Exhibit
10.460


 


 


 


 


LOAN
AGREEMENT


 


 


 


Dated as of December 16, 2004


 


 


 


Between


 


 


 


INLAND
WESTERN PHOENIX 19TH 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. 

  	
  INTENTIONALLY
  OMITTED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 NO SALE OR ENCUMBRANCE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1. 

  	
  TRANSFER DEFINITIONS

  	
   

  
	
   

  	
  SECTION 7.2.

  	
  NO SALE/ENCUMBRANCE

  	
   

  
	
   

  	
  SECTION 7.3.

  	
  PERMITTED TRANSFERS

  	
   

  
	
   

  	
  SECTION 7.4. 

  	
  LENDER’S RIGHTS

  	
   

  
	
   

  	
  SECTION 7.5. 

  	
  ASSUMPTION

  	
   

  
	
   

  	
  SECTION
  7.6. 

  	
  ASSUMPTION
  BY INLAND PERMITTED TRANSFEREE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 INSURANCE; CASUALTY;
  CONDEMNATION; RESTORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.1.

  	
  INSURANCE

  	
   

  
	
   

  	
  SECTION 8.2. 

  	
  CASUALTY

  	
   

  
	
   

  	
  SECTION 8.3. 

  	
  CONDEMNATION

  	
   

  
	
   

  	
  SECTION 8.4. 

  	
  RESTORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 REPLACEMENTS; RESERVE FUNDS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1. 

  	
  REPLACEMENTS

  	
   

  
	
   

  	
  SECTION
  9.2.

  	
  TAX AND
  INSURANCE RESERVE FUNDS

  	
   

  
	
   

  	
  SECTION 9.3. 

  	
  RESERVE FUNDS GENERALLY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 CASH MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 10.1. 

  	
  CASH MANAGEMENT
  ACCOUNT

  	
   

  
	
   

  	
  SECTION 10.2. 

  	
  DEPOSITS AND
  WITHDRAWALS

  	
   

  
	
   

  	
  SECTION 10.3. 

  	
  SECURITY INTEREST

  	
   

  



 


ii





















 


	
  ARTICLE 11
  EVENTS OF DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 11.l. 

  	
  EVENT OF DEFAULT

  	
   

  
	
   

  	
  SECTION 11.2. 

  	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12
  ENVIRONMENTAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  12.1. 

  	
  ENVIRONMENTAL
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  SECTION 12.2. 

  	
  ENVIRONMENTAL
  COVENANTS

  	
   

  
	
   

  	
  SECTION 12.3. 

  	
  LENDER’S RIGHTS

  	
   

  
	
   

  	
  SECTION 12.4. 

  	
  OPERATIONS AND MAINTENANCE PROGRAMS

  	
   

  
	
   

  	
  SECTION 12.5. 

  	
  ENVIRONMENTAL DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 SECONDARY MARKET

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 13.1. 

  	
  TRANSFER OF LOAN

  	
   

  
	
   

  	
  SECTION 13.2. 

  	
  DELEGATION OR
  SERVICING

  	
   

  
	
   

  	
  SECTION
  13.3. 

  	
  DISSEMINATION
  OF INFORMATION

  	
   

  
	
   

  	
  SECTION 13.4. 

  	
  COOPERATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14 INDEMNIFICATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 14.1. 

  	
  GENERAL INDEMNIFICATION

  	
   

  
	
   

  	
  SECTION 14.2. 

  	
  MORTGAGE AND INTANGIBLE TAX INDEMNIFICATION

  	
   

  
	
   

  	
  SECTION 14.3. 

  	
  ERISA INDEMNIFICATION

  	
   

  
	
   

  	
  SECTION 14.4. 

  	
  SURVIVAL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15 EXCULPATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 15.1. 

  	
  EXCULPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16 NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 16.1. 

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  


 
 	
  ARTICLE 17 FURTHER
  ASSURANCES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 17.1. 

  	
  REPLACEMENT DOCUMENTS

  	
   

  
	
   

  	
  SECTION 17.2. 

  	
  RECORDING OF MORTGAGE, ETC

  	
   

  
	
   

  	
  SECTION 17.3. 

  	
  FURTHER ACTS, ETC 

  	
   

  
	
   

  	
  SECTION
  17.4. 

  	
  CHANGES
  IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS 

  	
   

  
	
   

  	
  SECTION 17.5. 

  	
  EXPENSES 

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18 WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  18.1. 

  	
  REMEDIES
  CUMULATIVE; WAIVERS 

  	
   

  
	
   

  	
  SECTION 18.2. 

  	
  MODIFICATION, WAIVER IN WRITING

  	
   

  
	
   

  	
  SECTION 18.3. 

  	
  DELAY NOT A WAIVER

  	
   

  
	
   

  	
  SECTION 18.4. 

  	
  TRIAL BY JURY

  	
   

  
	
   

  	
  SECTION 18.5. 

  	
  WAIVES OF NOTICE

  	
   

  
	
   

  	
  SECTION 18.6. 

  	
  REMEDIES OF BORROWER

  	
   

  
	
   

  	
  SECTION 18.7. 

  	
  WAIVER OF MARSHALLING OF ASSETS

  	
   

  
	
   

  	
  SECTION 18.8. 

  	
  WAIVER OF STATUTE OF LIMITATIONS

  	
   

  
	
   

  	
  SECTION 18.9. 

  	
  WAIVER OF
  COUNTERCLAIM

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19 GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 19.1. 

  	
  CHOICE OF LAW

  	
   

  
	
   

  	
  SECTION 19.2. 

  	
  SEVERABILITY 

  	
   

  
	
   

  	
  SECTION 19.3. 

  	
  PREFERENCES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20 MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SECTION 20.l.

  	
  SURVIVAL

  	
   

  
	
   

  	
  SECTION 20.2. 

  	
  LENDER’S DISCRETION

  	
   

  



 


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 Phoenix 19th
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-1” by S&P, “P-l” by Moody’s and “F-1”
by Fitch in the case of accounts in which funds are held for thirty (30) 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.


 


“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).


 


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


 


5





















 


“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 Southwest 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.l(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 $8,260,000, made by Borrower in favor of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


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


 


“OFAC” shall have the meaning set forth in 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 13.1 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. l(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. l(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 property taxes, assessments, water rates or
sewer rents, now or hereafter levied or assessed or imposed against the
Property 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 or 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 1 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(1)(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 casements 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
Properly 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.l(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 casements or other encumbrances
upon the Property 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; (c) 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 does 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 in formation, 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 5.1 l(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.


 


27





















 


(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:


 


30





















 


(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 (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


 


32





















 


(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
such Person acting as additional member of Borrower in accordance with the
terms of the Loan Documents and the LLC Agreement 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 successor Special Member has been
admitted to Borrower as Special Member in accordance with requirements of
Delaware law. 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 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.


 


33





















 


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.     Intentionally
Omitted


 


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.


 


34





















 


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 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.


 


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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 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


 


36





















 


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
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;


 


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(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


 


(l)            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;


 


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(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 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


 


39





















 


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.


 


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


 


40





















 


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;


 


(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


 


41





















 


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


 


(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).


 


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(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 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


 


43





















 


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. 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


 


44





















 


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;


 


(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;


 


45





















 


(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.


 


(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.


 


46





















 


(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 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.


 


47





















 


(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.


 


(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


 


48





















 


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 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.


 


49





















 


(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 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.


 


50





















 


(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.


 


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


 


51





















 


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 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.


 


52





















 


(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 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


 


53





















 


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 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 hereundcr.


 


(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


 


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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;


 


(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


 


55





















 


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;


 


(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;


 


(l)            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


 


56





















 


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, 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 m violation of
any


 


57





















 


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.


 


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 safely 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


 


58





















 


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 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


 


59





















 


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, 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.


 


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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 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; (c) 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


 


61





















 


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 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.


 


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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 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 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;


 


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(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 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):


 


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  If to Lender:

  	
  Bank of America, N.A.

  
	
   

  	
  Capital Markets Servicing Group

  
	
   

  	
  900 West Trade Street, Suite 650

  
	
   

  	
  NC1-026-06-01

  
	
   

  	
  Charlotte, North Carolina 28255

  
	
   

  	
  Attn: Servicing Manager

  
	
   

  	
  Telephone No: (866) 531-0957

  
	
   

  	
   

  
	
   

  	
   

  
	
  If to Borrower:

  	
  Inland Western Phoenix 19th Avenue,
  L.L.C.

  
	
   

  	
  c/o Inland Real Estate Investment Corporation

  
	
   

  	
  2901 Butterfield Road

  
	
   

  	
  Oak Brook, Illinois 60523

  
	
   

  	
  Attention: Roberta Matlin, Vice President

  
	
   

  	
  Facsimile No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy to:

  	
  The Inland Real Estate Group, Inc.

  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Attention: General Counsel

  Facsimile No.: 630-218-4900

  
	
   

  	
   

  
	
  If to Borrower Principal:

  	
  Inland Western Retail Real Estate Trust, Inc.

  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Roberta Matlin, Vice President

  
	
   

  	
  Facsimile No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy to:

  	
  The Inland Real Estate Group, Inc.

  
	
   

  	
  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Attention: General Counsel

  Facsimile No.: 630-218-4900

  



 


A notice shall be deemed to have been given: in 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,


 


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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 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.


 


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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.


 


(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


 


67





















 


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.


 


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 therefore, 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


 


68





















 


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
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.


 


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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.


 


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


 


70





















 


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.


 


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.


 


71





















 


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


 


72





















 


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.


 


73





















 


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.


 


74





















 


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 PHOENIX 19TH AVENUE,

  L.L.C., a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

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

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra A. Palmer

  
	
   

  	
   

  	
  Name:

  	
  Debra A. Palmer

  
	
   

  	
   

  	
  Its:

  	
  Asst Sec.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BORROWER PRINCIPAL:

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra A. Palmer

  
	
   

  	
   

  	
  Name:

  	
  Debra A. Palmer

  
	
   

  	
   

  	
  Its:

  	
  Asst. Sec.

  
								



 


[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