”**for purposes of this Section 8.4 shall mean: (i) thenet amount of all insurance proceeds received by Lender pursuant to Section8.1(a)(i), (iv), (vi) and (viii) as a result of a Casualty, after deduction ofits reasonable costs and expenses (including, but not limited to, reasonablecounsel fees), if any, in collecting the same (**“Insurance Proceeds”**),****or (ii) the net amount of the Awardas a result of a Condemnation, after deduction of its reasonable costs andexpenses (including, but not limited to, reasonable counsel fees), if any, incollecting 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 than thirtypercent (30%) of the total floor area of the Improvements on the Property hasbeen damaged, destroyed or rendered unusable as a result of a Casualty, or (2) inthe event the Net Proceeds are Condemnation Proceeds, less than ten percent (10%)of the land constituting the Property is taken, such land is located along the perimeteror periphery of the Property, and no portion of the Improvements is located onsuch 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 in 

Section8.1(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)          theRestoration shall be done and completed by Borrower in an expeditious and diligentfashion and in compliance with all applicable Legal Requirements;

 

(I)            suchCasualty or Condemnation, as applicable, does not result in the loss of accessto the Property or the Improvements;

 

(J)            Borrowershall deliver, or cause to be delivered, to Lender a signed detailed budgetapproved in writing by Borrower’s architect or engineer stating the entire costof completing the Restoration, which budget shall be acceptable to Lender; and

 

(K)          theNet Proceeds together with any cash or cash equivalent deposited by Borrowerwith Lender are sufficient in Lender’s reasonable judgment to cover the cost ofthe Restoration.

 

(ii)           TheNet Proceeds shall be held by Lender until disbursements commence, and, untildisbursed in accordance with the provisions of this Section 8.4, shallconstitute additional security for the Debt and other obligations under theLoan Documents. The Net Proceeds shall be disbursed by Lender to, or asdirected by, Borrower from time to time during the course of the Restoration,upon receipt of evidence satisfactory to Lender that (A) all the conditionsprecedent to such advance, including those set forth in Section 8.4(b)(i), have been satisfied, (B) allmaterials installed and work and labor performed (except to the extent thatthey are to be paid for out of the requested disbursement) in connection withthe related Restoration item have been paid for in full, and (C) there exist nonotices of pendency, stop orders, mechanic’s or materialman’s liens or noticesof intention to file same, or any other liens or encumbrances of any naturewhatsoever on the Property which have not either been fully bonded to thesatisfaction of Lender and discharged of record or in the alternative fullyinsured to the satisfaction of Lender by the title company issuing the TitleInsurance Policy.  Notwithstanding theforegoing, Business Interruption Proceeds required to be maintained by Borrowerpursuant to section 8.1(a)(iii) shall be controlled by Lender at all times,shall not be subject to the provisions of this Section 8.4 and shall be usedsolely for the payment of the obligations under the Loan Documents andOperating Expenses.

 

(iii)          All plans and specifications required in connection with the Restoration shallbe subject to prior review and acceptance in all respects by Lender and by anindependent consulting engineer selected by Lender (the “**Restoration Consultant**”). Lender shall havethe use of the plans and specifications and all permits, licenses and approvalsrequired or obtained in connection with the Restoration. The identity of thecontractors, subcontractors and materialmen engaged in the Restoration, as wellas the contracts in excess of $50,000 under which they have been engaged, shallbe subject 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’s fees,shall be paid by Borrower.

 

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(iv)          Inno event shall Lender be 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 suretycompany, if any, which has issued a payment or performance bond with respect tothe contractor, subcontractor or materialman.

 

(v)           Lendershall not be 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.  Borrowershall deposit the deficiency (the **“Net Proceeds Deficiency”**) with Lender before any furtherdisbursement, of the Net Proceeds shall be made. The Net Proceeds Deficiencydeposited with Lender shall be held by Lender and shall be disbursed for costsactually incurred in connection with the Restoration on the same conditionsapplicable to the disbursement of the Net Proceeds, and until so disbursedpursuant to this Section 8.4(b) shall constitute additional security for theDebt and other obligations under the Loan 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 ofthe Loan, Borrower shall make capital repairs, replacements and improvementsnecessary to keep the Property in good order and repair and in a goodmarketable condition or prevent deterioration of the Property. So long as noAmerican Express Lease Default shall have occurred, the compliance by AmericanExpress with its obligations for maintenance of the Property as set forth inthe American Express Lease shall be deemed compliance by Borrower with theprovisions of this Section 9.1.

 

**Section 9.2.     Taxand Insurance Reserve Funds**

 

If required by Lender following a default byAmerican Express under the American Express Lease Borrower shall establish anEligible Account with Lender or Lender’s agent sufficient to discharge Borrower’sobligations for the payment of Taxes and Insurance Premiums pursuant to Section5.4 and Section 8.1 hereof (the **“Tax andInsurance Reserve Account”**) Borrowershall deposit, into the Tax and Insurance Reserve Account on each ScheduledPayment Date (a) one-twelfth of the Taxes that Lender estimates will be payableduring the next ensuing twelve (12) months or such higher amount necessary toaccumulate with Lender sufficient funds to pay all such Taxes at least thirty(30) days prior to the earlier of (i) the date that the same will

 

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become delinquent and (ii) the date that additional charges or interestwill accrue due to the non-payment thereof, and (b) except to the extent Lenderhas waived the insurance escrow because the insurance required hereunder ismaintained under a blanket insurance Policy acceptable to Lender in accordancewith Section 8.1(c), one-twelfth of the Insurance Premiums that Lenderestimates will be payable during the next ensuing twelve (12) months for therenewal of the coverage afforded by the Policies upon the expiration thereof orsuch higher amount necessary to accumulate with Lender sufficient funds to payall such Insurance Premiums at least thirty (30) days prior to the expirationof the Policies (said amounts in (a) and (b) above hereinafter called the **“Tax****and Insurance ReserveFunds”**). Lender will apply the Tax and Insurance Reserve Funds topayments of Taxes and Insurance Premiums required to be made by Borrowerpursuant to Section 5.4 and Section 8.1 hereof. In making any disbursement fromthe Tax and Insurance Reserve Account, Lender may do so according to any bill,statement or estimate procured from the appropriate public office or tax lienservice (with respect to Taxes) or insurer or agent (with respect to InsurancePremiums), without inquiry into the accuracy of such bill, statement orestimate or into the validity of any tax, assessment, sale, forfeiture, tax lienor title or claim thereof. If the amount of the Tax and Insurance Reserve Fundsshall exceed the amounts due for Taxes and Insurance Premiums pursuant toSection 5.4 and Section 8.1 hereof, Lender shall, in its sole discretion,return any excess to Borrower or credit such excess against future payments tobe made to the Tax and Insurance Reserve Account. In allocating any suchexcess, Lender may deal with the person shown on Lender’s records as being theowner of the Property. Any amount remaining in the Tax and Insurance ReserveAccount after the Debt has been paid in full shall be returned to Borrower orthe person shown on Lender’s records as being the owner of the Property and noother party shall have any right or claim thereto. 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.     ReserveFunds 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 loanservicer elects in its sole and absolute discretion to keep or maintain anyReserve Accounts or any funds deposited therein in an interest-bearing account(i) the account shall be an Eligible Account, (ii) such funds shall not beinvested except in Permitted Investments, and (iii) all interest earned oraccrued thereon shall be for the account of and be retained by Lender or suchloan 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 orapplied in accordance herewith, the Reserve Accounts and the Reserve Fundsshall constitute additional security for the Debt. The provisions of thisSection 9.9 are intended to give Lender or any subsequent holder of the Loan “control”of the Reserve Accounts within the meaning of the UCC.

 

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

 

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

 

(e)           As long as no Event of Default has occurred,Lender shall make disbursements from the Reserve Accounts in accordance withthis Agreement.  All such disbursementsshall be deemed to have been expressly pre-authorized by Borrower, and shallnot be deemed to constitute the exercise by Lender of any remedies againstBorrower unless an Event of Default has occurred and is continuing and Lenderhas expressly stated in writing its intent to proceed to exercise its remediesas a secured party, pledgee or lienholder with respect to the Reserve Accounts.

 

(f)            The Reserve Funds shall not constitute escrowor trust funds and may be commingled with other monies held by Lender. Notwithstandinganything else herein to the contrary, Lender may commingle in one or moreEligible Accounts any and all funds controlled by Lender, including, withoutlimitation, funds pledged in favor of Lender by other borrowers, whether forthe same purposes as the Reserve Accounts or otherwise. Without limiting anyother provisions of this Agreement or any other Loan Document, the ReserveAccounts may be established and held in such name or names as Lender or itsloan servicer, as agent for Lender, shall deem appropriate, including, withoutlimitation, in the name of Lender or such loan servicer as agent for Lender. Inthe case of any Reserve Account which is held in a commingled account, Lenderor its loan servicer, as applicable, shall maintain records sufficient toenable it to determine at all times which portion of such account is related tothe Loan. The Reserve Accounts are solely for the protection of Lender andLender shall have no responsibility beyond the allowance of due credit, for thesums actually received by Lender or beyond the reimbursement or payment of thecosts and expenses for which such accounts were established in accordance withtheir terms. Upon assignment of the Loan by Lender, any Reserve Funds shall beturned over to the assignee and any responsibility of Lender as assignor shallterminate. The requirements of this Agreement concerning Reserve Accounts in noway supersede, limit or waive any other rights or obligations of the partiesunder any of the Loan Documents or under applicable law.

 

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

 

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(h)           Borrowerwill maintain the security interest created by this Section 9.9 as a firstpriority perfected security interest and will defend the right, title andinterest of Lender in and to the Reserve Accounts and the Reserve Funds againstthe claims and demands of all Persons whomsoever. At any time and from time totime, upon the written request of Lender, and at the sole expense of Borrower,Borrower will promptly and duly execute and deliver such further instrumentsand documents and will take such further actions as Lender reasonably mayrequest for the purpose of obtaining or preserving the full benefits of thisAgreement and of the rights and powers herein granted.

 

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

 

**Section 10.1.     CashManagement Account**

 

(a)           Borrower acknowledges andconfirms that Borrower has established, and Borrower covenants that it shallmaintain an Eligible Account into which Borrower shall, and shall cause Managerto, deposit or cause to be deposited all Rents and other revenue from the Propertyduring the Cash Management Period or upon the occurrence of an Event of Defaultprior to the commencement of the Cash Management Period pursuant to the termsof Section 10.2 hereof (such account, the sub-accounts thereof, all funds atany time on deposit therein and any proceeds, replacements or substitutions ofsuch account or funds therein, are referred to herein 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 for federaland applicable state and local tax purposes (except to the extent Lenderretains any interest earned on the Cash Management Account for its own accountfollowing the occurrence and during the continuance of an Event of Default). Sumson deposit in the Cash Management Account shall not be invested except in suchPermitted Investments as determined and directed by Lender and all incomeearned thereon shall be the income of Borrower and be applied to and become partof the Cash Management Account, to be disbursed in accordance with this Article10. Lender shall have no liability for any loss resulting from the investmentof funds in Permitted Investments in accordance with the terms and conditionsof 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, shallhave any 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 shall not be under any obligation or duty toperform any act which would involve it in expense or liability or to instituteor defend any suit in respect

 

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hereof, or to advance any of its own monies. Borrower shall indemnifyand hold Lender and its directors, employees, officers and agents harmless fromand against any loss, cost or damage (including, without limitation, reasonableattorneys’ fees and disbursements) incurred by such parties in connection withthe Cash Management Account other than such as result from the gross negligenceor willful misconduct of Lender or intentional nonperformance by Lender of itsobligations under this Agreement.

 

**Section 10.2.     Depositsand Withdrawals**

 

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

 

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

 

(iii)          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 neither Borrower,Manager nor any other Person shall open or maintain any accounts other than theCash Management Account into which revenues from the ownership and operation ofthe Property are deposited.

 

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(b)           IntentionallyOmitted.

 

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

 

(i)            followinga default by American Express under the American Express Lease, fundssufficient to pay the monthly deposits to the Tax and Insurance Reserve Accountshall be allocated to the Tax and Insurance Reserve Account to be held anddisbursed in accordance with Section 9.2;

 

(ii)           fundssufficient to pay the Monthly Payment Amount shall be withdrawn and paid toLender;

 

(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)          fundssufficient to pay Operating Expenses (to the extent actually incurred) for thefollowing month shall be allocated to the Operating Expense Reserve Account tobe 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 isresponsible for 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 on deposit in the Cash Management Accountis insufficient to make all of the withdrawals and allocations described inSection 10.2(c)(i) through (v) above, Borrower shall deposit such deficiencyinto the Cash Management Account within five (5) days (provided that such fiveday period shall not constitute a grace period for any default or Event ofDefault under this Agreement or any other Loan Document based on a failure tosatisfy any monetary obligation provided in any Loan Document).

 

(e)           Ifan Event of Default shall have occurred and be continuing, Borrower hereby irrevocablyauthorizes Lender to make any and all withdrawals from the Cash Management Accountand transfers 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 andabsolute discretion. Lender’s right to withdraw and

 

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apply funds as stated herein shall be in addition toall other rights and remedies provided to Lender under this Agreement, theNote, the Mortgage and the other Loan Documents.

 

**Section10.3.     Security Interest**

 

(a)           Tosecure the full and punctual payment of the Debt and performance of allobligations of Borrower now or hereafter existing under this Agreement and theother Loan Documents, Borrower hereby grants to Lender a first-priorityperfected security interest in each of the Accounts and the Account Collateral.Furthermore, Borrower shall not, without obtaining the prior written consent ofLender, further pledge, assign or grant any security interest in any of theforegoing or permit any Lien to attach thereto or any levy to be made thereonor any UCC Financing Statements to be filed with respect thereto. Borrower willmaintain 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)           Borrowerauthorizes Lender to file any financing statement or statements required byLender to establish or maintain the validity, perfection and priority of thesecurity interest granted herein in connection with the Cash ManagementAccount. 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 hereundcr.

 

(c)           Uponthe occurrence of an Event of Default, Lender may exercise any or all of itsrights and remedies as a secured party, pledgee and lienholder with respect tothe Accounts and the Account Collateral. Without limitation of the foregoing,upon any Event of Default, Lender may use the Accounts and the AccountCollateral for any of the following purposes: (A) repayment of the Debt,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 inequity or under this Agreement or under any of the other Loan Documents; (D)payment of any item as required or permitted under this Agreement; or (E) anyother purpose permitted by applicable law; provided, however, that any suchapplication of funds shall not cure or be deemed to cure any Event of Default,Without limiting any other provisions hereof, each of the remedial actionsdescribed in the immediately preceding sentence shall be deemed to be acommercially reasonable exercise of Lender’s rights and remedies as a securedparty with respect to the Accounts and the Account Collateral and shall not inany event be deemed to constitute a setoff or a foreclosure of a statutorybanker’s lien. Nothing in this Agreement shall obligate Lender to apply all orany portion of the Accounts and the Account Collateral to effect a cure of anyEvent of Default, or to pay the Debt, or in any specific order of priority. Theexercise of any or all of Lender’s rights and remedies under this Agreement orunder any of the other Loan

 

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Documents shall not in any way prejudice or affectLender’s right to initiate and complete a foreclosure under the Mortgage.

 

**ARTICLE11****EVENTS OF DEFAULT; REMEDIES**

 

**Section 11.1.     Eventof Default**

 

The occurrence of any oneor more of the following events shall constitute 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)           exceptas otherwise expressly provided in the Loan Documents, if any of the Taxes orOther Charges are 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)           shouldAmerican Express cease to be a self-insurer or if the rating of American expressissued by the Rating Agencies falls below the Trigger Rating, if (i) thePolicies are not kept in full force and effect, or (ii) the Accord 28 (orsimilar) certificate is not delivered to Lender in accordance with Section 8.1;

 

(d)           ifBorrower breaches any covenant with respect to itself contained in Article 6 orany covenant contained in Article 7 hereof;

 

(e)           ifany representation or warranty of, or with respect to, Borrower or BorrowerPrincipal, or any member, general partner, principal or beneficial owner of anyof the foregoing, made herein, in any other Loan Document, or in anycertificate, report, financial statement or other instrument or documentfurnished to Lender at the time of the closing of the Loan or during the termof the Loan shall have been false or misleading in any material respect whenmade;

 

(f)            if(i) Borrower, or any managing member or general partner of Borrower, BorrowerPrincipal, or American Express shall commence any case, proceeding or otheraction (A) under any Creditors Rights Laws, seeking to have an order for reliefentered with respect to it, or seeking to adjudicate it a bankrupt orinsolvent, or seeking reorganization, or (B) seeking appointment of a receiver,trustee, custodian, conservator or other similar official for it or for all orany substantial part of its assets, or Borrower, any managing member or generalpartner of Borrower, Borrower Principal, or American Express shall make a generalassignment for the benefit of its creditors; or (ii) there shall be commencedagainst Borrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express any case, proceeding or other action of a naturereferred to in clause (i) above which (A) results in the entry of an order forrelief or any such adjudication or appointment or (B) remains undismissed,undischarged or unbonded for a period of sixty (60) days; or (iii) there shallbe commenced against Borrower, any managing member or general partner ofBorrower, Borrower Principal, or American Express any case, proceeding or otheraction seeking issuance of a warrant of

 

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attachment, execution, distraint or similar processagainst all or any substantial part of its assets which results in the entry ofany order for any such relief which shall not have been vacated, discharged, orstayed or bonded pending appeal within sixty (60) days from the entry thereof;or (iv) Borrower, any managing member or general partner of Borrower, BorrowerPrincipal, or American Express shall take any action in furtherance of, orindicating its consent to, approval of, or acquiescence in, any of the acts setforth in clause (i), (ii), or (iii) above; or (v) Borrower, any managing memberor general partner of Borrower, Borrower Principal, or American Express shallgenerally not, or shall be unable to, or shall admit in writing its inabilityto, pay its debts as they become due;

 

(g)           ifBorrower shall be in default beyond applicable notice and grace periods underany other mortgage, deed of trust, deed to secure debt or other securityagreement covering any part of the Property, whether it be superior or juniorin lien to the Mortgage;

 

(h)           ifthe Property becomes subject to any mechanic’s, materialman’s or other Lienother than a Lien for any Taxes or Other Charges not then due and payable andthe Lien shall remain undischarged of record (by payment, bonding or otherwise)for a period of thirty (30) days;

 

(i)            ifany federal income tax lien is filed against Borrower, any member or generalpartner of Borrower, Borrower Principal, or the Property and same is notdischarged of record (or bonded or insured to Lender’s satisfaction) withinthirty (30) days after same is 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)            ifBorrower shall permit any event within its control to occur that would causeany REA to terminate without notice or action by any party thereto or wouldentitle any party to terminate any REA and the term thereof by giving notice toBorrower; or any REA shall be surrendered, terminated or canceled for anyreason or under any circumstance whatsoever except as provided for in such REA;or any term of any REA shall be modified or supplemented unless permitted bythe American Express Lease; or Borrower shall fail, within ten (10) BusinessDays after demand by Lender, to exercise its option to renew or extend the termof any REA or shall fail or neglect to pursue diligently all actions necessaryto exercise such renewal rights pursuant to such REA except as provided for insuch REA; or

 

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

 

(n)           ifBorrower shall continue to be in default under any other term, covenant orcondition of this Agreement or any of the Loan Documents for more than ten (10)days after notice from Lender in the case of any default which can be cured bythe payment of a sum of money or for thirty (30) days after notice from Lenderin the case of any other default, provided that if such default cannotreasonably be cured within such thirty (30) day period and Borrower shall havecommenced to cure such default within such thirty (30) day period andthereafter

 

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diligently and expeditiously proceeds to cure thesame, such thirty (30) day period shall be extended for so long as it shallrequire Borrower in the exercise of due diligence to cure such default, itbeing agreed that no such extension shall be for a period in excess of onehundred twenty (120) days.

 

**Section 11.2.     Remedies**

 

(a)           Uponthe occurrence of an Event of Default (other than an Event of Default describedin Section 11.1(f) above) and at any time thereafter Lender may, in addition toany other rights or remedies available to it pursuant to this Agreement and theother Loan Documents or at law or in equity, take such action, without noticeor demand, that Lender deems advisable to protect and enforce its rightsagainst Borrower and in the Property, including, without limitation, declaringthe Debt to be immediately due and payable, and Lender may enforce or availitself of any or all rights or remedies provided in the Loan Documents againstBorrower and the Property, including, without limitation, all rights orremedies available at law or in equity; and upon any Event of Default describedin Section 11.1(f) above, the Debt and all other obligations of Borrowerhereunder and under the other Loan Documents shall immediately andautomatically become due and payable, without notice or demand, and Borrowerhereby expressly waives any such notice or demand, anything contained herein orin any other Loan Document to the contrary notwithstanding.

 

(b)           Uponthe occurrence of an Event of Default, all or any one or more of the rights, powers,privileges and other remedies available to Lender against Borrower under this Agreementor any of the other Loan Documents executed and delivered by, or applicable to,Borrower or at law or in equity may be exercised by Lender at any time and fromtime to time, whether or not all or any of the Debt shall be declared due andpayable, and whether or not Lender shall have commenced any foreclosureproceeding or other action for the enforcement of its rights and remedies underany of the Loan Documents with respect to the Property. Any such actions takenby Lender shall 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.

 

**ARTICLE12ENVIRONMENTAL PROVISIONS**

 

**Section12.1.     Environmental Representations and, Warranties**

 

Borrower represents andwarrants, except as disclosed in an Environmental Report of the Property andinformation that Borrower knows that: (a) there are no Hazardous Materials orunderground storage tanks in, on, or under the Property, except those that areboth (i) in compliance with Environmental Laws and with permits issued pursuantthereto (if such permits are required), if any, and (ii) either (A) in the caseof Hazardous Materials, in amounts not in excess of that necessary to operatethe Property for the purposes set forth herein or (B) fully disclosed to andapproved by Lender in writing pursuant to an Environmental Report; (b) there areno past, present or threatened Releases of Hazardous Materials m violation ofany

 

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Environmental Law or which would require remediationby a Governmental Authority in, on, under or from the Property except asdescribed in the Environmental Report; (c) there is no threat of any Release ofHazardous Materials migrating to the Property except as described in theEnvironmental Report; (d) there is no past or present non-compliance withEnvironmental Laws, or with permits issued pursuant thereto, in connection withthe Property except as described in the Environmental Report; (e) Borrower doesnot know of, and has not received, any written or oral notice or othercommunication from any Person relating to Hazardous Materials in, on, under orfrom the Property; (f) the Property is free of Mold; and (g) Borrower hastruthfully and fully provided to Lender, in writing, any and all informationrelating to environmental conditions in, on, under or from the Property knownto Borrower or contained in Borrower’s files and records, including but notlimited to any reports relating to Hazardous Materials in, on, under ormigrating to or from the Property and/or to the environmental condition of orthe presence of Mold at the Property.

 

**Section 12.2.     EnvironmentalCovenants**

 

Borrower covenants andagrees that so long as Borrower owns, manages and is in possession of theoperation of the Property: (a) all uses and operations on or of the Property,whether by Borrower or any other Person, shall be in compliance with allEnvironmental Laws and permits issued pursuant thereto; (b) there shall be noReleases of Hazardous Materials in, on, under or from the Property; (c) thereshall be no Hazardous Materials in, on, or under the Property, except thosethat are both (i) in compliance with all Environmental Laws and with permitsissued pursuant thereto, if and to the extent required, and (ii) (A) in amountsnot in excess of that necessary to operate the Property for the purposes setforth herein or (B) fully disclosed to and approved by Lender in writing or (C)with respect to Mold, not in a condition, location, or of a type which may posea risk to human health or safely or the environment or which may result indamage to or would adversely affect or impair the value or marketability of theProperty; (d) Borrower shall keep the Property free and clear of allEnvironmental Liens; (e) Borrower shall, at its sole cost and expense, fullyand expeditiously cooperate in all activities pursuant to Section 12.4 below,including but not limited to providing all relevant information and makingknowledgeable persons available for interviews; (f) Borrower shall, at its solecost and expense, perform any environmental site assessment or otherinvestigation of environmental conditions in connection with the Property,pursuant to any reasonable written request of Lender, upon Lender’s reasonablebelief that the Property is not in full compliance with all Environmental Laws,and share with Lender the reports and other results thereof, and Lender andother Indemnified Parties shall be entitled to rely on such reports and otherresults thereof; (g) Borrower shall keep the Property free of Mold; and (h)Borrower shall, at its sole cost and expense, comply with all reasonablewritten requests of Lender to (i) reasonably effectuate remediation of anyHazardous Materials in, on, under or from the Property; and (ii) comply withany Environmental Law; (i) Borrower shall not allow any tenant or other user ofthe Property to violate any Environmental Law; and (j) Borrower shallimmediately notify Lender in writing after it has become aware of (A) anypresence or Release or threatened Release of Hazardous Materials in, on, under,from or migrating towards the Property; (B) any non-compliance with anyEnvironmental Laws related in any way to the Property; (C) any actual orpotential Environmental Lien against the Property; (D) any required or proposedremediation of environmental conditions relating to the Property; and (E) anywritten or oral notice or other communication of which Borrower becomes awarefrom any source whatsoever (including but

 

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not limited to a Governmental Authority) relating inany way to Hazardous Materials. Any failure of Borrower to perform itsobligations pursuant to this Section 12.2 shall constitute bad faith waste withrespect to the Property.

 

**Section 12.3.     Lender’sRights**

 

Lender and any otherPerson designated by Lender, including but not limited to any representative ofa Governmental Authority, and any environmental consultant, and any receiverappointed by any court of competent jurisdiction, shall have the right, but notthe obligation, to enter upon the Property at all reasonable times to assessany and all aspects of the environmental condition of the Property and its use,including but not limited to conducting any environmental assessment or audit(the scope of which shall be determined in Lender’s sole discretion) and takingsamples of soil, groundwater or other water, air, or building materials, andconducting other invasive testing. Borrower shall cooperate with and provideaccess to Lender and any such person or entity designated by Lender.

 

**Section12.4.     Operations and Maintenance Programs**

 

If recommended by theEnvironmental Report or any other environmental assessment or audit of theProperty, Borrower shall establish and comply with an operations and maintenanceprogram with respect to the Property, in form and substance reasonablyacceptable to Lender, prepared by an environmental consultant reasonablyacceptable to Lender, which program shall address any asbestos-containingmaterial or lead based paint that may now or in the future be detected at or onthe Property. Without limiting the generality of the preceding sentence, Lendermay require (a) periodic notices or reports to Lender in form, substance and atsuch intervals as Lender may specify, (b) an amendment to such operations andmaintenance program to address changing circumstances, laws or other matters,(c) at Borrower’s sole expense, supplemental examination of the Property byconsultants specified by Lender, (d) access to the Property by Lender, its agentsor servicer, to review and assess the environmental condition of the Propertyand Borrower’s compliance with any operations and maintenance program, and (e)variation of the operations and maintenance program in response to the reportsprovided by any such consultants.

 

**Section12.5.     Environmental Definitions**

 

**“EnvironmentalLaw”**means any present and future federal, state and locallaws, statutes, ordinances, rules, regulations, standards, policies and othergovernment directives or requirements, as well as common law, including but notlimited to the Comprehensive Environmental Response, Compensation and LiabilityAct and the Resource Conservation and Recovery Act, that apply to Borrower orthe Property and relate to Hazardous Materials or protection of human health orthe environment. **“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 written reportsresulting from the environmental site assessments of the Property delivered toLender in connection with the Loan. **“HazardousMaterials”**shall mean petroleum and petroleum products and compoundscontaining them, including gasoline, diesel fuel and oil; explosives, flammablematerials; radioactive materials; polychlorinated biphenyls and compounds

 

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containing them; lead and lead-based paint; asbestosor asbestos-containing materials in any form that is or could become friable;underground or above-ground storage tanks, whether empty or containing anysubstance; any substance the presence of which on the Property is prohibited byany federal, state or local authority; any substance that requires specialhandling; and any other material or substance now or in the future defined as a“hazardous substance,” “hazardous material”, “hazardous waste”, “toxicsubstance”, “toxic pollutant”, “contaminant”, or “pollutant” within the meaningof any Environmental Law. **“Mold”**shallmean any mold, fungi, bacterial or microbial matter present at or in theProperty, including, without limitation, building materials which is in acondition, location or a type which may pose a risk to human health or safetyor the environment, may result in damage to or would adversely affect or impairthe value or marketability of the Property, **“Release”**of any Hazardous Materials includes but is not limited to anyrelease, deposit, discharge, emission, leaking, spilling, seeping, migrating,injecting, pumping, pouring, emptying, escaping, dumping, disposing or othermovement of Hazardous Materials.

 

**ARTICLE13SECONDARY MARKET**

 

**Section 13.1.     Transferof Loan**

 

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

 

**Section13.2.     Delegation of 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.

 

**Section13.3.     Dissemination of Information**

 

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

 

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**Section 13.4.     Cooperation**

 

Borrower and BorrowerPrincipal agree to cooperate with Lender in connection with any sale ortransfer of the Loan or any Participation and/or Securities created pursuant tothis Article 13, including, without limitation, (a) the delivery of an estoppelcertificate required in accordance with Section 5.12(a) and such otherdocuments as may be reasonably requested by Lender, (b) the execution of suchamendments to the Loan Documents as may be requested by the holder of the Noteor the Rating Agencies or otherwise to effect the Securitization including,without limitation, bifurcation of the Loan into two or more components and/orseparate notes; provided, however, that Borrower shall not be required tomodify or amend any Loan Document if such modification or amendment would (i) changethe interest rate, the stated maturity or the amortization of principal setforth in the Note, except in connection with a bifurcation of the Loan whichmay result in varying fixed interest rates and amortization schedules, butwhich shall have the same initial weighted average coupon of the original Note,or (ii) in the reasonable judgment of Borrower, modify or amend any othermaterial economic term of the Loan, or (iii) in the reasonable judgment ofBorrower, materially increase Borrower’s obligations and liabilities under theLoan Documents, and (c) make changes to the organizational documents ofBorrower and its principals and/or use its best efforts to cause changes to thelegal opinions delivered by Borrower in connection with the Loan, provided,that such changes shall not result in a material adverse economic effect toBorrower. Borrower shall also furnish and Borrower and Borrower Principalconsent to Lender furnishing to such Investors or such prospective Investors orsuch Rating Agency any and all information concerning the Property, theAmerican Express Lease, the financial condition of Borrower or BorrowerPrincipal as may be requested by Lender, any Investor, any prospective Investoror any Rating Agency in connection with any sale or transfer of the Loan or anyParticipations or Securities. Neither Borrower nor Borrower Principal shall beresponsible for any costs incurred by Lender in connection with aSecuritization.

 

**ARTICLE14INDEMNIFICATIONS**

 

**Section14.1.     General Indemnification**

 

Borrower shall indemnify,defend and hold harmless the Indemnified Parties from and against any and allLosses imposed upon or incurred by or asserted against any Indemnified Partiesand directly or indirectly arising out of or in any way relating to any one ormore of the following: (a) any accident, injury to or death of persons or lossof or damage to property occurring in, on or about the Property or any partthereof or on the adjoining sidewalks, curbs, adjacent property or adjacentparking areas, streets or ways; (b) any use, nonuse or condition in, on orabout the Property or any part thereof or on the adjoining sidewalks, curbs,adjacent property or adjacent parking areas, streets or ways; (c) performanceof any labor or services or the furnishing of any materials or other propertyin respect of the Property or any part thereof; (d) any failure of the Propertyto be in compliance with any applicable Legal Requirements; (c) any and allclaims and demands whatsoever which may be asserted against Lender by reason ofany alleged obligations or undertakings on its part to perform or discharge anyof the terms, covenants, or agreements contained in any Lease; (f) the holdingor investing of the Reserve Accounts, or (g) the payment of any commission, chargeor brokerage fee to anyone which may be payable in connection with the fundingof the Loan (collectively, the **“Indemnified Liabilities”**);provided, however, that Borrower shall not have any obligation to Lenderhereunder to the extent that such indemnified Liabilities arise from the grossnegligence, illegal

 

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acts, fraud or willful misconduct of Lender. To theextent that the undertaking to indemnify, defend and hold harmless set forth inthe preceding sentence may be unenforceable because it violates any law orpublic policy, Borrower shall pay the maximum portion that it is permitted topay and satisfy under applicable law to the payment and satisfaction of allIndemnified Liabilities incurred by Lender.

 

**Section14.2.     Mortgage and Intangible TaxIndemnification**

 

Borrower shall, at itssole cost and expense, protect, defend, indemnify, release and hold harmlessthe Indemnified Parties from and against any and all Losses imposed upon orincurred by or asserted against any Indemnified Parties and directly orindirectly arising out of or in any way relating to any tax on the makingand/or recording of the Mortgage, the Note or any of the other Loan Documents,but excluding any income, franchise or other similar taxes.

 

**S****ection 14.3.     ERISA Indemnification**

 

Borrower shall, at itssole cost and expense, protect, defend, indemnify, release and hold harmlessthe Indemnified Parties from and against any and all Losses (including, withoutlimitation, reasonable attorneys’ fees and costs incurred in the investigation,defense, and settlement of Losses incurred in correcting any prohibitedtransaction or in the sale of a prohibited loan, and in obtaining anyindividual prohibited transaction exemption under ERISA that may be required,in Lender’s sole discretion) that Lender may incur, directly or indirectly, asa result of a default under Section 4.9 or Section 5.18 of this Agreement.

 

**Section 14.4.     Survival**

 

The obligations andliabilities of Borrower and Borrower Principal under this Article 14 shallfully survive indefinitely notwithstanding any termination, satisfaction,assignment, entry of a judgment of foreclosure, exercise of any power of sale,or delivery of a deed in lieu of foreclosure of the Mortgage.

 

**ARTICLE15EXCULPATION**

 

**Section 15.1.     Exculpation**

 

(a)           Exceptas otherwise provided herein or in the other Loan Documents, Lender shall notenforce the liability and obligation of Borrower or Borrower Principal, asapplicable, to perform and observe the obligations contained herein or in theother Loan Documents by any action or proceeding wherein a money judgment shallbe sought against Borrower or Borrower Principal, except that Lender may bringa foreclosure action, action for specific performance or other appropriateaction or proceeding to enable Lender to enforce and realize upon thisAgreement, the Note, the Mortgage and the other Loan Documents, and theinterest in the Property, the Rents (following an Event of Default) and anyother collateral given to Lender created by this Agreement, the Note, theMortgage and the other Loan Documents; provided, however, that any judgment inany such action or proceeding shall be enforceable against Borrower or BorrowerPrincipal, as applicable, only to the extent of Borrower’s or BorrowerPrincipal’s interest in the Property, in the Rents and in any other collateralgiven to Lender.

 

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Lender, by accepting this Agreement, the Note, theMortgage and the other Loan Documents, agrees that it shall not, except asotherwise provided in this Section 15.1, sue for, seek or demand any deficiencyjudgment against Borrower or Borrower Principal in any such action orproceeding, under or by reason of or under or in connection with thisAgreement, the Note, the Mortgage or the other Loan Documents. The provisionsof this Section 15.1 shall not, however, (i) constitute a waiver, release orimpairment of any obligation evidenced or secured by this Agreement, the Note, theMortgage or the other Loan Documents; (ii) impair the right of Lender to nameBorrower or Borrower Principal as a party defendant in any action or suit forjudicial foreclosure and sale under this Agreement and the Mortgage; (iii)affect the validity or enforceability of any indemnity (including, withoutlimitation, those contained in Section 12.6 and Article 14 of this Agreement),environmental indemnity, guaranty, master lease or similar instrument made inconnection with this Agreement, the Note, the Mortgage and the other LoanDocuments; (iv) impair the right of Lender to obtain the appointment of areceiver; (v) impair the enforcement of the assignment leases provisionscontained in the Mortgage; or (vi) impair the right of Lender to obtain adeficiency judgment or other judgment on the Note against Borrower or BorrowerPrincipal if necessary to obtain any Insurance Proceeds or Awards to whichLender would otherwise be entitled under this Agreement; provided however,Lender shall only enforce such judgment to the extent of the Insurance Proceedsand/or Awards.

 

(b)           Notwithstandingthe provisions 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 the occurrenceof an Event of Default;

 

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

 

(iv)          themisapplication or the misappropriation of Insurance Proceeds 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 allRents and books and records relating to the Property.

 

(c)           Notwithstandingthe Foregoing, 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) anyAffiliate, officer, director, or representative which controls Borrowerconsents to or acquiesces in or joins in an application for the appointment ofa custodian, receiver, trustee, or examiner for Borrower or any portion of the Property.

 

(d)           Nothingherein shall be deemed to be a waiver of any right which Lender may have underSection 506(a), 506(b), 1111(b) or any other provision of the U.S. BankruptcyCode to file a claim for the full amount of the indebtedness secured by theMortgage or to require that all collateral shall continue to secure all of theindebtedness owing to Lender in accordance with this Agreement, the Note, theMortgage or the other Loan Documents.

 

**ARTICLE16NOTICES**

 

**Section 16.1.     Notices**

 

All notices, consents,approvals and requests required or permitted hereunder or under any other LoanDocument shall be given in writing and shall be effective for all purposes ifhand delivered or sent by (a) certified or registered United States mail,postage prepaid, return receipt requested, (b) expedited prepaid overnightdelivery service, either commercial or United States Postal Service, with proofof attempted delivery, or by (c) telecopier (with answer back acknowledgedprovided an additional notice is given pursuant to subsection (b) above),addressed as follows (or at such other address and Person as shall bedesignated from time to time by any party hereto, as the case may be, in awritten notice to the other parties hereto in the manner provided for in thisSection):

 

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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 Phoenix 19th Avenue,  L.L.C.                                                                                                   |
|                      | c/o Inland Real Estate Investment Corporation                                                                                                 |
|                      | 2901 Butterfield Road                                                                                                                         |
|                      | Oak Brook, Illinois 60523                                                                                                                     |
|                      | Attention: Roberta Matlin, Vice President                                                                                                     |
|                      | Facsimile No.: 630-218-4965                                                                                                                   |
|                      |                                                                                                                                          |
| With a copy to:           | The Inland Real Estate Group, Inc.  2901 Butterfield Road  Oak Brook, Illinois 60523  Attention: General Counsel  Facsimile No.: 630-218-4900 |
|                      |                                                                                                                                          |
| If to Borrower Principal: | Inland Western Retail Real Estate Trust, Inc.  2901 Butterfield Road  Oak Brook, Illinois 60523  Roberta Matlin, Vice President               |
|                      | Facsimile No.: 630-218-4965                                                                                                                   |
|                      |                                                                                                                                          |
| With a copy to:           | The Inland Real Estate Group, Inc.                                                                                                            |
|                      | 2901 Butterfield Road  Oak Brook, Illinois 60523  Attention: General Counsel

Facsimile No.: 630-218-4900                                     |

 

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

 

**ARTICLE17FURTHER ASSURANCES**

 

**Section17.1.     Replacement Documents**

 

Upon receipt of anaffidavit of an officer of Lender as to the loss, theft, destruction ormutilation of the Note or any other Loan Document which is not of public recordand, in the case of such mutilation upon surrender and cancellation of suchNote or other Loan Document,

 

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Borrower will issue in lieu thereof a replacement Noteor other Loan Document, dated the date of such lost, stolen, destroyed or mutilatedNote or other Loan Document in the same principal amount thereof and otherwiseof like tenor.

 

**Section17.2.     Recording of Mortgage, etc.**

 

Borrower forthwith uponthe execution and delivery of the Mortgage and thereafter, From time to time,will cause the Mortgage and any of the other Loan Documents creating a lien or securityinterest or evidencing the lien hereof upon the Property and each instrument offurther assurance to be filed, registered or recorded in such manner and insuch places as may be required by any present or future law in order to publishnotice of and fully to protect and perfect the lien or security interest hereofupon, and the interest of Lender in, the Property. Borrower will pay all taxes,filing, registration or recording fees, and all expenses incident to thepreparation, execution, acknowledgment and/or recording of the Note, theMortgage, the other Loan Documents, any note, deed of trust or mortgagesupplemental hereto, any security instrument with respect to the Property andany instrument of further assurance, and any modification or amendment of theforegoing documents, and all federal, state, county and municipal taxes,duties, imposts, assessments and charges arising out of or in connection withthe execution and delivery of the Mortgage, any deed of trust or mortgagesupplemental hereto, any security instrument with respect to the Property orany instrument of further assurance, and any modification or amendment of theforegoing documents, except where prohibited by law so to do.

 

**Section 17.3.     FurtherActs, Etc.**

 

Borrower will, at thecost of Borrower (except with respect to costs incurred by Lender, for whichLender shall be responsible), do, execute, acknowledge and deliver all andevery further acts, deeds, conveyances, deeds of trust, mortgages, assignments,security agreements, control agreements, notices of assignments, transfers andassurances as Lender shall, from time to time, reasonably require, for thebetter assuring, conveying, assigning, transferring, and confirming unto Lenderthe property and rights hereby mortgaged, deeded, granted, bargained, sold,conveyed, confirmed, pledged, assigned, warranted and transferred or intendednow or hereafter so to be, or which Borrower may be or may hereafter becomebound to convey or assign to Lender, or for carrying out the intention orfacilitating the performance of the terms of this Agreement or for filing,registering or recording the Mortgage, or for complying with all LegalRequirements. Borrower, on demand, will execute and deliver, and in the eventit shall fail to so execute and deliver, hereby authorizes Lender to execute inthe name of Borrower or without the signature of Borrower to the extent Lendermay lawfully do so, one or more financing statements and financing statementamendments to evidence more effectively, perfect and maintain the priority ofthe security interest of Lender in the Property. Borrower grants to Lender anirrevocable power of attorney coupled with an interest for the purpose of exercisingand perfecting any and all rights and remedies available to Lender at law andin equity, including without limitation, such rights and remedies available toLender pursuant to this Section 17.3.

 

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**Section17.4.     Changes in Tax, Debt, Credit andDocumentary Stamp Laws**

 

(a)           Ifany law is enacted or adopted or amended after the date of this Agreement whichdeducts the Debt from the value of the Property for the purpose of taxation orwhich imposes a tax, either directly or indirectly, on the Debt or Lender’sinterest in the Property, Borrower will pay the tax, with interest andpenalties thereon, if any. If Lender is advised by counsel chosen by it thatthe payment of tax by Borrower would be unlawful or taxable to Lender orunenforceable or provide the basis for a defense of usury then Lender shallhave the option by written notice of not less than one hundred eighty (80) daysto declare the Debt immediately due and payable.

 

(b)           Borrowerwill not claim or demand or be entitled to any credit or credits on account ofthe Debt for any part of the Taxes or Other Charges assessed against theProperty, or any part thereof, and no deduction shall otherwise be made orclaimed from the assessed value of the Property, or any part thereof, for realestate tax purposes by reason of the Mortgage or the Debt. If such claim,credit or deduction shall be required by law, Lender shall have the option, bywritten notice of not less than one hundred eighty (80) days, to declare theDebt immediately due and payable.

 

If at any time the UnitedStates of America, any State thereof or any subdivision of any such State shallrequire revenue or other stamps to be affixed to the Note, the Mortgage, or anyof the other Loan Documents or impose any other tax or charge on the same,Borrower will pay for the same, with interest and penalties thereon, if any.

 

**Section 17.5.     Expenses**

 

Borrower covenants andagrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receiptof written notice from Lender for all reasonable costs and expenses (includingreasonable, actual attorneys’ fees and disbursements and the allocated costs ofinternal legal services and all actual disbursements of internal counsel)reasonably incurred by Lender in accordance with this Agreement in connectionwith (a) the preparation, negotiation, execution and delivery of this Agreementand the other Loan Documents and the consummation of the transactionscontemplated hereby and thereby and all the costs of furnishing all opinions bycounsel for Borrower (including without limitation any opinions requested byLender as to any legal matters arising under this Agreement or the other LoanDocuments with respect to the Property); (b) Borrower’s ongoing performance ofand compliance with Borrower’s respective agreements and covenants contained inthis Agreement and the other Loan Documents on its part to be performed orcomplied with after the Closing Date, including, without limitation, confirmingcompliance with environmental and insurance requirements; (c) following arequest by Borrower, Lender’s ongoing performance and compliance with allagreements and conditions contained in this Agreement and the other LoanDocuments on its part to be performed or complied with after the Closing Date;(d) the negotiation, preparation, execution, delivery and administration of anyconsents, amendments, waivers or other modifications to this Agreement and theother Loan Documents and any other documents or matters requested by Lender; (e)securing Borrower’s compliance with any requests made pursuant to theprovisions of this Agreement; (f) the filing and recording fees and expenses,title insurance and reasonable fees and expenses of counsel for providing toLender all required legal opinions, and other similar expenses incurred increating and perfecting the Lien in favor of Lender pursuant to this Agreementand the other Loan Documents; (g) enforcing or preserving any rights, inresponse to

 

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third party claims or the prosecuting or defending ofany action or proceeding or other litigation, in each case against, under oraffecting Borrower, this Agreement, the other Loan Documents, the Property, orany other security given for the Loan; and (h) enforcing any obligations of orcollecting any payments due from Borrower under this Agreement, the other LoanDocuments or with respect to the Property or in connection with any refinancingor restructuring of the credit arrangements provided under this Agreement inthe nature of a “work-out” or of any insolvency or bankruptcy proceedings;provided, however, that Borrower shall not be liable for the payment of anysuch costs and expenses to the extent the same arise by reason of the grossnegligence, illegal acts, fraud or willful misconduct of Lender.

 

**ARTICLE 18WAIVERS**

 

**Section 18.1.     RemediesCumulative; Waivers**

 

The rights, powers andremedies of Lender under this Agreement shall be cumulative and not exclusiveof any other right, power or remedy which Lender may have against Borrower orBorrower Principal pursuant to this Agreement or the other Loan Documents, orexisting at law or in equity or otherwise. Lender’s rights, powers and remediesmay be pursued singularly, concurrently or otherwise, at such time and in suchorder as Lender may determine in Lender’s sole discretion. No delay or omissionto exercise any remedy, right or power accruing upon an Event of Default shallimpair any such remedy, right or power or shall be construed as a waiverthereof, but any such remedy, right or power may be exercised from time to timeand as often as may be deemed expedient. A waiver of one Default or Event ofDefault with respect to Borrower shall not be construed to be a waiver of anysubsequent Default or Event of Default by Borrower or to impair any remedy,right or power consequent thereon.

 

**Section 18.2.     Modification,Waiver in Writing**

 

No modification,amendment, extension, discharge, termination or waiver of any provision of thisAgreement, or of the Note, or of any other Loan Document, nor consent to anydeparture by Borrower therefrom, shall in any event be effective unless thesame shall be in a writing signed by the party against whom enforcement issought, and then such waiver or consent shall be effective only in the specificinstance, and for the purpose, for which given. Except as otherwise expresslyprovided herein, no notice to, or demand on Borrower, shall entitle Borrower toany other or future notice or demand in the same, similar or othercircumstances.

 

**Section 18.3.     Delay Not a Waiver**

 

Neither any failure norany delay on the part of Lender in insisting upon strict performance of anyterm, condition, covenant or agreement, or exercising any right, power, remedyor privilege hereunder, or under the Note or under any other Loan Document, orany other instrument given as security therefore, shall operate as orconstitute a waiver thereof, nor shall a single or partial exercise thereofpreclude any other future exercise, or the exercise of any other right, power,remedy or privilege. In particular, and not by way of limitation, by acceptingpayment after the due date of any amount payable under this Agreement, the Noteor any other

 

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Loan Document, Lender shall not be deemed to havewaived any right either to require prompt payment when due of all other amountsdue under this Agreement, the Note or the other Loan Documents, or to declare adefault for failure to effect prompt payment of any such other amount.

 

**Section 18.4.     Trialby Jury**

 

**BORROWER,BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURYOF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURYFULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITHREGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTIONARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVENKNOWINGLY AND VOLUNTARILY BY BORROWER, BORROWER PRINCIPAL AND LENDER, AND ISINTENDED 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.     Waiverof Notice**

 

Borrower shall not beentitled to any notices of any nature whatsoever from Lender except withrespect to matters for which this Agreement or the other Loan Documentsspecifically and expressly provide for the giving of notice by Lender toBorrower and except with respect, to matters for which Borrower is not,pursuant to applicable Legal Requirements, permitted to waive the giving ofnotice. Borrower hereby expressly waives the right to receive any notice fromLender with respect to any matter for which this Agreement or the other LoanDocuments do not specifically and expressly provide for the giving of notice byLender to Borrower.

 

**Section18.6.     Remedies of Borrower**

 

In the event that a claimor adjudication is made that Lender or its agents have acted unreasonably orunreasonably delayed acting in any case where by law or under this Agreement orthe other Loan Documents, Lender or such agent, as the case may be, has anobligation to act reasonably or promptly, Borrower agrees that neither Lendernor its agents shall be liable for any monetary damages, and Borrower’s soleremedies shall be limited to commencing an action seeking injunctive relief ordeclaratory judgment. The parties hereto agree that any action or proceeding todetermine whether Lender has acted reasonably shall be determined by an actionseeking declaratory judgment. Lender agrees that, in such event, it shallcooperate in expediting any action seeking injunctive relief or declaratoryjudgment.

 

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**Section18.7.     Waiver of Marshalling of Assets**

 

To the fullest extentpermitted by law, Borrower, for itself and its successors and assigns, waivesall rights to a marshalling of the assets of Borrower, Borrower’s partners andothers with interests in Borrower, and of the Property, and agrees not toassert any right under any laws pertaining to the marshalling of assets, thesale in inverse order of alienation, homestead exemption, the administration ofestates of decedents, or any other matters whatsoever to defeat, reduce oraffect the right of Lender under the Loan Documents to a sale of the Propertyfor the collection of the Debt without any prior or different resort forcollection or of the right of Lender to the payment of the Debt out of the netproceeds of the Property in preference to every other claimant whatsoever.

 

**Section 18.8.     Waiverof Statute of Limitations**

 

Borrower hereby expresslywaives and releases, to the fullest extent permitted by law, the pleading ofany statute of limitations as a defense to payment of the Debt or performanceof its Other Obligations.

 

**Section 18.9.     Waiverof Counterclaim**

 

Borrower hereby waivesthe right to assert a counterclaim, other than a compulsory counterclaim, inany action or proceeding brought against it by Lender or its agents.

 

**ARTICLE 19GOVERNING LAW**

 

**Section 19.1.     Choice of Law**

 

This Agreement shall bedeemed to be a contract entered into pursuant to the laws of the State andshall in all respects be governed, construed, applied and enforced inaccordance with the laws of the State and applicable laws of the United Statesof America, provided, however, that with respect to the security interest ineach of the Reserve Accounts, and the Cash Management Account, the laws of thestate where each such account is located shall apply.

 

**Section 19.2.     Severability**

 

Wherever possible, each provisionof this Agreement shall be interpreted in such manner as to be effective andvalid under applicable law, but if any provision of this Agreement shall beprohibited by or invalid under applicable law, such provision shall beineffective to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provision or the remaining provisions ofthis Agreement.

 

**Section 19.3.     Preferences**

 

Lender shall have thecontinuing and exclusive right to apply or reverse and reapply any and allpayments by Borrower to any portion of the obligations of Borrower hereunder.To the extent Borrower makes a payment or payments to Lender, which payment orproceeds or any part thereof are subsequently invalidated, declared to befraudulent or preferential, set aside or required to be repaid to a trustee,receiver or any other party under any Creditors Rights Laws, state or federallaw, common law or equitable cause, then, to the extent of such payment or

 

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proceeds received, the obligations hereunder or partthereof intended to be satisfied shall be revived and continue in full forceand effect, as if such payment or proceeds had not been received by Lender.

 

**ARTICLE20MISCELLANEOUS**

 

**Section 20.1.     Survival**

 

This Agreement and allcovenants, agreements, representations and warranties made herein and in thecertificates delivered pursuant hereto shall survive the making by Lender ofthe Loan and the execution and delivery to Lender, of the Note, and shallcontinue in full force and effect so long as all or any of the Debt isoutstanding and unpaid unless a longer period is expressly set forth herein orin the other Loan Documents. Whenever in this Agreement any of the partieshereto is referred to, such reference shall be deemed to include the legalrepresentatives, successors and assigns of such party. All covenants, promisesand agreements in this Agreement, by or on behalf of Borrower, shall inure tothe benefit of the legal representatives, successors and assigns of Lender.

 

**Section20.2.     Lender’s Discretion**

 

Whenever pursuant to thisAgreement, Lender exercises any right given to it to approve or disapprove, orany arrangement or term is to be satisfactory to Lender, the decision of Lenderto approve or disapprove or to decide whether arrangements or terms aresatisfactory or not satisfactory shall (except as is otherwise specificallyherein provided) be in the sole discretion of Lender and shall be final andconclusive.

 

**Section 20.3.     Headings**

 

The Article and/orSection headings and the Table of Contents in this Agreement are includedherein for convenience of reference only and shall not constitute a part ofthis Agreement for any other purpose.

 

**Section20.4.     Cost of Enforcement**

 

In the event (a) that theMortgage is foreclosed in whole or in part, (b) of the bankruptcy, insolvency,rehabilitation or other similar proceeding in respect of Borrower or any of itsconstituent Persons or an assignment by Borrower or any of its constituentPersons for the benefit of its creditors, or (c) Lender exercises any of itsother remedies under this Agreement or any of the other Loan Documents,Borrower shall be chargeable with and agrees to pay all costs of collection anddefense, including attorneys’ fees and costs, incurred by Lender or Borrower inconnection therewith and in connection with any appellate proceeding orpost-judgment action involved therein, together with all required service oruse taxes.

 

**Section20.5.     Schedules Incorporated**

 

The Schedules annexedhereto are hereby incorporated herein as a part of this Agreement with the sameeffect as if set forth in the body hereof.

 

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**Section20.6.     Offsets, Counterclaims and Defenses**

 

Any assignee of Lender’sinterest in and to this Agreement, the Note and the other Loan Documents shalltake the same free and clear of all offsets, counterclaims or defenses whichare unrelated to such documents which Borrower may otherwise have against anyassignor of such documents, and no such unrelated counterclaim or defense shallbe interposed or asserted by Borrower in any action or proceeding brought byany such assignee upon such documents and any such right to interpose or assertany such unrelated offset, counterclaim or defense in any such action orproceeding is hereby expressly waived by Borrower.

 

**Section20.7.     No Joint Venture or Partnership;****No ThirdParty Beneficiaries**

 

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

 

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

 

(c)           Thegeneral partners, members, principals and (if Borrower is a trust) beneficial ownersof Borrower are experienced in the ownership and operation of propertiessimilar to the Property, and Borrower and Lender are relying solely upon suchexpertise and business plan in connection with the ownership and operation ofthe Property. Borrower is not relying on Lender’s expertise, business acumen oradvice 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)           Byaccepting or approving anything required to be observed, performed or fulfilledor to be given to Lender pursuant to this Agreement, the Mortgage, the Note orthe other Loan Documents, including, without limitation, any officer’scertificate, balance sheet, statement of profit and loss or other financialstatement, survey, appraisal, or insurance policy, Lender shall not be deemedto have warranted, consented to, or affirmed the sufficiency, the legality or

 

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effectiveness of same, and such acceptance or approvalthereof shall not constitute any warranty or affirmation with respect theretoby Lender.

 

(f)            Borrowerrecognizes and acknowledges that in accepting this Agreement, the Note, theMortgage and the other Loan Documents, Lender is expressly and primarilyrelying on the truth and accuracy of the representations and warranties setforth in Article 4 of this Agreement without any obligation to investigate theProperty and notwithstanding any investigation of the Property by Lender; thatsuch reliance existed on the part of Lender prior to the date hereof, that thewarranties and representations are a material inducement to Lender in makingthe Loan; and that Lender would not be willing to make the Loan and accept thisAgreement, the Note, the Mortgage and the other Loan Documents in the absenceof the warranties and representations as set forth in Article 4 of thisAgreement.

 

**S****ection 20.8.     Publicity**

 

All news releases,publicity or advertising by Borrower or its Affiliates through any mediaintended to reach the general public which refers to the Loan, Lender, Banc ofAmerica Securities LLC, or any of their Affiliates shall be subject to theprior written approval of Lender, not to be unreasonably withheld. Lender shallbe permitted to make any news, releases, publicity or advertising by Lender orits Affiliates through any media intended to reach the general public whichrefers to the Loan, the Property, Borrower, Borrower Principal and theirrespective Affiliates without the approval of Borrower or any such Persons.Borrower also agrees that Lender may share any information pertaining to theLoan with Bank of America Corporation, including its bank subsidiaries. Banc ofAmerica Securities LLC and any other Affiliates of the foregoing, in connectionwith the sale or transfer of the Loan or any Participations and/or Securitiescreated.

 

**Section20.9.     Conflict; Construction of Documents;Reliance**

 

In the event of any conflictbetween the provisions of this Agreement and any of the other Loan Documents,the provisions of this Agreement shall control. The parties hereto acknowledgethat they were represented by competent counsel in connection with thenegotiation, drafting and execution of the Loan Documents and that such LoanDocuments shall not be subject to the principle of construing their meaningagainst the party which drafted same. Borrower acknowledges that, with respectto the Loan, Borrower shall rely solely on its own judgment and advisors inentering into the Loan without relying in any manner on any statements,representations or recommendations of Lender or any parent, subsidiary orAffiliate of Lender.  Lender shall not besubject to any limitation whatsoever in the exercise of any rights or remediesavailable to it under any of the Loan Documents or any other agreements orinstruments which govern the Loan by virtue of the ownership by it or anyparent, subsidiary or Affiliate of Lender of any equity interest any of themmay acquire in Borrower, and Borrower hereby irrevocably waives the right toraise any defense or take any action on the basis of the foregoing with respectto Lender’s exercise of any such rights or remedies. Borrower acknowledges thatLender engages in the business of real estate financings and other real estatetransactions and investments which may be viewed as adverse to or competitivewith the business of Borrower or its Affiliates.

 

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**Section20.10.     Entire Agreement**

 

This Agreement and theother Loan Documents contain the entire agreement of the parties hereto andthereto in respect of the transactions contemplated hereby and thereby, and allprior agreements among or between such parties, whether oral or written betweenBorrower and Lender are superseded by the terms of this Agreement and the otherLoan Documents.

 

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

 
|       | BORROWER:                                                                                                                                        |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                             |
|       |                                                                                                                                             |
|       | INLAND WESTERN PHOENIX 19TH AVENUE,  L.L.C., a Delaware limited liability company                                                                |
|       |                                                                                                                                             |
|       |                                                                                                                                             |
|       | By:                                                                                                                                              | Inland Western Retail Real Estate Trust, Inc., a  Maryland corporation, its sole member |
|       |                                                                                                                                             |
| ** ** |                                                                                                                                             | By: | /s/ Debra A. Palmer |
|       |                                                                                                                                             | Name: | Debra A. Palmer |
|       |                                                                                                                                             | Its: | Asst Sec. |
|       |                                                                                                                                             |
|       |                                                                                                                                             |
|       | BORROWER PRINCIPAL:                                                                                                                              |
|       |                                                                                                                                             |
|       | Acknowledged and agreed to with respect to its  obligations set forth in Article 4, Section 12.6, Article 13, Article 15 and  Article 18 hereof: |
|       |                                                                                                                                             |
|       |                                                                                                                                             |
|       | INLAND WESTERN RETAIL REAL ESTATE TRUST INC., a Maryland corporation, its                                                                        |
|       |                                                                                                                                             |
|       | By:                                                                                                                                              | /s/ Debra A. Palmer |
|       |                                                                                                                                             | Name: | Debra A. Palmer |
|       |                                                                                                                                             | Its: | Asst. Sec. |
|            |                                                                                                                                                  |  |  |  |  |  |  |

 

[ADDITIONALSIGNATURE PAGE TO FOLLOW]

 

 

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

 

 

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EXHIBIT A

 

Borrower EquityOwnership Structure

 

 

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EXHIBIT B

Tenant Direction Letter

 

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