Exhibit 10.464


 


LOAN AGREEMENT


 


 


Dated as of December 16, 2004


 


 


Between


 


 


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


 


 


as Borrower


 


 


and


 


 


BANK OF AMERICA, N.A.,


as Lender


 





















 


TABLE
OF CONTENTS


 


	
  ARTICLE
  1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1. DEFINITIONS

  	
   

  
	
  SECTION 1.2.
  PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2 GENERAL TERMS

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER

  	
   

  
	
  SECTION 2.2. LOAN PAYMENTS

  	
   

  
	
  SECTION 2.3. PREPAYMENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3 CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4 REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1. ORGANIZATION

  	
   

  
	
  SECTION 4.2. STATUS OF BORROWER

  	
   

  
	
  SECTION 4.3. VALIDITY OF DOCUMENTS

  	
   

  
	
  SECTION 4.4. NO CONFLICTS

  	
   

  
	
  SECTION 4.5. LITIGATION

  	
   

  
	
  SECTION 4.6. AGREEMENTS

  	
   

  
	
  SECTION 4.7. SOLVENCY

  	
   

  
	
  SECTION
  4.8. FULL AND ACCURATE
  DISCLOSURE

  	
   

  
	
  SECTION 4.9. NO PLAN ASSETS

  	
   

  
	
  SECTION 4.10. NOT A FOREIGN PERSON

  	
   

  
	
  SECTION 4.11. ENFORCEABILITY

  	
   

  
	
  SECTION 4.12. BUSINESS PURPOSES

  	
   

  
	
  SECTION 4.13. COMPLIANCE

  	
   

  
	
  SECTION 4.14. FINANCIAL INFORMATION

  	
   

  
	
  SECTION 4.15. CONDEMNATION

  	
   

  
	
  SECTION 4.16. UTILITIES AND PUBLIC Access; PARKING

  	
   

  
	
  SECTION 4.17. SEPARATE LOTS

  	
   

  
	
  SECTION 4.18. ASSESSMENTS

  	
   

  
	
  SECTION 4.19. INSURANCE

  	
   

  
	
  SECTION 4.20. USE OF PROPERTY

  	
   

  
	
  SECTION 4.21. CERTIFICATE OF OCCUPANCY;
  LICENSES

  	
   

  
	
  SECTION 4.22. FLOOD ZONE

  	
   

  
	
  SECTION 4.23. PHYSICAL CONDITION

  	
   

  
	
  SECTION 4.24. BOUNDARIES; SURVEY

  	
   

  
	
  SECTION 4.25. LEASES

  	
   

  
	
  SECTION 4.26. FILING AND RECORDING TAXES

  	
   

  
	
  SECTION 4.27. MANAGEMENT AGREEMENT

  	
   

  
	
  SECTION 4.28. ILLEGAL ACTIVITY

  	
   

  
	
  SECTION 4.29. CONSTRUCTION EXPENSES

  	
   

  
	
  SECTION 4.30. PERSONAL PROPERTY

  	
   

  
	
  SECTION
  4.31. TAXES

  	
   

  
	
  SECTION 4.32. PERMITTED ENCUMBRANCES

  	
   

  
	
  SECTION
  4.33. FEDERAL RESERVE
  REGULATIONS

  	
   

  
	
  SECTION 4.34. INVESTMENT COMPANY ACT

  	
   

  
	
  SECTION 4.35. RECIPROCAL EASEMENT AGREEMENTS

  	
   

  
	
  SECTION
  4.36. NO CHANGE IN FACTS OR
  CIRCUMSTANCES; DISCLOSURE

  	
   

  



 


i





















 


	
  SECTION 4.37.
  INTELLECTUAL PROPERTY

  	
   

  
	
  SECTION
  4.38. COMPLIANCE WITH ANTI-TERRORISM LAWS

  	
   

  
	
  SECTION 4.39. PATRIOT ACT

  	
   

  
	
  SECTION 4.40. SURVIVAL

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5 BORROWER
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1. EXISTENCE; COMPLIANCE WITH
  LEGAL REQUIREMENTS

  	
   

  
	
  SECTION 5.2. MAINTENANCE AND USE OF
  PROPERTY

  	
   

  
	
  SECTION 5.3. WASTE

  	
   

  
	
  SECTION 5.4. TAXES AND OTHER CHARGES

  	
   

  
	
  SECTION 5.5. LITIGATION

  	
   

  
	
  SECTION 5.6. ACCESS TO PROPERTY

  	
   

  
	
  SECTION 5.7. NOTICE OF DEFAULT

  	
   

  
	
  SECTION 5.8. COOPERATE IN LEGAL PROCEEDINGS

  	
   

  
	
  SECTION 5.9. PERFORMANCE BY BORROWER

  	
   

  
	
  SECTION 5.10. AWARDS; INSURANCE PROCEEDS

  	
   

  
	
  SECTION 5.11. FINANCIAL REPORTING

  	
   

  
	
  SECTION 5.12. ESTOPPEL STATEMENT

  	
   

  
	
  SECTION 5.13. LEASING MATTERS

  	
   

  
	
  SECTION 5.14. PROPERTY MANAGEMENT

  	
   

  
	
  SECTION 5.15. LIENS

  	
   

  
	
  SECTION 5.16. DEBT CANCELLATION

  	
   

  
	
  SECTION
  5.17. ZONING

  	
   

  
	
  SECTION
  5.18. ER1SA

  	
   

  
	
  SECTION 5.19. NO
  JOINT ASSESSMENT

  	
   

  
	
  SECTION
  5.20. RECIPROCAL EASEMENT AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6 ENTITY COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1. SINGLE PURPOSE
  ENTITY/SEPARATENESS

  	
   

  
	
  SECTION 6.2. CHANGE OF NAME, IDENTITY OR
  STRUCTURE

  	
   

  
	
  SECTION 6.3. BUSINESS AND OPERATIONS

  	
   

  
	
  SECTION 6.4. INTENTIONALLY OMITTED

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7 NO SALE OR
  ENCUMBRANCE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.1.
  TRANSFER DEFINITIONS

  	
   

  
	
  SECTION 7.2. NO SALE/ENCUMBRANCE

  	
   

  
	
  SECTION 7.3.
  PERMITTED TRANSFERS

  	
   

  
	
  SECTION 7.4. LENDER’S RIGHTS

  	
   

  
	
  SECTION 7.5. ASSUMPTION

  	
   

  
	
  SECTION 7.6. ASSUMPTION BY INLAND PERMITTED
  TRANSFEREE

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

  	
   

  
	
   

  	
   

  
	
  SECTION 8.1. INSURANCE

  	
   

  
	
  SECTION 8.2. CASUALTY

  	
   

  
	
  SECTION 8.3. CONDEMNATION

  	
   

  
	
  SECTION 8.4. RESTORATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9
  REPLACEMENTS; RESERVE FUNDS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.1. REPLACEMENTS

  	
   

  
	
  SECTION 9.2. TAX AND INSURANCE RESERVE
  FUNDS

  	
   

  
	
  SECTION 9.3. RESERVE FUNDS GENERALLY

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10 CASH MANAGEMENT

  	
   

  
	
   

  	
   

  
	
  SECTION 10.1. CASH MANAGEMENT ACCOUNT

  	
   

  
	
  SECTION 10.2. DEPOSITS AND WITHDRAWALS

  	
   

  
	
  SECTION 10.3. SECURITY INTEREST

  	
   

  



 


ii





















 


	
  ARTICLE 11 EVENTS
  OF DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 11.1. EVENT OF
  DEFAULT 

  	
   

  
	
  SECTION 11.2. REMEDIES

  	
   

  
	
   

  	
   

  
	
  ARTICLE 12
  ENVIRONMENTAL PROVISIONS

  	
   

  
	
   

  	
   

  
	
  SECTION
  12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  SECTION 12.2.
  ENVIRONMENTAL COVENANTS

  	
   

  
	
  SECTION 12.3. LENDER’S
  RIGHTS

  	
   

  
	
  SECTION
  12.4. OPERATIONS AND MAINTENANCE PROGRAMS

  	
   

  
	
  SECTION 12.5.
  ENVIRONMENTAL DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE 13 SECONDARY MARKET

  	
   

  
	
   

  	
   

  
	
  SECTION 13.1. TRANSFER
  OF LOAN

  	
   

  
	
  SECTION 13.2.
  DELEGATION OF SERVICING

  	
   

  
	
  SECTION 13.3.
  DISSEMINATION OF INFORMATION

  	
   

  
	
  SECTION 13.4. COOPERATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE 14
  INDEMNIFICATIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 14.1.
  GENERAL INDEMNIFICATION

  	
   

  
	
  SECTION
  14.2. MORTGAGE AND INTANGIBLE TAX INDEMNIFICATION

  	
   

  
	
  SECTION 14.3. ERISA
  INDEMNIFICATION

  	
   

  
	
  SECTION 14.4. SURVIVAL

  	
   

  
	
   

  	
   

  
	
  ARTICLE 15 EXCULPATION

  	
   

  
	
   

  	
   

  
	
  SECTION 15.1. EXCULPATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  16 NOTICES

  	
   

  
	
   

  	
   

  
	
  SECTION 16.1. NOTICES

  	
   

  
	
   

  	
   

  
	
  ARTICLE 17 FURTHER
  ASSURANCES

  	
   

  
	
   

  	
   

  
	
  SECTION 17.1.
  REPLACEMENT DOCUMENTS

  	
   

  
	
  SECTION
  17.2. RECORDING OF MORTGAGE, ETC.

  	
   

  
	
  SECTION 17.3. FURTHER
  ACTS, ETC.

  	
   

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

  	
   

  
	
  SECTION 17.5. EXPENSES

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  18 WAIVERS

  	
   

  
	
   

  	
   

  
	
  SECTION 18.1
  REMEDIES CUMULATIVE; WAIVERS

  	
   

  
	
  SECTION
  18.2. MODIFICATION, WAIVER IN WRITING

  	
   

  
	
  SECTION 18.3. DELAY
  NOT A WAIVER

  	
   

  
	
  SECTION 18.4. TRIAL BY
  JURY

  	
   

  
	
  SECTION 18.5. WAIVER OF
  NOTICE

  	
   

  
	
  SECTION 18.6.
  REMEDIES OF BORROWER

  	
   

  
	
  SECTION
  18.7. WAIVER OF MARSHALLING OF ASSETS

  	
   

  
	
  SECTION
  18.8. WAIVER OF STATUTE OF LIMITATIONS

  	
   

  
	
  SECTION 18.9.
  WAIVER OF COUNTERCLAIM

  	
   

  
	
   

  	
   

  
	
  ARTICLE 19 GOVERNING LAW

  	
   

  
	
   

  	
   

  
	
  SECTION 19.1. CHOICE OF
  LAW

  	
   

  
	
  SECTION 19.2. SEVERABILITY

  	
   

  
	
  SECTION 19.3. PREFERENCES

  	
   

  
	
   

  	
   

  
	
  ARTICLE 20 MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 20.1. SURVIVAL

  	
   

  
	
  SECTION 20.2.
  LENDER’S DISCRETION

  	
   

  



 


iii





















 


	
  SECTION 20.3. HEADINGS

  	
   

  
	
  SECTION 20.4. COST OF ENFORCEMENT

  	
   

  
	
  SECTION 20.5. SCHEDULES INCORPORATED

  	
   

  
	
  SECTION 20.6. OFFSETS, COUNTERCLAIMS AND
  DEFENSES

  	
   

  
	
  SECTION 20.7. NO JOINT VENTURE OR
  PARTNERSHIP; NO THIRD PARTY BENEFICIARIES

  	
   

  
	
  SECTION 20.8. PUBLICITY

  	
   

  
	
  SECTION 20.9. CONFLICT; CONSTRUCTION OF
  DOCUMENTS; RELIANCE

  	
   

  
	
  SECTION 20.10. ENTIRE AGREEMENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 21 OUT PARCEL
  RELEASE

  	
   

  



 


iv





















 


LOAN
AGREEMENT


 


THIS
LOAN AGREEMENT, dated as of December 16, 2004 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), between BANK OF
AMERICA, N.A., a national banking association, having an address at Bank of
America Corporate Center, 214 North Tryon Street, Charlotte, North Carolina
28255 (together with its successors and/or assigns, “Lender”) and INLAND WESTERN DE PERE, L.L.C., a Delaware
limited liability company having an address at c/o Inland Real Estate
Investment Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523
(together with its successors and/or assigns, “Borrower”).


 


RECITALS:


 


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


 


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


 


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


 


ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section 1.1.  Definitions


 


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


 


“Account Collateral” shall mean (i) the Accounts, and all cash,
checks, drafts, certificates and instruments, if any, from time to time
deposited or held in the Accounts; (ii) any and all amounts in or credited to
the Accounts invested in Permitted Investments; (iii) all interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing; and (iv) to the extent not covered by clauses (i) - (iii) above, all
“proceeds” (as defined under the UCC as in effect in the State in which the
Accounts are located) of any or all of the foregoing.


 


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


 


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


 


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


 





















 


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


 


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


 


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


 


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


 


“American Express” shall
mean IDS Property Casualty Insurance Company, a Wisconsin corporation.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2





















 


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


 


“Condemnation Proceeds” shall
have the meaning set forth in Section 8.4(b)


 


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


 


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


 


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


 


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


 


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


 


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


 


“Eligible Institution” shall
mean a depository institution or trust company insured by the Federal Deposit
Insurance Corporation, the short term unsecured debt obligations or commercial
paper of which are rated at least “A-1” by S&P, “P-l” by Moody’s and “F-l”
by Fitch in the case of accounts in which funds are held for thirty (30) days
or less (or, in the case of accounts in which funds are held for more than
thirty (30) days, the long term unsecured debt obligations of which are rated
at least “AA-” by Fitch and S&P (or “A-” by S&P, if such depository’s
short


 


3





















 


term
unsecured debt rating is at least “A-1” by S&P) and “Aa2” by Moody’s).
Notwithstanding the foregoing, prior to a Securitization, Bank of America, N.A.
shall be an Eligible Institution.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Fitch” shall
mean Fitch, Inc.


 


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


 


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


 


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


 


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


 


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


 


“Indemnified Parties” shall
mean (a) Lender, (b) any prior owner or holder of the Loan or Participations in
the Loan, (c) any servicer or prior servicer of the Loan, (d) any Investor or
any prior Investor in any Securities, (e) any trustees, custodians or other
fiduciaries who hold or


 


4





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7





















 


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


 


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


 


(b)           Federal Housing Administration
debentures;


 


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


 


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


 


8





















 


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


 


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


 


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


 


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


 


9





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


11





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 1.2.  Principles of Construction.


 


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


 


12





















 


ARTICLE 2

GENERAL TERMS


 


Section 2.1.  Loan
Commitment; Disbursement to Borrower


 


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


 


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


 


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


 


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


 


Section 2.2.  Loan Payments


 


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


 


Section 2.3.  Prepayment


 


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


 


ARTICLE 3

CONDITIONS PRECEDENT


 


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


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


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


 


Section 4.1.  Organization


 


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


 


13





















 


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


 


Section 4.2.  Status of
Borrower


 


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


 


Section 4.3.  Validity of
Documents


 


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


 


Section 4.4.  No Conflicts


 


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


 


14





















 


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


 


Section 4.5.  Litigation


 


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


 


Section 4.6.  Agreements


 


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


 


Section
4.7.  Solvency


 


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


 


15





















 


Section 4.8.  Full and
Accurate Disclosure


 


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


 


Section 4.9.  No Plan Assets


 


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


 


Section 4.10.  Not a
Foreign Person


 


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


 


Section 4.11.  Enforceability


 


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


 


Section 4.12.  Business
Purposes


 


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


 


Section 4.13.  Compliance


 


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


 


16





















 


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


 


Section 4.14.  Financial
Information


 


All financial data, including, without limitation, the balance sheets,
statements of cash flow, statements of income and operating expense and rent
rolls, that have been delivered to Lender in respect of Borrower, Borrower
Principal and/or the Property (a) are true, complete and correct in all
material respects, (b) accurately represent the financial condition of
Borrower, Borrower Principal or the Property, as applicable, as of the date of
such reports, and (c) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with tax
basis accounting throughout the periods covered, except as disclosed therein.
Borrower does not have any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Borrower and reasonably
likely to have a material adverse effect on the Property or the current and/or intended
operation thereof, except as referred to or reflected in said financial
statements. Since the date of such financial statements, there has been no
materially adverse change in the financial condition, operations or business of
Borrower or Borrower Principal from that set forth in said financial
statements.


 


Section 4.15.  Condemnation


 


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


 


Section 4.16.  Utilities
and Public Access; Parking


 


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


 


Section 4.17.  Separate Lots


 


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


 


17





















 


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


 


Section 4.18.  Assessments


 


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


 


Section 4.19.  Insurance


 


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


 


Section 4.20.  Use of
Property


 


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


 


Section 4.21.  Certificate
of Occupancy; Licenses


 


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


 


Section 4.22.  Flood Zone


 


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


 


Section 4.23.  Physical
Condition


 


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


 


18





















 


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


 


Section 4.24.  Boundaries;
Survey


 


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


 


Section
4.25.  Leases


 


The entire Property has been leased to American Express pursuant to the
American Express Lease. (a) The American Express Lease is in full force and
effect; (b) the premises demised under the American Express Lease have been
completed and American Express has accepted possession of and is in occupancy
of the demised premises; (c) American Express has commenced the payment of rent
under the American Express Lease, there are no offsets, claims or defenses to
the enforcement thereof and Borrower has no monetary obligations to American
Express under the American Express Lease; (d) all Rents due and payable under
the American Express Lease have been paid and no portion thereof has been paid
for any period more than thirty (30) days in advance; (e) the rent payable
under the American Express Lease is the amount of fixed rent set forth in the
American Express Lease, and there is no claim or basis for a claim by American
Express thereunder for an adjustment to the Rent; (f) Borrower is the sole
owner of the entire landlord’s interest in the American Express Lease; (g) the
American Express Lease is the valid, binding and enforceable obligation of
Borrower and American Express thereunder and there are no agreements with
American Express with respect to the American Express Lease other than as
expressly set forth therein; (h) no Person has any possessory interest in, or
right to occupy, the Property or any portion thereof except under the American
Express Lease; (i) except for the right of first refusal set forth in Article 4
and the right to offer to purchase the Property under Article 12, the American
Express Lease does not contain any option or offer to purchase or right of
first refusal to purchase the Property or any part thereof; and (j) neither the
American Express Lease not the Rents have been assigned or pledged except to
Lender, and no other Person has any interest therein.


 


Section 4.26.  Filing and
Recording Taxes


 


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


 


19





















 


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


 


Section 4.27.  Management Agreement


 


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


 


Section 4.28.  Illegal
Activity


 


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


 


Section 4.29.  Construction
Expenses


 


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


 


Section 4.30.  Personal
Property


 


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


 


Section
4.31.  Taxes


 


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


 


Section 4.32.  Permitted
Encumbrances


 


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


 


20





















 


Section 4.33.  Federal
Reserve Regulations


 


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


 


Section 4.34.  Investment
Company Act


 


Borrower is not (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; (b) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended; or (c) subject to any other federal or state law or regulation
which purports to restrict or regulate its ability to borrow money.


 


Section 4.35.  Reciprocal
Easement Agreements


 


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


 


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


 


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


 


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


 


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


 


21





















 


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


 


Section 4.36.  No Change
in Facts or Circumstances; Disclosure


 


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


 


Section 4.37.  Intellectual
Property


 


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


 


Section 4.38.  Compliance
with Anti-Terrorism Laws


 


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


 


Section 4.39.  Patriot Act


 


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


 


22





















 


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


 


Section 4.40.  Survival


 


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


 


ARTICLE 5


BORROWER COVENANTS


 


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


 


Section 5.1.  Existence; Compliance with
Legal Requirements


 


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


 


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


 


23





















 


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


 


Section 5.2.  Maintenance and Use of
Property


 


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


 


Section
5.3.  Waste


 


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


 


Section 5.4.  Taxes and Other Charges


 


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


 


24





















 


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


 


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


 


Section
5.5. 
Litigation


 


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


 


Section 5.6.  Access to Property


 


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


 


Section 5.7.  Notice of Default


 


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


 


25





















 


Section 5.8.  Cooperate in Legal
Proceedings


 


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


 


Section 5.9.  Performance by Borrower


 


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


 


Section 5.10.  Awards; Insurance Proceeds


 


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


 


Section 5.11.  Financial Reporting


 


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


 


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


 


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


 


26





















 


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


 


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


 


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


 


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


 


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


 


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


 


Section 5.12.  Estoppel Statement


 


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


 


27





















 


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


 


Section 5.13.  Leasing Matters.


 


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


 


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


 


Section 5.14.  Property
Management


 


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


 


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


 


(c)           In addition to the
foregoing, in the event that Lender, in Lender’s reasonable discretion, at any
time prior to the termination of the Assignment of Management Agreement, determines
that the Property is not being managed in accordance with generally accepted management
practices for projects similarly situated, Lender may deliver written notice
thereof to Borrower and Manager, which notice shall specify with particularity
the grounds for Lender’s


 


28





















 


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


 


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


 


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


 


Section 5.15.  Liens


 


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


 


Section 5.16.  Debt Cancellation


 


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


 


Section 5.17.  Zoning


 


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


 


Section
5.18.  ERISA


 


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


 


29





















 


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


 


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


 


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


 


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


 


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


 


Section 5.19.  No Joint
Assessment


 


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


 


Section 5.20.  Reciprocal
Easement Agreements


 


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


 


ARTICLE 6

ENTITY COVENANTS


 


Section 6.1.  Single
Purpose Entity/Separateness


 


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


 


30





















 


(a)           Borrower has not and
will not:


 


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


 


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


 


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


 


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


 


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


 


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


 


(vii)         incur
any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than (A) the Debt, (B) trade and operational
indebtedness incurred in the ordinary course of business with trade creditors,
provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3)
on commercially reasonable terms and conditions, and (4) due not more than
sixty (60) days past the date incurred and paid on or prior to such date,
and/or (C) financing leases and purchase money indebtedness incurred in the
ordinary course of business relating to Personal Property on commercially
reasonable terms and conditions; provided however, the aggregate amount of the
indebtedness described in (B) and (C) shall not exceed at any time three percent
(3%) of the outstanding principal amount of the Note;


 


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


 


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


 


31





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


32





















 


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


 


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


 


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


 


33





















 


Section 6.2.  Change of
Name, Identity or Structure


 


Borrower shall not change or permit to be changed (a) Borrower’s name,
(b) Borrower’s identity (including its trade name or names), (c) Borrower’s
principal place of business set forth on the first page of this Agreement, (d)
the corporate, partnership or other organizational structure of Borrower, or
Borrower Principal, (e) Borrower’s state of organization, or (f) Borrower’s
organizational identification number, without in each case notifying Lender of
such change in writing at least thirty (30) days prior to the effective date of
such change and, in the case of a change in Borrower’s structure, without first
obtaining the prior written consent of Lender.  In addition, Borrower shall not change or
permit to be changed any organizational documents of Borrower if such change
would adversely impact the covenants set forth in Section 6.1 and Section 6.4
hereof.  Borrower authorizes Lender to
file any financing statement or financing statement amendment required by
Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein.  At the
request of Lender, Borrower shall execute a certificate in form satisfactory to
Lender listing the trade names under which Borrower
intends to operate the Property, and representing and warranting that Borrower does
business under no other trade name with respect to the Property. If Borrower
does not now have an organizational identification number and later obtains
one, or if the organizational identification number assigned to Borrower
subsequently changes, Borrower shall promptly notify Lender of such
organizational identification number or change. 
Nothing in this Section 6.2 shall be deemed to restrict any express
rights granted to Borrower under Article 7 hereof.


 


Section 6.3.  Business
and Operations


 


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


 


Section 6.4.  Intentionally Omitted.


 


ARTICLE 7

NO SALE OR ENCUMBRANCE


 


Section 7.1.  Transfer
Definitions


 


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


 


34





















 


Section 7.2.  No Sale/Encumbrance


 


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


 


(b)           A Prohibited Transfer shall include, but not
be limited to, (i) an installment sales agreement wherein Borrower agrees to
sell the Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower’s right, title and interest in and to any Leases or any Rents; (iii)
if a Restricted Party is a corporation, any merger, consolidation or Sale or
Pledge of such corporation’s stock or the creation or issuance of new stock in
one or a series of transactions; (iv) if a Restricted Party is a limited or
general partnership or joint venture, any merger or consolidation or the
change, removal, resignation or addition of a general partner or the Sale or
Pledge of the partnership interest of any general or limited partner or any
profits or proceeds relating to such partnership interests or the creation or
issuance of new partnership interests; (v) if a Restricted Party is a limited
liability company, any merger or consolidation or the change, removal,
resignation or addition of a managing member or non-member manager (or if no
managing member, any member) or the Sale or Pledge of the membership interest
of any member or any profits or proceeds relating to such membership interest;
(vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial interests;
or (vii) the removal or the resignation of the Manager (including, without
limitation, an Affiliated Manager) other than in accordance with Section 5.14.


 


Section 7.3.  Permitted Transfers


 


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


 


35





















 


Section 7.4.  Lender’s Rights


 


Lender reserves the right to condition the consent to a Prohibited
Transfer requested hereunder upon (a) a modification of the terms hereof and an
assumption of the Note and the other Loan Documents as so modified by the
proposed Prohibited Transfer, (b) receipt of payment of a transfer fee equal to
one percent (1%) of the outstanding principal balance of the Loan and all of
Lender’s expenses incurred in connection with such Prohibited Transfer, (c)
receipt of written confirmation from the Rating Agencies that the Prohibited
Transfer will not result in a downgrade, withdrawal or qualification of the
initial, or if higher, then current ratings issued in connection with a
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, (d) the proposed transferee’s
continued compliance with the covenants set forth in this Agreement (including,
without limitation, the covenants in Article 6) and the other Loan Documents,
(e) a new manager for the Property and a new management agreement satisfactory
to Lender, and (f) the satisfaction of such other conditions and/or legal
opinions as Lender shall determine in its sole discretion to be in the interest
of Lender. All expenses incurred by Lender shall be payable by Borrower whether
or not Lender consents to the Prohibited Transfer. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Prohibited Transfer made without Lender’s consent. This provision shall apply
to each and every Prohibited Transfer, whether or not Lender has consented to
any previous Prohibited Transfer. In the event an opinion letter pertaining to
substantive consolidation was delivered to Lender and the Rating Agencies in
connection with the closing of the Loan, and if any Sale or Pledge permitted
under this Article 7 results in any Person and its Affiliates owning in excess
of forty-nine percent (49%) of the ownership interests in a Restricted Party,
Borrower shall, prior to such transfer, and in addition to any other
requirement for Lender consent contained herein, deliver a revised substantive
non-consolidation opinion letter to Lender reflecting such Prohibited Transfer,
which opinion shall be in form, scope and substance acceptable in all respects
to Lender and the Rating Agencies.


 


Section 7.5.  Assumption


 


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


 


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


 


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


 


36





















 


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


 


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


 


(d)           (i) Transferee shall
have assumed and agreed to pay the Debt as and when due subject to the
provisions of Article 15 hereof and, prior to or concurrently with the closing
of such transfer, Transferee and its constituent partners, members or
shareholders as Lender may require, shall have executed, without any cost or
expense to Lender, such documents and agreements as Lender shall reasonably
require to evidence and effectuate said assumption and (ii) if required by
Lender, a Person affiliated with Transferee and acceptable to Lender shall have
assumed the obligations of Borrower Principal under the Loan Documents with
respect to all acts and events occurring or arising after the transfer of the
Property pursuant to this Section 7.5;


 


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


 


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


 


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


 


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


 


37





















 


(i)            Transferee shall
furnish an opinion of counsel satisfactory to Lender and its counsel (A) that
Transferee’s formation documents provide for the matters described in
subparagraph (g) above, (B) that the assumption of the Debt has been duly
authorized, executed and delivered, and that the Note, the Mortgage, this
Agreement, the assumption agreement and the other Loan Documents are valid,
binding and enforceable against Transferee in accordance with their terms, (C)
that Transferee and any entity which is a controlling stockholder, member or
general partner of Transferee, have been duly organized, and are in existence and
good standing, and (E) with respect to such other matters as Lender may
reasonably request;


 


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


 


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


 


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


 


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


 


Section 7.6.  Assumption
by Inland Permitted Transferee


 


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


 


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


 


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


 


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


 


38





















 


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


 


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


 


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


 


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


 


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


 


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


 


39





















 


or general
partner of Transferee, have been duly organized, and are in existence and good
standing, and (E) with respect to such other matters as Lender may reasonably
request, including, without limitation, customary single member limited
liability company opinions in the event that such
Inland Permitted Transferee is a Delaware limited liability company; and


 


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


 


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


 


ARTICLE 8

INSURANCE;  CASUALTY;
CONDEMNATION; RESTORATION


 


Section 8.1.  Insurance


 


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


 


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


 


40





















 


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


 


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


 


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


 


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


 


41





















 


subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount endorsement
waiving co-insurance provisions;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


42





















 


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


 


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


 


(i)            no
act or negligence of Borrower, or anyone acting for Borrower, or of any Tenant
or other occupant, or failure to comply with the provisions of any Policy,
which might otherwise result in a forfeiture of the insurance or any part
thereof, shall in any way affect the validity or enforceability of the insurance
insofar as Lender is concerned;


 


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


 


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


 


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


 


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


 


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


 


Section
8.2.  Casualty


 


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


 


43





















 


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


 


Section 8.3.  Condemnation


 


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


 


Section 8.4.  Restoration


 


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


 


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


 


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


 


44





















 


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


 


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


 


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


 


(B)           (1) in the event the Net Proceeds are Insurance Proceeds, less than
thirty percent (30%) of the total floor area of the Improvements on the
Property has been damaged, destroyed or rendered unusable as a result of a
Casualty, or (2) in the event the Net Proceeds are Condemnation Proceeds, less
than ten percent (10%) of the land constituting the Property is taken, such
land is located along the perimeter or periphery of the Property, and no
portion of the Improvements is located on such land;


 


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


 


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


 


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


 


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


 


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


 


45





















 


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


 


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


 


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


 


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


 


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


 


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


 


46





















 


(iv)          In
no event shall Lender he obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the Restoration
Consultant, minus the Restoration Retainage. The term “Restoration Retainage” shall mean an
amount equal to ten percent (10%) of the costs actually incurred for work in
place as part of the Restoration, as certified by the Restoration Consultant,
until the Restoration has been completed. The Restoration Retainage shall be
reduced to five percent (5%) of the costs incurred upon receipt by Lender of
satisfactory evidence that fifty percent (50%) of the Restoration has been
completed. The Restoration Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 8.4(b), be less
than the amount actually held back by Borrower from contractors, subcontractors
and materialmen engaged in the Restoration. The Restoration Retainage shall not
be released until the Restoration Consultant certifies to Lender that the
Restoration has been completed in accordance with the provisions of this
Section 8.4(b) and that all approvals necessary for the re-occupancy and use of
the Property have been obtained from all appropriate Governmental Authorities,
and Lender receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the
Restoration Retainage; provided, however, that Lender will release the portion
of the Restoration Retainage being held with respect to any contractor,
subcontractor or materialman engaged in the Restoration as of the date upon
which the Restoration Consultant certifies to Lender that the contractor,
subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor’s,
subcontractor’s or materialman’s contract, the contractor, subcontractor or
materialman delivers the lien waivers and evidence of payment in full of all
sums due to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the Title Insurance Policy,
and Lender receives an endorsement to the Title Insurance Policy insuring the
continued priority of the lien of the Mortgage and evidence of payment of any
premium payable for such endorsement. If required by Lender, the release of any
such portion of the Restoration Retainage shall be approved by the surety company,
if any, which has issued a payment or performance bond
with respect to the contractor, subcontractor or materialman.


 


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


 


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


 


47





















 


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


 


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


 


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


 


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


 


ARTICLE 9

REPLACEMENTS; RESERVE FUNDS


 


Section 9.1.  Replacements


 


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


 


Section 9.2.  Tax and Insurance Reserve
Funds


 


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


 


48





















 


become
delinquent and (ii) the date that additional charges or interest will accrue
due to the non-payment thereof, and (b) except to the extent Lender has waived
the insurance escrow because the insurance required hereunder is maintained
under a blanket insurance Policy acceptable to Lender in accordance with
Section 8.l(c), one-twelfth of the Insurance Premiums that Lender estimates
will be payable during the next ensuing twelve (12) months for the renewal of
the coverage afforded by the Policies upon the expiration thereof or such
higher amount necessary to accumulate with Lender sufficient funds to pay all
such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Reserve Funds”), Lender will apply the
Tax and Insurance Reserve Funds to payments of Taxes and Insurance Premiums
required to be made by Borrower pursuant to Section 5.4 and Section 8.1 hereof.
In making any disbursement from the Tax and Insurance Reserve Account, Lender
may do so according to any bill, statement or estimate procured from the
appropriate public office or tax lien service (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax and Insurance Reserve Funds shall exceed the amounts due for Taxes
and Insurance Premiums pursuant to Section 5.4 and Section 8.1 hereof, Lender
shall, in its sole discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Tax and Insurance Reserve
Account. In allocating any such excess, Lender may deal with the person shown
on Lender’s records as being the owner of the Property. Any amount remaining in
the Tax and Insurance Reserve Account after the Debt has been paid in full
shall be returned to Borrower or the person shown on Lender’s records as being
the owner of the Property and no other party shall have any right or claim
thereto.  If at any time Lender
reasonably determines that the Tax and Insurance Reserve Funds are not or will
not be sufficient to pay Taxes and Insurance Premiums by the dates set forth in
(a) and (b) above, Lender shall notify Borrower of such determination and
Borrower shall pay to Lender any amount necessary to make up the deficiency
within ten (10) days after notice from Lender to Borrower requesting payment
thereof.


 


Section 9.3.  Reserve Funds Generally


 


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


 


(b)           Borrower grants to
Lender a first-priority perfected security interest in, and assigns and pledges
to Lender, each of the Reserve Accounts and any and all funds hereafter deposited
therein as additional security for payment of the Debt.  Until expended or applied in accordance
herewith, the Reserve Accounts and the Reserve Funds shall constitute
additional security for the Debt.  The
provisions of this Section 9.9 are intended to give Lender or any subsequent
holder of the Loan “control” of the Reserve Accounts within the meaning of the UCC.


 


49





















 


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


 


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


 


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


 


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


 


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


 


50





















 


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


 


ARTICLE 10


CASH MANAGEMENT


 


Section 10.1.  Cash Management Account


 


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


 


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


 


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


 


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


 


(e)           Lender shall be
responsible for the performance only of such duties with respect to the Cash
Management Account as are specifically set forth herein, and no duty shall be implied
from any provision hereof.  Lender shall
not be under any obligation or duty to perform any act which would involve it
in expense or liability or to institute or defend any suit in respect


 


51





















 


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


 


Section 10.2.  Deposits
and Withdrawals


 


(a)           Borrower represents, warrants and covenants that:


 


(i)            Concurrently
with the execution of this Agreement Borrower has executed and delivered to
Lender an instruction letter in the form of Exhibit B attached hereto addressed
to American Express (the “Tenant Direction Letter”).  Upon the occurrence of an Event of Default or
upon commencement of the Cash Management Period, Lender or Lender’s agent shall
have the right to deliver the Tenant Direction Letter to American Express and
all payments of Rent and other items payable under the American Express Lease
shall thereafter be sent directly to the Cash Management Account;


 


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


 


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


 


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


 


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


 


52





















 


(b)           Intentionally Omitted.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


53





















 


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


 


Section 10.3.  Security Interest


 


(a)           To secure the full and punctual payment of
the Debt and performance of all obligations of Borrower now or hereafter
existing under this Agreement and the other Loan Documents, Borrower hereby
grants to Lender a first-priority perfected security interest in each of the
Accounts and the Account Collateral.  Furthermore, Borrower shall not, without
obtaining the prior written consent of Lender, further pledge, assign or grant
any security interest in any of the foregoing or permit any Lien to attach
thereto or any levy to be made thereon or any UCC Financing Statements to be
filed with respect thereto.  Borrower
will maintain the security interest created by this Section 10.3(a) as a first
priority perfected security interest and will defend the right, title and
interest of Lender in and to each of the Accounts and the Account Collateral
against the claims and demands of all Persons whomsoever.


 


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


 


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


 


54





















 


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


 


ARTICLE 11

EVENTS OF DEFAULT; REMEDIES


 


Section 11.1.  Event of Default


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


55





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


56





















 


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


 


Section 11.2.  Remedies


 


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


 


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


 


ARTICLE 12

ENVIRONMENTAL PROVISIONS


 


Section 12.1.  Environmental
Representations and Warranties


 


Borrower represents and warrants, except as disclosed in an
Environmental Report of the Property and information that Borrower knows that:
(a) there are no Hazardous Materials or underground storage tanks in, on, or
under the Property, except those that are both (i) in compliance with
Environmental Laws and with permits issued pursuant thereto (if such permits are
required), if any, and (ii) either (A) in the case of Hazardous Materials, in
amounts not in excess of that necessary to operate the Property for the purposes
set forth herein or (B) fully disclosed to and approved by Lender in writing
pursuant to an Environmental Report; (b) there are no past, present or
threatened Releases of Hazardous Materials in violation of any


 


57





















 


Environmental
Law or which would require remediation by a Governmental Authority in, on,
under or from the Property except as described in the Environmental Report; (c)
there is no threat of any Release of Hazardous Materials migrating to the
Property except as described in the Environmental Report; (d) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property except as described in the
Environmental Report; (e) Borrower does not know of, and has not received, any
written or oral notice or other communication from any Person relating to
Hazardous Materials in, on, under or from the Property; (f) the Property is
free of Mold; and (g) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to environmental conditions in, on,
under or from the Property known to Borrower or contained in Borrower’s files
and records, including but not limited to any reports relating to Hazardous
Materials in, on, under or migrating to or from the Property and/or to the
environmental condition of or the presence of Mold at the Property.


 


Section 12.2.  Environmental
Covenants


 


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


 


58





















 


not
limited to a Governmental Authority) relating in any way to Hazardous
Materials. Any failure of Borrower to perform its obligations pursuant to this
Section 12.2 shall constitute bad faith waste with respect to the Property.


 


Section 12.3.  Lender’s
Rights


 


Lender and any other Person designated by Lender, including but not
limited to any representative of a Governmental Authority, and any
environmental consultant, and any receiver appointed by any court of competent
jurisdiction, shall have the right, but not the obligation, to enter upon the
Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall
be determined in Lender’s sole discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and conducting other
invasive testing. Borrower shall cooperate with and provide access to Lender
and any such person or entity designated by Lender.


 


Section 12.4.  Operations
and Maintenance Programs


 


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


 


Section 12.5.  Environmental
Definitions


 


“Environmental Law” means
any present and future federal, state and local laws, statutes, ordinances,
rules, regulations, standards, policies and other government directives or
requirements, as well as common law, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act and the
Resource Conservation and Recovery Act, that apply to Borrower or the Property
and relate to Hazardous Materials or protection of human health or the
environment. “Environmental Liens” means
all Liens and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Borrower or any other Person. “Environmental Report” means the written
reports resulting from the environmental site assessments of the Property
delivered to Lender in connection with the Loan. “Hazardous Materials” shall mean petroleum and petroleum
products and compounds containing them, including gasoline, diesel fuel and
oil; explosives, flammable materials; radioactive materials; polychlorinated
biphenyls and compounds


 


59





















 


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


 


ARTICLE 13

SECONDARY MARKET


 


Section 13.1.  Transfer of
Loan


 


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


 


Section 13.2.  Delegation
of Servicing


 


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


 


Section 13.3.  Dissemination
of Information


 


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


 


60





















 


Section 13.4.  Cooperation


 


Borrower and Borrower Principal agree to cooperate with Lender in
connection with any sale or transfer of the Loan or any Participation and/or
Securities created pursuant to this Article 13, including, without limitation,
(a) the delivery of an estoppel certificate required in accordance with Section
5.12(a) and such other documents as may be reasonably requested by Lender, (b)
the execution of such amendments to the Loan Documents as may be requested by
the holder of the Note or the Rating Agencies or otherwise to effect the
Securitization including, without limitation, bifurcation of the Loan into two
or more components and/or separate notes; provided, however, that Borrower
shall not be required to modify or amend any Loan Document if such modification
or amendment would (i) change the interest rate, the stated maturity or the
amortization of principal set forth in the Note, except in connection with a
bifurcation of the Loan which may result in varying fixed interest rates and
amortization schedules, but which shall have the same initial weighted average
coupon of the original Note, or (ii) in the reasonable judgment of Borrower,
modify or amend any other material economic term of the Loan, or (iii) in the
reasonable judgment of Borrower, materially increase Borrower’s obligations and
liabilities under the Loan Documents, and (c) make changes to the
organizational documents of Borrower and its principals and/or use its best
efforts to cause changes to the legal opinions delivered by Borrower in
connection with the Loan, provided, that such changes shall not result in a
material adverse economic effect to Borrower. Borrower shall also furnish and
Borrower and Borrower Principal consent to Lender furnishing to such Investors or
such prospective Investors or such Rating Agency any and all information
concerning the Property, the American Express Lease, the financial condition of
Borrower or Borrower Principal as may be requested by Lender, any Investor, any
prospective Investor or any Rating Agency in connection with any sale or
transfer of the Loan or any Participations or Securities. Neither Borrower nor
Borrower Principal shall be responsible for any costs incurred by Lender in
connection with a Securitization.


 


ARTICLE 14

INDEMNIFICATIONS


 


Section 14.1.  General Indemnification


 


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


 


61





















 


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


 


Section 14.2.  Mortgage
and Intangible Tax Indemnification


 


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


 


Section 14.3.  ERISA
Indemnification


 


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


 


Section 14.4.  Survival


 


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


 


ARTICLE 15

EXCULPATION


 


Section 15.1.  Exculpation


 


(a)           Except as otherwise
provided herein or in the other Loan Documents, Lender shall not enforce the
liability and obligation of Borrower or Borrower Principal, as applicable, to
perform and observe the obligations contained herein or in the other Loan
Documents by any action or proceeding wherein a money judgment shall be sought
against Borrower or Borrower Principal, except that Lender may bring a foreclosure
action, action for specific performance or other appropriate action or
proceeding to enable Lender to enforce and realize upon this Agreement, the
Note, the Mortgage and the other Loan Documents, and the interest in the
Property, the Rents (following an Event of Default) and any other collateral
given to Lender created by this Agreement, the Note, the Mortgage and the other
Loan Documents; provided, however, that any judgment in any such action or
proceeding shall be enforceable against Borrower or Borrower Principal, as
applicable, only to the extent of Borrower’s or Borrower Principal’s interest
in the Property, in the Rents and in any other collateral given to Lender.


 


62





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


63





















 


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


 


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


 


(c)           Notwithstanding the
foregoing, the agreement of Lender not to pursue recourse liability as set
forth in subsection (a) above SHALL BECOME NULL AND VOID and shall be of no
further force and effect and the Debt shall be fully recourse to Borrower and
Borrower Principal on a joint and several basis in the event (i) of a breach by
Borrower or Borrower Principal of any of the covenants set forth in Article 6
hereof, to the extent that such breach is (A) material and (B) is not cured
within fifteen (15) days of the earlier to occur of notice from Lender or
Borrower’s knowledge of such breach, (ii) of a breach of any of the covenants
set forth in Article 7 hereof, (iii) the Property or any part thereof shall
become an asset in a voluntary bankruptcy or insolvency proceeding of Borrower,
(iv) Borrower, Borrower Principal or any Affiliate, officer, director, or
representative which controls, directly or indirectly, Borrower or Borrower
Principal files, or joins in the filing of, an involuntary petition against
Borrower under any Creditors Rights Laws, or solicits or causes to be solicited
petitioning creditors for any involuntary petition against Borrower from any
Person; (v) Borrower files an answer consenting to or otherwise acquiescing in
or joining in any involuntary petition filed against it, by any other Person
under any Creditors Rights Laws, or solicits or causes to be solicited
petitioning creditors for any involuntary petition from any Person;  or (vi) 
any Affiliate, officer, director, or representative which controls
Borrower consents to or acquiesces in or joins in an application for the
appointment of a custodian, receiver, trustee, or examiner for Borrower or any
portion of the Property.


 


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


 


ARTICLE
16

NOTICES


 


Section
16.1.  Notices


 


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


 


64





















 


	
  If to
  Lender:

  	
  Bank of
  America, N.A.

  
	
   

  	
  Capital
  Markets Servicing Group

  
	
   

  	
  900 West
  Trade Street, Suite 650

  
	
   

  	
  NC1-026-06-01

  
	
   

  	
  Charlotte,
  North Carolina 28255

  
	
   

  	
  Attn:
  Servicing Manager

  
	
   

  	
  Telephone
  No: (866) 531-0957

  
	
   

  	
   

  
	
  If to
  Borrower:

  	
  Inland
  Western De Pere, L.L.C.

  
	
   

  	
  c/o Inland
  Real Estate Investment Corporation

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  Illinois 60523

  
	
   

  	
  Attention:
  Roberta Matlin, Vice President

  
	
   

  	
  Facsimile
  No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  The Inland
  Real Estate Group, Inc.

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  Illinois 60523

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Facsimile
  No.: 630-218-4900

  
	
   

  	
   

  
	
  If to
  Borrower Principal:

  	
  Inland
  Western Retail Real Estate Trust., Inc.

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  Illinois 60523

  
	
   

  	
  Roberta
  Matlin, Vice President

  
	
   

  	
  Facsimile
  No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  The Inland
  Real Estate Group, Inc.

  
	
   

  	
  2901
  Butterfield Road

  
	
   

  	
  Oak Brook,
  Illinois 60523

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Facsimile
  No.: 630-218-4900

  



 


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


 


ARTICLE 17
FURTHER ASSURANCES


 


Section 17.1.  Replacement Documents


 


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


 


65





















 


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


 


Section 17.2.  Recording of Mortgage, etc.


 


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


 


Section 17.3.  Further Acts, Etc.


 


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


 


66





















 


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


 


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


 


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


 


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


 


Section
17.5.  Expenses


 


Borrower covenants and agrees to pay or, if Borrower fails to pay, to
reimburse, Lender upon receipt of written notice from Lender for all reasonable
costs and expenses (including reasonable, actual attorneys’ fees and
disbursements and the allocated costs of internal legal services and all actual
disbursements of internal counsel) reasonably incurred by Lender in accordance
with this Agreement in connection with (a) the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby and all the
costs of furnishing all opinions by counsel for Borrower (including without
limitation any opinions requested by Lender as to any legal matters arising
under this Agreement or the other Loan Documents with respect to the Property);
(b) Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan
Documents on its part to be performed or complied with after the Closing Date,
including, without limitation, confirming compliance with environmental and
insurance requirements; (c) following a request by Borrower, Lender’s ongoing
performance and compliance with all agreements and conditions contained in this
Agreement and the other Loan Documents on its part to be performed or complied
with after the Closing Date; (d) the negotiation, preparation, execution,
delivery and administration of any consents, amendments, waivers or other
modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Lender; (e) securing Borrower’s compliance
with any requests made pursuant to the provisions of this Agreement; (f) the
filing and recording fees and expenses, title insurance and reasonable fees and
expenses of counsel for providing to Lender all required legal opinions, and
other similar expenses incurred in creating and perfecting the Lien in favor of
Lender pursuant to this Agreement and the other Loan Documents; (g) enforcing
or preserving any rights, in response to


 


67





















 


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


 


ARTICLE
18

WAIVERS


 


Section 18.1.  Remedies
Cumulative; Waivers


 


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


 


Section 18.2.  Modification,
Waiver in Writing


 


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


 


Section 18.3.  Delay Not a
Waiver


 


Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or exercising
any right, power, remedy or privilege hereunder, or under the Note or under any
other Loan Document, or any other instrument given as security 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


 


68





















 


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


 


Section 18.4.  Trial by Jury


 


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


 


Section 18.5.  Waiver of
Notice


 


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


 


Section 18.6.  Remedies of
Borrower


 


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


 


69





















 


Section 18.7.  Waiver of
Marshalling of Assets


 


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


 


Section 18.8.  Waiver of
Statute of Limitations


 


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


 


Section 18.9.  Waiver of
Counterclaim


 


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


 


ARTICLE 19

GOVERNING LAW


 


Section 19.1.  Choice of Law


 


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


 


Section 19.2.  Severability


 


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


 


Section 19.3.  Preferences


 


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


 


70





















 


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


 


71





















 


ARTICLE 20

MISCELLANEOUS


 


Section 20.1.  Survival


 


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


 


Section 20.2.  Lender’s
Discretion


 


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


 


Section 20.3.  Headings


 


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


 


Section 20.4.  Cost of
Enforcement


 


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


 


Section 20.5.  Schedules Incorporated


 


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


 


72





















 


Section 20.6.  Offsets,
Counterclaims and Defenses


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


73





















 


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


 


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


 


Section 20.8.  Publicity


 


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


 


Section 20.9.  Conflict;
Construction of Documents; Reliance


 


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


 


74





















 


Section 20.10.  Entire
Agreement


 


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


 


ARTICLE 21

OUT PARCEL RELEASE


 


Section 21.1.  Out Parcel Release.
Provided no Event of Default
exists and is continuing, Borrower shall be entitled to a release from the lien
of the Mortgage of a portion of the Property (the “Out Parcel”) more
particularly described on Exhibit C hereof upon the following terms and
conditions:


 


(a)           Borrower shall deliver evidence reasonably
satisfactory to Lender that (i) the Property remaining encumbered by the lien
of the Mortgage shall comply with all Legal Requirements (including, without
limitation, all zoning and building codes), (ii) the Property remaining
encumbered by the lien of the Security Instrument shall constitute a separate
lot for tax and assessment purposes by no later than the earliest date
permitted under applicable Legal Requirements, (iii) the Out Parcel, at the
time of release, remains an unimproved parcel of land (exclusive of parking
areas contained thereon), (iv) such release shall not adversely affect ingress
or egress to or from the Property, (v) the documents with respect to such
release shall not impose any obligations or otherwise burden the Property in
any way, (vi) Borrower has obtained or caused to be obtained all necessary
approvals, consents or permits with respect to such release and (vii) the Out
Parcel has been transferred to an entity other than Borrower.


 


(b)           Borrower shall (i) deliver to Lender (A) a
current title survey for the Out Parcel certified to the title company and
Lender, their successors and assigns, in form and content satisfactory to
Lender and prepared by a professional and properly licensed land survey or
satisfactory to Lender in accordance with the 1999 Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys and reflecting the same metes and
bounds legal description contained in the Title Insurance Policy referred to in
subsection (B) of this paragraph (b) and certified in form and substance
satisfactory to Lender, (B) a revised, updated Title Insurance Policy (or an
endorsement to the existing Title Insurance Policy) reasonably acceptable to
Lender in all respects reflecting the release of the Out Parcel and containing
such endorsements as Lender shall reasonably require (including, without
limitation, a “date-down” or similar endorsement), and (C) such amendments or
modifications to the Loan Documents as Lender may reasonably require to reflect
the release of the Out Parcel (including, without limitation, an amendment to
the Mortgage substituting a revised legal description reflecting the release of
the Out Parcel), and (ii) pay all of Lender’s reasonable costs and expenses in
connection with a release of the Out Parcel, including, without limitation,
reasonable counsel fees and disbursements and all recording fees and title
charges.


 


75





















 


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 DEPERE L.L.C., a Delaware

  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Inland
  Western Retail Real Estate Trust,

  Inc., a Maryland corporation, its sole

  member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra A.
  Palmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Debra A. Palmer

  	
   

  
	
   

  	
   

  	
  Its:

  	
   Asst. Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BORROWER
  PRINCIPAL:

  
	
   

  	
   

  
	
   

  	
  Acknowledged
  and agreed to with respect to its

  obligations set forth in Article 4, Section 12.6,

  Article 13, Article 15 and Article 18 hereof:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INLAND
  WESTERN RETAIL REAL ESTATE

  TRUST INC., Maryland corporation, its

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Debra A. Palmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Debra A. Palmer

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Asst. Secretary

  	
   

  
										



 


[ADDITIONAL SIGNATURE PAGE TO FOLLOW]


 





















 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Lisa K. McGee

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Lisa K. McGee

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Vice President

  	
   

  
						



 





















 


EXHIBIT A


 


Borrower Equity Ownership Structure


 





















 


EXHIBIT B


 


Tenant Direction Letter


 





















 


EXHIBIT C


 


Description of Out Parcel