Exhibit 10.458


 


LOAN AGREEMENT


 


 


Dated as of December 16,
2004


 


 


Between


 


 


INLAND
WESTERN PHOENIX 31st  AVENUE,
L.L.C.,


 


 


as Borrower


 


 


and


 


 


BANK OF
AMERICA, N.A.,


as Lender


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE 1
  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  SECTION
  1.1. DEFINITIONS

  	
   

  
	
  SECTION
  1.2. PRINCIPLES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2 GENERAL
  TERMS

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.1. LOAN COMMITMENT; DISBURSEMENT TO BORROWER

  	
   

  
	
  SECTION
  2.2. LOAN PAYMENTS

  	
   

  
	
  SECTION
  2.3. PREPAYMENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3 CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  4.1. ORGANIZATION

  	
   

  
	
  SECTION
  4.2. STATUS OF BORROWER

  	
   

  
	
  SECTION
  4.3. VALIDITY OF DOCUMENTS

  	
   

  
	
  SECTION
  4.4. NO CONFLICTS

  	
   

  
	
  SECTION
  4.5. LITIGATION

  	
   

  
	
  SECTION
  4.6. AGREEMENTS

  	
   

  
	
  SECTION
  4.7. SOLVENCY

  	
   

  
	
  SECTION
  4.8. FULL AND ACCURATE DISCLOSURE

  	
   

  
	
  SECTION
  4.9. NO PLAN ASSETS

  	
   

  
	
  SECTION
  4.10. NOT A FOREIGN PERSON

  	
   

  
	
  SECTION
  4.11. ENFORCEABILITY

  	
   

  
	
  SECTION
  4.12. BUSINESS PURPOSES

  	
   

  
	
  SECTION
  4.13. COMPLIANCE

  	
   

  
	
  SECTION
  4.14. FINANCIAL INFORMATION

  	
   

  
	
  SECTION
  4.15. CONDEMNATION

  	
   

  
	
  SECTION
  4.16. UTILITIES AND PUBLIC ACCESS; PARKING

  	
   

  
	
  SECTION
  4.17. SEPARATE LOTS

  	
   

  
	
  SECTION
  4.18. ASSESSMENTS

  	
   

  
	
  SECTION
  4.19. INSURANCE

  	
   

  
	
  SECTION
  4.20. USE OF PROPERTY

  	
   

  
	
  SECTION
  4.21. CERTIFICATE OF OCCUPANCY; LICENSES

  	
   

  
	
  SECTION
  4.22. FLOOD ZONE

  	
   

  
	
  SECTION
  4.23. PHYSICAL CONDITION

  	
   

  
	
  SECTION
  4.24. BOUNDARIES; SURVEY

  	
   

  
	
  SECTION
  4.25. LEASES

  	
   

  
	
  SECTION
  4.26. FILING AND RECORDING TAXES

  	
   

  
	
  SECTION
  4.27. MANAGEMENT AGREEMENT

  	
   

  
	
  SECTION
  4.28. ILLEGAL ACTIVITY

  	
   

  
	
  SECTION
  4.29. CONSTRUCTION EXPENSES

  	
   

  
	
  SECTION
  4.30. PERSONAL PROPERTY

  	
   

  
	
  SECTION
  4.31. TAXES

  	
   

  
	
  SECTION
  4.32. PERMITTED ENCUMBRANCES

  	
   

  
	
  SECTION
  4.33. FEDERAL RESERVE REGULATIONS

  	
   

  
	
  SECTION
  4.34. INVESTMENT COMPANY ACT

  	
   

  
	
  SECTION
  4.35. RECIPROCAL EASEMENT AGREEMENTS

  	
   

  
	
  SECTION
  4.36. NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE

  	
   

  



 


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  SECTION
  4.37. INTELLECTUAL PROPERTY

  	
   

  
	
  SECTION
  4.38. COMPLIANCE WITH ANTI-TERRORISM LAWS

  	
   

  
	
  SECTION
  4.39. PATRIOT ACT

  	
   

  
	
  SECTION
  4.40. SURVIVAL

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5 BORROWER COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  5.1. EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS

  	
   

  
	
  SECTION
  5.2. MAINTENANCE AND USE OF PROPERTY

  	
   

  
	
  SECTION
  5.3. WASTE

  	
   

  
	
  SECTION
  5.4. TAXES AND OTHER CHARGES

  	
   

  
	
  SECTION
  5.5. LITIGATION

  	
   

  
	
  SECTION
  5.6. ACCESS TO PROPERTY

  	
   

  
	
  SECTION
  5.7. NOTICE OF DEFAULT

  	
   

  
	
  SECTION 5.8. COOPERATE IN LEGAL
  PROCEEDINGS

  	
   

  
	
  SECTION 5.9. PERFORMANCE BY BORROWER

  	
   

  
	
  SECTION 5.10. AWARDS; INSURANCE PROCEEDS

  	
   

  
	
  SECTION 5.11. FINANCIAL REPORTING

  	
   

  
	
  SECTION 5.12. ESTOPPEL STATEMENT

  	
   

  
	
  SECTION 5.13. LEASING MATTERS

  	
   

  
	
  SECTION 5.14. PROPERTY MANAGEMENT

  	
   

  
	
  SECTION 5.15. LIENS

  	
   

  
	
  SECTION 5.16. DEBT CANCELLATION

  	
   

  
	
  SECTION 5.17. ZONING

  	
   

  
	
  SECTION 5.18. ERISA

  	
   

  
	
  SECTION 5.19. NO JOINT ASSESSMENT

  	
   

  
	
  SECTION 5.20. RECIPROCAL EASEMENT
  AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  6 ENTITY COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1. SINGLE PURPOSE
  ENTITY/SEPARATENESS

  	
   

  
	
  SECTION 6.2. CHANGE OF NAME, IDENTITY OR
  STRUCTURE

  	
   

  
	
  SECTION 6.3. BUSINESS AND OPERATIONS

  	
   

  
	
  SECTION 6.4. INDEPENDENT DIRECTOR

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  7 NO SALE OR ENCUMBRANCE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.1. TRANSFER DEFINITIONS

  	
   

  
	
  SECTION 7.2. NO SALE/ENCUMBRANCE

  	
   

  
	
  SECTION 7.3. PERMITTED TRANSFERS

  	
   

  
	
  SECTION 7.4. LENDER’S RIGHTS

  	
   

  
	
  SECTION 7.5. ASSUMPTION

  	
   

  
	
  SECTION 7.6. ASSUMPTION BY INLAND
  PERMITTED TRANSFEREE

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  8 INSURANCE; CASUALTY; CONDEMNATION; RESTORATION

  	
   

  
	
   

  	
   

  
	
  SECTION 8.1. INSURANCE

  	
   

  
	
  SECTION 8.2. CASUALTY

  	
   

  
	
  SECTION 8.3. CONDEMNATION

  	
   

  
	
  SECTION 8.4. RESTORATION

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  9 REPLACEMENTS; RESERVE FUNDS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.1. REPLACEMENTS

  	
   

  
	
  SECTION 9.2. TAX AND INSURANCE RESERVE
  FUNDS

  	
   

  
	
  SECTION 9.3. RESERVE FUNDS GENERALLY

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  10 CASH MANAGEMENT

  	
   

  
	
   

  	
   

  
	
  SECTION 10.1. CASH MANAGEMENT ACCOUNT

  	
   

  
	
  SECTION 10.2. DEPOSITS AND WITHDRAWALS

  	
   

  
	
  SECTION 10.3. SECURITY INTEREST

  	
   

  



 


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  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

  	
   

  



 


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  SECTION 20.3. HEADINGS

  	
   

  
	
  SECTION 20.4. COST OF ENFORCEMENT

  	
   

  
	
  SECTION 20.5. SCHEDULES INCORPORATED

  	
   

  
	
  SECTION 20.6. OFFSETS, COUNTERCLAIMS AND
  DEFENSES

  	
   

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

  	
   

  
	
  SECTION 20.8. PUBLICITY

  	
   

  
	
  SECTION 20.9. CONFLICT; CONSTRUCTION OF
  DOCUMENTS; RELIANCE

  	
   

  
	
  SECTION 20.10. ENTIRE AGREEMENT

  	
   

  



 


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LOAN AGREEMENT


 


THIS
LOAN AGREEMENT, dated as of December 16, 2004 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Agreement”), between BANK OF AMERICA, N.A.,
a national banking association, having an address at Bank of America Corporate
Center, 214 North Tryon Street, Charlotte, North Carolina 28255 (together with
its successors and/or assigns, “Lender”)
and Inland Western Phoenix 31st Avenue, L.L.C., a Delaware limited
liability company having an address at c/o Inland Real Estate Investment
Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (together with
its successors and/or assigns, “Borrower”).


 


RECITALS:


 


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


 


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


 


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


 


ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section 1.1.    Definitions


 


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


 


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


 


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


 


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


 


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


 





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Eligible Institution” shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation, the short term
unsecured debt obligations or commercial paper of which are rated at least “A-1”
by S&P, “P-1” 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-l” by S&P) and “Aa2” by Moody’s).
Notwithstanding the foregoing, prior to a Securitization, Bank of America, N.A.
shall be an Eligible Institution.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Fitch”
shall mean Fitch, Inc.


 


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


 


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


 


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


 


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


 


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


 


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


 


4





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Member” shall
have the meaning set forth in Section 6.1(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 $31,860,000, 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 amortisation, 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.


 


“Ratine 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 casement 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 he reborrowed.


 


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


 


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


 


Section 2.2.    Loan Payments


 


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


 


Section 2.3.    Prepayment


 


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


 


ARTICLE 3

CONDITIONS PRECEDENT


 


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


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


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


 


Section 4.1.    Organization


 


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


 


13





















 


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


 


Section 4.2.    Status of Borrower


 


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


 


Section 4.3.    Validity of Documents


 


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


 


Section 4.4.    No Conflicts


 


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


 


14





















 


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


 


Section
4.5.    Litigation


 


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


 


Section 4.6.    Agreements


 


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


 


Section 4.7.    Solvency


 


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


 


15





















 


Section
4.8.    Full and Accurate Disclosure


 


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


 


Section
4.9.    No Plan Assets


 


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


 


Section
4.10.  Not a Foreign
Person


 


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


 


Section
4.11.  Enforceability


 


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


 


Section
4.12.  Business Purposes


 


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


 


Section
4.13.   Compliance


 


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


 


16





















 


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


 


Section 4.14. 
Financial Information


 


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


 


Section 4.15. 
Condemnation


 


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


 


Section 4.16. 
Utilities and Public Access; Parking


 


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


 


Section 4.17. 
Separate Lots


 


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


 


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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,


 


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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; (c) the
rent payable under the American Express Lease is the amount of fixed rent set
forth in the American Express Lease, and there is no claim or basis for a claim
by American Express thereunder for an adjustment to the Rent; (f) Borrower is
the sole owner of the entire landlord’s interest in the American Express Lease;
(g) the American Express Lease is the valid, binding and enforceable obligation
of Borrower and American Express thereunder and there are no agreements with
American Express with respect to the American Express Lease other than as
expressly set forth therein; (h) no Person has any possessory interest in, or
right to occupy, the Property or any portion thereof except under the American
Express Lease; (i) except for the right of first refusal set forth in Article 4
and the right to offer to purchase the Property under Article 12, the American
Express Lease does not contain any option or offer to purchase or right of
first refusal to purchase the Property or any part thereof; and (j) neither the
American Express Lease nor the Rents have been assigned or pledged except to
Lender, and no other Person has any interest therein.


 


Section
4.26.  Filing and
Recording Taxes


 


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


 


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the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Mortgage, have been paid or will be paid, and, under current Legal
Requirements, the Mortgage is enforceable 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 arid
restrictions with respect to kiosk placement, tenant restrictions (type,
location or exclusivity), sale of certain goods or services, and/or other use
restrictions.


 


Section
4.36.  No Change in Facts or
Circumstances; Disclosure


 


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


 


Section 4.37. 
Intellectual Property


 


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


 


Section
4.38.  Compliance with
Anti-Terrorism Laws


 


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


 


Section
4.39.  Patriot Act


 


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


 


22





















 


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


 


Section 4.40.  Survival


 


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


 


ARTICLE 5 


BORROWER COVENANTS


 


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


 


Section 5.1.    Existence; Compliance with Legal
Requirements


 


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


 


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


 


23





















 


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


 


Section 5.2.    Maintenance and Use of Property


 


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


 


Section 5.3.    Waste


 


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


 


Section 5.4.    Taxes and Other Charges


 


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


 


24





















 


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


 


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


 


Section 5.5.    Litigation


 


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


 


Section
5.6.    Access to Property


 


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


 


Section 5.7.    Notice of Default


 


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


 


25





















 


Section
5.8.    Cooperate in Legal
Proceedings


 


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


 


Section 5.9.    Performance by Borrower


 


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


 


Section
5.10.  Awards; Insurance
Proceeds


 


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


 


Section
5.11.  Financial
Reporting


 


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


 


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


 


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


 


26





















 


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


 


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


 


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


 


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


 


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


 


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


 


Section
5.12.    Estoppel Statement


 


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


 


27





















 


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


 


Section
5.13.    Leasing
Matters.


 


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


 


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


 


Section
5.14.    Property
Management


 


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


 


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


 


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


 


28





















 


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


 


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


 


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


 


Section 5.15. 
 Liens


 


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


 


Section
5.16.   Debt Cancellation


 


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


 


Section
5.17.   Zoning


 


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


 


Section
5.18.   ERISA


 


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


 


29





















 


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


 


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


 


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


 


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


 


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


 


Section 5.19. 
 No Joint Assessment


 


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


 


Section 5.20. 
 Reciprocal Easement Agreements


 


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


 


ARTICLE
6

ENTITY COVENANTS


 


Section 6.1.    Single Purpose Entity/Separateness


 


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


 


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(a)           Borrower has not and will not:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section
6.3.    Business and Operations


 


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


 


Section
6.4.    Independent Director


 


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


 


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


 


ARTICLE 7 

NO SALE OR ENCUMBRANCE


 


Section
7.1.    Transfer Definitions


 


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


 


Section 7.2.    No Sale/Encumbrance


 


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


 


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


 


35





















 


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


 


Section
7.3.    Permitted Transfers


 


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


 


Section 7.4.    Lender’s Rights


 


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


 


36





















 


substantive
consolidation was delivered to Lender and the Rating Agencies in connection
with the closing of the Loan, and if any Sale or Pledge permitted under this
Article 7 results in any Person and its Affiliates owning in excess of
forty-nine percent (49%) of the ownership interests in a Restricted Party,
Borrower shall, prior to such transfer, and in addition to any other
requirement for Lender consent contained herein, deliver a revised substantive
non-consolidation opinion letter to Lender reflecting such Prohibited Transfer,
which opinion shall be in form, scope and substance acceptable in all respects
to Lender and the Rating Agencies.


 


Section 7.5.    Assumption


 


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


 


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


 


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


 


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


 


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


 


37





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section
7.6.    Assumption by Inland
Permitted Transferee


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


39





















 


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


 


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


 


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


 


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


 


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


 


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


 


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ARTICLE 8 

INSURANCE; CASUALTY; CONDEMNATION; RESTORATION


 


Section
8.1.    Insurance


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


42





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


43





















 


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


 


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


 


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


 


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


 


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


 


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


 


Section
8.2.    Casualty


 


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


 


Section
8.3.    Condemnation


 


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


 


44





















 


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


 


Section
8.4.    Restoration


 


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


 


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


 


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


 


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


 


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


 


 


45





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


46





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE 9


REPLACEMENTS; RESERVE FUNDS


 


Section
9.1.    Replacements


 


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


 


Section 9.2.    Tax and Insurance Reserve Funds


 


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


 


49





















 


thereof. If the amount of the Tax and
Insurance Reserve Funds shall exceed the amounts due for Taxes and Insurance
Premiums pursuant to Section 5.4 and Section 8.1 hereof, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Reserve Account. In
allocating any such excess, Lender may deal with the person shown on Lender’s
records as being the owner of the Property. Any amount remaining in the Tax and
Insurance Reserve Account after the Debt has been paid in full shall be
returned to Borrower or the person shown on Lender’s records as being the owner
of the Property and no other party shall have any right or claim thereto.  If at any time Lender reasonably determines
that the Tax and Insurance Reserve Funds are not or will not be sufficient to
pay Taxes and Insurance Premiums by the dates set forth in (a) and (b) above,
Lender shall notify Borrower of such determination and Borrower shall pay to
Lender any amount necessary to make up the deficiency within ten (10) days
after notice from Lender to Borrower requesting payment thereof.


 


Section 9.3.    Reserve Funds Generally


 


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


 


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


 


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


 


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


 


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


 


50





















 


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


 


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


 


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


 


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


 


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ARTICLE 10

CASH MANAGEMENT


 


Section
10.1.  Cash Management
Account


 


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


 


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


 


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


 


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


 


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


 


Section 10.2.  Deposits and Withdrawals


 


(a)           Borrower represents, warrants and covenants
that:


 


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


 


52





















 


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


 


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


 


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


 


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


 


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


 


(b)                                 Intentionally Omitted.


 


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


 


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


 


53





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 10.3   Security
Interest


 


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


 


54





















 


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


 


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


 


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


 


ARTICLE 11


EVENTS OF DEFAULT; REMEDIES


 


Section 11.1.  Event of
Default


 


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


 


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


 


55





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 11.2.  Remedies


 


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


 


57





















 


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


 


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


 


ARTICLE 12


ENVIRONMENTAL
PROVISIONS


 


Section 12.1.  Environmental
Representations and Warranties


 


Borrower represents and warrants, except as disclosed in an
Environmental Report of the Property and information that Borrower knows that:
(a) there are no Hazardous Materials or underground storage tanks in, on, or
under the Property, except those that are both (i) in compliance with
Environmental Laws and with permits issued pursuant thereto (if such permits
are required), if any, and (ii) either (A) in the case of Hazardous Materials,
in amounts not in excess of that necessary to operate the Property for the
purposes set forth herein or (B) fully disclosed to and approved by Lender in
writing pursuant to an Environmental Report; (b) there are no past, present or
threatened Releases of Hazardous Materials in violation of any Environmental
Law or which would require remediation by a Governmental Authority in, on,
under or from the Property except as described in the Environmental Report; (c)
there is no threat of any Release of Hazardous Materials migrating to the
Property except as described in the Environmental Report; (d) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property except as described in the
Environmental Report; (c) 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.


 


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Section 12.2.  Environmental
Covenants


 


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


 


Section 12.3.  Lender’s
Rights


 


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


 


59





















 


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


 


Section 12.4.  Operations
and Maintenance Programs


 


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


 


Section 12.5.  Environmental
Definitions


 


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


 


60





















 


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


 


ARTICLE 13


SECONDARY MARKET


 


Section 13.1.  Transfer of
Loan


 


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


 


Section 13.2.  Delegation
of Servicing


 


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


 


Section 13.3.  Dissemination
of Information


 


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


 


Section 13.4.  Cooperation


 


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


 


61





















 


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


 


ARTICLE 14


INDEMNIFICATIONS


 


Section 14.1.  General
Indemnification


 


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


 


Section 14.2.  Mortgage
and Intangible Tax Indemnification


 


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


 


62





















 


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


 


Section 14.3.  ERISA
Indemnification


 


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


 


Section 14.4.  Survival


 


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


 


ARTICLE 15


EXCULPATION


 


Section 15.1.  Exculpation


 


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


 


63





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


64





















 


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


 


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


 


ARTICLE 16


NOTICES


 


Section 16.1.  Notices


 


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


 


	
  If to Lender:

  	
  Bank of America, N.A.

  Capital Markets Servicing Group

  900 West Trade Street, Suite 650

  NC1-026-06-01

  Charlotte, North Carolina
  28255

  Attn: Servicing Manager

  Telephone No: (866) 531-0957

  



 


65





















 


	
  If to Borrower:

  	
  Inland Western Phoenix 31st
  Avenue, L.L.C.

  c/o Inland Real Estate
  Investment Corporation
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Roberta Matlin, Vice
  President
Facsimile No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy to:

  	
  The Inland Real Estate
  Group, Inc.

  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Attention: General Counsel

  Facsimile No.: 630-218-4900

  
	
   

  	
   

  
	
  If to Borrower Principal:

  	
  Inland Western Retail Real
  Estate Trust, Inc.

  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Roberta Matlin, Vice President

  Facsimile No.: 630-218-4965

  
	
   

  	
   

  
	
  With a copy to:

  	
  The Inland Real Estate
  Group, Inc.

  2901 Butterfield Road

  Oak Brook, Illinois 60523

  Attention: General Counsel

  Facsimile No.: 630-218-4900

  



 


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


 


ARTICLE 17


FURTHER ASSURANCES


 


Section 17.1.  Replacement
Documents


 


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


 


Section 17.2.  Recording
of Mortgage, etc.


 


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


 


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


 


Section 17.3.  Further
Acts, Etc.


 


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


 


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


 


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


 


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


 


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


 


Section 17.5.  Expenses


 


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


 


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ARTICLE 18


WAIVERS


 


Section 18.1.  Remedies
Cumulative; Waivers


 


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


 


Section 18.2.  Modification,
Waiver in Writing


 


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


 


Section 18.3.  Delay Not a
Waiver


 


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


 


Section 18.4.  Trial by
Jury


 


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


 


69





















 


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


 


Section 18.5.  Waiver of
Notice


 


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


 


Section 18.6.  Remedies of
Borrower


 


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


 


Section 18.7.  Waiver of Marshalling
of Assets


 


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


 


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Section 18.8.  Waiver of
Statute of Limitations


 


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


 


Section 18.9.  Waiver of
Counterclaim


 


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


 


ARTICLE 19


GOVERNING LAW


 


Section 19.1.  Choice of
Law


 


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


 


Section 19.2.  Severability


 


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


 


Section 19.3.  Preferences


 


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


 


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ARTICLE 20


MISCELLANEOUS


 


Section 20.1.  Survival


 


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


 


Section 20.2.  Lender’s
Discretion


 


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


 


Section 20.3.  Headings


 


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


 


Section 20.4.  Cost of
Enforcement


 


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


 


Section 20.5.  Schedules
Incorporated


 


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


 


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Section 20.6.  Offsets.
Counterclaims and Defenses


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


73





















 


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


 


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


 


Section 20.8.  Publicity


 


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


 


Section 20.9.  Conflict;
Construction of Documents; Reliance


 


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


 


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Section 20.10.  Entire
Agreement


 


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


 


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 PHOENIX
  31ST AVENUE, L.L.C.,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra A Palmer

  
	
   

  	
   

  	
  Name:

  	
  Debra A Palmer

  
	
   

  	
   

  	
  Its:

  	
  Asst Sec.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BORROWER PRINCIPAL:

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debra A Palmer

  
	
   

  	
   

  	
  Name:

  	
  Debra A Palmer

  
	
   

  	
   

  	
  Title:

  	
  Asst Sec.

  
							



 


[ADDITIONAL
SIGNATURE PAGE TO FOLLOW]


 





















 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lisa K. McGee

  
	
   

  	
   

  	
  Name:

  	
  Lisa K. McGee

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 





















 


EXHIBIT
A



Borrower Equity Ownership Structure


 





















 


EXHIBIT
B


 


Tenant Direction Letter