Exhibit
10.445


 


LOAN AGREEMENT


 


THIS LOAN AGREEMENT,
dated as of the 29th
day of December, 2004, (as amended, restated, replaced, supplemented or
otherwise modified from time to time, this “Agreement”),
between NOMURA CREDIT & CAPITAL INC., a
Delaware corporation, having an address at Two World Financial Center, Building
B, New York, New York 10281 (“Lender”),
and INLAND WESTERN WESLEY CHAPEL NORTHWOODS, L.L.C.,
a Delaware limited liability company, having an address at 2901 Butterfield
Road, Oak Brook, Illinois 60523 (“Borrower”).


 


W I T N E S S E T H:


 


WHEREAS, Borrower desires to obtain the Loan
(as hereinafter defined) from Lender; and


 


WHEREAS, 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 (as hereinafter defined).


 


NOW, THEREFORE, 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 I


 


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:


 


“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.


 


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


 


“Annual Budget”
shall mean the operating budget, including all planned capital expenditures,
for the Property prepared by Borrower for the applicable Fiscal Year or other
period.


 


“Assignment of Leases”
shall mean, with respect to the Property, that certain first priority
Assignment of Leases and Rents, dated as of the Closing Date, from Borrower, as
assignor, to Lender, as assignee, assigning to Lender all of Borrower’s
interest in and to the Leases and Rents of the Property as security for the
Loan, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.


 


“Assignment of Management Agreement”
shall mean that certain Assignment of Management Agreement and Subordination of
Management Fees dated as of the Closing Date


 





















 


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.


 


“Basic Carrying Costs” shall
mean, with respect to the Property, the sum of the following costs associated
with the Property for the relevant Fiscal Year or payment period: (i) Taxes and
(ii) Insurance Premiums.


 


“Borrower” shall
mean INLAND WESTERN WESLEY CHAPEL NORTHWOODS,
L.L.C., a Delaware limited liability company, together with its
permitted successors and assigns.


 


“Business Day” shall
mean any day other than a Saturday, Sunday or any other day on which national
banks in New York, New York are not open for business.


 


“Capital Expenditures” shall
mean, for any period, the amount expended for items capitalized under
accounting principles reasonably acceptable to Lender, consistently applied
(including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements).


 


“Cash Expenses” shall
mean, for any period, the operating expenses for the operation of the Property
as set forth in an Approved Annual Budget to the extent that such expenses are
actually incurred by Borrower minus any payments into the Tax and Insurance
Escrow Fund.


 


“Casualty” shall
have the meaning specified in Section 6.2 hereof.


 


“Casualty/Condemnation Prepayment” shall have the meaning specified in Section 6.4(e)
hereof.


 


“Casualty Consultant”
shall have the meaning set forth in Section 6.4(b)(iii) hereof.


 


“Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv)
hereof.


 


“Closing Date” shall mean the date hereof.


 


“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.


 


“Condemnation” shall mean a temporary or permanent
taking by any Governmental Authority as the result or 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


 


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right accruing thereto, including any right
of access thereto or any change of grade affecting the Property or any part
thereof.


 


“Contract of Sale Earnout Period”
shall mean the period commencing on the date hereof and continuing through and
including December 7, 2005.


 


“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 (including the Prepayment Consideration) 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 interest
payments under the Note.


“Debt Service Coverage Ratio”
shall mean a ratio for the applicable period in which:


 


(a)                                  the
numerator is the Net Operating Income (excluding interest on credit accounts)
for such period as set forth in the statements required hereunder, without
deduction for (i) actual management fees incurred in connection with the
operation of the Property, (ii) amounts paid to the Reserve Funds, less (A)
management fees equal to the greater of (1) assumed management fees of four and
a half percent (4.5%) of Gross Income from Operations or (2) the actual
management fees incurred, (B) assumed Replacement Reserve Fund contributions equal
to $0.15 per square foot of gross leaseable area at the Property; and (C)
assumed reserves for tenant improvements and leasing commissions equal to $1.15
per square foot of gross leaseable area at the Property; and


 


(b)                                 the
denominator is the aggregate amount of interest due and payable on the Note for
such applicable period.


 


“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) five percent (5%)
above the Interest Rate.


 


“Disclosure Document”
shall have the meaning set forth in Section 9.2 hereof.


 


“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 a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, 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 and surplus of at least $50,000,000 and subject to
supervision or examination by federal and state


 


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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 Standard & Poor’s Ratings
Services, P-1 by Moody’s Investors Service, Inc., and F-1 + by Fitch, Inc. in
the case of accounts in which funds are held for 30 days or less (or, in the
case of accounts in which funds are held for more than 30 days, the long term
unsecured debt obligations of which are rated at least “AA” by Fitch and
S&P and “Aa” by Moody’s).


 


“Environmental Indemnity” shall mean that certain Environmental
Indemnity Agreement executed by Borrower 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 Report” shall have the meaning as defined in
the Environmental Indemnity executed by the Borrower.


 


“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended.


 


“Event of Default” shall have the meaning set forth in Section 8.1(a)
hereof.


 


“Exchange Act” shall have the meaning set forth in Section 9.2
hereof.


 


“Fiscal Year” shall mean each twelve (12) month
period commencing on January 1 and ending on December 31 during each year
of the term of the Loan.


 


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


 


“Gross Income from Operations” shall mean all sustainable income as
reported on the financial statements delivered by the Borrower in accordance
with this Agreement, computed in accordance with accounting principles
reasonably acceptable to Lender, consistently applied, derived from the
ownership and operation of the Property from whatever source, including, but not limited to, (i)
Rents from Tenants that are in occupancy, open for business and paying unabated
Rent, (ii) utility charges, (iii) escalations, (iv) intentionally omitted; (v)
service fees or charges, (vi) license fees, (vii) parking fees, and (viii)
other required pass-throughs but excluding
(i) Rents from Tenants that are subject to any bankruptcy proceeding
(unless such Tenant has affirmed its Lease or Inland Western Retail Real Estate
Trust, Inc. has master leased such Tenant’s premises for full contract rent for
a period not less than three years, and the net worth of Inland Western Retail
Real Estate Trust, Inc. (as determined by Lender) is not less than such entity’s
net worth as of December 31, 2003), or are not in occupancy, open for
business or paying unabated Rent, (ii) sales, use and occupancy or other taxes
on receipts required to be accounted for by Borrower to any Governmental
Authority, (iii) refunds and uncollectible accounts, (iv) sales of furniture,
fixtures and equipment, (v)


 


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Insurance Proceeds (other than business interruption or other loss of
income insurance), (vi) Awards, (vii) unforfeited security deposits, (viii)
utility and other similar deposits and (ix) any disbursements to Borrower from
the Reserve Funds.  Gross income shall
not be diminished as a result of the Mortgage or the creation of any
intervening estate or interest in the Property or any part thereof.


 


“Improvements” shall have the meaning set forth in
the granting clause of the Mortgage with respect to the Property.


 


“Indebtedness” of a Person, at a particular date,
means the sum (without duplication) at such date of (a) indebtedness or
liability for borrowed money; (b) obligations evidenced by bonds, debentures,
notes, or other similar instruments; (c) obligations for the deferred purchase
price of property or services (including trade obligations); (d) obligations
under letters of credit; (e) obligations under acceptance facilities; (f) all
guaranties, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds, to invest in any Person or entity, or
otherwise to assure a creditor against loss; and (g) obligations secured by any
Liens, whether or not the obligations have been assumed.


 


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


 


“Indemnity Agreement” shall mean that certain Indemnity
Agreement dated as of the Closing Date by Borrower and Indemnitor in favor of
Lender.


 


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


 


“Insurance Premiums” shall have the meaning set forth in Section 6.1(b)
hereof.


 


“Insurance Proceeds” shall have the meaning set forth in Section 6.4(b)
hereof.


 


“Interest Rate” shall mean FOUR AND EIGHTY HUNDRED
FIFTEEN THOUSANDTHS percent (4.815%) per annum.


“Lease” shall
mean any lease, sublease or subsublease, letting, license, concession or other
agreement (whether written or oral and whether now or hereafter in effect)
pursuant to which any Person is granted a possessory interest in, or right to
use or occupy all or any portion of any space in the Property of Borrower, and
every modification, amendment or other agreement relating to such lease,
sublease, subsublease, or other agreement entered into in connection with such
lease, sublease, subsublease, or other agreement and every guarantee of the
performance and observance of the covenants, conditions and agreements to be
performed and observed by the other party thereto.


 


“Lease-Up Reserve Tenants” shall
mean, collectively, tenants on the Rent Roll identified as occupying the
following spaces: (i) Cellular Services, (ii) Anything Computers, (iii) Cork
& Olive, (iv) The Bombay Company, (v) Tanning and Smoothie Store, (vi)
Friedman’s Jewelry, (vii) Florida Health and Wellness, (viii) 1 800 Dry
Cleaners and (ix) Tire Kingdom, the


 


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demised spaces for which are more particularly described in that
certain Amendment to Agreement dated as of November 8, 2004 between
Borrower and Kimco Tampa LP.


 


“Legal Requirements” shall mean, with respect to the Property,
all federal, state, county, municipal and other governmental 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, or any part thereof,
whether now or hereafter enacted and in force, and all permits, licenses and
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.


 


“Lender” shall mean Nomura Credit &
Capital Inc., together with its successors and assigns.


 


“Licenses”
shall have the meaning set forth in Section 4.1.22 hereof.


 


“Lien” shall mean, with respect to the
Property, any mortgage, deed of trust, deed to secure debt, 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.


 


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


 


“Loan Documents” shall mean, collectively, this
Agreement, the Note, the Mortgage, the Assignment of Leases and Rents, the
Environmental Indemnity, the Assignment of Management Agreement, the Indemnity
Agreement and all other documents executed and/or delivered in connection with
the Loan.


 


“Management Agreement” shall mean, with respect to the
Property, the management agreement entered into by and between Borrower and the
Manager, pursuant to which the Manager is to provide management and other
services with respect to the Property.


 


“Manager”
shall mean INLAND US MANAGEMENT, LLC.


 


“Maturity Date” shall mean January 11, 2010 or
such other date on which the final payment of principal of the Note becomes due
and payable as therein or herein provided, whether at such stated maturity
date, by declaration of acceleration, or otherwise.


 


“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


 


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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.


 


“Monthly Debt Service Payment Amount”
shall mean an amount equal to $44,909.91.


 


“Mortgage”
shall mean, with respect to the Property, that certain first priority Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated
the Closing Date, 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 Cash Flow”
shall mean, with respect to the Property for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.


 


“Net Cash Flow After Debt Service”
shall mean, with respect to the Property for any period, the amount obtained by
subtracting Debt Service for such period from Net Cash Flow for such period.


 


“Net Cash Flow Schedule”
shall have the meaning set forth in Section 5.1.11(b) hereof.


 


“Net Operating Income”
shall mean the amount obtained by subtracting from Gross Income from Operations
(i) Operating Expenses, and (ii) a vacancy allowance equal to the greater of
(x) market vacancy (as reasonably determined by Lender), less actual vacancy,
and (y) underwritten vacancy of seven (7%) percent, less actual vacancy.  Notwithstanding the foregoing, if actual
vacancy exceeds market vacancy and underwritten vacancy, then there shall be no
adjustment for a vacancy allowance.


 


“Net Proceeds”
shall have the meaning set forth in Section 6.4(b) hereof.


 


“Net Proceeds Deficiency”
shall have the meaning set forth in Section 6.4(b)(vi) hereof.


 


“Net Proceeds Prepayment”
shall have the meaning set forth in Section 6.4(c) hereof.


 


“Note” shall
mean that certain Promissory Note of even date herewith in the principal amount
of Eleven Million One Hundred Ninety Two Thousand Five Hundred and No/100
Dollars ($11,192,500.00), made by Borrower in favor of Lender, as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Officers’ Certificate”
shall mean a certificate delivered to Lender by Borrower which is signed by the
Sole Member.


 


“Operating Expenses”
shall mean the total of all expenditures, computed in accordance with
accounting principles reasonably acceptable to Lender, consistently applied, of


 


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whatever kind relating to the operation, maintenance and management of
the Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, property taxes and assessments, advertising expenses,
management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Lender, and other
similar costs, but excluding depreciation, Debt Service, Capital Expenditures
and contributions to the Reserve Funds.


 


“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.


 


“Partial Prepayment Conditions” shall have the meaning set forth in Schedule II
hereof.


 


“Payment Date” shall mean the eleventh (11th) day of
each calendar month during the term of the Loan or, if such day is not a
Business Day, the immediately succeeding Business Day.


 


“Permitted Encumbrances” shall mean, with respect to the
Property, collectively, (a) the Liens and security interests created by the
Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the
Title Insurance Policy relating to the Property or any part thereof, (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 reasonable discretion, which
Permitted Encumbrances in the aggregate do not materially adversely affect the
value or use of the Property or Borrower’s ability to repay the Loan.


 


“Permitted Investments” shall mean any one or more of the
following obligations or securities acquired at a purchase price of not greater
than par, including those issued by Servicer, 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
first Payment Date following the date of acquiring such investment and meeting
one of the appropriate standards set forth below:


 


(i)                                     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 (A) have a
predetermined


 


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fixed dollar of principal due at maturity
that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) 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 (D) such investments must not be subject to liquidation prior to
their maturity;


 


(ii)                                  Federal
Housing Administration debentures;


 


(iii)                               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
Student Loan Marketing 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 (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed to
their rating, (C) 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 (D) such
investments must not be subject to liquidation prior to their maturity;


 


(iv)                              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 to the Securities); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C)
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 (D) such investments must not be
subject to liquidation prior to their maturity;


 


(v)                                 fully
Federal Deposit Insurance Corporation-insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances 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 (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by
S&P, must not have an “r” highlighter affixed to their


 


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rating, (C) 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 (D) such investments must not be subject to liquidation prior to
their maturity;


 


(vi)                              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 (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not
have an “r” highlighter affixed to their rating, (C) 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 (D) such investments must not be subject to liquidation prior to
their maturity;


 


(vii)                           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 (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C)
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 (D) such investments must not be
subject to liquidation prior to their maturity;


 


(viii)                        units
of taxable money market funds, 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


 


(ix)                                any
other security, obligation or investment which has been approved as a Permitted
Investment in writing by (a) Lender and (b) 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


 


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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 or
(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 120% of the yield to maturity at par of such underlying
investment.


 


“Permitted Prepayment Date” shall mean the date that is three (3)
years from the first day of the calendar month immediately following the
Closing Date.


 


“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 with respect to the Property.


 


“Physical Conditions Report” shall mean, with respect to the
Property, 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, which report shall, among other things, (a)
confirm that the Property and its use complies, in all material respects, with
all applicable Legal Requirements (including, without limitation, zoning,
subdivision and building laws) and (b) include a copy of a final certificate of
occupancy with respect to all Improvements on the Property.


 


“Policies” shall have the meaning specified in Section 6.1(b)
hereof.


 


“Prepayment Consideration” shall have the meaning set forth in Section 2.3.1.


 


“Prepayment Rate” shall mean the bond equivalent yield
(in the secondary market) on the United States Treasury Security that as of the
Prepayment Rate Determination Date has a remaining term to maturity closest to,
but not exceeding, the remaining term to the Maturity Date, as most recently
published in the “Treasury Bonds, Notes and Bills” section in The Wall
Street Journal as of the date of the related tender of the payment.  If more than one issue of United States
Treasury Securities has the remaining term to the Maturity Date referred to
above, the “Prepayment Rate” shall be the yield on the United States Treasury
Security most recently issued as of such date.  If the publication of the Prepayment Rate in
The Wall Street Journal is discontinued, Lender shall determine the Prepayment
Rate on the basis of “Statistical Release H.15(519), Selected Interest Rates,” or any successor publication,
published by the Board of Governors of the Federal Reserve System, or on the
basis of such other publication or statistical guide as Lender may reasonably
select.


 


“Prepayment Rate Determination Date” shall mean the date which is five (5)
Business Days prior to the prepayment date.


 


11





















 


“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
Clauses of the Mortgage and referred to therein as the “Property”.


 


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


 


“Qualifying Entity” shall have the meaning set forth in Section 5.2.13(b)
hereof.


 


“Qualifying Manager” shall mean either (a) a reputable and
experienced management organization reasonably satisfactory to Lender, which
organization or its principals possess at least ten (10) years experience in
managing properties similar in size, scope and value of the Property and which,
on the date Lender determines whether such management organization is a
Qualifying Manager, manages at least one million square feet of retail space,
provided that Borrower shall have obtained prior written confirmation from the
Rating Agency that management of the Property by such entity will not cause a
downgrading, withdrawal or qualification of the then current rating of the
securities issued pursuant to the Securitization, or (b) the fee owner of the
Property, provided that such owner possesses experience in managing and
operating properties similar in size, scope and value of the Property.  Lender acknowledges that on the Closing Date,
Manager shall be deemed to be a Qualifying Manager.


 


“Rating Agencies” shall mean each of Standard &
Poor’s Ratings Services, a division of McGraw-Hill, Inc., Moody’s Investors
Service, Inc. and Fitch, Inc., or any other nationally-recognized statistical
rating agency which has been approved by Lender.


 


“Rating Surveillance Charge” shall have the meaning set forth in Section 9.3
hereof.


 


“Relevant Leasing Threshold” shall mean Four Thousand or more
leasable square footage at the Property.


 


“Relevant Restoration Threshold” shall mean Three Hundred Fifty
Thousand and No/100 dollars ($350,000.00).


 


“REMIC Trust” shall mean a “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code that
holds the Note.


 


“Rents” shall mean, with respect to the
Property, all rents, rent equivalents, moneys payable as damages or in lieu of
rent or rent equivalents, royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for
the account of or benefit of Borrower or its agents or employees from any and
all sources arising from or attributable to the Property, and proceeds, if any,
from business interruption or other loss of income insurance.


 


12





















 


“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1
hereof.


 


“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1
hereof.


 


“Replacement Reserve Monthly Deposit” shall have
the meaning set forth in Section 7.3.1 hereof.


 


“Replacements” shall have the meaning set forth in Section 7.3.1(a)
hereof.


 


“Required Repair Account” shall have the meaning set forth in Section 7.1.1
hereof.


 


“Required Repair Fund” shall have the meaning set forth in Section 7.1.1
hereof.


 


“Required Repairs” shall have the meaning set forth in Section 7.1.1
hereof.


 


“Reserve Funds” shall mean the Tax and Insurance Escrow Fund,
the Replacement Reserve Fund, the Required Repair Fund (if any), or any other
escrow fund established by the
Loan Documents.


 


“Restoration” shall have the meaning set forth in Section 6.2
hereof.


 


“Securities” shall have the meaning set forth in Section 9.1
hereof.


 


“Securities Act” shall have the meaning set forth in Section 9.2
hereof.


 


“Securitization” shall have the meaning set forth in Section 9.1
hereof.


 


“Servicer” shall have the meaning set forth in Section 9.6
hereof.


 


“Servicing Agreement” shall have the meaning set forth in Section 9.6
hereof.


 


“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c)
hereof.


 


“Severing Documentation” shall have the meaning set forth in Section 9.7
hereof.


 


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


 


“Special Purpose Entity” means a corporation, limited
partnership, limited liability company, or Delaware statutory trust which at
all times on and after the Closing Date:


 


(i)                                     is
organized solely for the purpose of (A) acquiring, developing, owning, holding,
selling, leasing, transferring, exchanging, managing and operating the Property,


 


13





















 


entering into this Agreement with the Lender,
refinancing the Property in connection with a permitted repayment of the Loan,
and transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; or (B) acting as a general partner of the limited
partnership that owns the Property, a member of the limited liability company
that owns the Property or the beneficiary or trustee of a Delaware statutory
trust that owns the Property;


 


(ii)                                  is
not engaged and will not engage in any business unrelated to (A) the
acquisition, development, ownership, management or operation of the Property,
(B) acting as general partner of the limited partnership that owns the
Property, (C) acting as a member of the limited liability company that owns the
Property, or (D) acting as the beneficiary or trustee of a Delaware statutory
trust that owns the Property, as applicable;


 


(iii)                               does
not have and will not have any assets other than those related to the Property
or its partnership interest in the limited partnership, the member interest in
the limited liability company or the beneficial interest in the Delaware
statutory trust that owns the Property or acts as the general partner, managing
member or beneficiary or trustee thereof, as applicable;


 


(iv)                              has
not engaged, sought or consented to and will not engage in, seek or consent to
any dissolution, winding up, liquidation, consolidation, merger, sale of all or
substantially all of its assets, transfer of partnership, membership or
beneficial or trustee interests (if such entity is a general partner in a
limited partnership, a member in a limited liability company or a beneficiary
of a Delaware trust) or amendment of its limited partnership agreement,
articles of incorporation, articles of organization, certificate of formation,
operating agreement or trust formation and governance documents (as applicable)
with respect to the matters set forth in this definition;


 


(v)                                 if
such entity is a limited partnership, has as its only general partners, Special
Purpose Entities that are corporations, limited partnerships or limited
liability companies;


 


(vi)                              intentionally
omitted;


 


(vii)                           if
such entity is a limited liability company and such limited liability company
has more than one member, such limited liability company has as its manager a
Special Purpose Entity that is a corporation and that owns at least 1.0% (one
percent) of the equity of the limited liability company;


 


(viii)                        if
such entity is a limited liability company and such limited liability company
has only one member, such limited liability company (a) has been formed under
Delaware law, and (b) has either a corporation or other person or entity that
shall become a member of the limited liability company upon the dissolution or
disassociation of the member;


 


(ix)                                if
such entity is (a) a limited liability company, has articles of organization, a
certificate of formation and/or an operating agreement, as applicable, (b) a
limited partnership, has a limited partnership agreement, (c) a corporation,
has a


 


14





















 


certificate or articles of incorporation and
bylaws, as applicable, or (d) a Delaware statutory trust, has organizational
documents that, in each case, provide that such entity will not: (1) dissolve,
merge, liquidate, consolidate; (2) except as permitted herein, sell all or
substantially all of its assets or the assets of the Borrower (as applicable)
except as permitted herein; (3) engage in any other business activity, or amend
its organizational documents with respect to the matters set forth in this
definition without the consent of the Lender; or (4) without the affirmative
vote of all directors of the corporation (that is such entity or the general
partner or managing or co-managing member or manager of such entity), file a
bankruptcy or insolvency petition or otherwise institute insolvency proceedings
with respect to itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest;


 


(x)                                   has
not entered into or been a party to, and will not enter into or be a party to,
any transaction with its partners, members, beneficiaries, shareholders or
Affiliates except (A) in the ordinary course of its business and on terms which
are intrinsically fair, commercially reasonable and are no less favorable to it
than would be obtained in a comparable arm’s-length transaction with an
unrelated third party and (B) in connection with this Agreement;


 


(xi)                                is
solvent and pays its debts and liabilities (including, as applicable, shared
personnel and overhead expenses) from its assets as the same become due, and is
maintaining adequate capital for the normal obligations reasonably foreseeable
in a business of its size and character and in light of its contemplated
business operations;


 


(xii)                             has
not failed and will not fail to correct any known misunderstanding regarding
the separate identity of such entity;


 


(xiii)                          will
file its own tax returns; provided, however, that Borrower’s assets and
income may be included in a consolidated tax return of its parent companies if
inclusion on such consolidated tax return is in compliance with applicable law;


 


(xiv)                         has
maintained and will maintain its own resolutions and agreements;


 


(xv)                            (a)
has not commingled and will not commingle its funds or assets with those of any
other Person and (b) has not participated and will not participate in any cash
management system with any other Person, except with respect to a custodial
account maintained by the Manager on behalf of Affiliates of Borrower and, with
respect to funds in such custodial account, has separately accounted, and will continue
to separately account for, each item of income and expense applicable to the
Property and Borrower;


 


(xvi)                         has
held and will hold its assets in its own name;


 


(xvii)                        has
conducted and will conduct its business in its name or in a name franchised or licensed
to it by an entity other than an Affiliate of Borrower;


 


(xviii)                   has
maintained and will maintain its balance sheets, operating statements and other
entity documents separate from any other Person and has not permitted and will
not permit its assets to be listed as assets on the financial statement of any
other entity


 


15





















 


except as required or permitted by applicable
accounting principles acceptable to Lender, consistently applied; provided,
however, that (i) any such consolidated financial statement shall
contain a note indicating that it maintains separate balance sheets and
operating statements for the Borrower and the Property, or (ii) if such Person
is controlled by Inland Western Retail Real Estate Trust, Inc., then such
Person may be included in the consolidated financial statement of Inland
Western Retail Real Estate Trust, Inc. provided such consolidated financial
statement contains a note indicating that it maintains separate financial records
for each Person controlled by Inland Western Retail Real Estate Trust, Inc.;


 


(xix)                           has
a sufficient number of employees in light of its contemplated business
operations, which may be none;


 


(xx)                              has
observed and will observe all partnership, corporate, limited liability company
or Delaware statutory trust formalities, as applicable;


 


(xxi)                           has
and will have no Indebtedness (including loans (whether or not such loans are
evidenced by a written agreement) between Borrower and any Affiliates of
Borrower and relating to the management of funds in the custodial account
maintained by the Manager) other than (i) the Loan, (ii) liabilities incurred
in the ordinary course of business relating to the ownership and operation of
the Property and the routine administration of Borrower, which liabilities are
not more than sixty (60) days past the date incurred (unless disputed in
accordance with applicable law), are not evidenced by a note and are paid when
due, and which amounts are normal and reasonable under the circumstances and do
not, in any event, exceed $100,000 in the aggregate, and (iii) such other
liabilities that are permitted pursuant to this Agreement;


 


(xxii)                        has
not and will not assume or guarantee or become obligated for the debts of any
other Person or hold out its credit as being available to satisfy the
obligations of any other Person except as otherwise permitted pursuant to this
Agreement;


 


(xxiii)                     has
not and will not acquire obligations or securities of its partners, members,
beneficiaries or shareholders or any other Affiliate;


 


(xxiv)                    has
allocated and will allocate fairly and reasonably any overhead expenses that
are shared with any Affiliate, including, but not limited to, paying for shared
office space and services performed by any employee of an affiliate;


 


(xxv)                       has
not maintained or used, and will not maintain or use, invoices and checks
bearing the name of any other Person, provided, however, that
Manager, on behalf of such Person, may maintain and use invoices and checks
bearing Manager’s name;


 


(xxvi)                    has
not pledged and will not pledge its assets for the benefit of any other Person
except as permitted or required pursuant to this Agreement;


 


(xxvii)                 has
held itself out and identified itself and will hold itself out and identify
itself as a separate and distinct entity under its own name or in a name
franchised or licensed to it by an entity other than an Affiliate of Borrower
and not as a division or part


 


16





















 


of any other Person, except for services
rendered by Manager under the Management Agreement, so long as Manager holds
itself out as an agent of the Borrower;


 


(xxviii)              has
maintained and will maintain its assets in such a manner that it will not be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any other Person;


 


(xxix)                      has
not made and will not make loans to any Person or hold evidence of indebtedness
issued by any other person or entity (other than cash and investment-grade
securities issued by an entity that is not an Affiliate of or subject to common
ownership with such entity);


 


(xxx)                         has
not identified and will not identify its partners, members, beneficiaries or
shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any
other Person;


 


(xxxi)                      does
not and will not have any of its obligations guaranteed by any Affiliate except
as otherwise required in the Loan Documents;


 


(xxxii)                   has
not entered into or been a party to, and will not enter into or be a party to,
any transaction with its partners, members, beneficiaries, shareholders or
Affiliates except (A) in the ordinary course of its business and on terms which
are intrinsically fair, commercially reasonable and are no less favorable to it
than would be obtained in a comparable arm’s-length transaction with an
unrelated third party and (B) in connection with this Agreement; and


 


(xxxiii)                has
complied and will comply with all of the terms and provisions contained in its
organizational documents.  The statement
of facts contained in its organizational documents are true and correct and
will remain true and correct.


 


“State” shall
mean, with respect to the Property, the State or Commonwealth in which the
Property or any part thereof is located.


 


“Survey”
shall mean a survey of the Property in question prepared by a surveyor licensed
in the State and satisfactory to Lender and the company or companies issuing
the Title Insurance Policy, and containing a certification of such surveyor
satisfactory to Lender.


 


“Tax and Insurance Escrow Fund”
shall have the meaning set forth in Section 7.2 hereof regardless of
whether the funds held therein are held by Lender for the payment of Taxes or
Insurance Premiums or both.


 


“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 any part thereof.


 


“Tenant”
shall mean any person or entity with a possessory right to all or any part of
the Property pursuant to a Lease or other written agreement.


 


17





















 


“Tenant Reserve Earnout Conditions” shall mean the following with respect
to each of the Lease-Up Reserve Tenants: (i) the full execution and delivery of
a lease satisfying the conditions of this Loan Agreement, (ii) the rent
commencement date under the applicable Lease-Up Reserve Tenant’s lease shall
have occurred and the tenant thereunder shall have commenced the payment of
full rent, (iii) all leasing commissions and tenant improvement allowances
shall have been fully paid, (iv) a certificate of occupancy (or the local legal
equivalent indicating that the applicable space may be lawfully occupied by the
tenant for the conduct of its business) shall have been issued for the
applicable demised premises, (v) the applicable Lease-Up Reserve Tenant shall
have opened for business to the public for its permitted use for at least one
(1) day and (vi) the applicable Lease-Up Reserve Tenant shall have delivered to
Lender a tenant estoppel certificate in form reasonably satisfactory to Lender
stating, inter alia, that all
delivery conditions have been completed and that the tenant has accepted
possession of the demised premises.


 


“Tenant Reserve Earnout Conditions
Certificate” shall mean a certificate, executed by an officer or other
authorized signatory of Borrower, duly certifying that the Tenant Reserve
Earnout Conditions for a particular Lease-Up Reserve Tenant have been
satisfied.


 


“Terrorism Insurance Guarantor” shall have the meaning set forth in Section 6.1
hereof.


 


“Title Insurance Policy” shall mean, with respect to the
Property, an ALTA mortgagee title insurance policy in the form (acceptable to
Lender) (or, if the Property is in a State which does not permit the issuance
of such ALTA policy, such form as shall be permitted in such State and
acceptable to Lender) issued with respect to the Property and insuring the lien
of the Mortgage encumbering the Property.


 


“Transferee” shall have the meaning set forth in Section 5.2.13
hereof.


 


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


 


“U.S. Obligations” shall mean direct non-callable
obligations of the United States of America as defined in Section 2(a)(16)
of the Investment Company Act as amended (15 USC 80a-1) stated in REMIC Section 1.86
OG-2(a)(8).


 


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.


 


18





















 


ARTICLE II


 


GENERAL TERMS


 


Section 2.1                                      Loan
Commitment; Disbursement to Borrower.


 


2.1.1                        The
Loan.  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.


 


2.1.2                        Disbursement
to Borrower.  Borrower may request
and receive only one borrowing hereunder in respect of the Loan and any amount
borrowed and repaid hereunder in respect of the Loan may not be reborrowed.


 


2.1.3                        The
Note, Mortgage and Loan Documents.  The Loan shall be evidenced by the Note and
secured by the Mortgage, the Assignment of Leases and the other Loan Documents.


 


2.1.4                        Use
of Proceeds.  Borrower shall use the
proceeds of the Loan to (a) repay and discharge any existing loans relating to
the Property, (b) pay all past-due Basic Carrying Costs, if any, in respect of
the Property, (c) make deposits into the Reserve Funds on the Closing Date in
the amounts provided herein, (d) pay costs and expenses incurred in connection
with the closing of the Loan, as approved by Lender, (e) fund any working
capital requirements of the Property, and (f) distribute the balance, if any,
to Borrower.


 


Section 2.2                                      Interest;
Loan Payments; Late Payment Charge.


 


2.2.1                        Interest
Generally.  Interest on the
outstanding principal balance of the Loan shall accrue from the Closing Date to
but excluding the Maturity Date at the Interest Rate.


 


2.2.2                        Interest
Calculation.  Interest on the
outstanding principal balance of the Loan shall be calculated on the basis of a
three hundred sixty (360) day year comprised of twelve (12) months of thirty
(30) days each, except that interest due and payable for a period of less than a
full month shall be calculated by multiplying the actual number of days elapsed
in the period for which the calculation is being made by a daily rate based on
a three hundred sixty (360) day year.


 


2.2.3                        Payments
Generally.  Borrower shall pay to
Lender (a) on the Closing Date, an amount equal to interest only on the
outstanding principal balance of the Loan from the Closing Date up to but not
including the first Payment Date following the Closing Date, and (b) on February 11,
2005 and each Payment Date thereafter up to but not including the Maturity Date,
an amount equal to the Monthly Debt Service Payment Amount, which shall be
applied to interest on the outstanding principal amount of the Loan for the
prior calendar month at the Interest Rate.


 


2.2.4                        Intentionally
Omitted.


 


19





















 


2.2.5                        Payment
on Maturity Date.  Borrower shall pay
to Lender on the Maturity Date the outstanding principal balance of the Loan,
all accrued and unpaid interest and all other amounts due hereunder and under
the Note, the Mortgage and other the Loan Documents.


 


2.2.6                        Payments
after Default.  Upon the occurrence
and during the continuance of an Event of Default, interest on the outstanding principal
balance of the Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Loan, shall accrue at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein.  Interest
at the Default Rate shall be computed from the occurrence of the Event of
Default until the earlier of (i) in the event of a non-monetary default, the
cure of such Event of Default by Borrower and acceptance of such cure by Lender,
and (ii) in the event of a monetary default, the actual receipt and collection
of the Debt (or that portion thereof that is then due).  To the extent permitted by applicable law,
interest at the Default Rate shall be added to the Debt, shall itself accrue
interest at the same rate as the Loan and shall be secured by the Mortgage.  This paragraph shall not be construed as an
agreement or privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Event of Default and Lender retains its rights under the Note
and this Agreement to accelerate and to continue to demand payment of the Debt
upon the happening and continuance of any Event of Default.


 


2.2.7                        Late
Payment Charge.  If any principal,
interest or any other sums due under the Loan Documents is not paid by Borrower
on or prior to the date on which it is due, Borrower shall pay to Lender upon
demand an amount equal to the lesser of five percent (5%) of such unpaid sum or
the maximum amount permitted by applicable law in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment.  Any such amount shall be secured by the
Mortgage and the other Loan Documents to the extent permitted by applicable law.  The foregoing late payment charge shall not
apply to the payment of all outstanding principal, interest and other sums due
on the Maturity Date.


 


2.2.8                        Usury
Savings.  This Agreement and the Note
are subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the principal balance of the Loan at a
rate which could subject Lender to either civil or criminal liability as a result
of being in excess of the Maximum Legal Rate.  If, by the terms of this Agreement or the other
Loan Documents, Borrower is at any time required or obligated to pay interest
on the principal balance due hereunder at a rate in excess of the Maximum Legal
Rate, the Interest Rate or the Default Rate, as the case may be, shall be
deemed to be immediately reduced to the Maximum Legal Rate and all previous
payments in excess of the Maximum Legal Rate shall be deemed to have been
payments in reduction of principal and not on account of the interest due hereunder.
 All sums paid or agreed to be paid to
Lender for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until payment
in full so that the rate or amount of interest on account of the Loan does not
exceed the Maximum Legal Rate of interest from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.


 


20





















 


Section 2.3                                      Prepayments.


 


2.3.1                        Voluntary
Prepayments.


 


(a)                                  Except
as otherwise provided herein, Borrower shall not have the right to prepay the
Loan in whole or in part on or prior to the Permitted Prepayment Date.  After the Permitted Prepayment Date, Borrower
may, provided it has given Lender prior written notice in accordance with the
terms of this Agreement, prepay the unpaid principal balance of the Loan in whole,
but not in part, by paying, together with the amount to be prepaid, (i)
interest accrued and unpaid on the outstanding principal balance of the Loan
being prepaid to and including the date of prepayment, (ii) unless prepayment
is tendered on a Payment Date, an amount equal to the interest that would have
accrued on the amount being prepaid after the date of prepayment through and
including the next Payment Date had the prepayment not been made (which amount shall
constitute additional consideration for the prepayment), (iii) all other sums
then due under this Agreement, the Note, the Mortgage and the other Loan
Documents, and (iv) if prepayment occurs prior to the Payment Date which is
three months prior to the Maturity Date, a prepayment consideration (the “Prepayment Consideration”) equal to the greater of (A) one
percent (1%)  of the outstanding
principal balance of the Loan being prepaid or (B) the excess, if any, of (1)
the sum of the present values of all then-scheduled payments of principal and
interest under this Agreement including, but not limited to, principal and
interest on the Maturity Date (with each such payment discounted to its present
value at the date of prepayment at the rate which, when compounded monthly, is
equivalent to the Prepayment Rate), over (2) the outstanding principal amount
of the Loan.  Lender shall notify
Borrower of the amount and the basis of determination of the required
prepayment consideration.


 


(b)                                 On
the Payment Date that is three (3) months prior to the Maturity Date, and on
each day thereafter through the Maturity Date, Borrower may, at its option,
prepay the Debt without payment of any Prepayment Consideration or other
penalty or premium; provided, however, if such prepayment is not
paid on a regularly scheduled Payment Date, the Debt shall include interest
that would have accrued on such prepayment through and including the day
immediately preceding the Maturity Date.  Borrower’s right to prepay any portion of the
principal balance of the Loan shall be subject to (i) Borrower’s submission of
a notice to Lender setting forth the amount to be prepaid and the projected
date of prepayment, which date shall be no less than thirty (30) days from the
date of such notice, and (ii) Borrower’s actual payment to Lender of the amount
to be prepaid as set forth in such notice on the projected date set forth in
such notice or any day following such projected date occurring in the same
calendar month as such projected date.


 


2.3.2                        Mandatory
Prepayments.  (a) On the next occurring
Payment Date following the date on which Borrower actually receives any Net
Proceeds, if Lender is not obligated to make such Net Proceeds available to
Borrower pursuant to this Agreement for the restoration of the Property,
Borrower shall, at Lender’s option, prepay the outstanding principal balance of
the Note in an amount equal to one hundred percent (100%) of such Net Proceeds.
 No Prepayment Consideration or other
penalty or premium shall be due in connection with any prepayment made pursuant
to this Section 2.3.2.  Any partial
prepayment under this Section shall be applied to the last payments of
principal due under the Loan.


 


(b)                                 On
the date on which Borrower tenders a Casualty/Condemnation Prepayment pursuant
to Section 6.4(e) below, such tender shall include (a) all accrued and


 


21





















 


unpaid interest and the principal indebtedness being prepaid, including
interest on the outstanding principal amount of the applicable Note through the
last day of the month within which such tender occurs; and (b) any other sums
due hereunder relating to the applicable Note.  Except as set forth in this Section 2.3.2(b),
other than following an Event of Default, no Prepayment Consideration or other
penalty or premium shall be due in connection with any Casualty/Condemnation
Prepayment.


 


2.3.3                        Prepayments
after Default.  Following an Event of
Default, if Borrower or anyone on Borrower’s behalf makes a tender of payment
of all or any portion of the Debt at any time prior to a foreclosure sale
(including a sale under the power of sale under the Mortgage), or during any
redemption period after foreclosure, (i) the tender of payment shall constitute
an evasion of Borrower’s obligation to pay any Prepayment Consideration due under
this Agreement and such payment shall, therefore, to the maximum extent
permitted by law, include a premium equal to the Prepayment Consideration that
would have been payable on the date of such tender had the Loan not been so
accelerated, or (ii) if at the time of such tender a prepayment of the
principal amount of the Loan would have been prohibited under this Agreement
had the principal amount of the Loan not been so accelerated, the tender of
payment shall constitute an evasion of such prepayment prohibition and shall,
therefore, to the maximum extent permitted by law, include an amount equal to
the greater of (i) 1% of the then principal amount of the Loan (or the relevant
portion thereof being prepaid) and (ii) an amount equal to the excess of (A)
the sum of the present values of a series of payments payable at the times and
in the amounts equal to the payments of principal and interest (including, but
not limited to the principal and interest payable on the Maturity Date) which
would have been scheduled to be payable after the date of such tender under
this Agreement had the Loan (or the relevant portion thereof) not been
accelerated, with each such payment discounted to its present value at the date
of such tender at the rate which when compounded monthly is equivalent to the
Prepayment Rate, over (B) the then principal amount of the Loan.


 


Section 2.4                                      Intentionally
Omitted.


 


Section 2.5                                      Release
of Property.  Except as set forth in
this Section 2.5, no repayment or prepayment of all or any portion of the
Loan shall cause, give rise to a right to require, or otherwise result in, the
release of any Lien of the Mortgage on the Property.  If Borrower has elected to prepay the entire
amount of the Loan pursuant to Section 2.3.1 and the requirements of this Section 2.5
have been satisfied, the Property shall be released from the Lien of the
Mortgage.


 


2.5.1                        Release
on Payment in Full.  Lender shall,
upon the written request and at the expense of Borrower, upon payment in full
of all principal and interest on the Loan and all other amounts due and payable
under the Loan Documents in accordance with the terms and provisions of Section 2.3.1
of this Loan Agreement, release the Lien of the Mortgage on the Property not
theretofore released.


 


2.5.2                        Intentionally
Omitted.


 


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Section. 2.6                                   Manner
of Making Payments.


 


2.6.1                        Making
of Payments.  Each payment by
Borrower hereunder or under the Note shall be made in funds settled through the
New York Clearing House Interbank Payments System or other funds immediately
available to Lender by 1:00 p.m., New York City time, on the date such payment
is due, to Lender by deposit to such account as Lender may designate by written
notice to Borrower.  Whenever any payment
hereunder or under the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day.


 


2.6.2                        No
Deductions, Etc.  All payments made
by Borrower hereunder or under the Note or the other Loan Documents shall be
made irrespective of, and without any deduction for, any setoff, defense or
counterclaims.


 


ARTICLE III


 


CONDITIONS PRECEDENT


 


Section 3.1                                      Conditions
Precedent to Closing.  The obligation
of Lender to make the Loan hereunder is subject to the fulfillment by Borrower
or waiver by Lender of the following conditions precedent no later than the
Closing Date:


 


3.1.1                        Representations
and Warranties;  Compliance with
Conditions.  The representations and
warranties of Borrower contained in this Agreement and the other Loan Documents
shall be true and correct in all material respects on and as of the Closing
Date with the same effect as if made on and as of such date, and no Default or
an Event of Default shall have occurred and be continuing; and Borrower shall
be in compliance in all material respects with all terms and conditions set
forth in this Agreement and in each other Loan Document on its part to be
observed or performed.


 


3.1.2                        Loan
Agreement and Note.  Lender shall
have received a copy of this Agreement and the Note, in each case, duly
executed and delivered on behalf of Borrower.


 


3.1.3                        Delivery
of Loan Documents; Title Insurance; Reports; Leases, Etc.


 


(a)                                  Mortgage,
Assignment of Leases and other Loan Documents.  Lender shall have received from Borrower
fully executed and acknowledged counterparts of the Mortgage and the Assignment
of Leases and evidence that counterparts of the Mortgage and Assignment of
Leases have been delivered to the title company for recording, in the
reasonable judgment of Lender, so as to effectively create upon such recording
valid and enforceable first priority Liens upon the Property in favor of Lender
(or such trustee as may be required under local law), subject only to the
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents.  Lender shall have also
received from Borrower fully executed counterparts of the Assignment of
Management Agreement and the other Loan Documents.


 


(b)                                 Title
Insurance.  Lender shall have
received a Title Insurance Policy issued by a title company acceptable to
Lender and dated as of the Closing Date.  Such Title Insurance Policy shall (i) provide
coverage in an amount equal to the principal amount of the


 


23





















 


Loan together with, if applicable, a “tie-in”
or similar endorsement, (ii) insure Lender that the Mortgage creates a valid
first priority lien on the Property encumbered thereby, free and clear of all
exceptions from coverage other than Permitted Encumbrances and standard
exceptions and exclusions from coverage (as modified by the terms of any
endorsements), (iii) contain such endorsements and affirmative coverages as
Lender may reasonably request, and (iv) name Lender, its successors and
assigns, as the insured.  The Title
Insurance Policy shall be assignable without cost to Lender.  Lender also shall have received evidence that
all premiums in respect of such Title Insurance Policy have been paid.


 


(c)                                  Survey.
 Lender shall have received a title
survey for the Property, certified to the title company and Lender and their
successors and assigns, in form and content satisfactory to Lender and prepared
by a professional and properly licensed land surveyor satisfactory to Lender in
accordance with the most recent Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys.  The
following additional items from the list of “Optional Survey Responsibilities
and Specifications” (Table A) should be added to each survey: 2, 3, 4, 6, 8, 9,
10, 11 and 13.  The survey shall reflect
the same legal description contained in the Title Insurance Policy relating to
the Property referred to in clause (ii) above and shall include, among other
things, a legal description of the real property comprising part of such Property
reasonably satisfactory to Lender.  The
surveyor’s seal shall be affixed to each survey and the surveyor shall provide
a certification for each survey in form and substance acceptable to Lender.


 


(d)                                 Insurance.  Lender shall have received valid certificates
of insurance for the policies of insurance required hereunder, satisfactory to
Lender in its sole discretion, and evidence of the payment of all premiums
payable for the existing policy period.


 


(e)                                  Environmental
Reports.  Lender shall have received
an environmental report in respect of the Property, in each case reasonably
satisfactory to Lender.


 


(f)                                    Zoning.  With respect to the Property, Lender shall
have received, at Lender’s option, (i) letters or other evidence with respect
to the Property from the appropriate municipal authorities (or other Persons)
concerning applicable zoning and building laws, (ii) an ALTA 3.1 zoning
endorsement to the Title Insurance Policy or (iii) other evidence of zoning compliance,
in each case in substance reasonably satisfactory to Lender.


 


(g)                                 Encumbrances.  Borrower shall have taken or caused to be
taken such actions in such a manner so that Lender has a valid and perfected
first Lien on the Property as of the Closing Date with respect to the Mortgage,
subject only to applicable Permitted Encumbrances and such other Liens as are
permitted pursuant to the Loan Documents, and Lender shall have received
satisfactory evidence thereof.


 


3.1.4                        Related
Documents.  Each additional document
not specifically referenced herein, but relating to the transactions
contemplated herein, shall have been duly authorized, executed and delivered by
all parties thereto and Lender shall have received and approved certified
copies thereof.


 


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3.1.5                        Delivery
of Organizational Documents.  On or
before the Closing Date, Borrower shall deliver or cause to be delivered to
Lender copies certified by Borrower of all organizational documentation related
to Borrower and/or the formation, structure, existence, good standing and/or
qualification to do business, as Lender may request in its sole discretion, including,
without limitation, good standing certificates, qualifications to do business
in the appropriate jurisdictions, resolutions authorizing the entering into of
the Loan and incumbency certificates as may be requested by Lender.


 


3.1.6                        Opinions
of Borrower’s Counsel.  Lender shall
have received opinions of Borrower’s counsel (and if applicable, Borrower’s
local counsel) with respect to due execution, authority, enforceability of the
Loan Documents and such other matters as Lender may reasonably require, all
such opinions in form, scope and substance reasonably satisfactory to Lender
and Lender’s counsel in their reasonable discretion.


 


3.1.7                        Budgets.
 Borrower shall have delivered, and
Lender shall have approved, the Annual Budget for the current Fiscal Year.


 


3.1.8                        Basic
Carrying Costs.  Borrower shall have
paid all Basic Carrying Costs relating to the Property which are in arrears,
including without limitation, (a) accrued but unpaid insurance premiums
relating to the Property, (b) currently due and payable Taxes (including any in
arrears) relating to the Property, and (c) currently due Other Charges relating
to the Property, which amounts shall be funded with proceeds of the Loan.


 


3.1.9                        Completion
of Proceedings.  All organizational
proceedings taken or to be taken in connection with the transactions
contemplated by this Agreement and other Loan Documents and all documents
incidental thereto shall be reasonably satisfactory in form and substance to
Lender, and Lender shall have received all such counterpart originals or
certified copies of such documents as Lender may reasonably request.


 


3.1.10                  Payments.  All payments, deposits or escrows required to
be made or established by Borrower under this Agreement, the Note and the other
Loan Documents on or before the Closing Date shall have been paid.


 


3.1.11                  Tenant
Estoppels.  Borrower shall exercise
reasonable commercial efforts to deliver estoppel letters from Tenants
occupying not less than eighty percent (80%) of the gross leasable area of the
Property.


 


3.1.12                  Transaction
Costs.  Borrower shall have paid or
reimbursed Lender for all title insurance premiums, recording and filing fees
or taxes, costs of environmental reports, Physical Conditions Reports,
appraisals and other reports, the fees and costs of Lender’s counsel and all
other third party out-of-pocket expenses incurred in connection with the
origination of the Loan.


 


3.1.13                  Material
Adverse Change.  There shall have
been no material adverse change in the financial condition or business
condition of Borrower, Indemnitor or the Property since the date of the most
recent financial statements delivered to Lender.  The income and expenses of the Property, the
occupancy leases thereof, and all other features of the transaction shall be as
represented to Lender without material adverse change.  Neither Borrower, any of its


 


25





















 


constituent Persons, shall be the subject of any bankruptcy,
reorganization, or insolvency proceeding.


 


3.1.14                  Leases
and Rent Roll.  Lender shall have
received copies of all tenant leases, certified copies of any tenant leases as
requested by Lender and certified copies of all ground leases affecting the
Property.  Lender shall have received a
current certified rent roll of the Property, reasonably satisfactory in form
and substance to Lender.


 


3.1.15                  Subordination
and Attornment.  Lender shall have
received appropriate instruments acceptable to Lender in its commercially
reasonable discretion subordinating any Leases of record prior to the Mortgage
and any Tenant occupying more than 10,000 square feet and including an
agreement by such Tenants to attorn to Lender in the event of a foreclosure or delivery
of a deed in lieu thereof.


 


3.1.16                  Tax
Lot.  Lender shall have received
evidence that the Property constitutes one (1) or more separate tax lots, which
evidence shall be reasonably satisfactory in form and substance to Lender.


 


3.1.17                  Physical
Conditions Reports.  Lender shall
have received Physical Conditions Reports with respect to the Property, which
reports shall be reasonably satisfactory in form and substance to Lender.


 


3.1.18                  Management
Agreement.  Lender shall have
received a certified copy of the Management Agreement with respect to the
Property which shall be satisfactory in form and substance to Lender.  Lender acknowledges that it has reviewed the
Management Agreement, and as drafted, such Management Agreement does not violate
Borrower’s covenant that affiliated agreements be on terms which are
intrinsically fair, commercially reasonable and are no less favorable to it
than would be obtained in a comparable arm’s length transaction with an
unrelated third party.


 


3.1.19                  Appraisal.
 Lender shall have received an appraisal
of the Property, which shall be satisfactory in form and substance to Lender.


 


3.1.20                  Financial
Statements.  Lender shall have
received (a) a balance sheet with respect to the Property for the two most recent
Fiscal Years and statements of income and statements of cash flows with respect
to the Property for the three most recent Fiscal Years, each in form and
substance reasonably satisfactory to Lender or (b) such other financial
statements relating to the ownership and operation of the Property, in form and
substance reasonably satisfactory to Lender.


 


3.1.21                  Further
Documents.  Lender or its counsel
shall have received such other and further approvals, opinions, documents and
information as Lender or its counsel may have reasonably requested including
the Loan Documents in form and substance reasonably satisfactory to Lender and
its counsel.


 


3.1.22                  Environmental
Insurance.  If required by Lender,
Borrower shall have obtained a secured creditor environmental insurance policy
with respect to the Property, which shall be in form and substance satisfactory
to Lender.  Any such policy shall have a
term not less


 


26





















 


than the term of the Loan.  Borrower shall have provided to Lender
evidence that the premiums for such policy has been paid in full.


 


ARTICLE IV


 


REPRESENTATIONS AND WARRANTIES


 


Section 4.1                                      Borrower
Representations.  Borrower represents
and warrants as of the date hereof and as of the Closing Date that:


 


4.1.1                        Organization.
 Borrower has been duly organized and is
validly existing and in good standing with requisite power and authority to own
the Property and to transact the businesses in which it is now engaged.  Borrower is duly qualified to do business and
is in good standing in each jurisdiction where it is required to be so
qualified in connection with the Property, businesses and operations.  Borrower possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it
to own the Property 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.


 


4.1.2                        Proceedings.  Borrower has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents.  This Agreement and
such other Loan Documents have been duly executed and delivered by or on behalf
of Borrower and constitute legal, valid and binding obligations of Borrower
enforceable against Borrower 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).


 


4.1.3                        No
Conflicts.  The execution, delivery
and performance of this Agreement and the other Loan Documents by Borrower 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 pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, partnership agreement or
other agreement or instrument to which Borrower is a party or by which any of
Borrower’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 court or governmental agency or body having jurisdiction over Borrower or
any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.


 


4.1.4                        Litigation.  To Borrower’s knowledge, there are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending or threatened against or affecting
Borrower or the Property, which actions, suits or proceedings, if determined
against Borrower or the Property, might materially adversely affect


 


27





















 


the condition (financial or otherwise) or
business of Borrower or the condition or ownership of the Property.


 


4.1.5                        Agreements.
 Except such instruments and agreements
set forth as Permitted Exceptions in the Title Insurance Policy, Borrower is
not a party to any agreement or instrument or subject to any restriction which
might materially and adversely affect Borrower or the Property, or Borrower’s
business, properties or assets, operations or condition, financial or
otherwise.  To Borrower’s knowledge,
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 are bound.  Borrower
has no material financial obligation under any indenture, mortgage, deed of
trust, loan agreement or other 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.


 


4.1.6                        Title.
 Borrower has good and indefeasible fee
simple title to the real property comprising part of the Property and good
title to the balance of the Property, free and clear of all Liens whatsoever
except the Permitted Encumbrances, such other Liens as are permitted pursuant
to the Loan Documents and the Liens created by the Loan Documents.  The Mortgage, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected lien on the Property, subject only to Permitted Encumbrances
and the Liens created by the Loan Documents and (b) perfected security
interests in and to, and perfected collateral assignment of, all personalty
(including the Leases), all in accordance with the terms thereof, in each case
subject only to any applicable Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents.  There are no claims for
payment for work, labor or materials affecting the Property which are due and
unpaid under the contracts pursuant to which such work or labor was performed
or materials provided which are or may become a lien prior to, or of equal
priority with, the Liens created by the Loan Documents.


 


4.1.7                        Solvency:
No Bankrupcy Filing.  Borrower (a)
has 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 its
obligations under such Loan Documents.  Giving
effect to the Loan, the fair saleable value of Borrower’s assets exceeds and
will, immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities.  The
fair saleable value of Borrower’s assets is and will, immediately following the
making of the Loan, be greater than Borrower’s probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured.  Borrower’s
assets do not and, immediately following the making of the Loan will not,
constitute unreasonably small capital to carry out its business as conducted or
as proposed to be conducted.  Borrower
does not intend to, and does not believe that it will, incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations


 


28





















 


of Borrower).  Except as
expressly disclosed to Lender in writing, no petition in bankruptcy has been
filed against Borrower, or to the best of Borrower’s knowledge, any constituent
Person in the last seven (7) years, and neither Borrower, nor to the best of
Borrower’s knowledge, any constituent Person in the last seven (7) years has
ever made an assignment for the benefit of creditors or taken advantage of any
insolvency act for the benefit of debtors.  Neither Borrower nor any of its constituent
Persons are contemplating either the filing of a petition by it under any state
or federal bankruptcy or insolvency 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 it or such
constituent Persons.


 


4.1.8                        Full
and Accurate Disclosure.  To Borrower’s
knowledge, no statement of fact made by Borrower in this Agreement or in any of
the other Loan Documents 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 which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the Property or the business, operations or condition
(financial or otherwise) of Borrower.


 


4.1.9                        No
Plan Assets.  Borrower is not an “employee
benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of
ERISA, and none of the assets of Borrower constitutes or will constitute “plan assets”
of one or more such plans within the meaning of 29 C. F. R. Section 2510.3-101.  In addition, (a) Borrower is not a “governmental
plan” within the meaning of Section 3(32) of ERISA and (b) transactions by
or with Borrower are not subject to state statutes regulating investment of,
and fiduciary obligations with respect to, governmental plans similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code
currently in effect, which prohibit or otherwise restrict the transactions
contemplated by this Loan Agreement.


 


4.1.10                  Compliance.  To Borrower’s knowledge, Borrower and the
Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes.  Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority.  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 the federal government or any other 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.


 


4.1.11                  Financial
Information.  All financial data,
including, without limitation, the statements of cash flow and income and
operating expense, that have been delivered to Lender in respect of the
Property (i) are, to the best of Borrower’s knowledge, true, complete and correct
in all material respects, (ii) accurately represent the financial condition of
the Property as of the date of such reports, and (iii) to the extent prepared
or audited by an independent certified public accounting firm, have been
prepared in accordance with accounting principles reasonably acceptable to
Lender, consistently applied throughout the periods covered, except as
disclosed therein; provided, however, that if any financial data
is delivered to Lender by any Person other than Borrower, Indemnitor or any of
their Affiliates, or if such financial data has been prepared


 


29





















 


by or at the direction of any Person other
than Borrower, Indemnitor or any of their Affiliates, then the foregoing
representations with respect to such financial data shall be to the best of
Borrower’s knowledge, after due inquiry.  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 materially adverse effect on
the Property or the operation thereof as a retail shopping center, 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 from that set forth in said financial
statements.


 


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


 


4.1.13                  Federal
Reserve Regulations.  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 by the terms and
conditions of this Agreement or the other Loan Documents.


 


4.1.14                  Utilities
and Public Access.  The Property has
rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service the Property for its respective
intended uses.  All public utilities
necessary or convenient to the full use and enjoyment of the Property are
located either in the public right-of-way abutting the Property (which are
connected so as to serve the Property without passing over other property) or in
recorded easements serving the Property and such easements are set forth in and
insured by the Title Insurance Policy. 
All roads necessary for the use of the Property for their current respective
purposes have been completed and dedicated to public use and accepted by all Governmental
Authorities.


 


4.1.15                  Not
a Foreign Person.  Borrower is not a “foreign
person” within the meaning of §1445(f)(3) of the Code.


 


4.1.16                  Separate
Lots.  The Property is comprised of
one (1) or more parcels which constitute a separate tax lot or lots and does
not constitute a portion of any other tax lot not a part of the Property.


 


4.1.17                  Assessments.  There are no pending, or to Borrower’s
knowledge, 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.


 


4.1.18                  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


 


30





















 


thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.


 


4.1.19                  No
Prior Assignment.  There is no prior
assignment of the Leases or any portion of the Rents by Borrower or any of its
predecessors in interest, given as collateral security which are presently
outstanding.


 


4.1.20                  Insurance.  Borrower has obtained and has delivered to
Lender certified copies of all insurance policies reflecting the insurance
coverages, amounts and other requirements set forth in this Agreement.  To the best of Borrower’s knowledge, no claims
have been made under any such policy, and no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such
policy.


 


4.1.21                  Use
of Property.  The Property is used
exclusively for retail purposes and other appurtenant and related uses.


 


4.1.22                  Certificate
of Occupancy; Licenses.  All
certifications, permits, licenses and approvals, including without limitation,
certificates of completion and occupancy permits required to be obtained by
Borrower for the legal use, occupancy and operation of the Property as a retail
shopping center have been obtained and are in full force and effect, and to the
best of Borrower’s knowledge, after due inquiry, all certifications, permits,
licenses and approvals, including without limitation, certificates of
completion and occupancy permits required to be obtained by any Person other
than Borrower for the legal use, occupancy and operation of the Property as a
retail shopping center, have been obtained and are in full force and effect
(all of the foregoing certifications, permits, licenses and approvals are
collectively referred to as the “Licenses”).
 Borrower shall and shall cause all other
Persons to, keep and maintain all licenses necessary for the operation of the
Property as a retail shopping center.  To
Borrower’s knowledge, the use being made of the Property is in conformity with
all certificates of occupancy issued for the Property.


 


4.1.23                  Flood
Zone.  To the best of Borrower’s
knowledge, after due inquiry, no Improvements on the Property are located in an
area identified by the Federal Emergency Management Agency as an area having
special flood hazards.


 


4.1.24                  Physical
Condition.  Except as disclosed in
the Physical Conditions Reports delivered to Lender in connecting with this
Loan, to Borrower’s knowledge, the Property, including, without limitation, all
buildings, improvements, parking facilities, 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; there exists no structural or other material defects
or damages in the Property, whether latent or otherwise, and 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.


 


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4.1.25                  Boundaries.
 To the best of Borrower’s knowledge,
after due inquiry, all of the improvements which were included in determining
the appraised value of the Property lie wholly within the boundaries and
building restriction lines of the Property, and no improvements on adjoining
properties encroach upon the Property, and no easements or other encumbrances upon
the Property encroach upon any of the improvements, so as to affect the value
or marketability of the Property except those which are insured against by
title insurance.


 


4.1.26                  Leases.  The Property is not subject to any Leases
other than the Leases described on the Rent Roll attached as Schedule IV
hereto and made a part hereof (and subleases permitted under the Anchor Lease,
if any).  No Person has any possessory interest
in the Property or right to occupy the same except under and pursuant to the
provisions of the Leases.  The current
Leases are in full force and effect and to Borrower’s knowledge after inquiry,
there are no defaults thereunder by either party and there are no conditions
that, with the passage of time or the giving of notice, or both, would
constitute defaults thereunder.  No Rent
(including security deposits) has been paid more than one (1) month in advance
of its due date.  All work to be
performed by Borrower under each Lease has been performed as required and has
been accepted by the applicable tenant, and any payments, free rent, partial
rent, rebate of rent or other payments, credits, allowances or abatements
required to be given by Borrower to any tenant has already been received by
such tenant.  There has been no prior
sale, transfer or assignment, hypothecation or pledge of any Lease or of the
Rents received therein which is outstanding. 
To Borrower’s knowledge after inquiry, except as set forth on Schedule IV,
no tenant listed on Schedule IV has assigned its Lease or sublet
all or any portion of the premises demised thereby, no such tenant holds its
leased premises under assignment or sublease, nor does anyone except such
tenant and its employees occupy such leased premises.  No tenant under any Lease has a right or
option pursuant to such Lease or otherwise to purchase all or any part of the
leased premises or the building of which the leased premises are a part.  Except as set forth in Schedule IV,
no tenant under any Lease has any right or option for additional space in the
Improvements except as set forth in Schedule IV.  To Borrower’s actual knowledge based on the
Environmental Report delivered to Lender in connection herewith, no hazardous
wastes or toxic substances, as defined by applicable federal, state or local
statutes, rules and regulations, have been disposed, stored or treated by any
tenant under any Lease on or about the leased premises nor does Borrower have
any knowledge of any tenant’s intention to use its leased premises for any activity
which, directly or indirectly, involves the use, generation, treatment,
storage, disposal or transportation of any petroleum product or any toxic or
hazardous chemical, material, substance or waste, except in either event, in
compliance with applicable federal, state or local statues, rules and
regulations.


 


4.1.27                  Survey.  The Survey for the Property delivered to
Lender in connection with this Agreement has been prepared in accordance with
the provisions of Section 3.1.3(c) hereof, and does not fail to reflect
any material matter affecting the Property or the title thereto.


 


4.1.28                  Loan to Value.  The maximum principal amount of the Note does
not exceed sixty percent (60%) of the fair market value of the Property as set
forth on the appraisal of the Property delivered to Lender.


 


4.1.29                  Filing and Recording Taxes.  All transfer taxes, deed stamps, intangible taxes
or other amounts in the nature of transfer taxes required to be paid by any
Person under


 


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applicable Legal Requirements
currently in effect in connection with the acquisition of the Property by
Borrower have been paid or are simultaneously being paid.  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 the
execution, delivery, recordation, filing, registration, perfection or enforcement
of any of the Loan Documents, including, without limitation, the Mortgage, have
been paid, and, under current Legal Requirements, the Mortgage is enforceable
in accordance with its terms by Lender (or any subsequent holder thereof).


 


4.1.30                  Special Purpose
Entity/Separateness.  (a) Until the
Debt has been paid in full, Borrower hereby represents, warrants and covenants
that the Borrower is, shall be and shall continue to be a Special Purpose
Entity.  If Borrower consists of more
than one Person, each such Person shall be a Special Purpose Entity.


 


(b)                               The
representations, warranties and covenants set forth in Section 4.1.30(a)
shall survive for so long as any amount remains payable to Lender under this
Agreement or any other Loan Document.


 


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


 


4.1.32                  Illegal
Activity.  To Borrower’s knowledge,
no portion of the Property has been or will be purchased with proceeds of any
illegal activity.


 


4.1.33                  No Change in Facts or
Circumstances; Disclosure.  All
information submitted by Borrower to Lender and in all financial statements,
rent rolls, 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, provided, however,
that if such information was provided to Borrower by non-affiliated third
parties, Borrower represents that such information is, to the best of its
knowledge after due inquiry, 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.


 


4.1.34                  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)


 


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subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.


 


4.1.35                  Principal Place of Business and
Organization.  Borrower shall not
change its principal place of business set forth in the introductory paragraph
of this Agreement without first giving Lender thirty (30) days prior written
notice.  Borrower shall not change the
place of its organization as set forth in the introductory paragraph of this
Agreement without the consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed. 
Upon Lender’s request, Borrower shall execute and deliver additional
financing statements, security agreements and other instruments which may be
necessary to effectively evidence or perfect Lender’s security interest in the
Property as a result of such change of principal place of business or place of
organization.


 


4.1.36                  Service and Maintenance Contracts.  Borrower has delivered to Lender a true and
complete copy of all material service, maintenance or similar type contracts or
agreements affecting or pertaining to the Property or its operation, or any
portion thereof.


 


Section 4.2                                      Survival
of Representations.  Borrower agrees
that all of the representations and warranties of Borrower set forth in Section 4.1
and elsewhere in this Agreement and in the other Loan Documents shall survive
for so long as any amount remains owing to Lender under this Agreement or any
of the other Loan Documents by Borrower.  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 V


 


BORROWER
COVENANTS


 


Section 5.1                                      Affirmative
Covenants.  From the Closing Date and
until payment and performance in full of all obligations of Borrower under the
Loan Documents or the earlier release of the Lien of the Mortgage encumbering
the Property (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:


 


5.1.1                        Existence;
Compliance with Legal Requirements; Insurance.  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 shall not commit, nor shall Borrower
permit any other Person in occupancy of or involved with the operation or use
of the Property to commit, any act or omission affording the federal government
or any state or local government 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 hereby covenants and agrees not to commit, permit or suffer to
exist any act or omission affording such right of forfeiture.  Borrower shall at all times maintain,
preserve and protect all its franchises and trade names and preserve all the
remainder of its property used or useful in the conduct of its business and
shall keep the Property in good working order and repair, and from time to time


 


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make, or cause
to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto, all as more fully provided in the
Mortgage.  Borrower shall keep the
Property insured at all times by financially sound and reputable insurers, to
such extent and against such risks, and maintain liability and such other
insurance, as is more fully provided in this Agreement.  Borrower shall operate, or cause the tenant
to operate, any Property that is the subject of an O&M Agreement (if any)
in accordance with the terms and provisions thereof in all material respects.  After prior written notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding
promptly initiated and conducted in good faith and with due diligence, the
validity of any Legal Requirement, the applicability of any Legal Requirement
to Borrower or the Property or any alleged violation of any Legal Requirement,
provided that (i) no Event of Default has occurred and remains uncured; (ii)
intentionally omitted; (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any instrument to which Borrower
is subject and shall not constitute a default thereunder and such proceeding
shall be conducted in accordance with all applicable statutes, laws and
ordinances; (iv) the Property or any part thereof or interest therein will not
be in danger of being sold, forfeited, terminated, cancelled or lost; (v)
Borrower shall promptly upon final determination thereof comply with any such
Legal Requirement determined to be valid or applicable or cure any violation of
any Legal Requirement; (vi) such proceeding shall suspend the enforcement of
the contested Legal Requirement against Borrower or the Property; and (vii)
Borrower shall furnish such security as may be required in the proceeding, or
as may be requested by Lender, to insure compliance with such Legal
Requirement, together with all interest and penalties payable in connection
therewith.  Lender may apply any such
security, as necessary to cause compliance with such Legal Requirement at any
time when, in the reasonable judgment of Lender, the validity, applicability or
violation of such Legal Requirement is finally established or the Property (or
any part thereof or interest therein) shall be in danger of being sold,
forfeited, terminated, cancelled or lost.


 


5.1.2                        Taxes
and Other Charges.  Borrower shall
pay or cause to be paid 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; provided, however, Borrower’s obligation to
directly pay to the appropriate taxing authority Taxes shall be suspended for
so long as Borrower complies with the terms and provisions of Section 7.2
hereof.  Borrower will deliver to Lender
receipts for payment or other evidence satisfactory to Lender that the Taxes
and Other Charges have been so paid or are not then delinquent no later than
ten (10) days prior to the date on which the Taxes and/or Other Charges would
otherwise be delinquent if not paid (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 7.2
hereof).  If Borrower pays or causes to
be paid all Taxes and Other Charges and provides a copy of the receipt
evidencing the payment thereof to Lender, then Lender shall reimburse Borrower,
provided that there are then sufficient proceeds in the Tax and Insurance
Escrow Fund and provided that the Taxes are being paid pursuant to Section 7.2.  Upon written request of Borrower, if Lender
has paid such Taxes pursuant to Section 7.2 hereof, Lender shall provide
Borrower with evidence that such Taxes have been paid.  Borrower shall not 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. 
After prior written notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or


 


35





















 


application in whole or in part of any Taxes
or Other Charges, provided that (i) Borrower is permitted to do so under the
provisions of any mortgage or deed of trust superior in lien to the Mortgage;
(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 statutes, laws and ordinances;
(iii) the Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled 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 such security as may be required in the proceeding, or
as may be reasonably requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon.  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 reasonable judgment of Lender, the entitlement of such claimant is
established.


 


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


 


5.1.4                        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 Tenants under their respective Leases.


 


5.1.5                        Notice
of Default.  Borrower shall promptly
advise Lender of any material adverse change in Borrower’s condition, financial
or otherwise, or of the occurrence of any Default or Event of Default of which
Borrower has knowledge.


 


5.1.6                        Cooperate
in Legal Proceedings.  Borrower shall
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.


 


5.1.7                        Perform
Loan Documents.  Borrower shall
observe, perform and satisfy all the terms, provisions, covenants and
conditions of, and shall pay when due all costs, fees and expenses to the
extent required under the Loan Documents executed and delivered by, or applicable
to, Borrower.


 


5.1.8                        Insurance
Benefits.  Borrower shall cooperate
with Lender in obtaining for Lender the benefits of any Insurance Proceeds
lawfully or equitably payable in connection with the Property, and Lender shall
be reimbursed for any expenses incurred in connection therewith (including
reasonable attorneys’ fees and disbursements, and the payment by Borrower of
the expense of an appraisal on behalf of Lender in case of a fire or other
casualty affecting the Property or any part thereof) out of such Insurance
Proceeds.


 


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5.1.9                        Further
Assurances.  Borrower shall, at
Borrower’s sole cost and expense:


 


(a)                                  furnish
to Lender all instruments, documents, boundary surveys, footing or foundation
surveys, certificates, plans and specifications, appraisals, title and other
insurance reports and agreements, and each and every other document,
certificate, agreement and instrument required to be furnished by Borrower
pursuant to the terms of the Loan Documents or reasonably requested by Lender
in connection therewith;


 


(b)                                 execute
and deliver to Lender such documents, instruments, certificates, assignments
and other writings, and do such other acts necessary or desirable, to evidence,
preserve and/or protect the collateral at any time securing or intended to
secure the obligations of Borrower under the Loan Documents, as Lender may
reasonably require; and


 


(c)                                  do
and execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and purposes
of this Agreement and the other Loan Documents, as Lender shall reasonably
require from time to time.


 


5.1.10                  Intentionally
Omitted.


 


5.1.11                  Financial
Reporting. (a)  Borrower will keep
and maintain or will cause to be kept and maintained on a Fiscal Year basis, in
accordance with the requirements for a Special Purpose Entity set forth above,
proper and accurate books, records and accounts reflecting all of the financial
affairs of Borrower and all items of income and expense in connection with the operation
on an individual basis of the Property. 
Lender shall have the right from time to time at all times during normal
business hours upon reasonable notice to examine such books, records and
accounts at the office of Borrower or other Person maintaining such books,
records and accounts and to make such copies or extracts thereof as Lender
shall desire.  After the occurrence and
during the continuance of an Event of Default, Borrower shall pay any costs and
expenses incurred by Lender to examine Borrower’s accounting records with
respect to the Property, as Lender shall reasonably determine to be necessary
or appropriate in the protection of Lender’s interest.


 


(b)                                 Borrower
will furnish to Lender annually, within ninety (90) days following the end of
each Fiscal Year of Borrower, either (i) a complete copy of Borrower’s annual
financial statements audited by an accounting firm or other independent
certified public accountant reasonably acceptable to Lender in accordance with
the requirements for a Special Purpose Entity set forth above, or (ii) a
consolidated and annotated financial statement of Borrower and Sole Member (as
applicable), audited by an accounting firm or other independent certified
public accountant reasonably acceptable to Lender in accordance with the
requirements for a Special Purpose Entity set forth above, together with
unaudited financial statements relating to the Borrower and the Property.  Such financial statements for the Property
for such Fiscal Year and shall contain statements of profit and loss for
Borrower and the Property and a balance sheet for Borrower.  Such statements shall set forth the financial
condition and the results of operations for the Property for such Fiscal Year,
and shall include, but not be limited to, amounts representing annual Net Cash
Flow, Net Operating Income, Gross Income from Operations and Operating Expenses.  Borrower’s annual financial statements shall
be accompanied by (i) a comparison of


 


37





















 


the budgeted income and expenses and the
actual income and expenses for the prior Fiscal Year, (ii) a certificate
executed by the chief financial officer of Borrower or Sole Member, as
applicable, stating that each such annual financial statement presents fairly
the financial condition and the results of operations of Borrower and the
Property being reported upon and has been prepared in accordance with
accounting principles reasonably acceptable to Lender, consistently applied,
(iii) an unqualified opinion of an accounting firm or other independent
certified public accountant reasonably acceptable to Lender, (iv) a certified
rent roll containing current rent, lease expiration dates and the square
footage occupied by each tenant; (v) a schedule audited by such
independent certified public accountant reconciling Net Operating Income to Net
Cash Flow (the “Net Cash Flow Schedule”), which shall itemize all adjustments made to Net Operating
Income to arrive at Net Cash Flow deemed material by such independent certified
public accountant.  Together with
Borrower’s annual financial statements, Borrower shall furnish to Lender an
Officer’s Certificate certifying as of the date thereof whether there exists an
event or circumstance which constitutes a Default or Event of Default under the
Loan Documents executed and delivered by, or applicable to, Borrower, and if
such Default or Event of Default exists, the nature thereof, the period of time
it has existed and the action then being taken to remedy the same.


 


(c)                                  Borrower
will furnish, or cause to be furnished, to Lender on or before ninety (90) days
after the end of each calendar quarter the following items, accompanied by a
certificate of the chief financial officer of Borrower or Sole Member, as
applicable, stating that such items are true, correct, accurate, and complete
and fairly present the financial condition and results of the operations of
Borrower and the Property (subject to normal year-end adjustments) as
applicable: (i) a rent roll for the subject month accompanied by an Officer’s
Certificate with respect thereto; (ii) quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund, and other
information necessary and sufficient to fairly represent the financial position
and results of operation of the Property during such calendar month, and
containing a comparison of budgeted income and expenses and the actual income
and expenses together with a detailed explanation of any variances of five
percent (5%) or more between budgeted and actual amounts for such periods, all
in form satisfactory to Lender; (iii) a calculation reflecting the annual Debt
Service Coverage Ratio for the immediately preceding twelve (12) month period
as of the last day of such month accompanied by an Officer’s Certificate with
respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash Flow for
the Borrower may be unaudited if it is certified by an officer of the
Borrower).  In addition, such certificate
shall also be accompanied by a certificate of the chief financial officer of
Borrower or Sole Member stating that the representations and warranties of
Borrower set forth in Section 4.1.30(a) are true and correct as of the
date of such certificate.


 


(d)                                 For
the partial year period commencing on the Closing Date, and for each Fiscal Year
thereafter, Borrower shall submit to Lender an Annual Budget not later than
thirty (30) days after the commencement of such period or Fiscal Year in form
reasonably satisfactory to Lender.


 


(e)                                  Borrower
shall furnish to Lender, within ten (10) Business Days after request (or as
soon thereafter as may be reasonably possible), such further detailed
information with respect


 


38





















 


to the operation of the Property and the
financial affairs of Borrower as may be reasonably requested by Lender.


 


(f)                                    Borrower
shall furnish to Lender, within ten (10) Business Days after Lender’s request
(or as soon thereafter as may be reasonably possible), financial and sales
information from any Tenant designated by Lender (to the extent such financial
and sales information is required to be provided under the applicable Lease and
same is received by Borrower after request therefor).


 


(g)                                 Borrower
will cause Indemnitor to furnish to Lender annually, within one hundred twenty
(120) days following the end of each Fiscal Year of Indemnitor, financial
statements audited by an independent certified public accountant, which shall
include an annual balance sheet and profit and loss statement of Indemnitor, in
the form reasonably required by Lender.


 


(h)                                 Any
reports, statements or other information required to be delivered under this Agreement
shall be delivered (i) in paper form, (ii) on a diskette, and (iii) if
requested by Lender and within the capabilities of Borrower’s data systems
without change or modification thereto, in electronic form and prepared using a
Microsoft Word for Windows or WordPerfect for Windows files (which files may be
prepared using a spreadsheet program and saved as word processing files).


 


5.1.12                  Business and Operations.  Borrower will continue to engage in the businesses
presently conducted by it as and to the extent the same are necessary for the ownership,
maintenance, management and operation of the Property.  Borrower will qualify to do business and will
remain in good standing under the laws of each jurisdiction as and to the extent
the same are required for the ownership, maintenance, management and operation
of the Property.


 


5.1.13                  Title to the Property.  Borrower will warrant and defend (a) the title
to the Property and every part thereof, subject only to Liens permitted
hereunder (including Permitted Encumbrances) and (b) the validity and priority
of the Liens of the Mortgage and the Assignment of Leases on the Property,
subject only to Liens permitted hereunder (including Permitted Encumbrances),
in each case against the claims of all Persons whomsoever.  Borrower shall reimburse Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and
court costs) incurred by Lender if an interest in the Property, other than as
permitted hereunder, is claimed by another Person.


 


5.1.14                  Costs of Enforcement.  In the event (a) that the Mortgage encumbering
the Property is foreclosed in whole or in part or that the Mortgage is put into
the hands of an attorney for collection, suit, action or foreclosure, (b) of
the foreclosure of any mortgage prior to or subsequent to the Mortgage
encumbering the Property in which proceeding Lender is made a party, or (c) 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,
Borrower, its successors or assigns, shall be chargeable with and agrees to pay
all costs of collection and defense, including reasonable attorneys’ fees and
costs, incurred by Lender or Borrower in connection therewith and in


 


39





















 


connection with any
appellate proceeding or post-judgment action involved therein, together with
all required service or use taxes.


 


5.1.15                  Estoppel Statement.  (a)  After request by Lender, Borrower shall
within ten (10) 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 unpaid principal amount of the Note, (iii) the applicable
interest rate 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.


 


(b)                                 Borrower shall use commercially reasonable
efforts to deliver to Lender upon request, tenant estoppel certificates from each
commercial tenant leasing space at the Property in form and substance
reasonably satisfactory to Lender provided that Borrower shall not be required
to deliver such certificates more frequently than one (1) time in any calendar
year.


 


(c)                                  Within thirty (30) days of request by
Borrower, Lender shall deliver to Borrower a statement setting forth the items
described at (a)(i), (ii), (iii) and (iv) of this Section 5.1.15.


 


5.1.16                  Loan Proceeds. 
Borrower shall use the proceeds of the Loan received by it on the
Closing Date only for the purposes set forth in Section 2.1.4.


 


5.1.17                  Performance by Borrower.  Borrower
shall in a timely manner observe, perform and fulfill each and every covenant,
term and provision of each Loan Document executed and delivered by, or
applicable to, Borrower, and shall not enter into or otherwise suffer or permit
any amendment, waiver, supplement, termination or other modification of any
Loan Document executed and delivered by, or applicable to, Borrower without the
prior written consent of Lender.


 


5.1.18                  Confirmation of Representations.  Borrower
shall deliver, in connection with any Securitization, (a) one or more Officer’s
Certificates certifying as to the accuracy of all representations made by
Borrower in the Loan Documents as of the date of the closing of such
Securitization, and (b) certificates of the relevant Governmental Authorities
in all relevant jurisdictions indicating the good standing and qualification of
Borrower and its member as of the date of the Securitization.


 


5.1.19                  No Joint Assessment.  Borrower
shall not suffer, permit or initiate the joint assessment of the Property (a)
with any other real property constituting a tax lot separate from the Property,
and (b) which constitutes real property with 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 such real property portion of the Property.


 


5.1.20                  Leasing Matters.  Any
Leases with respect to the Property written after the Closing Date for more
than the smallest of the Relevant Leasing Threshold square footage shall be
subject to the prior written approval of Lender, which approval may be given or
withheld in the sole discretion of Lender. 
Lender shall approve or disapprove any such Lease within ten (10)


 


40





















 


Business Days
of Lender’s receipt of a final execution draft of such Lease (including all
exhibits, schedules, supplements, addenda or other agreements relating thereto)
and a written notice from Borrower requesting Lender’s approval to such Lease,
and such Lease shall be deemed approved, if Lender does not disapprove such
Lease within said ten (10) Business Day period provided
such written notice conspicuously states, in large bold type, that “PURSUANT TO SECTION 5.1.20 OF THE LOAN
AGREEMENT, THE LEASE SHALL BE
DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN
(10) BUSINESS DAYS OF LENDER’S RECEIPT
OF SUCH LEASE AND WRITTEN NOTICE”.  Borrower shall furnish Lender with
executed copies of all Leases.  All
renewals of Leases and all proposed Leases shall provide for rental rates
comparable to existing local market rates (unless such rental rates are
otherwise set forth in the Leases executed prior to the Closing Date).  All proposed Leases shall be on commercially
reasonable terms and shall not contain any terms which would materially affect
Lender’s rights under the Loan Documents. 
All Leases executed after the Closing Date shall provide that they are
subordinate to the Mortgage encumbering the Property and that the tenant
thereunder agrees to attorn to Lender or any purchaser at a sale by foreclosure
or power of sale.  Borrower (i) shall
observe and perform the obligations imposed upon the lessor under the Leases in
a commercially reasonable manner; (ii) shall enforce the terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed in a commercially reasonable manner and in a manner not
to impair the value of the Property involved except that no termination by
Borrower or acceptance of surrender by a tenant of any Lease shall be permitted
unless by reason of a tenant default and then only in a commercially
reasonable manner to preserve and protect the Property provided, however,
that no such termination or surrender of any Lease covering more than the
smallest Relevant Leasing Threshold will be permitted without the written
consent of Lender which consent may be withheld in the sole discretion of
Lender; (iii) shall not collect any of the rents more than one (1) month in
advance (other than security deposits); (iv) shall not execute any other
assignment of lessor’s interest in the Leases or the Rents (except as
contemplated by the Loan Documents); (v) shall not alter, modify or change the
terms of the Leases in a manner inconsistent with the provisions of the Loan
Documents without the prior written consent of Lender, which consent may be
withheld in the sole discretion of Lender; and (vi) shall execute and deliver
at the request of Lender all such further assurances, confirmations and
assignment in connection with the Leases as Lender shall from time to time
reasonably require.  Notwithstanding the
foregoing, Borrower may, without the prior written consent of Lender, terminate
any Lease which demises less than the smallest of the Relevant Leasing
Threshold under any of the following circumstances: (i) the tenant under said
Lease is in default beyond any applicable grace and cure period, and Borrower
has the right to terminate such Lease; (ii) such termination is permitted by
the terms of the Lease in question and Borrower has secured an obligation from
a third party to lease the space under the Lease to be terminated at a rental
equal to or higher than the rental due under the Lease to be terminated; and
(iii) if the tenant under the Lease to be terminated, has executed a right
under said Lease to terminate its lease upon payment of a termination fee to
Borrower, and has in fact terminated its lease and paid said fee, Borrower may
accept said termination.


 


5.1.21                  Alterations.
 Subject to the rights of tenants to make
alterations pursuant to the terms of their respective Leases, Borrower shall
obtain Lender’s prior written consent to any alterations to any Improvements,
which consent shall not be unreasonably withheld or delayed except with respect
to alterations that may have a material adverse effect on Borrower’s financial


 


41





















 


condition, the value of the Property or the
Net Operating Income.  Notwithstanding
the foregoing, Lender’s consent shall not be required in connection with any
alterations that will not have a material adverse effect on Borrower’s
financial condition, the value of the Property or the Net Operating Income,
provided that such alterations are made in connection with (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or before
the Closing Date, (b) tenant improvement work performed pursuant to the terms
and provisions of a Lease and not adversely affecting any structural component
of any Improvements, any utility or HVAC system contained in any Improvements
or the exterior of any building constituting a part of any Improvements, (c)
alterations performed in connection with the restoration of the Property after
the occurrence of a casualty in accordance with the terms and provisions of
this Agreement or (d) any structural alteration which costs less than
$50,000.00 in the aggregate for all components thereof which constitute such
alteration or any non-structural alteration which costs less than $100,000.00
in the aggregate for all components thereof which constitute such alteration.  If the total unpaid amounts due and payable
with respect to alterations to the Improvements at the Property (other than
such amounts to be paid or reimbursed by tenants under the Leases) shall at any
time equal or exceed $350,000.00 (the “Threshold Amount”),
Borrower, upon Lender’s request, shall promptly deliver to Lender as security
for the payment of such amounts and as additional security for Borrower’s
obligations under the Loan Documents any of the following: (A) cash, (B) U.S.  Obligations, (C) other securities having a
rating acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization, or (D) a completion bond or
letter of credit issued by a financial institution having a rating by Standard
& Poor’s Ratings Group of not less than A-1+ if the term of such bond or
letter of credit is no longer than three (3) months or, if such term is in
excess of three (3) months, issued by a financial institution having a rating
that is acceptable to Lender and that the applicable Rating Agencies have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization. 
Such security shall be in an amount equal to the excess of the total
unpaid amounts with respect to alterations to the Improvements on the Property
(other than such amounts to be paid or reimbursed by tenants under the Leases)
over the Threshold Amount and, if cash, may be applied from time to time, at
the option of Borrower, to pay for such alterations.  At the option of Lender, following the
occurrence and during the continuance of an Event of Default, Lender may
terminate any of the alterations and use the deposit to restore the Property to
the extent necessary to prevent any material adverse effect on the value of the
Property.


 


Section 5.2                                      Negative
Covenants.  From the Closing Date
until payment and performance in full of all obligations of Borrower under the
Loan Documents or the earlier release of the Lien of the Mortgage encumbering
the Property in accordance with the terms of this Agreement and the other Loan
Documents, Borrower covenants and agrees with Lender that it will not do,
directly or indirectly, any of the following:


 


5.2.1                         Operation
of Property.  Borrower shall not,
without the prior consent of Lender, terminate the Management Agreement or
otherwise replace the Manager or enter into any other management agreement with
respect to the Property unless the Manager is in default thereunder beyond any
applicable grace or cure period, in which event no consent by Lender shall be
required.  Lender agrees that its consent
will not be unreasonably withheld, delayed or


 


42





















 


conditioned
provided that the Person chosen by Borrower as the replacement Manager is a
Qualifying Manager and provided further that Borrower shall deliver an
acceptable non-consolidation opinion covering such replacement Manager if such
Person was not covered by such opinion delivered at the closing of the Loan.


 


5.2.2                        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:


 


(i)                                     Permitted
Encumbrances;


 


(ii)                                 Liens
created by or related to Indebtedness permitted pursuant to the Loan Documents;
and


 


(iii)                              Liens
for Taxes or Other Charges not yet due (or that Borrower is contesting in
accordance with the terms of Section 5.1.2 hereof).


 


5.2.3                        Dissolution.
 Borrower shall not (a) engage in any
dissolution, liquidation or consolidation or merger with or into any other
business entity, (b) engage in any business activity not related to the
ownership and operation of the Property, (c) transfer, lease or sell, in one
transaction or any combination of transactions, the assets or all or
substantially all of the properties or assets of Borrower except to the extent
permitted by the Loan Documents, (d) modify, amend, waive or terminate its
organizational documents or its qualification and good standing in any
jurisdiction or (e) cause the Sole Member to (i) dissolve, wind up or liquidate
or take any action, or omit to take an action, as a result of which the Sole
Member would be dissolved, wound up or liquidated in whole or in part, or (ii)
amend, modify, waive or terminate the certificate of limited partnership or
partnership agreement of the Sole Member, in each case, without obtaining the
prior written consent of Lender or Lender’s designee.


 


5.2.4                        Change in Business.  Borrower shall not enter into any line of
business other than the ownership and operation of the Property, or make any
material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the
continuance of its present business.


 


5.2.5                        Debt Cancellation.  Borrower shall not cancel or otherwise
forgive or release any claim or debt (other than termination of Leases in
accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower’s business.


 


5.2.6                        Affiliate Transactions.  Borrower shall not enter into, or be a party
to, any transaction with an Affiliate of Borrower or any of the partners of
Borrower except in the ordinary course of business and on terms which are fully
disclosed to Lender in advance and are no less favorable to Borrower or such
Affiliate than would be obtained in a comparable arm’s-length transaction with
an unrelated third party.


 


5.2.7                        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


 


43





















 


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 consent of
Lender.


 


5.2.8                        Assets.  Borrower shall not purchase or own any
properties other than the Property owned by Borrower as of the Closing Date as
reflected in the applicable Title Insurance Policy.


 


5.2.9                        Debt.  Borrower shall not create, incur or assume
any Indebtedness other than the Debt except to the extent expressly permitted
hereby.


 


5.2.10                  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.


 


5.2.11                  Intentionally Omitted.


 


5.2.12                  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 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 (A) 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; (B) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (C) one or
more of the following circumstances is true:


 


(i)                                     Equity
interests in Borrower are publicly offered securities, within the meaning of 29
C.F.R. §25l0.3-101(b)(2);


 


(ii)                                  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


 


(iii)                               Borrower
qualifies as an “operating company” or a “real estate operating company” within
the meaning of 29 C.F.R. §2510.3-10l(c) or (e).


 


5.2.13                  Transfers.  Unless such action is permitted by the
provisions of this Section 5.2.13, Borrower agrees that it will not (i)
sell, assign, convey, transfer or otherwise dispose of its interests in the
Property or any part thereof, (ii) permit any owner, directly or indirectly, of
an ownership interest in the Property, to transfer such interest, whether by
transfer of stock or other interest in Borrower or any entity, or otherwise, (iii)
incur Indebtedness (other than the Indebtedness permitted pursuant to the terms
of this Agreement), (iv) mortgage, hypothecate or otherwise encumber or grant a
security interest in the Property or any part


 


44





















 


thereof, (v) sell, assign, convey, transfer,
mortgage, encumber, grant a security interest in, or otherwise dispose of any
direct or indirect ownership interest in Borrower, or permit any owner of an
interest in Borrower to do the same, or (vi) file a declaration of condominium
with respect to the Property (any of the foregoing transactions, a “Transfer”).  For
purposes hereof, a “Transfer” shall not include (A) any issuance, sale or
transfer of interests in Inland Western Retail Real Estate Trust, Inc., (B)
transfer by devise or descent or by operation of law upon the death of a member
of Borrower, and (C) a sale, transfer or hypothecation of a membership interest
in Borrower, whichever the case may be, by the current member(s), as
applicable, to an immediate family member (i.e., parents, spouses, siblings,
children or grandchildren) of such member (or a trust for the benefit of any
such persons).


 


(a)                                  On
and after the date that is twelve (12) months following the Closing Date,
Lender shall not withhold its consent to a Transfer of the Property, provided
that the following conditions are satisfied:


 


(1)                                  the transferee of the
Property shall be a Special Purpose Entity (the “Transferee”)
which at the time of such transfer will be in compliance with the covenants
contained in Section 5.1.1 and the representations contained in 4.1.30
hereof and which shall have assumed in writing (subject to the terms of Section 9.4
hereof) and agreed to comply with all the terms, covenants and conditions set
forth in this Loan Agreement and the other Loan Documents, expressly including
the covenants contained in Section 5.1.1 and the representations contained
in 4.1.30 hereof;


 


(2)                                  if requested by
Lender, Borrower shall deliver confirmation in writing from the Rating Agencies
that such proposed Transfer will not cause a downgrading, withdrawal or
qualification of the then current rating of any securities issued pursuant to
such Securitization;


 


(3)                                  if Manager does not
act as manager of the transferred Property then the manager of the Property
must be a Qualifying Manager;


 


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


 


(5)                                  if required or
requested by any of the Rating Agencies, Borrower shall have caused counsel to
render a substantive non-consolidation opinion which in each case may be relied
upon by the holder of the Note, the Ratings Agencies and their respective
counsel, agents and representatives with respect to the proposed transaction,
including the Transferee, which opinion shall be acceptable to Lender in its
reasonable discretion;


 


(6)                                  Borrower shall have
paid (A) an assumption fee equal to one percent (1.0%) of the then outstanding
principal balance of the Loan, and (B) the reasonable and customary third-party
expenses (including reasonable attorneys’ fees and disbursements) actually
incurred by Lender in connection with such Transfer; provided, however,
no assumption fee shall be required for a Transfer of the Property to a
Transferee acceptable


 


45





















 


to Lender in connection with a joint venture between
Inland Western Retail Real Estate Trust, Inc. or Inland Western Retail Real
Estate Limited Partnership and an institution acceptable to Lender provided
Inland Western Retail Real Estate Trust, Inc., or an Affiliate wholly-owned
(directly or indirectly) by Inland Western Retail Real Estate Trust, Inc., owns
at least twenty percent (20%) of the ownership interests in such Transferee
(which shall include the right to receive material economic benefits from the operation
of the Property) and for which Inland Western Retail Real Estate Trust, Inc.,
or an Affiliate wholly-owned (directly or indirectly) by Inland Western Retail
Real Estate Trust, Inc., is the managing entity and otherwise maintains
operational and managerial control of such Transferee, provided that Borrower
shall pay all of Lender’s reasonable and customary third-party expenses
(including reasonable attorneys’ fees and disbursements) actually incurred by
Lender in connection with such Transfer and a processing fee of $5,000.


 


Lender shall approve or disapprove any
proposed Transfer governed by this Section 5.2.l3(a) within thirty (30)
days of Lender’s receipt of a written notice from Borrower requesting Lender’s
approval, provided such notice includes all information necessary to make such
decision, and further provided that such written notice from Borrower shall
conspicuously state, in large bold type, that “PURSUANT
TO SECTION 5.2.13 OF THE LOAN AGREEMENT, A RESPONSE IS REQUIRED WITHIN THIRTY (30)
DAYS OF LENDER’S RECEIPT OF THIS
WRITTEN NOTICE”.  If Lender
fails to disapprove any such matter within such period, Borrower shall provide
a second written notice requesting approval, which written notice shall
conspicuously state, in large bold type, that “PURSUANT
TO SECTION 5.2.13 OF THE LOAN AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL
BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10)
DAYS OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. 
Thereafter, if Lender does not disapprove such matter within
said ten (10) day period such matter shall be deemed approved.


 


(b)                                 On
and after the date that is twelve (12) months following the Closing Date,
Lender shall not withhold its consent to, and shall not charge an assumption
fee in connection with, (1) a Transfer of up to, in the aggregate, forty-nine
percent (49%) of the direct or indirect ownership interests in Borrower, or (2)
a Transfer of greater than forty-nine percent (49%) of the direct or indirect
ownership interest in Borrower, provided that (A) such transfer is to a
Qualified Entity (as defined below), and (B) Borrower shall pay all of Lender’s
reasonable and customary third-party expenses (including reasonable attorneys’
fees and disbursements) actually incurred by Lender in connection with such
Transfer and a processing fee of $5,000. 
For purposes of this Agreement, a
“Qualified Entity” shall
mean an entity (x) with a net worth of $200,000,000 or more, (y) with
sufficient experience (determined by Lender in its reasonable discretion) in
the ownership and management of properties similar to the Property, and (z)
which owns or manages retail properties containing at least 1,000,000 square
feet of gross leasable area.  If required
or requested by any of the Rating Agencies, Borrower shall deliver a
substantive non-consolidation opinion with respect to any party not now owning
more than 49% of the ownership interests in Borrower acquiring more than 49% of
the ownership interests in Borrower.


 


46





















 


(c)                                  Notwithstanding
anything in this Section 5.2.13 to the contrary, on or after the date that
is twelve (12) months after the Closing Date, Borrower shall be permitted to
Transfer the entire Property in a single transaction to one newly-formed Special
Purpose Entity which shall be wholly-owned subsidiary of Inland Western Retail
Real Estate Trust, Inc. (“Permitted Affiliate
Transferee”) which shall be approved by Lender in its reasonable
discretion (“Permitted Affiliate Transfer”),
provided (1) no Event of Default shall have occurred and be continuing, (2) the
creditworthiness of Inland Western Retail Real Estate Trust, Inc., as applicable,
has not deteriorated, in the sole discretion of Lender, from the Closing Date
to the date of the proposed Transfer, and (3) Borrower shall have paid all
reasonable and customary third party expenses (including reasonable attorneys’
fees and disbursements) actually incurred by Lender in connection with such
Transfer (but not any assumption or processing fee).


 


(d)                                 Borrower, without the
consent of Lender, may grant easements, restrictions, covenants, reservations
and rights of way in the ordinary course of business for access, parking, water
and sewer lines, telephone and telegraph lines, electric lines and other utilities
or for other similar purposes, provided that no transfer, conveyance or
encumbrance shall materially impair the utility and operation of the Property
or materially adversely affect the value of the Property or the Net Operating
Income of the Property.  If Borrower
shall receive any consideration in connection with any of said described
transfers or conveyances, Borrower shall have the right to use any such
proceeds in connection with any alterations performed in connection therewith,
or required thereby.  In connection with
any transfer, conveyance or encumbrance permitted above, the Lender shall
execute and deliver any instrument reasonably necessary or appropriate to evidence
its consent to said action or to subordinate the Lien of the Mortgage to such
easements, restrictions, covenants, reservations and rights of way or other
similar grants upon receipt by the Lender of: (A) a copy of the instrument of
transfer; and (B) an Officer’s Certificate stating with respect to any transfer
described above, that such transfer does not materially impair the utility and
operation of the Property or materially reduce the value of the Property or the
Net Operating Income of the Property.


 


ARTICLE VI


 


INSURANCE;
CASUALTY; CONDEMNATION


 


Section 6.1                                      Insurance.  (a) Borrower shall obtain and maintain
insurance for Borrower and the Property providing at least the following
coverages:


 


(i)                                     comprehensive
all risk insurance on the Improvements and the Personal Property, including
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements, in each case (A) in an amount
equal to 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) containing an agreed amount endorsement with
respect to the Improvements and Personal Property waiving all co-insurance
provisions; (C) providing for no deductible in excess of Ten Thousand and
No/100 Dollars ($10,000) for all such insurance coverage; and (D) containing an
“Ordinance or Law Coverage” or “Enforcement” endorsement if any of the
Improvements or the use of the Property shall at any time constitute legal 


 


47





















 


non-conforming
structures or uses.  In addition,
Borrower shall obtain: (y) if any portion of the Improvements is currently or
at any time in the future located in a federally designated “special flood
hazard area”, flood hazard insurance in an amount equal to the lesser of (1)
the outstanding principal balance of the Note or (2) 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 or such greater amount as Lender shall require;
and (z) earthquake insurance in amounts and in form and substance satisfactory
to Lender in the event the Property is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses (y) and (z)
hereof shall be on terms consistent with the comprehensive all risk insurance
policy 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, such
insurance (A) to be on the so-called “occurrence” form with a combined limit,
including umbrella coverage, of not less than Five Million and No/100 Dollars
($5,000,000.00); (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 on an “if any” basis; (3) independent contractors; (4) blanket
contractual liability for all legal contracts; and (5) contractual liability
covering the indemnities contained in Article 9 of the Mortgage to the
extent the same is available;


 


(iii)                               business
income insurance (A) with loss payable to Lender; (B) covering all risks
required to be covered by the insurance provided for in subsection (i)
above; (C) covering rental losses or business interruption, as may be
applicable, for a period of at least twelve (12) months after the date of the
casualty; and (D) in an annual amount equal to (100%) of the rents or estimated
gross revenues from the operation of the Property (as reduced to reflect
expenses not incurred during a period of Restoration).  The amount of such business income insurance
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 twelve (12) month period.  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 and the other Loan Documents except to the
extent such amounts are actually paid out of the proceeds of such business
income insurance;


 


(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
all risks insured against pursuant to subsection (i) above,


 


48





















 


(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;


 


(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)                           umbrella
liability insurance in an amount not less than Five Million and No/100 Dollars
($5,000,000.00) per occurrence on terms consistent with the commercial general
liability insurance policy required under subsection (ii) above;


 


(viii)                        if any of
the policies of insurance covering the risks required to be covered under
subsections (i) through (vii) above contains an exclusion from coverage for
acts of terrorism, Borrower shall obtain and maintain a separate policy
providing such coverages in the event of any act of terrorism, provided such
coverage is commercially available for properties similar to the Property and
located in or around the region in which the Property is located.  Notwithstanding the foregoing, Borrower shall
not be required to obtain such a policy, provided (I) Borrower confirms to
Lender, in writing, that it shall protect and hold Lender harmless from any
losses associated with such risks by, among other things, either (A) depositing
with Lender sums sufficient to pay for all uninsured costs related to a Restoration
of the Property following any act of terrorism (which sum shall be treated as a
Net Proceeds Deficiency), or (B) provided such act of terrorism occurs on or
after the Permitted Prepayment Date, prepaying the Loan in accordance with the
terms hereof;  (II) Inland Western Retail
Real Estate Trust, Inc. (“Terrorism Insurance
Guarantor”) executes a guaranty, in form and substance
satisfactory to Lender, guaranteeing in the event of any act of terrorism,
payment to Lender of any sums that Borrower is obligated to pay to Lender under
clause (I) above (which shall be applied in accordance with Section 6.4
hereof) and (III) Terrorism Insurance Guarantor maintains a net worth of at
least $300,000,000 (as determined by such entity’s most recent audited financial
statements), such entity maintains a direct or indirect ownership interest in
Borrower, and the aggregate loan-to-value ratio (as determined by Lender) (“LTV”)
for all properties on which such entity has a direct or indirect ownership
interest shall not exceed 60%, however, Terrorism Insurance Guarantor may
exceed the 60% LTV for a period not to exceed six (6) months out of any twelve
(12) month period either 1) during the time period when Terrorism Insurance
Guarantor is offering securities to the public, or 2) when in the business
judgement of Terrorism Insurance Guarantor, exceeding an LTV of 60% is
necessary given existing circumstances of the credit environment, but in no
event shall the LTV exceed 65% if Terrorism Insurance Guarantor maintains a net
worth greater than or equal to $300,000,000, but less than $400,000,000, or 70%
if Terrorism Insurance Guarantor maintains a net worth of at least
$400,000,000.


 


(ix)                                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.


 


49





















 


(b)                                 All insurance provided
for in Section 6.1(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 rating of “A:X” or better in the current
Best’s Insurance Reports and a claims paying ability rating of “AA” or better
by at least two (2) of the Rating Agencies including, (i) Standard & Poor’s
Ratings Group, and (ii) Moody’s Investors Services, Inc. if Moody’s Investors
Service, Inc. is rating the Securities. 
The Policies described in Section 6.1 (other than those strictly
limited to liability protection) shall designate Lender as loss payee.  Not less than thirty (30) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.


 


(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 6.1(a).


 


(d)                                 All Policies of
insurance provided for or contemplated by Section 6.1(a), except for the
Policy referenced in Section 6.1(a)(v), shall name Borrower, or the
Tenant, 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 of
insurance provided for in Section 6.1(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
Policy shall not be materially changed (other than to increase the coverage
provided thereby) or canceled without at least thirty (30) days’ 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 Policy has not been
renewed fifteen (15) 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, after ten
(10) Business Days written notice to Borrower, to take such action as Lender
deems necessary to protect its


 


50





















 


interest in the Property, including, without
limitation, the obtaining of 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.  If
Borrower fails in so insuring the Property or in so assigning and delivering
the Policies, Lender may, at its option, obtain such insurance using such
carriers and agencies as Lender shall elect from year to year and pay the
premiums therefor, and Borrower will reimburse Lender for any premium so paid,
with interest thereon as stated in the Note from the time of payment, on
demand, and the amount so owning to Lender shall be secured by the Mortgage.  The insurance obtained by Lender may, but
need not, protect Borrower’s interest and the coverage that Lender purchases
may not pay any claim that Borrower makes or any claim that is made against
Borrower in connection with the Property.


 


Section 6.2                                      Casualty.
 If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a “Casualty”), Borrower (a) shall give to Lender prompt notice
of such damage reasonably estimated by Borrower to cost more than One Hundred
Thousand Dollars ($100,000.00) to repair, and (b) shall promptly commence and
diligently prosecute 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 fire or other casualty, with such alterations as may be reasonably
approved by Lender (a “Restoration”)
and otherwise in accordance with Section 6.4.  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.


 


Section 6.3                                      Condemnation.
 Borrower shall promptly give Lender
notice of the actual or threatened commencement of any proceeding for the
Condemnation of the Property 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 6.4.  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.


 


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Section 6.4                                      Restoration.  The following provisions shall
apply in connection with the Restoration of the Property:


 


(a)                                  If the Net Proceeds shall be less than Relevant
Restoration Threshold and the costs of completing the Restoration shall be less
than the Relevant Restoration Threshold, the Net Proceeds will be disbursed by
Lender to Borrower upon receipt, provided that all of the conditions set forth
in clauses (A), (E), (F), (G), (H), (J) and (L) of Section 6.4(b)(i) below
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 the Relevant Restoration Threshold or the costs of completing the
Restoration is equal to or greater than the Relevant Restoration Threshold,
then in either case, Lender shall make the Net Proceeds available for the Restoration
in accordance with the provisions of this Section 6.4(b).  The term “Net Proceeds”
for purposes of this Section 6.4 shall mean; (x) the net amount of all
insurance proceeds received by Lender pursuant to Section 6.1 (a)(i),
(iv), (vi) and (viii) as a result of such damage or destruction, after
deduction of its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same (“Insurance Proceeds”),
or (y) the net amount of the Award, after deduction of its reasonable costs and
expenses (including, but not limited to, reasonable counsel fees), if any, in
collecting 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, and (x) less
than twenty-five percent (25%) of the total floor area of the Improvements on
the Property has been damaged, destroyed or rendered unusable as a result of
such fire or other casualty, or (y) Borrower is required under a Lease
exceeding the smallest of the Relevant Leasing Threshold to use the Net
Proceeds for the restoration of the Property, or (2) in the event the Net
Proceeds are Condemnation Proceeds, and (x) less than ten percent (10%) of the
land constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements is
located on such land, or (y) Borrower is required under a Lease exceeding the
smallest of the Relevant Leasing Threshold to use the Net Proceeds for the
restoration of the Property;


 


(C)                                Leases demising in the aggregate a percentage amount equal to or
greater than the Rentable Space Percentage of the total rentable space in the
Property which has been demised under executed and delivered Leases in effect
as of the date of the occurrence of such fire or other casualty or taking,
whichever the case may be, shall remain in full force and effect during and
after the completion of the Restoration,


 


52





















 


notwithstanding
the occurrence of any such fire or other casualty or taking, whichever the case
may be, and will make all necessary repairs and restorations thereto at their
sole cost and expense.  The term “Rentable Space Percentage” shall
mean (x) in the event the Net Proceeds are Insurance Proceeds, a percentage amount
equal to fifty percent (50%) and (y) in the event the Net Proceeds are
Condemnation Proceeds, a percentage amount equal to fifty percent (50%);


 


(D)                               Borrower
shall commence the Restoration as soon as reasonably practicable (but in no
event later than ninety (90) days after such damage or destruction or taking,
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 of principal and interest under the Note, which will be incurred with
respect to the Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, will be covered out of (1) the Net
Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(iii),
if applicable, or (3) by other funds of Borrower;


 


(F)                                 Lender
shall be satisfied that the Restoration will be completed on or before the
earliest to occur of (1) the Maturity Date, (2) the earliest date required for
such completion under the terms of any Leases, (3) such time as may be required
under applicable zoning law, ordinance, rule or regulation in order to repair
and restore the Property to the condition it was in immediately prior to such
fire or other casualty or to as nearly as possible the condition it was in
immediately prior to such taking, as applicable or (4) the expiration of the
insurance coverage referred to in Section 6.1(a)(iii);


 


(G)                                the
Property and the use thereof after the Restoration will be in compliance with
and permitted under all applicable zoning laws, ordinances, rules and
regulations provided, however, that compliance with such zoning laws,
ordinances, rules and regulations (including, without limitation, parking
requirements)  will not require
restoration of the Improvements or the Property to a size, condition, or
configuration materially different than that which existed immediately prior to
such Casualty or taking;


 


(H)                               the
Restoration shall be done and completed by Borrower in an expeditious and
diligent fashion and in compliance with all applicable governmental laws, rules
and regulations (including, without limitation, all applicable environmental
laws);


 


(I)                                    such
fire or other casualty or taking, as applicable, does not result in the loss of
access to the Property or the related Improvements;


 


53





















 


(J)                                   the
Debt Service Coverage Ratio, after giving effect to the Restoration, shall be
equal to or greater than 2.10:1.0;


 


(K)                               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 should be consistent with
restoration budgets of similar retail properties then owned and operated by
nationally recognized owners and operators of retail properties located in the
areas in which the Property is located; and


 


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


 


(ii)                                  The
Net Proceeds shall be held by Lender in an interest bearing account and, until
disbursed in accordance with the provisions of this Section 6.4(b), 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 materials installed and work and labor performed to be paid for
out of the requested disbursement in connection with the Restoration have been
performed, and (B) 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.


 


(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 “Casualty
Consultant”), such review and acceptance not to be unreasonably
withheld or delayed.  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 under which they have been engaged, shall be subject to prior review
and acceptance by Lender and the Casualty Consultant, such review and
acceptance not to be unreasonably withheld or delayed.  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 Casualty Consultant’s fees, shall be paid by Borrower.


 


(iv)                              In
no event shall Lender be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the Casualty
Consultant, minus the Casualty Retainage.  The term “Casualty Retainage”
shall mean an amount equal to


 


54





















 


ten percent (10%)
of the costs actually incurred for work in place as part of the Restoration, as
certified by the Casualty Consultant, until the Restoration has been completed.  The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above in this Section 6.4(b),
be less than the amount actually held back by Borrower from contractors,
subcontractors and materialmen engaged in the Restoration.  The Casualty Retainage shall not be released
until the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 6.4(b) and
that all approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate governmental and quasi-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
Casualty Retainage; provided, however, that Lender will release
the portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Casualty 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 Casualty 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 Casualty Consultant,
be sufficient to pay in full the balance of the costs which are estimated by
the Casualty 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 6.4(b) shall
constitute additional security for the Debt and other obligations under the
Loan Documents.


 


(vii)                           The
excess, if any, of the Net Proceeds and the remaining balance, if any, of the
Net Proceeds Deficiency deposited with Lender after the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance with
the provisions of this Section 6.4(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


 


55





















 


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 6.4(b)(vii)
may 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 (provided no Event of Default exists,
such Borrower shall not be required to pay any Prepayment Consideration in
connection with such payment), or, at the discretion of Lender, the same may be
paid, either in whole or in part, to Borrower for such purposes as Lender shall
designate, in its discretion.


 


(d)                                 In the event of
foreclosure of the Mortgage with respect to the Property, 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 that are not
blanket Policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or Lender
or other transferee in the event of such other transfer of title.


 


(e)                                  Lender shall with
reasonable promptness following any Casualty or Condemnation notify Borrower
whether or not Net Proceeds are required to be made available to Borrower for
restoration pursuant to this Section 6.4.  All Net Proceeds not required to be made available
for Restoration shall be retained and applied by Lender in accordance with Section 2.3.2(a)
hereof (a “Net Proceeds Prepayment”).  If such Net Proceeds Prepayment shall be equal
to or greater than One Million Two Hundred Twenty-Five Thousand and No/100
Dollars ($1,225,000.00), Borrower shall have the right to elect to prepay the
remaining outstanding principal balance of the Note (a “Casualty/Condemnation
Prepayment”) in accordance with Section 2.3.2(b)
hereof upon satisfaction of the following conditions: (i) within thirty (30)
days following the date of the Net Proceeds Prepayment, Borrower shall provide
Lender with written notice of Borrower’s intention to pay the Note in full,
(ii) Borrower shall prepay the Note in accordance with Section 2.3.2(b)
hereof on or before the second Payment Date occurring following the date of the
Net Proceeds Prepayment, and (iii) no Event of Default shall exist on the date
of such Casualty/Condemnation Prepayment. 
Notwithstanding anything in Section 6.2 or Section 6.3 to the
contrary, Borrower shall have no obligation to commence Restoration of the Property
upon delivery of the written notice set forth in clause (i) of the preceding
sentence (unless Borrower subsequently shall fail to satisfy the requirement of
clause (ii) of the preceding sentence).


 


ARTICLE VII


 


RESERVE
FUNDS


 


Section 7.1                                      Required
Repair Funds.


 


7.1.1                        Deposits.
 Borrower shall perform the repairs at
the Property, if any, as more particularly set forth on Schedule III
hereto (such repairs hereinafter referred to as “Required
Repairs”) within nine (9) months from the Closing Date, or such
earlier time as


 


56





















 


specified on Schedule III.  If Borrower has not delivered to Lender
evidence reasonably satisfactory to Lender that it has completed all Required
Repairs on or before the date that is nine (9) months from the Closing Date, or
such earlier time as specified on Schedule III,  Borrower shall deposit with Lender the amount
for the Property set forth on such Schedule III hereto, if any
(less the amount allocated to the performance of Required Repairs for which
evidence of completion has been delivered to Lender), to perform the Required
Repairs for the Property.  Amounts so
deposited with Lender, if any, shall be held by Lender in an interest bearing
account.  Amounts so deposited, if any,
shall hereinafter be referred to as Borrower’s “Required
Repair Fund” and the account, if any, in which such amounts are
held shall hereinafter be referred to as Borrower’s “Required
Repair Account”.  It shall be an Event of Default under this
Agreement if Borrower does not either (i) does not deposit with Lender the
Required Repair Fund as set forth above, or (ii) complete the Required Repairs
at the Property within nine (9) months from the Closing Date.  Upon the occurrence of such an Event of
Default, Lender, at its option, may withdraw all Required Repair Funds from the
Required Repair Account and Lender may apply such funds either to completion of
the Required Repairs at the Property or toward payment of the Debt in such
order, proportion and priority as Lender may determine in its sole discretion.  Lender’s right to withdraw and apply Required
Repair Funds shall be in addition to all other rights and remedies provided to
Lender under this Agreement and the other Loan Documents.


 


7.1.2                        Release
of Required Repair Funds.  Lender
shall disburse to Borrower the Required Repair Funds from the Required Repair
Account from time to time upon satisfaction by Borrower of each of the
following conditions: (i) Borrower shall submit a written request for payment
to Lender at least fifteen (15) days prior to the date on which Borrower
requests such payment be made and specifies the Required Repairs to be paid,
(ii) on the date such request is received by Lender and on the date such
payment is to be made, no Default or Event of Default shall exist and remain
uncured, (iii) Lender shall have received a certificate from Borrower (A)
stating that all Required Repairs at the Property to be funded by the requested
disbursement have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority required to commence
and/or complete the Required Repairs, (B) identifying each Person that supplied
materials or labor in connection with the Required Repairs performed at the
Property to be funded by the requested disbursement under a contract in excess
of $50,000, and (C) stating that each Person who has supplied materials or
labor in connection with the Required Repairs to be funded by the requested disbursement
has been paid in full or will be paid in full upon such disbursement, such
certificate to be accompanied by lien waivers or other evidence of payment
satisfactory to Lender, (iv) at Lender’s option, a title search for the
Property indicating that the Property is free from all liens, claims and other
encumbrances not previously approved by Lender, and (v) Lender shall have
received such other evidence as Lender shall reasonably request that the
Required Repairs at the Property to be funded by the requested disbursement
have been completed and are paid for or will be paid upon such disbursement to
Borrower.  Lender shall not be required
to make disbursements from the Required Repair Account with respect to the
Property more than once each calendar month and such disbursement shall be made
only upon satisfaction of each condition contained in this Section 7.1.2.


 


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Section 7.2                                      Tax
and Insurance Escrow Fund.


 


Borrower shall pay to Lender
on each Payment Date (a) one-twelfth of the Taxes that Lender estimates will be
payable during the next ensuing twelve (12) months in order to accumulate with
Lender sufficient funds to pay all such Taxes at least thirty (30) days prior
to their respective due dates and (b) one-twelfth of the Insurance Premiums
that Lender estimates will be payable for the renewal of the coverage afforded
by the Policies upon the expiration thereof in order 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 are
hereinafter called the “Tax and Insurance Escrow Fund”).  The Tax and Insurance Escrow Fund and the
payments of interest or principal or both, payable pursuant to the Note, shall
be added together and shall be paid as an aggregate sum by Borrower to Lender.  Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to this Agreement and under the Mortgage.  In making any payment relating to the Tax and
Insurance Escrow Fund, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums) or from Borrower 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, provided, however, Lender shall use reasonable efforts to pay such
real property taxes sufficiently early to obtain the benefit of any available
discounts of which it has knowledge.  If
the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due
for Taxes and Insurance Premiums, 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 Escrow Fund.  The
Tax and Insurance Escrow Fund shall be held by Lender in an interest-bearing
account and shall at Lender’s option be held in Eligible Account at an Eligible
Institution.  Any interest earned on said
account shall accrue in said account for the benefit of Borrower, but shall
remain in and constitute part of the Tax and Insurance Escrow Fund, and shall
be disbursed in accordance with the terms hereof.  Any amount remaining in the Tax and Insurance
Escrow Fund after the Debt has been paid in full shall be returned to Borrower.  In allocating such excess, Lender may deal
with the Person shown on the records of Lender to be the owner of the Property.  If at any time Lender reasonably determines
that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay
Taxes or Insurance Premiums by the dates set forth above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the Taxes or
Insurance Premiums.


 


Notwithstanding anything to
the contrary hereinbefore contained, in the event that Borrower provides (1)
evidence satisfactory to Lender that the Property is insured in accordance with
Section 6.1 of this Agreement and (2) evidence satisfactory to
Lender that the Taxes for the Property have been paid in accordance with the
requirements set forth in this Agreement, Lender will waive the requirement set
forth herein for Borrower to make deposits into the Tax and Insurance Escrow
Fund for the payment of Insurance Premiums and for payment of such Taxes,
provided, however, Lender expressly reserves the right to require Borrower to
make deposits to the Tax and Insurance Escrow Fund for the payment of Insurance
Premiums if at any time the Property is not insured in accordance with Section 6.1
of this Agreement or Taxes are not paid in accordance with the requirements of
this Agreement.


 


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Section 7.3                                      Replacements and Replacement Reserve.


 


Section 7.3.1                             Replacement
Reserve Fund.  Borrower shall pay to
Lender on the Closing Date and on each Payment Date one twelfth of the amount
(the “Replacement Reserve Monthly Deposit”)
reasonably estimated by Lender in its sole discretion to be due for
replacements and repairs required to be made to the Property during the
calendar year (collectively, the “Replacements”),
which Replacement Reserve Monthly Deposit shall be in an amount equal to no
less than $0.15 per year per square foot of gross leasable area.  Amounts so deposited shall hereinafter be
referred to as Borrower’s “Replacement Reserve
Fund” and the account in which such amounts are held shall
hereinafter be referred to as Borrower’s “Replacement Reserve
Account”.  Lender may
reassess its estimate of the amount necessary for the Replacement Reserve Fund
from time to time, and may increase the monthly amounts required to be
deposited into the Replacement Reserve Fund upon thirty (30) days notice to
Borrower if Lender determines in its reasonable discretion that an increase is
necessary to maintain the proper maintenance and operation of the Property.  Any amount held in the Replacement Reserve
Account and allocated for the Property shall be retained by Lender in an
interest bearing account, or, at the option of Lender, in an Eligible Account
at an Eligible Institution; provided, however, that, any interest
earned on said account shall accrue in said account for the benefit of
Borrower, but shall remain in and constitute part of the Replacement Reserve
Fund, and shall be disbursed in accordance with the terms hereof.


 


Notwithstanding
anything to the contrary in this Section 7.3, Borrower shall not be
required to make Replacement Reserve Monthly Deposits, provided that: (i) no
Event of Default shall have occurred; and (ii) Borrower makes all necessary
Replacements and otherwise maintains the Property to Lender’s satisfaction.  Upon notice from Lender following: (a) an
Event of Default; or (b) the failure of Borrower to make necessary Replacements
or otherwise maintain the Property to Lender’s satisfaction, Borrower shall
begin to deposit the Replacement Reserve Monthly Deposit into the Replacement
Reserve Fund beginning on the Payment Date (as defined herein) immediately
following the date of such notice.


 


Section 7.3.2                             Disbursements
from Replacement Reserve Account.


 


(a)                                  Lender shall make
disbursements from the Replacement Reserve Account to pay Borrower only for the
costs of the Replacements.  Lender shall
not be obligated to make disbursements from the Replacement Reserve Account to
reimburse Borrower for the costs of routine maintenance to the Property or for
costs which are to be reimbursed from the Required Repair Fund (if any).


 


(b)                                 Lender shall, upon
written request from Borrower and satisfaction of the requirements set forth in
this Section 7.3.2, disburse to Borrower amounts from the Replacement Reserve
Account necessary to pay for the actual approved costs of Replacements or to
reimburse Borrower therefor, upon completion of such Replacements (or, upon
partial completion in the case of Replacements made pursuant to Section 7.3.2(f))
as determined by Lender.  In no event shall
Lender be obligated to disburse funds from the Replacement Reserve Account if a
Default or an Event of Default exists.


 


(c)                                  Each request for
disbursement from the Replacement Reserve Account shall be in a form specified
or approved by Lender and shall specify (i) the specific Replacements for which
the disbursement is requested, (ii) the quantity and price of each item


 


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purchased, if the Replacement includes the
purchase or replacement of specific items, (iii) the price of all materials
(grouped by type or category) used in any Replacement other than the purchase
or replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such request for
disbursement is made.  With each request
Borrower shall certify that all Replacements have been made in accordance with
all applicable Legal Requirements of any Governmental Authority having
jurisdiction over the Property to which the Replacements are being provided
and, unless Lender has agreed to issue joint checks as described below, each
request shall include evidence of payment of all such amounts.  Each request for disbursement shall include
copies of invoices for all items or materials purchased and all contracted
labor or services provided.  Except as
provided in Section 7.3.2(e), each request for disbursement from the
Replacement.  Reserve Account shall be
made only after completion of the Replacement for which disbursement is
requested.  Borrower shall provide Lender
evidence of completion satisfactory to Lender in its reasonable judgment.


 


(d)                                 Borrower shall pay all
invoices in connection with the Replacements with respect to which a
disbursement is requested prior to submitting such request for disbursement from
the Replacement Reserve Account or, at the request of Borrower, Lender will
issue joint checks, payable to Borrower and the contractor, supplier, materialman,
mechanic, subcontractor or other party to whom payment is due in connection
with a Replacement.  In the case of payments
made by joint check, Lender may require a waiver of lien from each Person
receiving payment prior to Lender’s disbursement from the Replacement Reserve
Account.  In addition, as a condition to
any disbursement, Lender may require Borrower to obtain lien waivers from each contractor,
supplier, materialman, mechanic or subcontractor who receives payment in an amount
equal to or greater than $100,000 for completion of its work or delivery of its
materials.  Any lien waiver delivered
hereunder shall conform to the requirements of applicable law and shall cover
all work performed and materials supplied (including equipment and fixtures)
for the Property by that contractor, supplier, subcontractor, mechanic or
materialman through the date covered by the current reimbursement request (or,
in the event that payment to such contractor, supplier, subcontractor, mechanic
or materialmen is to be made by a joint check, the release of lien shall be
effective through the date covered by the previous release of funds request).


 


(e)                                  If (i) the cost of a
Replacement exceeds $100,000, (ii) the contractor performing such Replacement
requires periodic payments pursuant to terms of a written contract, and (iii)
Lender has approved in writing in advance such periodic payments, a request for
reimbursement from the Replacement Reserve Account may be made after completion
of a portion of the work under such contract, provided (A) such contract
requires payment upon completion of such portion of the work, (B) the materials
for which the request is made are on site at the Property and are properly
secured or have been installed in the Property, (C) all other conditions in
this Agreement for disbursement have been satisfied, (D) funds remaining in the
Replacement Reserve Account are, in Lender’s judgment, sufficient to complete
such Replacement and other Replacements when required, and (E) if required by
Lender, each contractor or subcontractor receiving payments under such contract
shall provide a waiver of lien with respect to amounts which have been paid to
that contractor or subcontractor.


 


(f)                                    Borrower shall not
make a request for disbursement from the Replacement Reserve Account more
frequently than once in any calendar month and (except in connection


 


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with the final
disbursement) the total cost of all Replacements in any request shall not be less
than $5,000.00.


 


Section 7.3.3                             Performance
of Replacements.


 


(a)                                  Borrower shall make
Replacements when required in order to keep the Property in condition and
repair consistent with other first class, full service retail properties in the
same market segment in the metropolitan area in which the Property is located,
and to keep the Properly or any portion thereof from deteriorating.  Borrower shall complete all Replacements in a
good and workmanlike manner as soon as practicable following the commencement
of making each such Replacement.


 


(b)                                 Lender reserves the
right, at its option, to approve all contracts or work orders with materialmen,
mechanics, suppliers, subcontractors, contractors or other parties providing
labor or materials under contracts for an amount in excess of $100,000 in
connection with the Replacements performed by Borrower.  Upon Lender’s request, Borrower shall assign any
contract or subcontract to Lender.


 


(c)                                  In the event Lender
determines in its reasonable discretion that any Replacement is not being
performed in a workmanlike or timely manner or that any Replacement has not
been completed in a workmanlike or timely manner, and such failure continues to
exist for more than thirty (30) days after notice from Lender to Borrower, Lender
shall have the option to withhold disbursement for such unsatisfactory
Replacement and to proceed under existing contracts or to contract with third
parties to complete such Replacement and to apply the Replacement Reserve Fund
toward the labor and materials necessary to complete such Replacement, without
providing any prior notice to Borrower and to exercise any and all other remedies
available to Lender upon an Event of Default hereunder.


 


(d)                                 In
order to facilitate Lender’s completion or making of the Replacements pursuant
to Section 7.3.3(c) above, Borrower grants Lender the right to enter onto
the Property and perform any and all work and labor necessary to complete or
make the Replacements and/or employ watchmen to protect the Property from
damage, subject to the rights of Tenants. 
All sums so expended by Lender, to the extent not from the Replacement
Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower
and secured by the Mortgage.  For this
purpose Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower.  Such
power of attorney shall be deemed to be a power coupled with an interest and
cannot be revoked but shall only be effective following an Event of Default.  Borrower empowers said attorney-in-fact as
follows: (i) to use any funds in the Replacement Reserve Account for the purpose
of making or completing the Replacements; (ii) to make such additions, changes
and corrections to the Replacements as shall be necessary or desirable to
complete the Replacements; (iii) to employ such contractors, subcontractors,
agents, architects and inspectors as shall be required for such purposes; (iv)
to pay, settle or compromise all existing bills and claims which are or may
become Liens against the Property, or as may be necessary or desirable for the completion
of the Replacements, or for clearance of title; (v) to execute all applications
and certificates in the name of Borrower which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the


 


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rehabilitation and repair of the Property;
and (vii) to do any and every act which Borrower might do in its own behalf to
fulfill the terms of this Agreement.


 


(e)                                  Nothing in this Section 7.3.3
shall:  (i) make Lender responsible for making
or completing the Replacements; (ii) require Lender to expend funds in addition
to the Replacement Reserve Fund to make or complete any Replacement; (iii)
obligate Lender to proceed with the Replacements; or (iv) obligate Lender to
demand from Borrower additional sums to make or complete any Replacement.


 


(f)                                    Borrower shall
permit Lender and Lender’s agents and representatives (including, without
limitation, Lender’s engineer, architect, or inspector) or third parties making
Replacements pursuant to this Section 7.3.3 to enter onto the Property
during normal business hours (subject to the rights of tenants under their
Leases) to inspect the progress of any Replacements and all materials being
used in connection therewith, to examine all plans and shop drawings relating
to such Replacements which are or may be kept at the Property, and to complete
any Replacements made pursuant to this Section 7.3.3.  Borrower shall cause all contractors and
subcontractors to cooperate with Lender or Lender’s representatives or such other
persons described above in connection with inspections described in this Section 7.3.3(f)
or the completion of Replacements pursuant to this Section 7.3.3.


 


(g)                                 Lender may require an
inspection of the Property at Borrower’s expense prior to making a monthly
disbursement in excess of $10,000 from the Replacement Reserve Account in order
to verify completion of the Replacements for which reimbursement is sought.  Lender may require that such inspection be
conducted by an appropriate independent qualified professional selected by
Lender and/or may require a copy of a certificate of completion by an independent
qualified professional acceptable to Lender prior to the disbursement of any amounts
from the Replacement Reserve Account.  Borrower shall pay the expense of the inspection
as required hereunder, whether such inspection is conducted by Lender or by an independent
qualified professional.


 


(h)                                 The
Replacements and all materials, equipment, fixtures, or any other item
comprising a part of any Replacement shall be constructed, installed or
completed, as applicable, free and clear of all mechanic’s, materialman’s or
other liens (except for those Liens existing on the date of this Agreement
which have been approved in writing by Lender).


 


(i)                                     Before
each disbursement from the Replacement Reserve Account, Lender may require
Borrower to provide Lender with a search of title to the Property effective to
the date of the disbursement, which search shows that no mechanic’s or
materialmen’s liens or other liens of any nature have been placed against the
Property since the date of recordation of the Mortgage and that title to the
Property is free and clear of all Liens (other than the lien of the Mortgage
and any other Liens previously approved in writing by Lender, if any).


 


(j)                                     All
Replacements shall comply with all applicable Legal Requirements of all
Governmental Authorities having jurisdiction over the Property and applicable
insurance requirements including, without limitation, applicable building
codes, special use permits, environmental regulations, and requirements of
insurance underwriters.


 


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(k)                                  In addition to any
insurance required under the Loan Documents, Borrower shall provide or cause to
be provided workmen’s compensation insurance, builder’s risk, and public
liability insurance and other insurance to the extent required under applicable
law in connection with a particular Replacement.  All such policies shall be in form and amount
reasonably satisfactory to Lender.  All
such policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed.  Certified copies of such policies shall be
delivered to Lender.


 


Section 7.3.4                             Failure
to Make Replacements.  (a) It shall
be an Event of Default under this Agreement if Borrower fails to comply with
any provision of this Section 7.3 and such failure is not cured within
thirty (30) days after notice from Lender; provided, however, if
such failure is not capable of being cured within said thirty (30) day period,
then provided that Borrower commences action to complete such cure and
thereafter diligently proceeds to complete such cure, such thirty (30) day
period shall be extended for such time as is reasonably necessary for Borrower,
in the exercise of due diligence, to cure such failure, but such additional
period of time shall not exceed sixty (60) days.  Upon the occurrence of such an Event of
Default, Lender may use the Replacement Reserve Fund (or any portion thereof)
for any purpose, including but not limited to completion of the Replacements as
provided in Section 7.3.3, or for any other repair or replacement to the
Property or toward payment of the Debt in such order, proportion and priority
as Lender may determine in its sole discretion. 
Lender’s right to withdraw and apply the Replacement Reserve Funds shall
be in addition to all other rights and remedies provided to Lender under this
Agreement and the other Loan Documents.


 


                (b)     Nothing
in this Agreement shall obligate Lender to apply all or any portion of the
Replacement Reserve Fund on account of an Event of Default to payment of the
Debt or in any specific order or priority.


 


Section 7.3.5                             Balance
in the Replacement Reserve Account.  The insufficiency of any balance in the
Replacement Reserve Account shall not relieve Borrower from its obligation to
fulfill all preservation and maintenance covenants in the Loan Documents.


 


Section 7.3.6                             Indemnification.
 Borrower shall indemnify Lender and hold
Lender harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and reasonable attorneys fees and expenses) arising from or in
any way connected with the performance of the Replacements unless the same are
solely due to gross negligence or willful misconduct of Lender.  Borrower shall assign to Lender all rights
and claims Borrower may have against all persons or entities supplying labor or
materials in connection with the Replacements; provided, however,
that Lender may not pursue any such right or claim unless an Event of Default
has occurred and remains uncured.


 


Section 7.4                                      Lease-Up
Reserve Letter of Credit.


 


As additional
security for the Loan, Borrower has contemporaneously herewith delivered to
Lender a clean, unconditional and irrevocable “evergreen” letter of credit in
the amount of $3,429,884.00 (the “Letter of Credit”),
which Letter of Credit is equal to 55% of the contract earnout reserve established
under the Borrower’s Agreement of Sale dated April 3, 2004, as


 


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amended by
Amendment to Agreement of Sale dated November 8, 2004, in respect of
certain spaces at the Property currently leased to the Lease-Up Reserve Tenants.  The Letter of Credit has a stated expiration
of not earlier than one (1) year after the date hereof and has an “evergreen”
feature, whereby the Letter of Credit is automatically renewed for additional
one-year periods unless the issuer gives to Lender not less than sixty (60)
days prior notice that it shall not renew the Letter of Credit.


 


The parties
agree that (i) if an Event of Default shall occur hereunder, or (ii) if, within
the 30 day period preceding the expiration date of the Letter of Credit (as the
same may have been reduced, modified, amended or renewed as permitted
hereunder), an amendment, replacement or renewal of such letter of credit
satisfactory in all respects to Lender in its sole discretion has not been delivered
to Lender( the preceding items (i) and (ii) above being referred to herein as
the “Letter of Credit Drawdown Conditions”), then Lender shall be entitled, in
its sole discretion, to (A) draw down the Letter of Credit without notice to
Borrower, and apply the proceeds thereof to the prepayment of the Debt in
whatever order Lender directs or (B) continue to hold the Letter of Credit as
additional collateral security for the Loan; provided, however, if the Event of
Default results from Borrower’s failure to timely remit any installment of the
Monthly Debt Service Payment Amount as and when due, then Lender shall not draw
down the Letter of Credit until the expiration of three (3) days following
Borrower’s receipt of written notice of such Event of Default.  If Lender elects to draw down the Letter of
Credit and apply the proceeds thereof toward the prepayment of the Debt,
Borrower shall, upon demand, pay to Lender (in addition to the amount of the
letter of credit so drawn and applied) a Prepayment Consideration in an amount
calculated pursuant to Section 2.3.1 (a) hereof and based on the amount of
the letter of credit so drawn down and applied. 
Borrower’s failure to pay the foregoing Prepayment Consideration shall
be an Event of Default hereunder.


 


Borrower may,
from time to time, reduce the amount of the Letter of Credit as follows:


 


(i) During the
Contract of Sale Earnout Period, Borrower may submit to Lender, not more
frequently than once in any calendar month, a Tenant Reserve Earnout Conditions
Certificate certifying (A) that the Tenant Reserve Earnout Conditions for a
particular Lease-Up Reserve Tenant have been satisfied and (B) the purchase
price attributable to the applicable Lease-Up Reserve Tenant’s Space, such
purchase price to be reasonably determined by Borrower based upon a
capitalization rate tied to the rental income derived from the applicable lease.  Lender shall, within ten (10) business days
following its receipt of such Tenant Reserve Earnout Conditions Certificate and
certification regarding the purchase price, either (A) forward to Borrower a
written consent authorizing the reduction of the Letter of Credit by an amount
equal to fifty five percent (55%) of the purchase price as certified by
Borrower as attributable to the applicable Lease-Up Reserve Tenant’s space or
(B) forward to Borrower a written explanation substantiating its refusal to
permit the aforesaid reduction together, if applicable, with a request for such
additional documentation and/or information as Lender shall require to renew
its review of the Tenant Reserve Earnout Conditions Certificate.  As a condition to Lender’s consent to the
aforesaid fifty five percent (55%) reduction in the Letter of Credit, Borrower
shall furnish Lender with documentation evidencing that the purchase price for
the applicable Lease-Up Reserve Tenant’s space has actually been paid by the
Borrower.


 


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(ii) Following
the expiration of the Contract of Sale Earnout Period, Borrower may submit to
Lender, not more frequently than once in any calendar month, a Tenant Reserve
Earnout Conditions Certificate certifying (A) that the Tenant Reserve Earnout
Conditions for a particular Lease-Up Reserve Tenant have been satisfied and (B)
the annual base rent for the applicable Lease-Up Reserve Tenant’s space.  Lender shall, within ten (10) business days
following its receipt of such Tenant Reserve Earnout Conditions Certificate and
statement regarding annual base rent, either (A) forward to Borrower a written
consent authorizing the reduction of the Letter of Credit by an amount equal to
fifty five percent (55%) of the annual base rent for the applicable Lease-Up
Reserve Tenant’s space divided by .079296 or (B) forward to Borrower a written
explanation substantiating its refusal to permit the aforesaid reduction
together, if applicable, with a request for such additional documentation and/or
information as Lender shall require to renew its review of the Tenant Reserve
Earnout Conditions Certificate.


 


The Letter of
Credit, as the same may have been reduced, amended, renewed or modified as
permitted hereunder, shall at all times be acceptable in form to Lender and
issued by a bank with a rating of not less than “A” by Standard & Poor’s
Ratings Services.


 


Section 7.5                                      Intentionally
Omitted. 


 


Section 7.6                                      Intentionally
Omitted. 


 


Section 7.7                                      Reserve
Funds. Generally.


 


7.7.1                        Borrower grants to Lender a
first-priority perfected security interest in each of the Reserve Funds and any
and all monies now or hereafter deposited in each Reserve Fund as additional
security for payment of the Debt.  Until
expended or applied in accordance herewith, the Reserve Funds shall constitute
additional security for the Debt.


 


7.7.2                        Upon the occurrence of an Event
of Default, Lender may, in addition to any and all other rights and remedies
available to Lender, apply any sums then present in any or all of the Reserve
Funds to the payment of the Debt in any order in its sole discretion.


 


7.7.3                        The Reserve Funds shall not constitute
trust funds and may be commingled with other monies held by Lender.


 


7.7.4                        Intentionally omitted.


 


7.7.5                        Borrower shall not, without
obtaining the prior written consent of Lender, further pledge, assign or grant
any security interest in any Reserve Fund or the monies deposited therein or
permit any lien or encumbrance to attach thereto, or any levy to be made
thereon, or any UCC-1 Financing Statements, except those naming Lender as the
secured party, to be filed with respect thereto.


 


7.7.6                        Lender shall not be liable for any
loss sustained on the investment of any funds constituting the Reserve Funds
unless occasioned by the gross negligence or willful misconduct of Lender.


 


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7.7.7                        Upon payment in full of the
Debt and performance of all other obligations under this Agreement and the
other Loan Documents, Lender shall disburse to Borrower all remaining Reserve
Funds.


 


ARTICLE VIII


 


DEFAULTS


 


Section 8.l                                         Event
of Default.  (a) Each of the
following events shall constitute an event of default hereunder (an “Event of Default”):


 


(i)                                     if
any portion of the Debt is not paid on the applicable due date;


 


(ii)                                  if
any of the Taxes or Other Charges are not paid prior to the date when the same
become delinquent, except to the extent that Borrower is contesting same in
accordance with the terms of Section 5.1.2 hereof, or there are sufficient
funds in the Tax and Insurance Escrow Fund to pay such Taxes or Other Charges
and Lender fails to or refuses to release the same from the Tax and Insurance
Escrow Fund;


 


(iii)                               if
the Policies are not kept in full force and effect, or if certified copies of
the Policies are not delivered to Lender within ten (10) days of request;


 


(iv)                              if
Borrower transfers or encumbers any portion of the Property without Lender’s
prior written consent (to extent such consent is required) or otherwise
violates the provisions of Section 5.2.13 of this Loan Agreement;


 


(v)                                 if
any material representation or warranty made by Borrower herein or in any other
Loan Document, or in any report, certificate, financial statement or other
instrument, agreement or document furnished to Lender shall have been false or
misleading in any material respect as of the date the representation or
warranty was made;


 


(vi)                              if
Borrower or indemnitor or any guarantor under any guaranty or indemnity issued
in connection with the Loan shall make an assignment for the benefit of
creditors;


 


(vii)                           if a
receiver, liquidator or trustee shall be appointed for Borrower or any
guarantor or indemnitor under any guarantee or indemnity issued in connection
with the Loan or if Borrower or such guarantor or indemnitor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Borrower or such guarantor or indemnitor, or if any
proceeding for the dissolution or liquidation of Borrower or such guarantor or
indemnitor shall be instituted; provided, however, if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Borrower or such guarantor or indemnitor, upon the same not
being discharged, stayed or dismissed within one hundred eighty (180) days;


 


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(viii)                        if
Borrower attempts to assign its rights under this Agreement or any of the other
Loan Documents or any interest herein or therein in contravention of the Loan
Documents;


 


(ix)                                if
Borrower breaches any of its respective negative covenants contained in Section 5.2
or any covenant contained in Section 4.1.30 hereof;


 


(x)                                   with
respect to any term, covenant or provision set forth herein which specifically
contains a notice requirement or grace period, if Borrower shall be in default
under such term, covenant or condition after the giving of such notice or the
expiration of such grace period;


 


(xi)                                if
any of the assumptions contained in any substantive non-consolidation opinion
required to be delivered in connection herewith are or shall become untrue in
any material respect;


 


(xii)                             if
Borrower shall continue to be in Default under any of the other terms,
covenants or conditions of this Agreement not specified in subsections (i) to
(xi) above, for ten (10) days after notice to Borrower 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,
however, that if such non-monetary Default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided further that
Borrower shall have commenced to cure such Default within such 30-day period
and thereafter diligently and expeditiously proceeds to cure the same, such
30-day period shall be extended for such time as is reasonably necessary for
Borrower in the exercise of due diligence to cure such Default, such additional
period not to exceed one hundred eighty (180) days; or


 


(xiii)                          if there
shall be default under any of the other Loan Documents beyond any applicable
cure periods contained in such documents, whether as to Borrower or the
Property, or if any other such event shall occur or condition shall exist, if
the effect of such event or condition is to accelerate the maturity of any
portion of the Debt or to permit Lender to accelerate the maturity of all or
any portion of the Debt.


 


(b)                                 Upon
the occurrence of an Event of Default (other than an Event of Default described
in clauses (vi), (vii) or (viii) 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, Lender may 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 clauses (vi), (vii) or (viii) 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.


 


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Section 8.2                                      Remedies.
 (a) 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, singly, 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.  Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing (i) Lender
is not subject to any “one action” or “election of remedies” law or rule, and
(ii) all liens and other rights, remedies or privileges provided to Lender
shall remain in full force and effect until Lender has exhausted all of its
remedies against the Property and the Mortgage has been foreclosed, sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid
in full.


 


(b)                                 Lender shall have the
right from time to time to partially foreclose the Mortgage in any manner and
for any amounts secured by the Mortgage then due and payable as determined by
Lender in its sole discretion including, without limitation, the following
circumstances: (i) in the event Borrower defaults beyond any applicable grace
period in the payment of one or more scheduled payments of principal and
interest, Lender may foreclose the Mortgage to recover such delinquent
payments, or (ii) in the event Lender elects to accelerate less than the entire
outstanding principal balance of the Loan, Lender may foreclose the Mortgage to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Mortgage as Lender may elect.  Notwithstanding one or more partial
foreclosures, the Property shall remain subject to the Mortgage to secure
payment of sums secured by the Mortgage and not previously recovered.


 


(c)                                  Lender shall have the
right from time to time to sever the Note and the other Loan Documents into one
or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as Lender shall determine in its sole discretion
for purposes of evidencing and enforcing its rights and remedies provided
hereunder.  Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order
to effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. 
Borrower hereby absolutely and irrevocably appoints Lender following the
occurrence of an Event of Default as its true and lawful attorney, coupled with
an interest, in its name and stead to make and execute all documents necessary
or desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender
shall not make or execute any such documents under such power until three (3)
days after notice has been given to Borrower by Lender of Lender’s intent to exercise
its rights under such power.  Borrower
shall not be obligated to pay any costs or expenses incurred in connection with
the preparation, execution, recording or filing of the Severed Loan Documents,
and the Severed Loan Documents shall not contain any


 


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representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.


 


(d)                                 As
used in this Section 8.2, a “foreclosure” shall include any sale by power
of sale.


 


Section 8.3                                      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 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 singly, 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.


 


ARTICLE IX


 


SPECIAL PROVISIONS


 


Section 9.1                                      Sale
of Notes and Securitization.  At the
request of the holder of the Note and, to the extent not already required to be
provided by Borrower under this Agreement, Borrower shall cooperate with Lender
to allow Lender to satisfy the market standards to which the holder of the Note
customarily adheres or which may be reasonably required in the marketplace or
by the Rating Agencies in connection with the sale of the Note or
participations therein or the first successful securitization (such sale and/or
securitization, the “Securitization”)
of rated single or multi-class securities (the “Securities”)
secured by or evidencing ownership interests in the Note and the Mortgage.  In this regard Borrower shall:


 


(a)                                  (i)                                     provide such
financial and other information with respect to the Property, Borrower and the
Manager, (ii) provide budgets relating to the Property and (iii) to perform or
permit or cause to be performed or permitted such site inspection, appraisals,
market studies, environmental reviews and reports (Phase I’s and, if
appropriate, Phase II’s), engineering reports and other due diligence investigations
of the Property, as may be reasonably requested by the holder of the Note or
the Rating Agencies or as may be necessary or appropriate in connection with
the Securitization (the “Provided Information”),
together, if customary, with appropriate verification and/or consents of the
Provided Information through letters of auditors or opinions of counsel of
independent attorneys acceptable to Lender and the Rating Agencies;


 


(b)                                 cause counsel to
render opinions, which may be relied upon by the holder of the Note, the Rating
Agencies and their respective counsel, agents and representatives, as to non-consolidation,
fraudulent conveyance, and true sale and/or lease or any other opinion


 


69





















 


customary in securitization transactions,
which counsel and opinions shall be reasonably satisfactory to the holder of
the Note and the Rating Agencies;


 


(c)                                  make such
representations and warranties as of the closing date of the Securitization
with respect to the Property, Borrower, and the Loan Documents as are
consistent with the representations and warranties made in the Loan Documents;
and


 


(d)                                 execute such
amendments to the Loan Documents and organizational documents as may be
reasonably requested by the holder of the Note or the Rating Agencies or otherwise
to effect the Securitization; 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, or (ii) modify or amend any
other material economic term of the Loan.


 


All material
out-of-pocket third party costs and expenses incurred by Borrower in connection
with complying with requests made under this Section 9.1 shall be paid by
Lender.


 


Section 9.2                                      Securitization.
 Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a “Disclosure Document”)
and may also be included in filings with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”),
or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),
or provided or made available to investors or prospective investors in the
Securities, the Rating Agencies, and service providers relating to the
Securitization.  In the event that the
Disclosure Document is required to be revised prior to the sale of all
Securities, Borrower will cooperate with the holder of the Note in updating the
Disclosure Document by providing all current information necessary to keep the
Disclosure Document accurate and complete in all material respects.


 


Section 9.3                                      Rating
Surveillance.  Lender, at its option,
may retain the Rating Agencies to provide rating surveillance services on any
certificates issued in a Securitization. 
Such rating surveillance will be at the expense of Lender (the “Rating Surveillance Charge”).


 


Section 9.4                                      Exculpation.
 Subject to the qualifications below,
Lender shall not enforce the liability and obligation of Borrower to perform
and observe the obligations contained in the Note, this Agreement, the Mortgage
or the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
under the Note, this Agreement, the Mortgage and the other Loan Documents, or
in the Property, the Rents following an Event of Default, or any other
collateral given to Lender pursuant to the Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action
or proceeding shall be enforceable against Borrower only to the extent of
Borrower’s interest in the Property, in the Rents following an Event of Default
and in any other collateral given to Lender, and Lender, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, agrees that it shall
not sue for, seek or demand any deficiency judgment against


 


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Borrower in any such action or proceeding
under or by reason of or under or in connection with the Note, this Agreement,
the Mortgage or the other Loan Documents.  The provisions of this section shall not,
however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under any of the Mortgage; (c) affect the validity or
enforceability of or any guaranty made in connection with the Loan or any of
the rights and remedies of Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of any of the Assignment
of Leases following an Event of Default; (f) constitute a prohibition against
Lender commencing any other appropriate action or proceeding in order for
Lender to exercise its remedies against the Property; or (g) constitute a
waiver of the right of Lender to enforce the liability and obligation of
Borrower, by money judgment or otherwise, to the extent of any loss, damage,
cost, expense, liability, claim or other obligation incurred by Lender
(including attorneys’ fees and costs reasonably incurred) arising out of or in
connection with the following:


 


(i)                                     fraud
or intentional misrepresentation by Borrower or any guarantor in connection
with the Loan;


 


(ii)                                  the
gross negligence or willful misconduct of Borrower;


 


(iii)                               material
physical waste of the Property;


 


(iv)                              the
breach of any representation, warranty, covenant or indemnification provision
in the Environmental Indemnity or in the Mortgage concerning environmental
laws, hazardous substances and asbestos and any indemnification of Lender with
respect thereto in either document;


 


(v)                                 the
removal or disposal of any portion of the Property after an Event of Default;


 


(vi)                              the
misapplication or conversion by Borrower of (A) any insurance proceeds paid by
reason of any loss, damage or destruction to the Property which are not applied
by Borrower in accordance with this Agreement, (B) any awards or other amounts
received in connection with the condemnation of all or a portion of the
Property which are not applied by Borrower in accordance with this Agreement,
or (C) any Rents following an Event of Default;


 


(vii)                           failure
to pay charges for labor or materials or other charges that can create liens on
any portion of the Property;


 


(viii)                        any
security deposits, advance deposits or any other deposits collected with
respect to the Property which are not delivered to Lender upon a foreclosure of
the Property or action in lieu thereof, except to the extent any such security
deposits were applied in accordance with the terms and conditions of any of the
Leases prior to the occurrence of the Event of Default that gave rise to such
foreclosure or action in lieu thereof;


 


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(ix)                                obligations
imposed pursuant to that certain Development Agreement dated as of August 10,
2004 among Kimco Tampa, L.P., Pasco County, Florida, Northwood Centers, LLP,
MJG Ventures, Ltd. and Spanos Corporation for the Northwood Development of
Regional Impact No. 119, and that certain Resolution (04-205) Amending the
Development Order for the Northwood Development of Regional Impact (86-17).


 


Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan
Documents, (A) the Debt shall be fully recourse to the Borrower and (B) Lender
shall not be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a
claim for the full amount of the Debt secured by the Mortgage or to require
that all collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents in the event that the (1) first full monthly
payment under the Note is not paid within five (5) days of notice that such
payment is late (provided, however, that such grace period relates only to the
recourse trigger described in this paragraph), or (II) failure of Borrower to
permit on-site inspections of the Property subject to the rights of Tenants and
any applicable cure period set forth in the Loan Documents, to provide
financial information as required under the Loan Documents subject to any
applicable cure period (except for financial information required to be
delivered by a tenant pursuant to the applicable Lease that has not been
delivered to Borrower, provided Borrower has requested such financial
information from such tenant), or to comply with Section 4.1.30 hereof, or
(III) failure of Borrower to obtain Lender’s prior written consent (to extent
such consent is required) to any subordinate financing or other voluntary lien
encumbering the Property, or (IV) failure of Borrower to obtain Lender’s prior
written consent to any assignment, transfer or conveyance of the Property, or
any portion thereof, or any interest therein as required by this Agreement.  Notwithstanding the provision set forth in
clause (III) of this paragraph, a voluntary lien other  than a lien
securing an extension of credit filed against the Property shall not constitute
a recourse trigger for purposes of this paragraph provided such lien (A) is
fully bonded to the satisfaction of Lender and discharged of record within
ninety (90) days of filing, or (B) within such ninety (90) day period, Lender
receives affirmative title insurance from the title insurance company insuring
the lien of the Mortgage that such lien is subject and subordinate to the lien
of the Mortgage and no enforcement action is commenced by the applicable lien
holder.


 


Section 9.5                                      Termination
of Manager.  If (a) the amounts
evidenced by the Note have been accelerated pursuant to Section 8.1(b)
hereof, (b) the Manager shall become insolvent, (c) the Manager is in default
under the terms of the Management Agreement beyond any applicable grace or cure
period, (d) Manager is not managing the Property in accordance with the
management practices of nationally recognized management companies managing
similar properties in locations comparable to those of the Property or the Debt
Service Coverage Ratio for the Property for the preceeding twelve month period
is less than or equal to 2.10  to 1.0, or
(e) if Manager shall assign the Management Agreement without Lender’s consent
(if such consent is required pursuant to the Assignment and Subordination of
Management Agreement between Manager, Lender and Borrower) then, in the case of
(a), (b), (c), (d) or (e), Borrower shall, at the request of Lender, terminate
the Management Agreement and replace the Manager with a manager reasonably
approved by Lender on terms and conditions reasonably satisfactory to Lender,
it being understood and agreed that the management fee for such replacement
manager shall not exceed then prevailing market rates.  In addition and without limiting the rights
of


 


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Lender hereunder or under any of the other
Loan Documents, in the event that (i) the Management Agreement is terminated,
(ii) the Manager no longer manages the Property, or (iii) a receiver,
liquidator or trustee shall be appointed for Manager or if Manager shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization
or arrangement pursuant to federal bankruptcy law, or any similar federal or
state law, shall be filed by or against, consented to, or acquiesced in by,
Manager, or if any proceeding for the dissolution or liquidation of Manager
shall be instituted, then Borrower (at Borrower’s sole cost and expense) shall
immediately, in its name, establish new deposit accounts separate from any
other Person with a depository satisfactory to Lender into which all Rents and
other income from the Property shall be deposited and shall grant Lender a
first priority security interest in such account pursuant to documentation
satisfactory in form and substance to Lender.


 


Section 9.6                                      Servicer.
 At the option of Lender, the Loan may be
serviced by a servicer/trustee (the “Servicer”)
selected by Lender and Lender may delegate all or any portion of its
responsibilities under this Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing
Agreement”) between Lender and Servicer.  Lender shall be responsible for any set-up
fees or any other costs relating to or arising under the Servicing Agreement.


 


Section 9.7                                      Splitting
the Loan.  At the election of Lender
in its sole discretion, the Loan or any individual Note making up the Loan
shall be split and severed into two or more loans which, at Lender’s election,
shall not be cross-collateralized or cross-defaulted with each other.  Borrower hereby agrees to deliver to Lender
to effectuate such severing of the Loan or any individual Note, as the case may
be, as reasonably requested by Lender, (a) additional executed documents, or
amendments and modifications to the applicable Loan Documents, (b) new opinions
or updates to the opinions delivered to Lender in connection with the closing of
the Loan, (c) endorsements and/or updates to the title insurance policies
delivered to Lender in connection with the closing of the Loan, and (d) any
other certificates, instruments and documentation reasonably determined by
Lender as necessary or appropriate to such severance (the items described in
subsections (a) through (d) collectively hereinafter shall be referred to as “Severing
Documentation”), which Severing Documentation shall be acceptable to Lender in
form and substance in its reasonable discretion.  Lender hereby agrees to be responsible for
all reasonable third-party expenses incurred in connection with the preparation
and delivery of the Severing Documentation and the effectuation of the
uncrossing of the Loan from the additional Loans.  Borrower hereby acknowledges and agrees that
upon such severing of the Loan, Lender may effect, in its sole discretion, one
or more Securitizations of which the severed loans may be a part.


 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1                                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.


 


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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 10.2                                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 10.3                                Governing Law.  THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO
PURSUANT TO THE LAWS OF THE STATE
IN WHICH THE PROPERTY IS LOCATED AND SHALL
IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE
IN WHICH THE PROPERTY IS LOCATED AND
APPLICABLE FEDERAL LAWS.


 


Section 10.4                                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 10.5                                Delay
Not a Waiver.  Neither any failure
nor any delay on the part of Lender in insisting upon strict performance of any
term, condition, covenant or agreement, or exercising any right, power, remedy
or privilege hereunder, or under the Note or under any other Loan Document, or
any other instrument given as security therefor, shall operate as or constitute
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege.  In particular, and not by way
of limitation, by accepting payment after the due date of any amount payable
under this Agreement, the Note or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of
all other amounts due under this Agreement, the Note or the other Loan
Documents, or to declare a default for failure to effect prompt payment of any
such other amount.


 


Section 10.6                                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 or (b) expedited prepaid delivery service, either
commercial or United States Postal Service, with proof of attempted delivery,
and by telecopier (with answer back acknowledged), 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:


 


Nomura Credit & Capital Inc.


Two World Financial Center


Building B


New York, New York 10281


 


with a copy to:


 


ArCap Servicing, Inc.


5605 N. MacArthur Blvd.


Suite 950


Irving TX 75038


Attn:  Clyde Greenhouse


 


or any other servicer of the
Loan


 


If to Borrower:


 


INLAND WESTERN WESLEY CHAPEL NORTHWOODS,
L.L.C.


2901 Butterfield Road, Oak
Brook, Illinois 60523


 


with a copy to:


 


The Inland Real Estate
Group, Inc.


2901 Butterfield Road


Oak Brook, IL 60523


Attention: Robert Baum


 


and with a copy to:


 


Inland Retail Real Estate
Trust, Inc.


2901 Butterfield Road


Oak Brook, IL 60523


Attention: Roberta Matlin


 


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.


 


Section 10.7                                Trial by Jury.  BORROWER AND LENDER HEREBY AGREE 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


 


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OTHER ACTION ARISING IN
CONNECTION THEREWITH.  THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER 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.  LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER AND LENDER.


 


Section 10.8                                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 apart of this Agreement for any
other purpose.


 


Section 10.9                                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 10.10         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
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.


 


Section 10.11         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 10.12         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.


 


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Section 10.13         Expenses; Indemnity.


 


(a)                                  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 attorneys’  fees and disbursements) incurred by Lender in
connection with (i) 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); (ii) 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; (iii) 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;
(iv) except as otherwise provided in this Agreement, 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 reasonably requested by Lender;
(v) securing Borrower’s compliance with any requests made pursuant to the
provisions of this Agreement; (vi) 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 Liens in favor of Lender pursuant to this Agreement
and the other Loan Documents; (vii) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Property, or any other
security given for the Loan; and (viii) 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.


 


(b)                                 Borrower shall indemnify, defend and hold
harmless Lender from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for Lender in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not Lender shall be designated a party
thereto), that may be imposed on, incurred by, or asserted against Lender in
any manner relating to or arising out of (i) any breach by Borrower of its
obligations under, or any material misrepresentation by Borrower contained in,
this Agreement or the other Loan Documents, or (ii) the use or intended use of
the proceeds of the Loan (collectively, the “Indemnified
Liabilities”); provided, however, that Borrower
shall not have any obligation to Lender hereunder to the extent that such
Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender.  To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may


 


77





















 


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 10.14                          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.


 


Section 10.15                          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 10.16                          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.


 


Section 10.17                          Publicity.
 All news releases, publicity or
advertising by Borrower or their Affiliates through any media intended to reach
the general public which refers to the Loan Documents or the financing
evidenced by the Loan Documents, to Lender, Nomura Credit & Captial Inc.,
or any of their Affiliates shall be subject to the prior written approval of
Lender.  All news releases, publicity or
advertising by Lender through any media intended to reach the general public
which refers solely to the Borrower or to the Loan made by the Lender to the
Borrower shall be subject to the prior written approval of Borrower, provided
however, the foregoing shall not apply to Provided Information included in
disclosure documents in connection with a Securitization.


 


78





















 


Section 10.18                          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, or to a
sale in inverse order of alienation in the event of foreclosure of the Mortgage
or sale of the Property by power of sale, 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 10.19                          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.


 


Section 10.20                          Conflict;
Construction of Documents; Reliance.  In the event of any conflict between the
provisions of this Loan Agreement and any of the other Loan Documents, the
provisions of this Loan 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.


 


Section 10.21                          Brokers
and Financial Advisors.  Borrower
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement other than Inland Mortgage Corp.  Borrower hereby agrees to indemnify, defend
and hold Lender harmless from and against any and all claims, liabilities,
costs and expenses of any kind (including Lender’s reasonable attorneys’ fees
and expenses) in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower or Lender in connection with the
transactions contemplated herein.  The
provisions of this Section 10.21 shall survive the expiration and
termination of this Agreement and the payment of the Debt.


 


Section 10.22                          Prior
Agreements.  This Agreement and the
other Loan Documents contain the entire agreement of the parties hereto and
thereto in respect of the transactions


 


79





















 


contemplated hereby and thereby, and all prior
agreements or understandings among or between such parties, whether oral or
written, are superseded by the terms of this Agreement and the other Loan
Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of such prior agreement do not
survive execution of this Agreement.


 


Section 10.23                        Transfer of Loan.  In
the event that Lender transfers the Loan, Borrower shall continue to make payments
at the place set forth in the Note until such time that Borrower is notified in
writing by Lender that payments are to be made at another place.


 


Section 10.24                       Joint and Several Liability.  If
Borrower consists of more than one person or party, the obligations and
liabilities of each person or party shall be joint and several.


 


(THE BALANCE OF THIS PAGE
HAS BEEN INTENTIONALLY LEFT BLANK)


 


80





















 


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 WESLEY CHAPEL

  NORTHWOODS,
  L.L.C.,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Inland
  Western Retail Real Estate Trust,

  Inc., a Maryland corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Valerie
  Medina

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Valerie
  Medina

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Asst.
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  NOMURA CREDIT & CAPITAL INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
									



 





















 


SCHEDULE I


 


Intentionally
omitted


 





















 


SCHEDULE II


 


Intentionally
omitted.


 





















 


SCHEDULE III


 


REQUIRED
REPAIRS


 


1.  Confirm
sinkhole recess


2.  Repair
asphalt concrete distress


3.  Install
lock at unsecured ladder and make related repairs


4.  Apply
waterproofing sealant to Marshall’s walls.


 


As each of such items is more particularly described
in that certain Property Conditions Assessment prepared by RCI Consulting dated
November 10, 2004.


 





















 


SCHEDULE IV


 


RENT ROLL


 


[exhibit
follows this page]