Exhibit 10.462


 


LOAN AGREEMENT


 


 


Dated
as of December 16, 2004


 


 


Between


 


 


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


 


 


as
Borrower


 


 


and


 


 


BANK OF AMERICA, N.A.,


as Lender


 





















 


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

  	
   

  



 


i





















 


	
  SECTION
  4.37. INTELLECTUAL PROPERTY

  	
   

  
	
  SECTION
  4.38. COMPLIANCE WITH ANTI-TERRORISM LAWS

  	
   

  
	
  SECTION
  4.39. PATRIOT ACT

  	
   

  
	
  SECTION
  4.40. SURVIVAL

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5 BORROWER COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS

  	
   

  
	
  SECTION
  5.2. MAINTENANCE AND USE OF PROPERTY

  	
   

  
	
  SECTION
  5.3. WASTE

  	
   

  
	
  SECTION
  5.4. TAXES AND OTHER CHARGES

  	
   

  
	
  SECTION
  5.5. LITIGATION

  	
   

  
	
  SECTION
  5.6. ACCESS TO PROPERTY

  	
   

  
	
  SECTION
  5.7. NOTICE OF DEFAULT

  	
   

  
	
  SECTION
  5.8. COOPERATE IN LEGAL PROCEEDINGS

  	
   

  
	
  SECTION
  5.9. PERFORMANCE BY BORROWER

  	
   

  
	
  SECTION
  5.10. AWARDS; INSURANCE PROCEEDS

  	
   

  
	
  SECTION 5.11. FINANCIAL REPORTING

  	
   

  
	
  SECTION 5.12. ESTOPPEL STATEMENT

  	
   

  
	
  SECTION 5.13.
  LEASING MATTERS

  	
   

  
	
  SECTION 5.14.
  PROPERTY MANAGEMENT

  	
   

  
	
  SECTION 5.15. LIENS

  	
   

  
	
  SECTION 5.16. DEBT
  CANCELLATION

  	
   

  
	
  SECTION 5.17. ZONING

  	
   

  
	
  SECTION 5.18. ERISA

  	
   

  
	
  SECTION 5.19. NO
  JOINT ASSESSMENT

  	
   

  
	
  SECTION
  5.20. RECIPROCAL EASEMENT AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  6 ENTITY COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  6.1. SINGLE PURPOSE ENTITY/SEPARATENESS

  	
   

  
	
  SECTION
  6.2. CHANGE OF NAME, IDENTITY OR STRUCTURE

  	
   

  
	
  SECTION 6.3.
  BUSINESS AND OPERATIONS

  	
   

  
	
  SECTION 6.4.
  INDEPENDENT DIRECTOR

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  7 NO SALE OR ENCUMBRANCE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.1.
  TRANSFER DEFINITIONS

  	
   

  
	
  SECTION 7.2. NO
  SALE/ENCUMBRANCE

  	
   

  
	
  SECTION 7.3.
  PERMITTED TRANSFERS

  	
   

  
	
  SECTION 7.4. LENDER’S
  RIGHTS

  	
   

  
	
  SECTION 7.5. ASSUMPTION 

  	
   

  
	
  SECTION
  7.6. ASSUMPTION BY INLAND PERMITTED TRANSFEREE

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

  	
   

  
	
   

  	
   

  
	
  SECTION 8.1. INSURANCE

  	
   

  
	
  SECTION 8.2. CASUALTY

  	
   

  
	
  SECTION 8.3.
  CONDEMNATION

  	
   

  
	
  SECTION 8.4. RESTORATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  9 REPLACEMENTS; RESERVE FUNDS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.1.
  REPLACEMENTS

  	
   

  
	
  SECTION
  9.2. TAX AND INSURANCE RESERVE FUNDS

  	
   

  
	
  SECTION 9.3.
  RESERVE FUNDS GENERALLY

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  10 CASH MANAGEMENT

  	
   

  
	
   

  	
   

  
	
  SECTION
  10.1. CASH MANAGEMENT ACCOUNT

  	
   

  
	
  SECTION
  10.2. DEPOSITS AND WITHDRAWALS

  	
   

  
	
  SECTION 10.3.
  SECURITY INTEREST

  	
   

  



 


ii





















 


	
  ARTICLE
  11 EVENTS OF DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 11.1. EVENT
  OF DEFAULT

  	
   

  
	
  SECTION 11.2. REMEDIES

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  12 ENVIRONMENTAL PROVISIONS

  	
   

  
	
   

  	
   

  
	
  SECTION
  12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  SECTION
  12.2. ENVIRONMENTAL COVENANTS

  	
   

  
	
  SECTION 12.3.
  LENDER’S RIGHTS

  	
   

  
	
  SECTION
  12.4. OPERATIONS AND MAINTENANCE PROGRAMS

  	
   

  
	
  SECTION
  12.5. ENVIRONMENTAL DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  13 SECONDARY MARKET

  	
   

  
	
   

  	
   

  
	
  SECTION 13.1.
  TRANSFER OF LOAN

  	
   

  
	
  SECTION
  13.2. DELEGATION OF SERVICING

  	
   

  
	
  SECTION
  13.3. DISSEMINATION OF INFORMATION

  	
   

  
	
  SECTION 13.4.
  COOPERATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  14 INDEMNIFICATIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 14.1.
  GENERAL INDEMNIFICATION

  	
   

  
	
  SECTION
  14.2. MORTGAGE AND INTANGIBLE TAX INDEMNIFICATION

  	
   

  
	
  SECTION 14.3.
  ERISA INDEMNIFICATION

  	
   

  
	
  SECTION 14.4. SURVIVAL

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  15 EXCULPATION

  	
   

  
	
   

  	
   

  
	
  SECTION 15.1.
  EXCULPATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  16 NOTICES

  	
   

  
	
   

  	
   

  
	
  SECTION 16.1. NOTICES

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  17 FURTHER ASSURANCES

  	
   

  
	
   

  	
   

  
	
  SECTION 17.1.
  REPLACEMENT DOCUMENTS

  	
   

  
	
  SECTION
  17.2. RECORDING OF MORTGAGE, ETC.

  	
   

  
	
  SECTION 17.3.
  FURTHER ACTS, ETC.

  	
   

  
	
  SECTION
  17.4. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS

  	
   

  
	
  SECTION 17.5. EXPENSES

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  18 WAIVERS

  	
   

  
	
   

  	
   

  
	
  SECTION
  18.1. REMEDIES CUMULATIVE; WAIVERS

  	
   

  
	
  SECTION
  18.2. MODIFICATION, WAIVER IN WRITING

  	
   

  
	
  SECTION 18.3.
  DELAY NOT A WAIVER

  	
   

  
	
  SECTION 18.4. TRIAL BY
  JURY

  	
   

  
	
  SECTION 18.5.
  WAIVER OF NOTICE

  	
   

  
	
  SECTION 18.6.
  REMEDIES OF BORROWER

  	
   

  
	
  SECTION
  18.7. WAIVER OK MARSHALLING OF ASSETS

  	
   

  
	
  SECTION
  18.8. WAIVER OF STATUTE OF LIMITATIONS

  	
   

  
	
  SECTION 18.9.
  WAIVER OF COUNTERCLAIM

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  19 GOVERNING LAW

  	
   

  
	
   

  	
   

  
	
  SECTION 19.1. CHOICE
  OF LAW

  	
   

  
	
  SECTION 19.2.
  SEVERABILITY

  	
   

  
	
  SECTION 19.3.
  PREFERENCES

  	
   

  
	
   

  	
   

  
	
  ARTICLE 20 MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 20.1. SURVIVAL

  	
   

  
	
  SECTION 20.2.
  LENDER’S DISCRETION

  	
   

  



 


iii





















 


	
  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

  	
   

  



 


iv





















 


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 OF AMERICA, N.A., a national banking association, having an address at
Bank of America Corporate Center, 214 North Tryon Street, Charlotte, North
Carolina 28255 (together with its successors and/or assigns, “Lender”) and INLAND WESTERN
MINNEAPOLIS 3RD AVENUE, L.L.C., a Delaware limited liability company
having an address at c/o Inland Real Estate Investment Corporation, 2901
Butterfield Road, Oak Brook, Illinois 60523 (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 in accordance 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, the parties hereto hereby covenant,
agree, represent and warrant as follows:


 


ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section 1.1.           Definitions


 


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


 


“Account Collateral” shall mean (i) the Accounts, and all cash,
checks, drafts, certificates and instruments, if any, from time to time
deposited or held in the Accounts; (ii) any and all amounts in or credited to
the Accounts invested in Permitted Investments; (iii) all interest, dividends,
cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing; 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 the Accounts are located) of any or all of the
foregoing.


 


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


 


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


 


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


 





















 


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


 


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


 


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


 


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


 


“American Express” shall mean American Express Travel Related
Services Company, Inc., a New York corporation.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Closing Date” shall mean the date of the funding of the
Loan.


 


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


 


2





















 


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


 


“Condemnation Proceeds” shall have 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 any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to its debts or debtors.


 


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


 


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


 


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


 


“Default Rate” shall mean, with respect to the Loan, a rate
per annum equal to the lesser of (a) the maximum rate permitted by applicable
law, or (b) four percent (4%) above the Note Rate.


 


“Eligible Account” shall mean a separate and identifiable
account from all other funds held by the holding institution that is either (a)
an account or accounts maintained with a federal or state chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (b) a segregated trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the
case of a federally chartered depository institution or trust company acting in
its fiduciary capacity is subject to the regulations 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), having in either case a combined
capital surplus of at least $50,000,000 and subject to supervision or
examination by federal and state authority. An Eligible Account will not be
evidenced by a certificate of deposit, passbook or other instrument.


 


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


 


3





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Fitch” shall mean Fitch, Inc.


 


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


 


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


 


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


 


“Hazardous Materials” shall have the meaning set forth in Section
12.5 hereof.


 


“Improvements” shall have 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 or Participations in the Loan, (c) any servicer or prior
servicer of the Loan, (d) any Investor or any prior Investor in any Securities,
(e) any trustees, custodians or other fiduciaries who hold or


 


4





















 


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


 


“Independent Director” shall have the meaning set forth in Section
6.4(a).


 


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


 


“Insurance Premiums” shall have the meaning set forth in Section
8.1 hereof.


 


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


 


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


 


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


 


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


 


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


 


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


 


“LLC Agreement” shall have the meaning set forth in Section
6.1(c).


 


5





















 


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


 


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


 


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


 


“Losses” shall mean any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges, fees, judgments,
awards, amounts paid in settlement of whatever kind or nature (including but
not limited to legal fees and other costs of defense).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6





















 


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


 


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


 


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


 


“Note” shall mean that certain promissory note of even date herewith in the principal
amount of $56,050,000, 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 Section 4.38 hereof.


 


“Operating Expenses” shall mean, with respect to any period of
time, the total of all expenses actually paid or payable, computed in
accordance with federal tax basis accounting, or in accordance with other
methods acceptable to Lender in its sole discretion, of whatever kind relating
to the operation, maintenance and management of the Property, including,
without limitation, utilities, ordinary repairs and maintenance, 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 the management fees actually payable
under the Management Agreement for such period of time, operational equipment
or other lease payments as approved by Lender, normalized capital expenditures
but specifically excluding depreciation and amortization, income taxes, Debt
Service, any incentive fees due under the Management Agreement, any item of
expense that in accordance with federal tax basis accounting should be
capitalized, any item of expense that would otherwise be covered by the
provisions hereof but which is paid by American Express under the American
Express Lease and deposits into the Reserve Accounts.


 


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


 


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


 


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


 


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


 


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


 


7





















 


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


 


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


 


(b)           Federal Housing
Administration debentures;


 


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


 


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


 


8





















 


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


 


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


 


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


 


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


 


9





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10





















 


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


 


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


 


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


 


“Release” shall have the meaning set forth in Section
12.5 hereof.


 


“REMIC Trust” shall mean a “real estate mortgage investment
conduit” (within the meaning of Section 860D, or applicable successor
provisions, of the Code) that holds the Note.


 


“Rents” shall have the meaning set forth in the
Mortgage.


 


“Replacements” shall have the meaning set forth in Section
9.2(a) hereof.


 


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


 


“Reserve Accounts” shall mean the Tax and Insurance Reserve
Account.


 


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


 


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


 


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


 


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


 


“Restricted Party” shall have the meaning set forth in Section
7.1 hereof.


 


“Sale or Pledge” shall have the meaning set forth in Section
7.1 hereof.


 


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


 


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


 


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


 


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


 


11





















 


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


 


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


 


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


 


“State” shall mean the state in which the Property or
any part thereof is located.


 


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


 


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


 


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


 


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


 


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


 


“Title Insurance Policy” shall mean that certain ALTA mortgagee title
insurance policy issued with respect to the Property and insuring the lien of
the Mortgage.


 


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


 


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


 


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


 


Section 1.2.           Principles
of Construction.


 


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


 


12





















 


ARTICLE 2

GENERAL TERMS


 


Section 2.1.           Loan
Commitment; Disbursement to Borrower


 


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


 


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


 


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


 


(d)           Borrower shall use the proceeds 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 of the Loan, as approved by Lender,
(iv) fund any working capital requirements of the Property, and (v) distribute
the balance, if any, to its members.


 


Section 2.2.           Loan Payments


 


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


 


Section 2.3.           Prepayment


 


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


 


ARTICLE 3

CONDITIONS PRECEDENT


 


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


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


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


 


Section 4.1.           Organization


 


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


 


13





















 


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


 


Section 4.2.           Status of Borrower


 


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


 


Section 4.3.           Validity
of Documents


 


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


 


Section 4.4.           No Conflicts


 


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


 


14





















 


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


 


Section 4.5.           Litigation


 


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


 


Section 4.6.           Agreements


 


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


 


Section 4.7.           Solvency


 


Borrower and each Borrower
Principal have (a) not entered into the transaction or executed the Note, this
Agreement or any other Loan Documents with the actual intent to hinder, delay
or defraud any creditor and (b) received reasonably equivalent value in
exchange for their obligations under such Loan Documents. Giving effect to the
Loan, the fair saleable value of the assets of Borrower and each Borrower Principal
exceeds and will, immediately following the making of the Loan, exceed the
total liabilities of Borrower and Borrower Principal, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. No
petition in bankruptcy has been filed against Borrower, Borrower Principal, or
Affiliated Manager in the last ten (10) years, and neither Borrower nor
Borrower Principal, or Affiliated Manager in the last ten (10) years has made
an assignment for the benefit of creditors or (taken advantage of any Creditors
Rights Laws. Neither Borrower nor Borrower Principal, or Affiliated Manager is
contemplating either the filing of a petition by it under any Creditors Rights
Laws or the liquidation of all or a major portion of Borrower’s assets or
property, and Borrower has no knowledge of any Person contemplating the filing
of any such petition against Borrower or Borrower Principal, or Affiliated
Manager.


 


15





















 


Section 4.8.           Full
and Accurate Disclosure


 


No statement of fact made by
or on behalf of Borrower or Borrower Principal in this Agreement or in any of
the other Loan Documents or in any other document or certificate delivered by
or on behalf of Borrower or Borrower Principal contains any untrue statement of
a material fact or omits to state any material fact necessary to make
statements contained herein or therein not misleading. There is no material
fact presently known to Borrower or Borrower Principal which has not been
disclosed to Lender which adversely affects, nor as far as Borrower or Borrower
Principal can reasonably foresee, might adversely affect, the Property or the
business, operations or condition (financial or otherwise) of Borrower or
Borrower Principal.


 


Section 4.9.           No
Plan Assets


 


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


 


Section 4.10.        Not a
Foreign Person


 


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


 


Section 4.11.        Enforceability


 


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


 


Section 4.12.        Business
Purposes


 


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


 


Section 4.13.        Compliance


 


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


 


16





















 


writ, injunction, decree or demand of any
Governmental Authority and Borrower has received no written notice of any such
default or violation. There has not been committed by Borrower or, to Borrower’s
knowledge, any other Person in occupancy of or involved with the operation or
use of the Property any act or omission affording any Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents.


 


Section 4.14.        Financial
Information


 


All financial data,
including, without limitation, the balance sheets, statements of cash flow,
statements of income and operating expense and rent rolls, that have been
delivered to Lender in respect of Borrower, Borrower Principal and/or the
Property (a) are true, complete and correct in all material respects, (b)
accurately represent the financial condition of Borrower, Borrower Principal or
the Property, as applicable, as of the date of such reports, and (c) to the
extent prepared or audited by an independent certified public accounting firm,
have been prepared in accordance with tax basis 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 losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a material
adverse effect on the Property or the current and/or intended operation
thereof, except as referred to or reflected in said financial statements. Since
the date of such financial statements, there has been no materially adverse
change in the financial condition, operations or business of Borrower or
Borrower Principal from that set forth in said financial statements.


 


Section 4.15.        Condemnation


 


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


 


Section 4.16.        Utilities
and Public Access; Parking


 


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


 


Section 4.17.        Separate
Lots


 


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


 


17





















 


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


 


Section 4.18.        Assessments


 


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


 


Section 4.19.        Insurance


 


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


 


Section 4.20.        Use of
Property


 


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


 


Section 4.21.        Certificate
of Occupancy; Licenses


 


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


 


Section 4.22.        Flood Zone


 


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


 


Section 4.23.        Physical
Condition


 


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


 


18





















 


sidewalks, storm drainage systems, roofs, plumbing
systems, HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior sidings and doors, landscaping, irrigation systems and all
structural components, are in good condition, order and repair in all material
respects. 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 company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination
or threatened termination of any policy of insurance or bond.


 


Section 4.24.        Boundaries;
Survey


 


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


 


Section 4.25.        Leases


 


The entire Property has been
leased to American Express pursuant to the American Express Lease. (a) The
American Express Lease is in full force and effect; (b) the premises demised
under the American Express Lease have been completed and American Express has
accepted possession of and is in occupancy of the demised premises; (c)
American Express has commenced the payment of rent under the American Express
Lease, there are no offsets, claims or defenses to the enforcement thereof and
Borrower has no monetary obligations to American Express under the American
Express Lease; (d) all Rents due and payable under the American Express Lease
have been paid and no portion thereof has been paid for any period more than
thirty (30) days in advance; (e) the rent payable under the American Express
Lease is the amount of fixed rent set forth in the American Express Lease, and
there is no claim or basis 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 the American Express Lease; (g) the American Express Lease is the
valid, binding and enforceable obligation of Borrower and American Express
thereunder and there are no agreements with American Express with respect to
the American Express Lease other than as expressly set forth therein; (h) no
Person has any possessory interest in, or right to occupy, the Property or any
portion thereof except under the American Express Lease; (i) except for the
right of first refusal set forth in Article 4 and the right to offer to
purchase the Property under Article 12, the American Express Lease docs not
contain any option or offer to purchase or right of first refusal to purchase
the Property or any part thereof; and (j) neither the American Express Lease
nor the Rents have been assigned or pledged except to Lender, and no other
Person has any interest therein.


 


Section
4.26.        Filing and Recording Taxes


 


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


 


19





















 


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


 


Section 4.27.        Management Agreement


 


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


 


Section 4.28.        Illegal
Activity


 


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


 


Section 4.29.        Construction
Expenses


 


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


 


Section
4.30.        Personal Property


 


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


 


Section 4.31.        Taxes


 


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


 


Section 4.32.        Permitted
Encumbrances


 


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


 


20





















 


Section 4.33.        Federal
Reserve Regulations


 


Borrower will use the
proceeds of the Loan for the purposes set forth in Section 2.1(d) hereof and
not for any illegal activity. No part of the proceeds of the Loan will be used
for the purpose of purchasing or acquiring any “margin stock” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
or for any other purpose which would be inconsistent with such Regulation U or
any other Regulations of such Board of Governors, or for any purposes
prohibited by Legal Requirements or prohibited by 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 of 1940, as amended; (b) a “holding
company” or a “subsidiary company” of a “holding company” or an “affiliate” of
either a “holding company” or a “subsidiary company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (c) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.


 


Section 4.35.        Reciprocal
Easement Agreements


 


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


 


(b)           All easements granted pursuant to the REA which 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 effect and
have not been released, terminated, extinguished or discharged by agreement or
otherwise;


 


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


 


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


 


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


 


21





















 


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


 


Section 4.36.        No Change in Facts or
Circumstances; Disclosure


 


All information submitted by
Borrower or its agents to Lender and in all financial statements, reports,
certificates and other documents submitted in connection with the Loan or in
satisfaction of the terms thereof and all statements of fact made by Borrower
in this Agreement or in any other Loan Document, are accurate, complete and
correct in all material respects. 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
otherwise materially and adversely affects or might materially and adversely
affect the Property or the business operations or the financial condition of
Borrower. Borrower has disclosed to Lender all material facts and has not
failed to disclose any material fact that could cause any representation or
warranty made herein to be materially misleading.


 


Section 4.37.        Intellectual Property


 


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


 


Section 4.38.        Compliance
with Anti-Terrorism Laws


 


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


 


Section 4.39.        Patriot
Act


 


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


 


22





















 


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


 


Section 4.40.        Survival


 


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


 


ARTICLE 5

BORROWER COVENANTS


 


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


 


Section 5.1.           Existence;
Compliance with Legal Requirements


 


(a)           Borrower shall do or cause to be done all things necessary
to preserve, renew and keep in full force and effect
its existence, rights, licenses, permits and franchises and comply with all
Legal Requirements applicable to it and the Property. Borrower hereby covenants
and agrees not to commit, permit or suffer to exist
any act or omission affording any Governmental Authority the right of
forfeiture as against the Property or any part thereof or any monies paid in performance
of Borrower’s obligations under any of the Loan Documents. Borrower shall at
all times maintain, preserve and protect all franchises and trade names used in
connection with the operation of the Property. So long as American Express is
in compliance with the terms of the American Express Lease with respect to the
matters described in this Section 5.1, Borrower shall be deemed in compliance
with this Section 5.1.


 


(b)           Borrower, at its own expense, may contest or permit
American Express to contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the Legal Requirements
affecting the Property, provided that (i) no Default or Event of Default has
occurred and is continuing; (ii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument to which
Borrower or the Property is subject and shall not constitute a default
thereunder; (iii) neither the Property, any part thereof or interest therein,
any of the tenants or occupants thereof, nor Borrower shall be affected in any
material adverse way as a result of such proceeding; (iv) non-compliance with
the


 


23





















 


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


 


Section 5.2.           Maintenance
and Use of Property


 


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


 


Section 5.3.           Waste


 


Borrower shall not commit or
suffer any waste of the Property or make any change in the use of the Property
which will in any way materially increase the 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 any Policy, or do or permit to be
done thereon anything that may in any way impair the value of the Property or
the security for the Loan. Borrower will not, without, the prior written
consent of Lender, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of
the Property, regardless of the depth thereof or the method of mining or
extraction thereof.


 


Section 5.4.           Taxes
and Other Charges


 


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


 


24





















 


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


 


(b)           Borrower, at its own expense, may contest or permit
American Express to contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any Taxes or Other Charges, provided that
(i) no Default or Event of Default has occurred and remains uncured; (ii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable Legal Requirements; (iii) neither the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost; (iv) Borrower shall promptly upon
final determination thereof pay the amount, of any such Taxes or Other Charges,
together with all costs, interest and penalties which may be payable in
connection therewith; (v) such proceeding shall suspend the collection of such
contested Taxes or Other Charges from the Property; and (vi) Borrower shall
furnish or cause American Express to furnish (but only to the extent required
to be furnished by American Express under the American Express Lease) such
security as may be required in the proceeding, or deliver to Lender such
reserve deposits as may be requested by Lender, to insure the payment of any
such Taxes or Other Charges, together with all interest and penalties thereon
(unless Borrower or American Express has paid all of the Taxes or Other Charges
under protest). Lender may pay over any such cash deposit or part thereof held
by Lender to the claimant entitled thereto at any time when, in the judgment of
Lender, the entitlement of such claimant is established or the Property (or
part thereof or interest therein) shall be in danger of being sold, forfeited,
terminated, canceled or lost or there shall be any danger of the Lien of the
Mortgage being primed by any related Lien.


 


Section 5.5.           Litigation


 


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


 


Section 5.6.           Access to Property


 


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


 


Section 5.7.           Notice of Default


 


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


 


25





















 


Section 5.8.           Cooperate in Legal
Proceedings


 


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


 


Section 5.9.           Performance by Borrower


 


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


 


Section 5.10.        Awards; Insurance Proceeds


 


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


 


Section 5.11.        Financial Reporting


 


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


 


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


 


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


 


26





















 


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


 


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


 


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


 


(b)           To the extent not inconsistent with the provisions
of Section 5.11(a) hereof (e.g., GAAP accounting and audits shall not be
required), Borrower and Borrower Principal shall furnish Lender with such other
additional financial or management information (including state and federal tax
returns) as may, from time to time, be reasonably required by Lender in form
and substance satisfactory to Lender (including, without limitation, any
financial reports required to be delivered by any Tenant or any guarantor of
any Lease pursuant to the terms of such Lease), and shall furnish to Lender and
its agents convenient facilities for the examination and audit of any such
books and records


 


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


 


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


 


Section 5.12.        Estoppel Statement


 


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


 


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


 


Section 5.13.        Leasing Matters.


 


(a)           Borrower (i) shall observe and perform all
the obligations imposed on the landlord under the American Express Lease and
shall not do or permit to be done anything to impair the value of the American
Express Lease as security for the Debt; (ii) shall promptly send copies to
Lender of all notices of default which Borrower shall send or receive
thereunder; (iii) shall enforce all of the material terms, covenants and
conditions contained in the American Express Lease on the part of the tenant
thereunder to be observed or performed; (iv) shall not collect any of the Rents
more than one (1) month in advance; (v) shall not execute any other assignment
of 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 Express
Lease not in accordance with its terms without the prior written consent of
Lender.


 


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


 


Section 5.14.        Property Management


 


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


 


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


 


(c)           In addition 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 generally accepted management
practices for projects similarly situated, Lender may deliver written notice
thereof to Borrower and Manager, which notice shall specify with particularity
the grounds for Lender’s


 


28





















 


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


 


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


 


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


 


Section 5.15.        Liens


 


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


 


Section 5.16.        Debt Cancellation


 


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


 


Section 5.17.        Zoning


 


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


 


Section 5.18.                         ERISA


 


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


 


29





















 


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


 


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


 


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


 


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


 


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


 


Section 5.19.        No Joint Assessment


 


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


 


Section 5.20.        Reciprocal Easement
Agreements


 


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


 


ARTICLE 6


ENTITY COVENANTS


 


Section 6.1.           Single Purpose
Entity/Separateness


 


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


 


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(a)           Borrower has not and will not:


 


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


 


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


 


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


 


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


 


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


 


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


 


(vii)         incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than (A) the Debt, (B) trade and
operational indebtedness 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
than sixty (60) days past the date incurred and paid on or prior to such date,
and/or (C) financing leases and purchase money indebtedness incurred in the
ordinary course of business relating to Personal Property on commercially
reasonable terms and conditions; provided however, the aggregate amount of the
indebtedness described in (B) and (C) shall not exceed at any time three
percent (3%) of the outstanding principal amount of the Note;


 


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


 


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


 


31





















 


(x)            maintain its 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)           assume or guarantee the debts of any other Person, hold itself out to
be responsible for the debts of any other Person, or otherwise pledge its
assets for the benefit of any other Person or hold out its credit as being
available to satisfy the obligations of any other Person;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)           The limited liability company agreement of
Borrower (the “LLC Agreement”) shall provide
that (i) upon the occurrence of any event that causes the sole member of
Borrower (“Member”) to cease to be the member of
Borrower (other than (A) upon an assignment by Member of all of its limited
liability company interest in Borrower and the admission of the transferee in
accordance with the Loan Documents and the LLC Agreement, or (B) the
resignation of Member and the admission of an additional member of Borrower in
accordance with the terms of the Loan Documents and the LLC Agreement), any
person acting as Independent Director of Borrower shall, without any action of
any other Person and simultaneously with the Member ceasing to be the member of
Borrower, automatically be admitted to Borrower (“Special
Member”) and shall continue Borrower without dissolution and (ii)
Special Member may not resign from Borrower or transfer its rights as Special
Member unless (A) a successor Special Member has been admitted to Borrower as
Special Member in accordance with requirements of Delaware law and (B) such
successor Special Member has also accepted its appointment as an Independent
Director. The LLC Agreement shall further provide that (i) Special Member shall
automatically cease to be a member of Borrower upon the admission to Borrower
of a substitute Member, (ii) Special Member shall be a member of Borrower that
has no interest in the profits, losses and capital of Borrower and has no right
to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301
of the Delaware Limited Liability Company Act (the “Act”),
Special Member shall not be required to make any capital contributions to
Borrower and shall not receive a limited liability company interest in
Borrower, (iv) Special Member, in its capacity as Special Member, may not bind
Borrower and (v) except as required by any mandatory provision of the Act,
Special Member, in its capacity as Special Member, shall have no right to vote
on, approve or otherwise consent to any action by, or matter relating to,
Borrower, including, without limitation, the merger, consolidation or
conversion of Borrower; provided, however, such prohibition shall not limit the
obligations of Special Member, in its capacity as Independent Director, to vote
on such matters required by the Loan Documents or the LLC Agreement. In order
to implement the admission to Borrower of Special Member, Special Member shall
execute a counterpart to the LLC Agreement. Prior to its admission to Borrower
as Special Member, Special Member shall not be a member of Borrower.


 


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


 


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Section 6.2.           Change of Name, Identity or
Structure


 


Borrower
shall not change or permit to be changed (a) Borrower’s name, (b) Borrower’s
identity (including its trade name or names), (c) Borrower’s principal place of
business set forth on the first page of this Agreement, (d) the corporate,
partnership or other organizational structure of Borrower, or Borrower
Principal, (e) Borrower’s state of organization, or (f) Borrower’s
organizational identification number, without in 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, without first
obtaining the prior written consent of Lender. In addition, Borrower shall not
change or permit to be changed any organizational documents of Borrower if such
change would adversely impact the covenants set forth in Section 6.1 and Section 6.4
hereof. Borrower authorizes Lender to file any financing statement or financing
statement amendment required by Lender to establish or maintain the validity, perfection
and priority of the security interest granted herein. At the request of Lender,
Borrower shall execute a certificate in form satisfactory to Lender listing the
trade names under which Borrower intends to operate the Property, and representing
and warranting that Borrower does business under no other trade name with
respect to the Property. If Borrower does not now have an organizational
identification number and later obtains one, or if the organizational identification
number assigned to Borrower subsequently changes, Borrower shall promptly notify
Lender of such organizational identification number or change. Nothing in this Section 6.2
shall be deemed to restrict any express rights granted to Borrower under Article 7
hereof.


 


Section 6.3.           Business and Operations


 


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


 


Section 6.4.           Independent Director


 


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


 


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


 


ARTICLE 7


NO SALE OR ENCUMBRANCE


 


Section 7.1.           Transfer Definitions


 


For
purposes of this Article 7 an “Affiliated
Manager” shall mean any managing agent in which Borrower, Borrower
Principal, or any affiliate of such entities has, directly or indirectly, any
legal, beneficial or economic interest; “Control”
shall mean the power to direct the management and policies of a
Restricted Party, directly or indirectly, whether through the ownership of
voting securities or other beneficial interests, by contract or otherwise; “Restricted Party” shall mean Borrower,
Borrower Principal, any Affiliated Manager, or any shareholder, partner, member
or non-member manager, 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 or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, grant of any options with respect to, or any other transfer
or disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) of a legal or beneficial interest.


 


Section 7.2.           No Sale/Encumbrance


 


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


 


(b)           A Prohibited Transfer shall include, but not
be limited to, (i) an installment sales agreement wherein Borrower agrees to
sell the Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale, assignment
or other transfer of, or the grant of a security interest in, Borrower’s right,
title and interest in and to any Leases or any Rents; (iii) if a Restricted Party
is a corporation, any merger, consolidation or Sale or Pledge of such
corporation’s stock or the creation or issuance of new stock in one or a series
of transactions; (iv) if a Restricted Party is a limited or general partnership
or joint venture, any merger or consolidation or the change, removal,
resignation or addition of a general partner or the Sale or Pledge of the
partnership interest of any general or limited partner or any profits or proceeds
relating to such partnership interests or the creation or issuance of new
partnership


 


35





















 


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


 


Section 7.3.           Permitted Transfers


 


Notwithstanding
the provisions of Section 7.2, 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 a member, partner or shareholder of a
Restricted Party, so long as Borrower delivers notice to Lender as soon as
practicable thereafter and that such Restricted Party is promptly
reconstituted, if applicable, following the death of such member, partner or
shareholder and there is no change in Control of such Restricted Party as a
result of such transfer; (b) the Sale or Pledge, in one or a series of related
transactions, of not more than forty-nine percent (49%) of the stock, limited
partnership interests or non-managing membership interests (as the case may be)
in a Restricted Party; provided, however, no such transfers shall result in a
change in Control in the Restricted Party or change in control of the Property,
and as a condition to each such transfer, Lender shall receive not less than
thirty (30) days prior written notice of such proposed transfer.
Notwithstanding the foregoing, any one or more of the transfers that results in
any Person owning in excess of forty-nine percent (49%) of the ownership
interest in a Restricted Party shall comply with the requirements of Section 7.4.


 


Section 7.4.           Lender’s Rights


 


Lender
reserves the right to condition the consent to a Prohibited Transfer requested
hereunder upon (a) a modification of the terms hereof and an assumption of the
Note and the other Loan Documents as so modified by the proposed Prohibited
Transfer, (b) receipt of payment of a transfer fee equal to one percent (1%) of
the outstanding principal balance of the Loan and all of Lender’s expenses
incurred in connection with such Prohibited Transfer, (c) receipt of written
confirmation from the Rating Agencies that the Prohibited Transfer will not
result in a downgrade, withdrawal or qualification of the initial, or if
higher, then current ratings issued in connection with a Securitization, or if
a Securitization has not occurred, any ratings to be assigned in connection
with a Securitization, (d) the proposed transferee’s continued compliance with
the covenants set forth in this Agreement (including, without limitation, the
covenants in Article 6) and the other Loan Documents, (e) a new manager
for the Property and a new management agreement satisfactory to Lender, and (f)
the satisfaction of such other conditions and/or legal opinions as Lender shall
determine in its sole discretion to be in the interest of Lender. All expenses
incurred by Lender shall be payable by Borrower whether or not Lender consents
to the Prohibited Transfer. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon a Prohibited
Transfer made without Lender’s consent. This provision shall apply to each and
every Prohibited Transfer, whether or not Lender has consented to any previous
Prohibited Transfer. In the event an opinion letter pertaining to


 


36





















 


substantive
consolidation was delivered to 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 Person and its Affiliates owning in excess of forty-nine percent
(49%) of the ownership interests in a Restricted Party, Borrower shall, prior
to such transfer, and in addition to any other requirement for Lender consent
contained herein, deliver a revised substantive non-consolidation opinion
letter to Lender reflecting such Prohibited Transfer, which opinion shall be in
form, scope and substance acceptable in all respects to Lender and the Rating
Agencies.


 


Section 7.5.           Assumption


 


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


 


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


 


(b)           Borrower shall have (i) delivered written
notice to Lender of the terms of such prospective transfer not less than
forty-five (45) days before the date on which such transfer is scheduled to
close and, concurrently therewith, all such information concerning the proposed
Transferee as Lender shall reasonably require and (ii) paid to Lender a non-refundable
processing fee in the amount of $10,000. Lender shall have the right to approve
or disapprove the proposed transfer based on its then current underwriting and
credit requirements for similar loans secured by similar properties which loans
are sold in the secondary market, such approval not to be unreasonably
withheld. In determining whether to give or withhold its approval of the proposed
transfer, Lender shall consider the experience and track record of Transferee
and its principals in owning and operating facilities similar to the Property,
the financial strength of Transferee and its principals, the general business
standing of Transferee and its principals and Transferee’s and its principals’
relationships and experience with contractors, vendors, tenants, lenders and
other business entities; provided, however, that, notwithstanding Lender’s
agreement to consider the foregoing factors in determining whether to give or
withhold such approval, such approval shall be given or withheld based on what
Lender determines to be commercially reasonable and, if given, may be given
subject to such conditions as Lender may deem reasonably appropriate;


 


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


 


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


 


37





















 


assumed
the obligations of Borrower Principal under the Loan Documents with respect to
all acts and events occurring or arising after the transfer of the Property
pursuant to this Section 7.5;


 


(e)           Borrower and Transferee, without any cost to
Lender, shall furnish any information requested by Lender for the preparation
of, and shall authorize Lender to file, new financing statements and financing
statement amendments and other documents to the fullest extent permitted by
applicable law, and shall execute any additional documents reasonably requested
by Lender;


 


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


 


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


 


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


 


(i)            Transferee shall furnish an opinion of
counsel satisfactory to Lender and its counsel (A) that Transferee’s formation
documents provide for the matters described in subparagraph (g) above, (B) that
the assumption of the Debt has been duly authorized, executed and delivered,
and that the Note, the Mortgage, this Agreement, 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 or general partner of Transferee, have been
duly organized, and are in existence and good standing, and (E) with respect to
such other matters as Lender may reasonably request;


 


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


 


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


 


38





















 


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


 


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


 


Section 7.6.           Assumption by Inland
Permitted Transferee


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


39





















 


insurance
endorsements or certificates and other similar materials as Lender may deem
necessary at the time of the transfer, all in form and substance satisfactory
to Lender;


 


(g)           such Inland Permitted Transferee shall have
furnished to Lender, if such Inland Permitted Transferee is a corporation,
partnership, limited liability company or other entity, all appropriate papers
evidencing Transferee’s organization and good standing, and the qualification of
the signers to execute the assumption of the Debt, which papers shall include
certified copies of all documents relating to the organization and formation of
Transferee and of the entities, if any, which are partners or members of
Transferee. Transferee and such constituent partners, members or shareholders
of Transferee (as the case may be), as Lender 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 partnership or a limited
liability company (with more than one member), Lender may require that the
general partner or managing member of such Inland Permitted Transferee also
comply with the covenants set forth in Article 6, as modified to state
that such general partner or managing member holds an interest in the Inland
Permitted Transferee rather than an interest in the Property or (ii) if such
Inland Permitted Transferee is a single member limited liability company, the
state of organization of such entity must be Delaware and the organizational
documents must provide for a springing member upon the bankruptcy or
dissolution of the sole member;


 


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


 


(i)            Transferee shall furnish an opinion of
counsel satisfactory to Lender and its counsel (A) that Transferee’s formation
documents provide for the matters described in subparagraph (g) above, (B) that
the assumption of the Debt has been duly authorized, executed and delivered,
and that the Note, the Mortgage, this Agreement, 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 or general partner of Transferee, have been
duly organized, and are in existence and good standing, and (E) with respect to
such other matters as Lender may reasonably request, including, without
limitation, customary single member limited liability company opinions in the
event that such Inland Permitted Transferee is a Delaware limited liability
company; and


 


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


 


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


 


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ARTICLE 8


INSURANCE; CASUALTY; CONDEMNATION; RESTORATION


 


Section 8.1.           Insurance


 


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


 


(i)            comprehensive “special causes of loss” form
of insurance (or its equivalent) on the Improvements and the Personal Property
(A) in an amount equal to not less than one hundred percent (100%) of the “Full
Replacement Cost,” which for purposes of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation; (B) written on a
replacement cost basis and containing either an agreed amount endorsement with
respect to the Improvements and Personal Property or a waiver of all
co-insurance provisions; (C) providing for no deductible in excess of $10,000
for all such insurance coverage; (D) at all times insuring against at least
those hazards that are commonly insured against under a “special causes of loss”
form of policy, as the same shall exist on the date hereof, and together with
any increase in the scope of coverage provided under such form after the date
hereof; and (E) if any of the Improvements or the use of the Property shall at
any time constitute legal non-conforming structures or uses, providing coverage
for contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements and containing an “Ordinance or Law
Coverage” or “Enforcement” endorsement. In addition, Borrower shall obtain: (y)
if any portion of the Improvements is currently or at any time in the future
located in a “special flood hazard area” designated by the Federal Emergency
Management Agency, flood hazard insurance in an amount equal to the maximum
amount of such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance
Reform Act of 1994, as each may be amended; and (z) earthquake insurance in
amounts and in form and substance reasonably satisfactory to Lender in the
event the Property is located in an area with a high degree of seismic risk,
provided that the insurance pursuant to clauses (y) and (z) hereof shall be on
terms consistent with the special causes of loss form required under this subsection (i);


 


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


 


41





















 


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


 


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


 


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


 


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


 


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


 


42





















 


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


 


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


 


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


 


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


 


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


 


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


 


(i)            no act or negligence of Borrower, or anyone
acting for Borrower, or of any Tenant or other occupant, or failure to comply
with the provisions of any Policy, which might otherwise result in a forfeiture
of the insurance or any part thereof, shall in


 


43





















 


any
way affect the validity or enforceability of the insurance insofar as Lender is
concerned;


 


(ii)           the Policies shall not be materially changed (other than to increase
the coverage provided 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 to Lender and any other party named therein as an additional
insured;


 


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


 


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


 


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


 


(g)           Notwithstanding any other provision hereof to the contrary, Lender
acknowledges that so long as no American Express Lease Default has occurred,
Borrower shall not be required to obtain 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-insurer and maintains a rating issued by the Rating
Agencies of not less than the Trigger Rating or (y) American Express maintains
insurance with coverages and carriers in compliance with the terms of the
American Express Lease.


 


Section 8.2.           Casualty


 


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


 


Section 8.3.           Condemnation


 


Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of the Property of which
Borrower has knowledge and shall deliver to Lender copies of any and all papers
served in connection with such proceedings.


 


44





















 


Lender
may participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by it to permit such participation.
Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and cooperate with them
in the carrying on or defense of any such proceedings. Notwithstanding any
taking by any public or quasi-public authority through Condemnation or
otherwise (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of such taking), Borrower shall continue to pay
the Debt at the time and in the manner provided for its payment in the Note and
in this Agreement and the Debt shall not be reduced until any Award shall have
been actually received and applied by Lender, after the deduction of expenses
of collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by a
condemning authority, Borrower shall promptly commence and diligently prosecute
the Restoration of the Property and otherwise comply with the provisions of Section 8.4,
whether or not Lender makes any Net Proceeds available pursuant to Section 8.4.
If the Property is sold, through foreclosure or otherwise, prior to the receipt
by Lender of the Award, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt. So long as
no American Express Lease Default has occurred, the payment and allocation of
any Awards shall be governed by the American Express Lease.


 


Section 8.4.           Restoration


 


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


 


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


 


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


 


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


 


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


 


45





















 


(B)           (1) in the event the Net Proceeds are
Insurance Proceeds, less than thirty percent (30%) of the total floor area of
the Improvements on the Property has been damaged, destroyed or rendered
unusable as a result of a Casualty, or (2) in the 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 perimeter or periphery of the
Property, and no portion of the Improvements is located on such land;


 


(C)           The American Express Lease shall remain in
full force and effect during and 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 to satisfactory completion;


 


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


 


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


 


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


 


(H)                               the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable Legal
Requirements;


 


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


 


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


 


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


 


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(ii)           The Net Proceeds shall be held by Lender until disbursements commence,
and, until disbursed in accordance with the provisions of this Section 8.4,
shall constitute additional security for the Debt and other obligations under
the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence satisfactory to Lender that (A) all the conditions
precedent to such advance, including those set forth in Section 8.4(b)(i),
have been satisfied, (B) all materials installed and work and labor performed
(except to the extent that they are to be paid for out of the requested
disbursement) in connection with the related Restoration item have been paid
for in full, and (C) there exist no notices of pendency, stop orders, mechanic’s
or materialman’s liens or notices of intention to file same, or any other liens
or encumbrances of any nature whatsoever on the Property which have not either
been fully bonded to the satisfaction of Lender and discharged of record or in
the alternative fully insured to the satisfaction of Lender by the title
company issuing the Title Insurance Policy. Notwithstanding the foregoing,
Business Interruption Proceeds required to be maintained by Borrower pursuant
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 used
solely for the payment of the obligations under the Loan Documents and
Operating Expenses.


 


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


 


(iv)          In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Restoration Consultant, minus the Restoration Retainage. The term “Restoration Retainage” shall mean an
amount equal to ten percent (10%) of the costs actually incurred for work in
place as part of the Restoration, as certified by the Restoration Consultant,
until the Restoration has been completed. The Restoration Retainage shall be
reduced to five percent (5%) of the costs incurred upon receipt by Lender of
satisfactory evidence that fifty percent (50%) of the Restoration has been
completed. The Restoration Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 8.4(b), be
less than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration. The Restoration
Retainage shall not be released until the Restoration Consultant certifies to
Lender that the Restoration has been completed in accordance with the provisions
of this Section 8.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
Governmental Authorities, and Lender receives evidence satisfactory to


 


47





















 


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


 


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


 


(vi)          If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the reasonable opinion of Lender in consultation with the
Restoration Consultant, be sufficient to pay in full the balance of the costs
which are estimated by the Restoration Consultant to be incurred in connection
with the completion of the Restoration, Borrower shall deposit the deficiency
(the “Net Proceeds Deficiency”) with Lender
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Lender shall be held by Lender and shall be
disbursed for costs actually incurred in connection with the Restoration on the
same conditions applicable to the disbursement of the Net Proceeds, and until
so disbursed pursuant to this Section 8.4(b) shall constitute additional
security for the Debt and other obligations under the Loan Documents.


 


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


 


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


 


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


 


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


 


ARTICLE 9


REPLACEMENTS; RESERVE FUNDS


 


Section 9.1.           Replacements


 


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


 


Section 9.2.           Tax and Insurance Reserve
Funds


 


If required by Lender following a default by American Express under the
American Express Lease Borrower shall establish an Eligible Account with Lender
or Lender’s agent sufficient to discharge Borrower’s obligations for the
payment of Taxes and Insurance Premiums pursuant to Section 5.4 and Section 8.1
hereof (the “Tax and Insurance Reserve
Account”) Borrower
shall deposit into the Tax and Insurance Reserve Account on each Scheduled
Payment Date (a) one-twelfth of the Taxes that Lender estimates will be payable
during the next ensuing twelve (12) months or such higher amount necessary to
accumulate 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 become
delinquent and (ii) the date that additional charges or interest will accrue
due to the non-payment thereof, and (b) except to the extent Lender has waived
the insurance escrow because the insurance required hereunder is maintained
under a blanket insurance Policy acceptable to Lender in accordance with Section 8.1(c),
one-twelfth of the Insurance Premiums that Lender estimates will be payable
during the next ensuing twelve (12) months for the renewal of the coverage
afforded by the Policies upon the expiration thereof or such higher amount
necessary to accumulate with Lender sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the Policies
(said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Reserve Funds”). Lender will apply the Tax and
Insurance Reserve Funds to payments of Taxes and Insurance Premiums required to
be made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.
In making any disbursement from the Tax and Insurance Reserve Account, Lender
may do so according to any bill, statement or estimate procured from the
appropriate public office or tax lien service (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim


 


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thereof.
If the amount of the Tax and Insurance Reserve Funds shall exceed the amounts
due for Taxes and Insurance Premiums pursuant to Section 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 to be made to the Tax and Insurance
Reserve Account. In allocating any such excess, Lender may deal with the person
shown on Lender’s records as being the owner of the Property. Any amount
remaining in the Tax and Insurance Reserve Account after the Debt has been paid
in full shall be returned to Borrower or the person shown on Lender’s records
as being the owner of the Property and no other party shall have any right or
claim thereto. If at any time Lender reasonably determines that the Tax and
Insurance Reserve Funds are not or will not 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 and Borrower shall pay to Lender any
amount necessary to make up the deficiency within ten (10) days after notice
from Lender to Borrower requesting payment thereof.


 


Section 9.3.           Reserve Funds Generally


 


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


 


(b)           Borrower grants to Lender a first-priority perfected security interest
in, and assigns and pledges to Lender, each of the Reserve Accounts and any and
all funds hereafter deposited therein as additional security for payment of the
Debt. Until expended or applied in accordance herewith, the Reserve Accounts
and the Reserve Funds shall constitute additional security for the Debt. The
provisions of this Section 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.


 


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


 


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


 


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


 


50





















 


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


 


(f)            The Reserve Funds shall not constitute escrow
or trust funds and may be commingled with other monies held by Lender.
Notwithstanding anything else herein to the contrary, Lender may commingle in
one or more Eligible Accounts any and all funds controlled by Lender,
including, without limitation, funds pledged in favor of Lender by other
borrowers, whether for the same purposes as the Reserve Accounts or otherwise.
Without limiting any other provisions of this Agreement or any other Loan
Document, the Reserve Accounts may be established and held in such name or
names as Lender or its loan servicer, as agent for Lender, shall deem
appropriate, including, without limitation, in the name of Lender or such loan
servicer as agent for Lender. In the case of any Reserve Account which is held
in a commingled account, Lender or its loan servicer, as applicable, shall
maintain records sufficient to enable it to determine at all times which
portion of such account is related to the Loan. The Reserve Accounts are solely
for the protection of Lender and Lender shall have no responsibility beyond the
allowance of due credit for the sums actually received by Lender or beyond the reimbursement
or payment of the costs and expenses for which such accounts were established
in accordance with their terms. Upon assignment of the Loan by Lender, any
Reserve Funds shall be turned over to the assignee and any responsibility of
Lender as assignor shall terminate. The requirements of this Agreement
concerning Reserve Accounts in no way supersede, limit or waive any other
rights or obligations of the parties under any of the Loan Documents or under applicable
law.


 


(g)           Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the Reserve
Accounts or the Reserve Funds deposited therein or permit any Lien to attach
thereto, except for the security interest granted in this Section 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 respect thereto.


 


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


 


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ARTICLE 10


CASH MANAGEMENT


 


Section 10.1.        Cash Management Account


 


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


 


(b)           The Cash Management Account shall be in the name of Borrower for the
benefit of Lender, provided that Borrower shall be the owner of all funds on
deposit in such accounts for federal and applicable state and local tax
purposes (except to the extent Lender retains any interest earned on the Cash
Management Account for its own account following the occurrence and during the
continuance of an Event of Default). Sums on deposit in the Cash Management Account
shall not be invested except in such Permitted Investments as determined and
directed by Lender and all income earned thereon shall be the income of
Borrower and be applied to and become part of the Cash Management Account, to
be disbursed in accordance with this Article 10. Lender shall have no
liability for any loss resulting from the investment of funds in Permitted
Investments in accordance with the terms and conditions of this Agreement.


 


(c)           The Cash Management Account shall be subject to the exclusive dominion
and control of Lender during the Cash Management Period or the continuance of
an Event of Default and, except as otherwise expressly provided herein, neither
Borrower, Manager nor any other party claiming on behalf of, or through,
Borrower or Manager, shall have any right of withdrawal therefrom or any other
right or power with respect thereto.


 


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


 


(e)           Lender shall be responsible for the performance only of such duties
with respect to the Cash Management Account as are specifically set forth
herein, and no duty shall be implied from any provision hereof. Lender shall
not be under any obligation or duty to perform any act which would involve it
in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies. Borrower shall indemnify and hold Lender
and its directors, employees, officers and agents harmless from and against any
loss, cost or damage (including, without limitation, reasonable attorneys’ fees
and disbursements) incurred by such parties in connection with the Cash
Management Account other than such as result from the gross negligence or
willful misconduct of Lender or intentional nonperformance by Lender of its obligations
under this Agreement.


 


Section 10.2.        Deposits and Withdrawals


 


(a)           Borrower represents, warrants and covenants that:


 


(i)            Concurrently with the execution of this
Agreement Borrower has executed and delivered to Lender an instruction letter
in the form of Exhibit B attached hereto addressed to American Express (the “Tenant
Direction Letter”). Upon the occurrence of


 


52





















 


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


 


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


 


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


 


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


 


(v)           So long as any portion of the Debt remains outstanding, during the Cash
Management Period or during the continuance of an Event of Default neither
Borrower, Manager nor any other Person shall open or maintain any accounts
other than the Cash Management Account into which revenues from the ownership
and operation of the Property are deposited.


 


(b)           Intentionally Omitted.


 


(c)           If
an Event of Default shall have occurred and be continuing or during a Cash Management
Period, on each Scheduled Payment Date (and if such day is not a Business Day, then
the immediately preceding day which is a Business Day) commencing the month immediately
following the month during which the Cash Management Period commences, Borrower
hereby irrevocably authorizes Lender to withdraw or allocate to the
sub-accounts of the Cash Management Account, as the case may be, amounts
received in the Cash Management Account, in each case to the extent that sufficient
funds remain therefor:


 


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


 


53





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 10.3.        Security Interest


 


(a)           To secure the full and punctual payment of
the Debt and performance of all obligations of Borrower now or hereafter
existing under this Agreement and the other Loan Documents, Borrower hereby
grants to Lender a first-priority perfected security interest in each of the
Accounts and the Account Collateral. Furthermore, Borrower shall not, without
obtaining the prior written consent of Lender, further pledge, assign or grant
any security interest in any of the foregoing or permit any Lien to attach
thereto or any levy to be made thereon or any UCC Financing Statements to be
filed with respect thereto. Borrower will maintain the security


 


54





















 


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


 


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


 


(c)           Upon the occurrence of an Event of Default,
Lender may exercise any or all of its rights and remedies as a secured party,
pledgee and lienholder with respect to the Accounts and the Account Collateral.
Without limitation of the foregoing, upon any Event of Default, Lender may use
the Accounts and the Account Collateral for any of the following purposes: (A) repayment
of the Debt, including, but not limited to, principal prepayments and the
prepayment premium applicable 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 a result of such Event of Default; (C) payment of any amount
expended in exercising any or all rights and remedies available to Lender at
law or in equity 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) any other purpose permitted by applicable law; provided,
however, that any such application of funds shall not cure or be deemed to cure
any Event of Default. Without limiting any other provisions hereof, each of the
remedial actions described in the immediately preceding sentence shall be
deemed to be a commercially reasonable exercise of Lender’s rights and remedies
as a secured party with respect to the Accounts and the Account Collateral and
shall not in any event be deemed to constitute a setoff or a foreclosure of a
statutory banker’s lien. Nothing in this Agreement shall obligate Lender to
apply all or any portion of the Accounts and the Account Collateral to effect a
cure of any Event of Default, or to pay the Debt, or in any specific order of
priority. The exercise of any or all of Lender’s rights and remedies under this
Agreement or under any of the other Loan Documents shall not in any way
prejudice or affect Lender’s right to initiate and complete a foreclosure under
the Mortgage.


 


ARTICLE 11


EVENTS OF DEFAULT; REMEDIES


 


Section 11.1.        Event of Default


 


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


 


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


 


55





















 


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


 


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


 


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


 


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


 


(f)            if (i) Borrower, or any managing member or
general partner of Borrower, Borrower Principal, or American Express shall
commence any case, proceeding or other action (A) under any Creditors Rights
Laws, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Borrower, any managing member or general partner of Borrower, Borrower
Principal, or American Express shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against Borrower, any
managing member or general partner of Borrower, Borrower Principal, or American
Express any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or (iii) there shall be commenced against
Borrower, any managing member or general partner of Borrower, Borrower
Principal, or American Express any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
any order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from the entry thereof;
or (iv) Borrower, any managing member or general partner of Borrower, Borrower
Principal, or American Express shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) Borrower, any managing member
or general partner of Borrower, Borrower Principal, or American Express shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;


 


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


 


56





















 


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


 


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


 


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


 


(k)           if any default occurs under any guaranty or
indemnity executed in connection herewith and such default continues after the
expiration of applicable grace periods, if any;


 


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


 


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


 


(n)           if Borrower shall continue to be in default
under any other term, covenant or condition 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 by the payment of a sum of money or for
thirty (30) days after notice from Lender in the case of any other default,
provided that if such default cannot reasonably be cured within such thirty
(30) day period and Borrower shall have commenced to cure such default within
such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) day period shall be extended for so
long as it shall require Borrower in the exercise of due diligence to cure such
default, it being agreed that no such extension shall be for a period in excess
of one hundred twenty (120) days.


 


Section 11.2.        Remedies


 


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


 


57





















 


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


 


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


 


ARTICLE 12


ENVIRONMENTAL PROVISIONS


 


Section 12.1.        Environmental
Representations and Warranties


 


Borrower
represents and warrants, except as disclosed in an Environmental Report of the
Property and information that Borrower knows that: (a) there are no Hazardous
Materials or underground storage tanks in, on, or under the Property, except
those that are both (i) in compliance with Environmental Laws and with permits
issued pursuant thereto (if such permits are required), if any, and (ii) either
(A) in the case of Hazardous Materials, in amounts not in excess of that
necessary to operate the Property for the purposes set forth herein or (B)
fully disclosed to and approved by Lender in writing pursuant to an
Environmental Report; (b) there are no past, present or threatened Releases of
Hazardous Materials in violation of any Environmental Law or which would
require remediation by a Governmental Authority in, on, under or from the
Property except as described in the Environmental Report; (c) there is no
threat of any Release of Hazardous Materials migrating to the Property except
as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant
thereto, in connection with the Property except as described in the
Environmental Report; (e) Borrower does not know of, and has not received, any
written or oral notice or other communication from any Person relating to
Hazardous Materials in, on, under or from the Property; (f) the Property is
free of Mold; and (g) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to environmental conditions in, on,
under or from the Property known to Borrower or contained in Borrower’s files
and records, including but not limited to any reports relating to Hazardous
Materials in, on, under or migrating to or from the Property and/or to the
environmental condition of or the presence of Mold at the Property.


 


58





















 


Section 12.2.        Environmental Covenants


 


Borrower
covenants and agrees that so long as Borrower owns, manages and is in
possession of the operation 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 all Environmental Laws and permits issued pursuant thereto; (b)
there shall be no Releases of Hazardous Materials in, on, under or from the
Property; (c) there shall be no Hazardous Materials in, on, or under the
Property, except those that are both (i) in compliance with all Environmental
Laws and with permits issued pursuant thereto, if and to the extent required,
and (ii) (A) in amounts not in excess of that necessary to operate the Property
for the purposes set forth 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 pose a risk to human health or safety or the environment or
which may result in damage to or would adversely affect or impair the value or
marketability of the Property; (d) Borrower shall keep the Property free and
clear of all Environmental Liens; (e) Borrower shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to Section 12.4
below, including but not limited to providing all relevant information and
making knowledgeable persons available for interviews; (f) Borrower shall, at
its sole cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Property,
pursuant to any reasonable written request of Lender, upon Lender’s reasonable
belief that the Property is not in full compliance with all Environmental Laws,
and share with Lender the reports and other results thereof, and Lender and
other Indemnified Parties shall be entitled to rely on such reports and other
results thereof; (g) Borrower shall keep the Property free of Mold; and (h)
Borrower shall, at its sole cost and expense, comply with all reasonable
written requests of Lender to (i) reasonably effectuate remediation of any
Hazardous Materials in, on, under or from the Property; and (ii) comply with
any Environmental Law; (i) Borrower shall not allow any tenant or other user of
the Property to violate any Environmental Law; and (j) Borrower shall
immediately notify Lender in writing after it has become aware of (A) any
presence or Release or threatened Release of Hazardous Materials in, on, under,
from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien against the Property; (D) any required or proposed
remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a Governmental
Authority) relating in any way to Hazardous Materials. Any failure of Borrower
to perform its obligations pursuant to this Section 12.2 shall constitute
bad faith waste with respect to the Property.


 


Section 12.3.        Lender’s Rights


 


Lender
and any other Person designated by Lender, including but not limited to any
representative of a Governmental Authority, and any environmental consultant,
and any receiver appointed by any court of competent jurisdiction, shall have
the right, but not the obligation, to enter upon the Property at all reasonable
times to assess any 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 taking samples of soil, groundwater or other water, air, or
building materials, and conducting


 


59





















 


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


 


Section 12.4.        Operations and Maintenance
Programs


 


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


 


Section 12.5.        Environmental Definitions


 


“Environmental Law” means any present and future federal, state and local laws, statutes,
ordinances, rules, regulations, standards, policies and other government
directives or requirements, as well as common law, including but not limited to
the Comprehensive Environmental Response, Compensation and Liability Act and
the Resource Conservation and Recovery Act, that apply to Borrower or the
Property and relate to Hazardous Materials or protection of human health or the
environment. “Environmental Liens” means
all 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
reports resulting from the environmental site assessments of the Property
delivered to Lender in connection with the Loan. “Hazardous Materials” shall mean petroleum and petroleum
products and compounds containing them, including gasoline, diesel fuel and
oil; explosives, flammable materials; radioactive materials; polychlorinated
biphenyls and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Property is prohibited by
any federal, state or local authority; any substance that requires special
handling; and any other material or substance now or in the future defined as a
“hazardous substance,” “hazardous material”, “hazardous waste”, “toxic
substance”, “toxic pollutant”, “contaminant”, or “pollutant” within the meaning
of any Environmental Law. “Mold” shall
mean any mold, fungi, bacterial or microbial matter present at or in the
Property, including, without limitation, building materials which is in a
condition, location or a type which may pose a risk to human health or safety
or the environment, may result in damage to or would adversely affect or impair
the value or marketability of the Property. “Release”
of any Hazardous Materials includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting,


 


60





















 


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


 


ARTICLE 13


SECONDARY MARKET


 


Section 13.1.        Transfer of 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-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement
(“Securities”) (a Syndication or the
issuance of Participations and/or Securities, a “Securitization”).


 


Section 13.2.        Delegation of Servicing


 


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


 


Section 13.3.        Dissemination of Information


 


Lender
may forward to each purchaser, transferee, assignee, or servicer of, and each
participant, or investor in, the Loan, or any Participations and/or Securities
or any of their respective successors (collectively, the “Investor”)
or any Rating Agency rating the Loan, or any Participations and/or Securities,
each prospective Investor, and any organization maintaining databases on the
underwriting and performance of commercial mortgage loans, all documents and
information which Lender now has or may hereafter acquire relating to the Debt
and to Borrower, any managing member or general partner thereof, Borrower
Principal, and the Property, including financial statements, whether furnished
by Borrower or otherwise, as Lender determines necessary or desirable. Borrower
irrevocably waives any and all rights it may have under applicable Legal
Requirements to prohibit such disclosure, including but not limited to any
right of privacy.


 


Section 13.4.        Cooperation


 


Borrower
and Borrower Principal agree to cooperate with Lender in connection with any
sale or transfer of the Loan or any Participation and/or Securities created
pursuant to this Article 13, including, without limitation, (a) the
delivery of an estoppel certificate required in accordance with Section 5.12(a)
and such other documents as may be reasonably requested by Lender, (b) the
execution of such amendments to the Loan Documents as may be requested by the
holder of the Note or the Rating Agencies or otherwise to effect the
Securitization including, without limitation, bifurcation of the Loan into two
or more components and/or separate notes; provided, however, that Borrower
shall not be required to modify or amend any Loan Document if such modification
or amendment would (i) change the interest rate, the stated maturity or the
amortization of principal set forth in the Note, except in connection with a bifurcation
of the Loan which may result in varying fixed interest rates and amortization
schedules, but which shall


 


61





















 


have
the same initial weighted average coupon of the original Note, or (ii) in the reasonable
judgment of Borrower, modify or amend any other material economic term of the
Loan, or (iii) in the reasonable judgment of Borrower, materially increase
Borrower’s obligations and liabilities under the Loan Documents, and (c) make changes to the organizational
documents of Borrower and its principals and/or use its best efforts to cause
changes to the legal opinions delivered by Borrower in connection with the
Loan, provided, that such changes shall not result in a material adverse
economic effect to Borrower. Borrower shall also furnish and Borrower and
Borrower Principal consent to Lender furnishing to such Investors or such
prospective Investors or such Rating Agency any and all information concerning
the Property, the American Express Lease, the financial condition of Borrower
or Borrower Principal as may be requested by Lender, any Investor, any
prospective Investor or any Rating Agency in connection with any sale or
transfer of the Loan or any Participations or Securities. Neither Borrower nor
Borrower Principal shall be responsible for any costs incurred by Lender in
connection with a Securitization.


 


ARTICLE 14


INDEMNIFICATIONS


 


Section 14.1.        General Indemnification


 


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


 


Section 14.2.        Mortgage and Intangible Tax
indemnification


 


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


 


62





















 


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


 


Section 14.3.        ERISA Indemnification


 


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


 


Section 14.4.        Survival


 


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


 


ARTICLE 15


EXCULPATION


 


Section 15.1.        Exculpation


 


(a)           Except as otherwise provided herein or in the
other Loan Documents, Lender shall not enforce the liability and obligation of
Borrower or Borrower Principal, as applicable, to perform and observe the
obligations contained herein or in the other Loan Documents by any action or
proceeding wherein a money judgment shall be sought against Borrower or
Borrower Principal, except that Lender may bring a foreclosure action, action
for specific performance or other appropriate action or proceeding to enable
Lender to enforce and realize upon this Agreement, the Note, the Mortgage and
the other Loan Documents, and the interest in the Property, the Rents
(following an Event of Default) and any other collateral given to Lender
created by this Agreement, the Note, the Mortgage and the other Loan Documents;
provided, however, that any judgment in any such action or proceeding shall be
enforceable against Borrower or Borrower Principal, as applicable, only to the
extent of Borrower’s or Borrower Principal’s interest in the Property, in the
Rents and in any other collateral given to Lender. Lender, by accepting this
Agreement, the Note, the Mortgage and the other Loan Documents, agrees that it
shall not, except as otherwise provided in this Section 15.1, sue for,
seek or demand any deficiency judgment against Borrower or Borrower Principal
in any such action or proceeding, under or by reason of or under or in
connection with this Agreement, the Note, the Mortgage or the other Loan
Documents. The provisions of this Section 15.1 shall not, however, (i)
constitute a waiver, release or impairment of any obligation evidenced or
secured by this Agreement, the Note, the Mortgage or the other Loan Documents;
(ii) impair the right of Lender to name Borrower or Borrower Principal as a
party defendant in any action or suit for judicial foreclosure and sale under
this Agreement and the Mortgage; (iii) affect, the validity or enforceability
of any indemnity (including, without limitation, those contained in Section 12.6


 


63





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


64





















 


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


 


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


 


ARTICLE 16


NOTICES


 


Section 16.1.        Notices


 


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


 


	
  If
  to Lender:

  	
   

  	
  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

  



 


65





















 


	
  If
  to Borrower:

  	
   

  	
  Inland
  Western Minneapolis 3rd Avenue, L.L.C.

  
	
   

  	
   

  	
  c/o
  Inland Real Estate Investment Corporation

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, Illinois 60523

  
	
   

  	
   

  	
  Attention:
  Roberta Matlin, Vice President

  
	
   

  	
   

  	
  Facsimile
  No.: 630-218-4965

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  The
  Inland Real Estate Group, Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, Illinois 60523

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile
  No.: 630-218-4900

  
	
   

  	
   

  	
   

  
	
  If to Borrower
  Principal:

  	
   

  	
  Inland
  Western Retail Real Estate Trust, Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, Illinois 60523

  
	
   

  	
   

  	
  Roberta
  Matlin, Vice President

  
	
   

  	
   

  	
  Facsimile
  No.: 630-218-4965

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  The
  Inland Real Estate Group, Inc.

  
	
   

  	
   

  	
  2901
  Butterfield Road

  
	
   

  	
   

  	
  Oak
  Brook, Illinois 60523

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Facsimile
  No.: 630-218-4900

  



 


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


 


ARTICLE 17


FURTHER ASSURANCES


 


Section 17.1.        Replacement Documents


 


Upon
receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any other Loan Document which is not
of public record and, in the case of such mutilation upon surrender and
cancellation of such Note or other Loan Document, Borrower will issue in lieu
thereof a replacement Note or other Loan Document, dated the date of such lost,
stolen, destroyed or mutilated Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.


 


Section 17.2.        Recording of Mortgage, etc.


 


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


 


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


 


Section 17.3.        Further Acts, Etc.


 


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


 


Section 17.4.        Changes in Tax, Debt, Credit
and Documentary Stamp Laws


 


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


 


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(b)           Borrower will not claim or demand or be
entitled to any credit or credits on account of the Debt for any part of the
Taxes or Other Charges assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate 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, by written notice of not less than one
hundred eighty (80) days, to declare the Debt immediately due and payable.


 


If
at any time the United States of America, any State thereof or any subdivision
of any such State shall require revenue or other stamps to be affixed to the
Note, the Mortgage, or any of 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 and agrees to pay or, if Borrower fails to pay, to reimburse, Lender
upon receipt of written notice from Lender for all reasonable costs and expenses
(including reasonable, actual attorneys’ fees and disbursements and the
allocated costs of internal legal services and all actual disbursements of
internal counsel) reasonably incurred by Lender in accordance with this
Agreement in connection with (a) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of
furnishing all opinions by counsel for Borrower (including without limitation
any opinions requested by Lender as to any legal matters arising under this
Agreement or the other Loan Documents with respect to the Property); (b)
Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (c) following a request by Borrower, Lender’s ongoing
performance and compliance with all agreements and conditions contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date; (d) the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Lender; (e) securing Borrower’s compliance
with any requests made pursuant to the provisions of this Agreement; (f) the
filing and recording fees and expenses, title insurance and reasonable fees and
expenses of counsel for providing to Lender all required legal opinions, and
other similar expenses incurred in creating and perfecting the Lien in favor of
Lender pursuant to this Agreement and the other Loan Documents; (g) enforcing
or preserving any rights, in response to third party claims or the prosecuting
or defending of any action or proceeding or other litigation, in each case
against, under or affecting Borrower, this Agreement, the other Loan Documents,
the Property, or any other security given for the Loan; and (h) enforcing any
obligations of or collecting any payments due from Borrower under this Agreement,
the other Loan Documents or with respect to the Property or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason
of the gross negligence, illegal acts, fraud or willful misconduct of Lender.


 


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ARTICLE 18


WAIVERS


 


Section 18.1.        Remedies Cumulative; Waivers


 


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


 


Section 18.2.        Modification, Waiver in
Writing


 


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


 


Section 18.3.        Delay Not a Waiver


 


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


 


Section 18.4.        Trial by Jury


 


BORROWER, BORROWER PRINCIPAL AND LENDER EACH HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH


 


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


 


Section 18.5.        Waiver of Notice


 


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


 


Section 18.6.        Remedies of Borrower


 


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


 


Section 18.7.        Waiver of Marshalling of
Assets


 


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


 


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Section 18.8.        Waiver of Statute of
Limitations


 


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


 


Section 18.9.        Waiver of Counterclaim


 


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


 


ARTICLE 19


GOVERNING LAW


 


Section 19.1.        Choice of Law


 


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


 


Section 19.2.        Severability


 


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


 


Section 19.3.        Preferences


 


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


 


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ARTICLE 20

MISCELLANEOUS


 


Section 20.1.        Survival


 


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


 


Section 20.2.        Lender’s Discretion


 


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


 


Section 20.3.        Headings


 


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


 


Section 20.4.        Cost of Enforcement


 


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


 


Section 20.5.        Schedules Incorporated


 


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


 


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Section 20.6.        Offsets, Counterclaims
and Defenses


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


73





















 


effectiveness
of same, and such acceptance or approval thereof shall not constitute any
warranty or affirmation with respect thereto by Lender.


 


(f)            Borrower recognizes and acknowledges that in
accepting this Agreement, the Note, the Mortgage and the other Loan Documents,
Lender is expressly and primarily relying on the truth and accuracy of the
representations and warranties set forth in Article 4 of this Agreement
without any obligation to investigate the Property and notwithstanding any
investigation of the Property by Lender; that such reliance existed on the part
of Lender prior to the date hereof, that the warranties and representations are
a material inducement to Lender in making the Loan; and that Lender would not
be willing to make the Loan and accept this Agreement, the Note, the Mortgage
and the other Loan Documents in the absence of the warranties and representations
as set forth in Article 4 of this Agreement.


 


Section 20.8.        Publicity


 


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


 


Section 20.9.        Conflict; Construction of
Documents; Reliance


 


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


 


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Section 20.10.      Entire Agreement


 


This
Agreement and the other Loan Documents contain the entire agreement of the
parties hereto and thereto in respect of the transactions contemplated hereby
and thereby, and all prior agreements among or between such parties, whether
oral or written between Borrower and Lender are superseded by the terms of this
Agreement and the other Loan Documents.


 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INLAND
  WESTERN MINNEAPOLIS 3RD AVENUE, L.L.C., a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Inland
  Western Retail Real Estate Trust, Inc., a Maryland corporation, its sole
  member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   /s/ Debra A. Palmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Debra
  A. Palmer

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Asst.
  Sec.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BORROWER
  PRINCIPAL:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged
  and agreed to with respect to its obligations set forth in Article 4, Section 12.6,
  Article 13, Article 15 and Article 18 hereof:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INLAND
  WESTERN RETAIL REAL ESTATE TRUST INC., a Maryland corporation, its

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Debra A. Palmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Debra
  A. Palmer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Asst. Sec.

  	
   

  
									



 


[ADDITIONAL SIGNATURE PAGE TO FOLLOW]


 





















 


	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lisa K. McGee

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Lisa K. McGee

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Vice President

  	
   

  
								



 





















 


EXHIBIT A


 


Borrower Equity Ownership Structure


 





















 


EXHIBIT B


 


Tenant Direction Letter