Exhibit 10.496


 


THIS
INSTRUMENT CONTAINS INDEMNIFICATION PROVISIONS LIMITING LENDER’S LIABILITY FOR
NEGLIGENCE.


 


Loan No. 10025002


 


LOAN AGREEMENT


 


Dated as of December 30,
2004


 


Between


 


INLAND WESTERN CEDAR HILL
PLEASANT RUN LIMITED PARTNERSHIP,


as Borrower


 


and


 


KEYBANK NATIONAL ASSOCIATION,


as Lender


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE
  I

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  
	
  Section
  1.1

  	
  Definitions

  	
   

  
	
  Section
  1.2

  	
  Principles of
  Construction

  	
   

  
	
  ARTICLE II

  	
  GENERAL TERMS

  	
   

  
	
  Section
  2.1

  	
  Loan Commitment;
  Disbursement to Borrower

  	
   

  
	
  Section
  2.2

  	
  Interest; Loan
  Payments; Late Payment Charge

  	
   

  
	
  Section
  2.3

  	
  Prepayments

  	
   

  
	
  Section
  2.4

  	
  Intentionally
  Omitted

  	
   

  
	
  Section
  2.5

  	
  Release of
  Property

  	
   

  
	
  Section
  2.6

  	
  Manner of Making
  Payments

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS PRECEDENT

  	
   

  
	
  Section
  3.1

  	
  Conditions
  Precedent to Closing

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  Section
  4.1

  	
  Borrower
  Representations

  	
   

  
	
  Section 4.2

  	
  Survival
  of Representations

  	
   

  
	
  ARTICLE V

  	
  BORROWER COVENANTS

  	
   

  
	
  Section 5.1

  	
  Affirmative
  Covenants

  	
   

  
	
  Section 5.2

  	
  Negative
  Covenants

  	
   

  
	
  ARTICLE
  VI 

  	
  INSURANCE;
  CASUALTY; CONDEMNATION

  	
   

  
	
  Section 6.1

  	
  Insurance

  	
   

  
	
  Section 6.2

  	
  Casualty

  	
   

  
	
  Section 6.3

  	
  Condemnation

  	
   

  
	
  Section 6.4

  	
  Restoration

  	
   

  
	
  ARTICLE VII

  	
  RESERVE FUNDS

  	
   

  
	
  Section 7.1

  	
  Required
  Repair Funds

  	
   

  
	
  Section 7.2

  	
  Tax
  and Insurance Escrow Fund

  	
   

  
	
  Section 7.3

  	
  Replacements
  and Replacement Reserve

  	
   

  
	
  Section 7.4

  	
  Intentionally
  Deleted

  	
   

  
	
  Section 7.5

  	
  Intentionally
  Deleted

  	
   

  
	
  Section 7.6

  	
  Intentionally
  Deleted

  	
   

  
	
  Section 7.7

  	
  Reserve
  Funds, Generally

  	
   

  
	
  ARTICLE
  VIII

  	
  DEFAULTS

  	
   

  
	
  Section 8.1

  	
  Event
  of Default

  	
   

  
	
  Section 8.2

  	
  Remedies

  	
   

  
	
  Section 8.3

  	
  Remedies
  Cumulative; Waivers

  	
   

  
	
  ARTICLE
  IX 

  	
  SPECIAL
  PROVISIONS

  	
   

  
	
  Section 9.1

  	
  Sale
  of Notes and Securitization

  	
   

  
	
  Section 9.2

  	
  Securitization

  	
   

  
	
  Section 9.3

  	
  Rating
  Surveillance

  	
   

  
	
  Section 9.4

  	
  Exculpation

  	
   

  
	
  Section 9.5

  	
  Termination
  of Manager

  	
   

  
	
  Section 9.6

  	
  Servicer

  	
   

  
	
  Section 9.7

  	
  Splitting
  the Loan

  	
   

  



 


i





















 


	
  ARTICLE
  X 

  	
  MISCELLANEOUS

  	
   

  
	
  Section 10.1

  	
  Survival

  	
   

  
	
  Section 10.2

  	
  Lender’s
  Discretion

  	
   

  
	
  Section 10.3

  	
  Governing
  Law

  	
   

  
	
  Section 10.4

  	
  Modification,
  Waiver in Writing

  	
   

  
	
  Section 10.5

  	
  Delay
  Not a Waiver

  	
   

  
	
  Section 10.6

  	
  Notices

  	
   

  
	
  Section 10.7

  	
  Trial
  by Jury

  	
   

  
	
  Section 10.8

  	
  Headings

  	
   

  
	
  Section 10.9

  	
  Severability

  	
   

  
	
  Section 10.10

  	
  Preferences

  	
   

  
	
  Section 10.11

  	
  Waiver of Notice

  	
   

  
	
  Section 10.12

  	
  Remedies of Borrower

  	
   

  
	
  Section 10.13

  	
  Expenses; Indemnity

  	
   

  
	
  Section 10.14

  	
  Schedules Incorporated

  	
   

  
	
  Section 10.15

  	
  Offsets, Counterclaims and Defenses

  	
   

  
	
  Section 10.16

  	
  No Joint Venture or Partnership; No Third
  Party Beneficiaries

  	
   

  
	
  Section 10.17

  	
  Publicity

  	
   

  
	
  Section 10.18

  	
  Waiver of Marshalling of Assets

  	
   

  
	
  Section 10.19

  	
  Waiver of Counterclaim

  	
   

  
	
  Section 10.20

  	
  Conflict; Construction of Documents;
  Reliance

  	
   

  
	
  Section 10.21

  	
  Brokers and Financial Advisors

  	
   

  
	
  Section 10.22

  	
  Prior Agreements

  	
   

  
	
  Section 10.23

  	
  Transfer of Loan

  	
   

  



 


 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  I

  	
  -

  	
  Intentionally
  Omitted

  
	
  Schedule
  II

  	
  -

  	
  Rent
  Roll

  
	
  Schedule
  III

  	
  -

  	
  Required
  Repairs

  
	
  Schedule
  IV

  	
  -

  	
  Intentionally
  Omitted

  
	
  Schedule
  V

  	
  -

  	
  Intentionally
  Omitted

  
	
  Schedule
  VI

  	
  -

  	
  Affiliate
  Agreements

  
	
  Schedule
  VII

  	
  -

  	
  Intentionally
  Omitted

  
	
  Schedule VIII

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule
  IX

  	
  -

  	
  Intentionally
  Omitted

  
	
  Schedule X

  	
  -

  	
  Other Contract Funds
  Agreements

  



 


ii





















 


LOAN AGREEMENT


 


THIS
LOAN AGREEMENT, dated as of this      day of
December, 2004 (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this “Agreement”),
between KEYBANK NATIONAL ASSOCIATION, a national banking association, having an
address at 911 Main Street, Suite 1500, Kansas City, Missouri 64105 (“Lender”), and INLAND WESTERN CEDAR
HILL PLEASANT RUN LIMITED PARTNERSHIP, an Illinois limited partnership, having
an address at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Borrower”).


 


W I T N E S S E T H:


 


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


 


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


 


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


 


ARTICLE I


 


DEFINITIONS; PRINCIPLES OF CONSTRUCTION


 


Section 1.1             Definitions. For all purposes of this Agreement, except
as otherwise expressly required or unless the context clearly indicates a
contrary intent:


 


“Additional Insolvency Opinion”  shall mean any subsequent Insolvency Opinion.


 


“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.


 


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


 


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


 





















 


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


 


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


 


“Borrower” shall mean Inland Western
Cedar Hill Pleasant Run Limited Partnership, together with its permitted
successors and assigns.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2





















 


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


 


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


 


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


 


(a)           the numerator is the Net Operating Income (excluding interest on credit
accounts) for such period as set forth in the statements required hereunder, without
deduction for (i) actual management fees incurred in connection with the
operation of the Property, (ii) amounts paid to the Reserve Funds, less (A)
management fees equal to the greater of (1) assumed management fees of five
percent (5%) of Gross Income from Operations or (2) the actual management fees
incurred; (B) assumed Replacement Reserve Fund contributions equal to $0.15 per
square foot of gross leaseable area at the Property; and (C) assumed reserves
for tenant improvements and leasing commissions equal to $0.72 per square foot
of gross leaseable area of the Property; and


 


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


 


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


 


“Default Rate” shall mean, with
respect to the Loan, a rate per annum equal to the lesser of (a) the maximum
rate permitted by applicable law, or (b) five percent (5%) above the Interest
Rate.


 


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


 


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


 


“Eligible Institution” shall mean a
depository institution or trust company insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial
paper of which are rated at least A-l by Standard & Poor’s Ratings
Services, P-1


 


3





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Gross Income from Operations” shall
mean all sustainable income as reported on the financial statements delivered
by Borrower in accordance with this Agreement, computed in accordance with
accounting principles reasonably acceptable to Lender, consistently applied,
derived from the ownership and operation of the Property from whatever source,
including, but not limited to, (i) Rents from Tenants that are in occupancy,
open for business and paying unabated Rent, (ii) utility charges, (iii)
escalations, (iv) intentionally omitted; (v) service fees or charges, (vi)
license fees, (vii) parking fees, and (viii) other required pass-throughs but
excluding (i) sales, use and occupancy or other taxes on receipts required to
be accounted for by Borrower to any Governmental Authority, (ii) refunds and
uncollectible accounts, (iii) sales of furniture, fixtures and equipment, (iv)
Insurance Proceeds (other than business interruption or other loss of income
insurance), (v) Awards, (vi) unforfeited security deposits, (vii) utility and
other similar deposits and (viii) any disbursements to Borrower from the
Reserve Funds. Gross income shall not be diminished as a result of the Mortgage
or the creation of any intervening estate or interest in the Property or any
part thereof.


 


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


 


“Indebtedness” of a Person, at a
particular date, means the sum (without duplication) at such date of (a)
indebtedness or liability for borrowed money; (b) obligations evidenced by
bonds, debentures, notes, or other similar instruments; (c) obligations for the
deferred purchase price of property or services (including trade obligations);
(d) obligations under letters of credit; (e) obligations under acceptance
facilities; (f) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent


 


4





















 


obligations to purchase, to provide funds for payment, to supply funds,
to invest in any Person or entity, or otherwise to assure a creditor against
loss; and (g) obligations secured by any Liens, whether or not the obligations
have been assumed.


 


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


 


“Indemnity Agreement” shall mean
that certain Indemnity Agreement dated as of the date hereof by and between
Borrower and Inland Western Retail Real Estate Trust, Inc., a Maryland
corporation in favor of Lender.


 


“Independent Director” shall mean a
director of a corporation or a manager of a limited liability company who is
not at the time of initial appointment, or at any time while serving as a
director or manager, as the case may be, of such an entity, and has not been at
any time during the preceding five (5) years: (a) a stockholder, director (with
the exception of serving as the Independent Director), officer, employee,
partner, attorney or counsel of the Borrower or any Affiliate of either of
them; (b) a customer, supplier or other person who derives any of its purchases
or revenues from its activities with the Borrower or any Affiliate of either of
them; (c) a Person controlling or under common control with any such
stockholder, director, officer, partner, customer, supplier or other Person; or
(d) a member of the immediate family of any such stockholder, director,
officer, employee, partner, customer, supplier or other person. As used in this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of management, policies or
activities of a Person, whether through ownership of voting securities, by
contract or otherwise.


 


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


 


“Insolvency
Opinion” shall have the
meaning set forth in Section 3.1.6 hereof.


 


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


 


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


 


“Interest Rate” shall mean 5.215
percent (5.215%) per annum.


 


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


 


“Legal Requirements” shall mean,
with respect to the Property, all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances,


 


5





















 


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


 


“Lender” shall mean KeyBank National
Association, together with its successors  and assigns.


 


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


 


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


 


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


 


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


 


“Major Tenant” shall mean any tenant
(i) leasing more than 10,000 square feet of the Property or (ii) whose Rents
comprise 25% or more of the effective gross income (as determined by Lender) of
the Property.


 


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


 


“Manager” shall mean Inland Southwest
Management LLC, a Delaware limited liability company.


 


“Maturity
Date” shall mean January 1,
2010, or such other date on which the final payment of principal of the Note
becomes due and payable as therein or herein provided, whether at such stated
maturity date, by declaration of acceleration, or otherwise.


“Maximum Legal Rate” shall mean the
maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or the other Loan


 


6





















 


Documents,
under the laws of such state or states whose laws are held by any court of
competent jurisdiction to govern the interest rate provisions of the Loan.


 


“Monthly Debt Service Payment Amount”
shall mean an amount equal to $ 99,085.00


 


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


 


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


 


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


 


“Net Operating Income” shall mean
the amount obtained by subtracting from Gross Income from Operations (i)
Operating Expenses, and (ii) a vacancy allowance equal to the greater of (x)
market vacancy (as reasonably determined by Lender), less actual vacancy, and
(y) underwritten vacancy of 11.6%, less actual vacancy. Notwithstanding the
foregoing, if actual vacancy exceeds market vacancy and underwritten vacancy,
then there shall be no adjustment for a vacancy allowance.


 


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


 


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


 


“Note” shall mean that certain
Promissory Note of even date herewith in the principal amount of TWENTY-TWO
MILLION EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($22,800,000.00), made by
Borrower in favor of Lender, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.


 


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


 


“Operating Expenses” shall mean the
total of all expenditures, computed in accordance with accounting principles
reasonably acceptable to Lender, consistently applied, of whatever kind
relating to the operation, maintenance and management of the Property that are
incurred on a regular monthly or other periodic basis, including without
limitation, utilities, ordinary repairs and maintenance, insurance, license
fees, property taxes and assessments, advertising expenses, management fees,
payroll and related taxes, computer processing charges,


 


7





















 


operational equipment or other lease payments as approved by Lender,
and other similar costs, but excluding depreciation, Debt Service, Capital
Expenditures and contributions to the Reserve Funds.


 


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


 


“Other Contract Funds” shall mean
any payment due to Borrower under any of the agreements described on Schedule
X.


 


“Payment Date” shall mean the first
(1st) day of each calendar month during the term of the Loan or, if such day is
not a Business Day, the immediately succeeding Business Day.


 


“Permitted Encumbrances” shall mean,
with respect to the Property,  collectively, (a) the Liens and security interests created by the Loan
Documents, (b) all Liens, encumbrances and other matters disclosed in the Title
Insurance Policies relating to the Property or any part thereof, (c) Liens, if
any, for Taxes imposed by any Governmental Authority not yet due or delinquent,
and (d) such other title and survey exceptions as Lender has approved or may
approve in writing in Lender’s reasonable discretion, which Permitted
Encumbrances in the aggregate do not materially adversely affect the value or
use of the Property or Borrower’s ability to repay the Loan.


 


“Permitted Investments” shall mean
any one or more of the following obligations or securities acquired at a
purchase price of not greater than par, including those issued by Servicer, the
trustee under any Securitization or any of their respective Affiliates, payable
on demand or having a maturity date not later than the Business Day immediately
prior to the first Payment Date following the date of acquiring such investment
and meeting one of the appropriate standards set forth below:


 


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


 


8





















 


a
fixed spread (if any) and must move proportionately with that index, and (D)
such investments must not be subject to liquidation prior to their maturity;


 


(ii)           Federal Housing Administration debentures;


 


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


 


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


 


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


 


9





















 


proportionately
with that index, and (D) such investments must not be subject to liquidation
prior to their maturity;


 


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


 


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


 


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


 


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


 


10





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


11





















 


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


 


“Purchase Contract” shall mean that
certain letter agreement dated April 21, 2004, between Inland Real Estate
Acquisitions, Inc., Lakepointe Towne Crossing, L.P. (I & II), Davis Towne
Crossing, L.P., PRTC Pleasant Run Town Crossing, L.P. and MTC Mansfield Towne
Crossing, L.P., as heretofore or hereafter assigned, amended and modified.


 


“Purchase Price Adjustment” shall
mean an adjustment of the purchase price with respect to the acquisition of the
Property in connection with an “Earnout Closing” pursuant to Section 17 of the
Purchase Contract.


 


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


 


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


 


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


 


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


 


“Relevant Leasing Threshold” shall
mean, any Lease for an amount of leaseable square footage equal to or greater
than [10,000] square feet.


 


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


 


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


 


“Rents” shall mean, with respect to
the Property, all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil
and gas or other mineral royalties and bonuses), income, receivables, receipts,


 


12





















 


revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or
paid to or for the account of or benefit of Borrower or its agents or employees
from any and all sources arising from or attributable to the Property, and
proceeds, if any, from business interruption or other loss of income insurance,
including the Other Contract Funds.


 


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


 


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


 


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


 


“Replacements” shall have the
meaning set forth in Section 7.3.l(a) hereof.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13





















 


“Sole Member” shall mean Inland
Western Retail Real Estate Trust, Inc., a Maryland corporation, the sole member
of the sole general partner of Borrower.


 


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


 


(i)            is organized solely for the purpose of (A)
acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Property, entering into this Agreement
with the Lender, refinancing the Property in connection with a permitted
repayment of the Loan, and transacting lawful business that is incident,
necessary and appropriate to accomplish the foregoing; or (B) acting as a
general partner of the limited partnership that owns the Property, a member of
the limited liability company that owns the Property or the beneficiary or
trustee of a Delaware statutory trust that owns the Property;


 


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


 


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


 


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


 


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


 


(vi)          if such entity is a corporation, has at least
one (1) Independent Director, and has not caused or allowed and will not cause
or allow the board of directors of such entity to take any action related to a
bankruptcy or insolvency proceeding or a voluntary dissolution without the unanimous
affirmative vote of 100% of the members of its board of directors, including
the Independent Director;


 


(vii)         if such entity is a limited liability company
and such limited liability company has more than one member, such limited
liability company has as its manager a


 


14





















 


Special
Purpose Entity that is a corporation and that owns at least 1.0% (one percent)
of the equity of the limited liability company;


 


(viii)        if such entity is a limited liability company
and such limited liability company has only one member, such limited liability
company (a) has been formed under Delaware law and (b) has either a corporation
or other person or entity that shall become a member of the limited liability
company upon the dissolution or disassociation of the member, and (c) has not
less than one (1) Independent Director, and (d) will not cause or allow its
board of directors to take any action related to a bankruptcy or insolvency
proceeding or a voluntary dissolution without the unanimous affirmative vote of
100% of the members of its board of directors, including the Independent
Director;


 


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


 


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


 


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


 


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


 


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


 


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


 


15





















 


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


 


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


 


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


 


(xviii)      has maintained and will maintain its balance
sheets, operating statements and other entity documents separate from any other
Person and has not permitted and will not permit its assets to be listed as
assets on the financial statement of any other entity except as required or
permitted by accounting principles reasonably acceptable to Lender,
consistently applied; provided, however, that (i) any such
consolidated financial statement shall contain a note indicating that it
maintains separate balance sheets and operating statements for the Borrower and
the Property, or (ii) if such Person is controlled by Inland Western Retail
Real Estate Trust, Inc., then such Person may be included in the consolidated
financial statement of Inland Western Retail Real Estate Trust, Inc. provided
such consolidated financial statement contains a note indicating that it
maintains separate financial records for each Person controlled by Inland
Western Retail Real Estate Trust, Inc.;


 


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


 


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


 


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


 


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


 


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


 


16





















 


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


 


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


 


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


 


(xxvii)      has held itself out and identified itself and
will hold itself out and identify itself as a separate and distinct entity
under its own name or in a name franchised or licensed to it by an entity other
than an Affiliate of Borrower and not as a division or part of any other
Person, except for services rendered by Manager under the Management Agreement,
so long as Manager holds itself out as an agent of the Borrower;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


17





















 


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


 


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


 


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


 


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


 


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


 


“Title Insurance Policies” shall
mean, with respect to the Property, one or more mortgagee title insurance
policies in the form (acceptable to Lender) promulgated by the state Board of
Insurance issued with respect to the Property and insuring the lien of the
Mortgage encumbering the Property.


 


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


 


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


 


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


 


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


 


Section 1.2             Principles
of Construction. All
references to sections and schedules are to sections and schedules in or to this
Agreement unless otherwise specified. All uses of the word “including” shall
mean “including, without limitation” unless the context shall indicate
otherwise. Unless otherwise specified, the words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all meanings attributed to defined terms herein
shall be equally applicable to both the singular and plural forms of the terms
so defined.


 


18





















 


ARTICLE II


 


GENERAL TERMS


 


Section 2.1             Loan
Commitment; Disbursement
to Borrower.


 


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


 


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


 


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


 


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


 


Section 2.2             Interest;
Loan Payments: Late Payment Charge.


 


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


 


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


 


2.2.3        Payments Generally.   Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the Closing Date up to but not including the first
Payment Date following the Closing Date, and (b) on February 1, 2005 and each
Payment Date thereafter up to but not including the Maturity Date, the Monthly
Debt Service Payment Amount which is an amount equal to the interest on the outstanding
principal amount of the Loan for the prior calendar month, calculated as set
forth herein, which payments shall be applied to accrued and unpaid interest at
the Interest Rate.


 


2.2.4        Intentionally Deleted.


 


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


 


2.2.6        Payments after Default.
Upon the occurrence and during the continuance of an Event of Default, interest
on the outstanding principal balance of the Loan and, to the extent permitted
by law, overdue interest and other amounts due in respect of the Loan, shall


 


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


 


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


 


2.2.8        Usury Savings.   The provisions of Section 4 of the Note are
hereby incorporated by reference into this Agreement to the same extent and with
the same force as if fully set forth herein.


 


Section 2.3             Prepayments.


 


2.3.1        Voluntary Prepayments.


 


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


 


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


 


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


 


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


 


Section 2.4             Intentionally
Omitted.


 


Section 2.5             Release
of Property.   Except as set forth in this Section 2.5, no
repayment or prepayment of all or any portion of the Note shall cause, give
rise to a right to


 


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require,
or otherwise result in, the release of any Lien of the Mortgage on the
Property. If Borrower has elected to prepay the entire amount of the Loan
pursuant to Section 2.3.1 and the requirements of this Section 2.5 have been
satisfied, the Property shall be released from the Lien of the Mortgage.


 


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


 


Section 2.6             Manner
of Making Payments.


 


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


 


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


 


ARTICLE III


 


CONDITIONS
PRECEDENT


 


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


 


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


 


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


 


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


 


(a)           Mortgage, Assignment of Leases and other Loan
Documents. Lender shall have
received from Borrower fully executed and acknowledged counterparts of the


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3.1.6        Opinions of Borrower’s Counsel. Lender shall have received opinions of Borrower’s counsel with
respect to (a) non-consolidation issues (“Insolvency
Opinion”) and (b) due execution, authority, enforceability of
the Loan Documents and such other matters as Lender may reasonably require, all
such opinions in form, scope and substance reasonably satisfactory to Lender
and Lender’s counsel in their reasonable discretion.


 


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


 


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


 


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


 


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


 


3.1.11      Tenant Estoppels.   (a) Lender shall have received an executed
tenant estoppel letter, which shall be in form and substance satisfactory to
Lender, from each Major Tenant, and (b) Borrower shall exercise reasonable
commercial efforts to deliver estoppel letters from Tenants occupying not less
than seventy percent (70%), disregarding the area leased by


 


24





















 


Major Tenants of the remaining gross leasable area of the Property;
provided, however, that, in the event that Borrower is unable to deliver some
or all of the estoppels described in clause (b) of this Section 3.1.11, Lender
agrees that the requirement to deliver such letters to Lender shall be waived
by Lender as a condition precedent to the closing of the Loan so long as
Borrower delivers on or before the Closing Date, a certificate executed by
Borrower with respect to all applicable leases which shall be in substantially
the same form and contain the same terms as set forth in Lender’s standard form
of estoppel certificate.


 


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


 


3.1.13      Material Adverse Change.   There shall have been no material adverse change
in the financial condition or business condition of Borrower, any Major Tenant
or the Property since the date of the most recent financial statements
delivered to Lender. The income and expenses of the Property, the occupancy
leases thereof, and all other features of the transaction shall be as represented
to Lender without material adverse change. Neither Borrower nor any of its
constituent Persons nor any Major Tenant shall be the subject of any
bankruptcy, reorganization, or insolvency proceeding.


 


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


 


3.1.15      Subordination and Attornment.  Lender shall have received
appropriate instruments acceptable to Lender in its commercially reasonable
discretion subordinating the Leases of each of the Major Tenants and other Leases
of record prior to the Mortgage and including an agreement by such Tenants to
attorn to Lender in the event of a foreclosure or delivery of a deed in lieu
thereof.


 


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


 


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


 


3.1.18      Management Agreement.  Lender shall have received a certified copy
of the Management Agreement with respect to the Property which shall be
satisfactory in form and substance to Lender.


 


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


 


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


 


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


 


3.1.22      Environmental Insurance.   If required by Lender, Borrower shall have obtained
a secured creditor environmental insurance policy with respect to the Property,
which shall be in form and substance satisfactory to Lender. Any such policy
shall have a term not less than the term of the Loan. Borrower shall have
provided to Lender evidence that the premiums for such policy has been paid in
full.


 


ARTICLE IV


 


REPRESENTATIONS
AND WARRANTIES


 


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


 


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


 


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


 


4.1.3        No Conflicts. The
execution, delivery and performance of this Agreement and the other Loan
Documents by Borrower will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance (other than pursuant
to the Loan Documents) upon any of the


 


26





















 


property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement or other
agreement or instrument to which Borrower is a party or by which any of
Borrower’s property or assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over Borrower or
any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower of this Agreement or any other
Loan Documents has been obtained and is in full force and effect.


 


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


 


4.1.5        Agreements.    Except such instruments and agreements set
forth as Permitted Encumbrances in the Title Insurance Policy, Borrower is not
a party to any agreement or instrument or subject to any restriction which
might materially and adversely affect Borrower or the Property, or Borrower’s
business, properties or assets, operations or condition, financial or otherwise.
To Borrower’s knowledge, Borrower is not in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party
or by which Borrower or the Property are bound. 
Borrower has no material financial obligation under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
Borrower is a party or by which Borrower or the Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the operation of
the Property and (b) obligations under the Loan Documents.


 


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


 


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4.1.7        Solvency; No Bankruptcy Filing. Borrower (a) has not entered into the transaction or executed the
Note, this Agreement or any other Loan Documents with the actual intent to
hinder, delay or defraud any creditor and (b) received reasonably equivalent
value in exchange for its obligations under such Loan Documents.  Giving effect to the Loan, the fair saleable
value of Borrower’s assets exceeds and will, immediately following the making
of the Loan, exceed Borrower’s total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities.
The fair saleable value of Borrower’s assets is and will, immediately following
the making of the Loan, be greater than Borrower’s probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured. Borrower’s assets do not and, immediately
following the making of the Loan will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Borrower does not intend to, and does not believe that it will, incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower). Except as expressly
disclosed to Lender in writing, no petition in bankruptcy has been filed
against Borrower, or to the best of Borrower’s knowledge, any constituent
Person in the last seven (7) years, and neither Borrower, nor to the best of
Borrower’s knowledge, any constituent Person in the last seven (7) years has
ever made an assignment for the benefit of creditors or taken advantage of any
insolvency act for the benefit of debtors. Neither Borrower nor any of its
constituent Persons are contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of
all or a major portion of Borrower’s assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
it or such constituent Persons.


 


4.1.8        Full and Accurate Disclosure. To Borrower’s knowledge, no statement of fact made by Borrower in
this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading. There is no
material fact presently known to Borrower which has not been disclosed to
Lender which adversely affects, nor as far as Borrower can foresee, might
adversely affect, the Property or the business, operations or condition
(financial or otherwise) of Borrower.


 


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


 


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


 


28





















 


has
not been committed by Borrower or, to Borrower’s knowledge, any other Person in
occupancy of or involved with the operation or use of the Property any act or
omission affording the federal government or any other Governmental Authority
the right of forfeiture as against the Property or any part thereof or any
monies paid in performance of Borrower’s obligations under any of the Loan
Documents.


 


4.1.11      Financial Information.   All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Property (i) are to the best of
Borrower’s knowledge, true, complete and correct in all material respects, (ii)
accurately represent the financial condition of the Property as of the date of
such reports, and (iii) to the extent prepared or audited by an independent
certified public accounting firm, have been prepared in accordance with
accounting principles reasonably acceptable to Lender, consistently applied
throughout the periods covered, except as disclosed therein; provided, however,
that if any financial data is delivered to Lender by any Person other than
Borrower, Indemnitor or any of their Affiliates, or if such financial data has
been prepared by or at the direction of any Person other than Borrower,
Indemnitor or any of their Affiliates, then the foregoing representations with
respect to such financial data shall be to the best of Borrower’s knowledge,
after due inquiry.  Borrower does not
have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a
materially adverse effect on the Property or the operation thereof as retail
shopping centers, except as referred to or reflected in said financial
statements.  Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operations or business of Borrower from that set forth in said
financial statements.


 


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


 


4.1.13      Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of
purchasing or acquiring any “margin stock” within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System or for any other
purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements or by the terms and conditions of this Agreement or the other Loan
Documents.


 


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


 


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


 


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


 


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


 


4.1.18      Enforceability.   The Loan Documents are not subject to any
right of rescission, set-off, counterclaim or defense by Borrower, including
the defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, set-off,
counterclaim or defense with respect thereto.


 


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


 


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


 


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


 


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


 


4.1.23      Flood Zone. To the
best of Borrower’s knowledge, after due inquiry, none of the Improvements on
the Property are located in an area as identified by the Federal Emergency
Management Agency as an area having special flood hazards.


 


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4.1.24      Physical Condition.    Except as disclosed in the Physical
Conditions Reports delivered to Lender in connecting with this Loan, to
Borrower’s knowledge, the Property, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems,
roofs, plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair
in all material respects; there exists no structural or other material defects or
damages in the Property, whether latent or otherwise, and Borrower has not
received notice from any insurance company or bonding company of any defects or
inadequacies in the Property, or any part thereof, which would adversely affect
the insurability of the same or cause the imposition of extraordinary premiums
or charges thereon or of any termination or threatened termination of any
policy of insurance or bond.


 


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


 


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


 


31





















 


chemical,
material, substance or waste, except in either event, in compliance with
applicable federal, state or local statues, rules and regulations.


 


4.1.27      Survey.  The Survey for the Property
delivered to Lender in connection with this Agreement has been prepared in
accordance with the provisions of Section 3.l.3(c) hereof, and does not fail to
reflect any material matter affecting the Property or the title thereto.


 


4.1.28      Loan to Value.   The maximum principal amount of the Loan
does not exceed one hundred twenty-five percent (125%) of the fair market value of the Property as set forth on the appraisals of the Property
delivered to Lender.


 


4.1.29      Filing and Recording Taxes.   All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the transfer of the Property to Borrower have been
paid or are simultaneously being paid. 
All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under applicable Legal Requirements currently
in effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, the Mortgage, have been paid, and, under current Legal Requirements,
the Mortgage is enforceable in accordance with its terms by Lender (or any subsequent
holder thereof).


 


4.1.30      Special Purpose Entity/Separateness.


 


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


 


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


 


(c)           Any and all of the assumptions made in any Insolvency Opinion, including,
but not limited to, any exhibits attached thereto, will have been and shall be true and correct in all respects, and Borrower
will have complied and will comply with all of the assumptions made with
respect to it in any Insolvency Opinion. Each entity other than Borrower with
respect to which an assumption is made in any Insolvency Opinion will have
complied and will comply with all of the assumptions made with respect to it in
any such Insolvency Opinion.


 


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


 


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


 


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4.1.33      No Change in Facts or Circumstances; Disclosure.   
All information submitted by Borrower to Lender and in all financial
statements, rent rolls, reports, certificates and other documents submitted in
connection with the Loan or in satisfaction of the terms thereof and all
statements of fact made by Borrower in this Agreement or in any other Loan Document,
are accurate, complete and correct in all material respects, provided, however,
that if such information was provided to Borrower by non-affiliated third
parties, Borrower represents that such information is, to the best of its
knowledge after due inquiry, accurate, complete and

correct in all material respects.  There
has been no material adverse change in any condition, fact, circumstance or
event that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely
affects or might materially and adversely affect the Property or the business
operations or the financial condition of Borrower. Borrower has disclosed to
Lender all material facts and has not failed to disclose any material fact that
could cause any representation or warranty made herein to be materially
misleading.


 


4.1.34      Intentionally omitted.


 


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


 


4.1.36      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 4.2             Survival
of Representations. Borrower
agrees that all of the representations and warranties of Borrower set forth in
Section 4.1 and elsewhere in this Agreement and in the other Loan Documents
shall survive for so long as any amount remains owing to Lender under this
Agreement or any of the other Loan Documents by Borrower. All representations,
warranties, covenants and agreements made in this Agreement or in the other
Loan Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on
its behalf.


 


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ARTICLE V


 


BORROWER
COVENANTS


 


Section 5.l              Affirmative
Covenants. From the date
hereof and until payment and performance in full of all obligations of Borrower
under the Loan Documents or the earlier release of the Lien of the Mortgage
encumbering the Property (and all related obligations) in accordance with the
terms of this Agreement and the other Loan Documents, Borrower hereby covenants
and agrees with Lender that:


 


5.1.1        Existence; Compliance with Legal Requirements; Insurance. Borrower shall do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
existence, rights, licenses, permits and franchises and comply with all Legal
Requirements applicable to it and the Property. There shall never be committed
by Borrower or any other Person in occupancy of or involved with the operation
or use of the Property any act or omission affording the federal government or
any state or local government the right of forfeiture as against the Property
or any part thereof or any monies paid in performance of Borrower’s obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture. Borrower shall at all times maintain, preserve and protect all its
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and shall keep the Property in good
working order and repair, and from time to time make, or cause to be made, all
reasonably necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the Mortgage. Borrower
shall keep the Property insured at all times by financially sound and reputable
insurers, to such extent and against such risks, and maintain liability and
such other insurance, as is more fully provided in this Agreement. Borrower
shall operate, or cause the tenant to operate, any Property that is the subject
of an O&M Agreement (if any) in accordance with the terms and provisions
thereof in all material respects. After prior written notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding
promptly initiated and conducted in good faith and with due diligence, the
validity of any Legal Requirement, the applicability of any Legal Requirement
to Borrower or the Property or any alleged violation of any Legal Requirement,
provided that (i) no Event of Default has occurred and remains uncured; (ii)
intentionally omitted; (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any instrument to which Borrower
is subject and shall not constitute a default thereunder and such proceeding
shall be conducted in accordance with the provisions of any instrument to which
Borrower is subject and shall not constitute a default thereunder and such
proceeding shall be conducted in accordance with all applicable statutes, laws
and ordinances; (iv) the Property or any part thereof or interest therein will
not be in danger of being sold, forfeited, terminated, concealed or lost; (v)
Borrower shall promptly upon final determination thereof comply with any such
Legal Requirement determined to be valid or applicable or cure any violation of
any Legal Requirement; (vi) such proceeding shall suspend the enforcement of
the contested Legal Requirement against Borrower or the Property; and (vii)
Borrower shall furnish such security as may be required in the proceeding, or
as may be requested by Lender, to insure compliance with such Legal
Requirement, together, with all interest and penalties payable in connection
therewith. Lender may apply any such security, as necessary to cause compliance
with such Legal Requirement at any time when, in the reasonable judgment of
Lender, the validity, applicability or violation of such Legal Requirement


 


34





















 


is
finally established or the Property (or any part thereof or interest therein)
shall be in danger of being sold, forfeited, terminated, cancelled or lost.


 


5.1.2        Taxes and Other Charges.   Borrower shall pay or caused to be paid all Taxes
and Other Charges now or hereafter levied or assessed or imposed against the
Property or any part thereof as the same become due and payable; provided,
however, Borrower’s obligation to directly pay to the appropriate taxing
authority Taxes shall be suspended for so long as Borrower complies with the
terms and provisions of Section 7.2 hereof. Borrower will deliver to Lender
receipts for payment or other evidence satisfactory to Lender that the Taxes
and Other Charges have been so paid or are not then delinquent no later than
ten (10) days prior to the date on which the Taxes and/or Other Charges would
otherwise be delinquent if not paid (provided, however, that
Borrower is not required to furnish such receipts for payment of Taxes in the
event that such Taxes have been paid by Lender pursuant to Section 7.2 hereof).
If Borrower pays or causes to be paid all Taxes and Other Charges and provides
a copy of the receipt evidencing the payment thereof to Lender, then Lender
shall reimburse Borrower, provided that there are then sufficient proceeds in
the Tax and Insurance Escrow Fund and provided that the Taxes are being paid
pursuant to Section 7.2.  Upon written
request of Borrower, if Lender has paid such Taxes pursuant to Section 7.2
hereof, Lender shall provide Borrower with evidence that such Taxes have been
paid.  Borrower shall not suffer and
shall promptly cause to be paid and discharged any Lien or charge whatsoever
which may be or become a Lien or charge against the Property, and shall
promptly pay for all utility services provided to the Property. After prior
written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith
and with due diligence, the amount or validity or application in whole or in
part of any Taxes or Other Charges, provided that (i) Borrower is permitted to
do so under the provisions of any mortgage or deed of trust superior in lien to
the Mortgage; (ii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) the Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, cancelled or lost; (iv) Borrower shall
promptly upon final determination thereof pay the amount of any such Taxes or
Other Charges, together with all costs, interest and penalties which may be
payable in connection therewith; (v) such proceeding shall suspend the
collection of such contested Taxes or Other Charges from the Property; and (vi)
Borrower shall furnish such security as may be required in the proceeding, or
as may be reasonably requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon.  Lender may pay over any such cash deposit or part
thereof held by Lender to the claimant entitled thereto at any time when, in
the reasonable judgment of Lender, the entitlement of such claimant is
established.


 


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


 


5.1.4        Access to Property.   Borrower shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice, subject to the
rights of Tenants under their respective Leases.


 


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


 


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


 


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


 


5.1.8        Insurance Benefits.
Borrower shall cooperate with Lender in obtaining for Lender the benefits of
any Insurance Proceeds lawfully or equitably payable in connection with the
Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and the payment by Borrower of the

expense of an appraisal on behalf of Lender in case of a fire or other casualty
affecting the Property or any part thereof) out of such Insurance Proceeds.


 


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


 


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


 


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


 


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


 


5.1.10         Intentionally Omitted.


 


5.1.11         Financial Reporting.


 


(a)                 Borrower will keep and maintain or will cause
to be kept and maintained on a Fiscal Year basis, in accordance with the
requirements for a Special Purpose Entity set forth above, proper and accurate
books, records and accounts reflecting all of the financial affairs of Borrower
and all items of income and expense in connection with the operation on an
individual


 


36





















 


basis
of the Property.  Lender shall have the
right from time to time at all times during normal business hours upon
reasonable notice to examine such books, records and accounts at the office of
Borrower or other Person maintaining such books, records and accounts and to
make such copies or extracts thereof as Lender shall desire. After the
occurrence and during the continuance of an Event of Default, Borrower shall
pay any costs and expenses incurred by Lender to examine Borrower’s accounting
records with respect to the Property, as Lender shall reasonably determine to
be necessary or appropriate in the protection of Lender’s interest.


 


(b)           Borrower will furnish to Lender annually, within one hundred twenty (120)
days following the end of each Fiscal Year of Borrower, either (i) a complete
copy of Borrower’s annual financial statements audited by a “Big Four” accounting
firm or other independent certified public accountant reasonably acceptable to
Lender in accordance with the requirements for a Special Purpose Entity set
forth above, or (ii) a consolidated and annotated financial statement of
Borrower and Sole Member, audited by a “Big Four” accounting firm or other
independent certified public accountant reasonably acceptable to Lender in
accordance with the requirements for a Special Purpose Entity set forth above,
together with unaudited financial statements relating to the Borrower and the
Property. Such financial statements for the Property for such Fiscal Year and
shall contain statements of profit and loss for Borrower and the Property and a
balance sheet for Borrower.  Such
statements shall set forth the financial condition and the results of
operations for the Property for such Fiscal Year, and shall include, but not be
limited to, amounts representing annual Net Cash Flow, Net Operating Income,
Gross Income from Operations and Operating Expenses. Borrower’s annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (ii) a certificate executed by the chief financial officer of Borrower or
Sole Member, as applicable, stating that each such annual financial statement presents
fairly the financial condition and the results of operations of Borrower and
the Property being reported upon and has been prepared in accordance with
accounting principles reasonably acceptable to Lender, consistently applied,
(iii) with respect to any consolidated financial statement of Borrower and Sole
Member, an unqualified opinion of a “Big Four” accounting firm or other
independent certified public accountant reasonably acceptable to Lender, (iv) a
certified rent roll containing current rent, lease expiration dates and the
square footage occupied by each tenant; (v) a schedule audited by such
independent certified public accountant reconciling Net Operating Income to Net
Cash Flow (the “Net Cash Flow Schedule”),
which shall itemize all adjustments made to Net Operating Income to arrive at
Net Cash Flow deemed material by such independent certified public
accountant.  Together with Borrower’s
annual financial statements, Borrower shall furnish to Lender an Officer’s
Certificate certifying as of the date thereof whether there exists an event or
circumstance which constitutes a Default or Event of Default under the Loan
Documents executed and delivered by, or applicable to, Borrower, and if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed and the action then being taken to remedy the same.


 


(c)           Borrower will furnish, or cause to be furnished, to Lender on or before
forty-five (45) days after the end of each calendar quarter the following
items, accompanied by a certificate of the chief financial officer of Borrower
or Sole Member, as applicable, stating that such items are true, correct,
accurate, and complete and fairly present the financial condition and results
of the operations of Borrower and the Property (subject to normal year-end
adjustments) as applicable: (i) a rent roll for the subject period accompanied
by an Officer’s Certificate with


 


37





















 


respect thereto; (ii) quarterly and year-to-date operating statements
(including Capital Expenditures) prepared for each calendar quarter, noting Net
Operating Income, Gross Income from Operations, and Operating Expenses (not
including any contributions to the Replacement Reserve Fund, and other
information necessary and sufficient to fairly represent the financial position
and results of operation of the Property during such calendar month, and
containing a comparison of budgeted income and expenses and the actual income
and expenses together with a detailed explanation of any variances of five
percent (5%) or more between budgeted and actual amounts for such periods, all
in form satisfactory to Lender; (iii) a calculation reflecting the annual Debt
Service Coverage Ratio for the immediately preceding twelve (12) month period
as of the last day of such period accompanied by an Officer’s Certificate with
respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash Flow for the
Borrower may be unaudited if it is certified by an officer of the Borrower). In
addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Borrower or Sole Member stating that the
representations and warranties of Borrower set forth in Section 4.1.30(a) are
true and correct as of the date of such certificate. Provided, further, that
during the twelve (12) month period commencing on the date hereof, Borrower
will furnish a current rent roll and monthly and year-to-date operating statements
within twenty (20) days of Lender’s written request.


 


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


 


(e)           Borrower shall furnish to Lender, within ten (10) Business Days after request
(or as soon thereafter as may be reasonably possible), such further detailed
information with respect to the operation of the Property and the financial
affairs of Borrower as may be reasonably requested by Lender.


 


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


 


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


 


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


 


38





















 


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


 


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


 


5.1.14      Costs of Enforcement.
In the event (a) that the Mortgage encumbering the Property is foreclosed in
whole or in part or that the Mortgage is put into the hands of an attorney for
collection, suit, action or foreclosure, (b) of the foreclosure of any mortgage
prior to or subsequent to the Mortgage encumbering the Property in which
proceeding Lender is made a party, or (c) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of Borrower or any of its
constituent Persons or an assignment by Borrower or any of its constituent
Persons for the benefit of its creditors, Borrower, its successors or assigns,
shall be chargeable with and agrees to pay all costs of collection and defense,
including reasonable attorneys’ fees and costs, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, together with all required service or
use taxes.


 


5.1.15       Estoppel Statement.


 


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


 


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


 


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


 


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


 


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


 


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


 


5.1.19      No Joint Assessment.
Borrower shall not suffer, permit or initiate the joint assessment of the
Property (a) with any other real property constituting a tax lot separate from
the Property, and (b) which constitutes real property with any portion of the
Property which may be deemed to constitute personal property, or any other
procedure whereby the lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to such real property portion
of the Property.


 


5.1.20      Leasing Matters. Any
Leases with respect to the Property written after the date hereof, for more
than the Relevant Leasing Threshold square footage, shall be subject to the
prior written approval of Lender, which approval may be given or withheld in
the sole discretion of Lender. Lender shall approve or disapprove any such
Lease within ten (10) Business Days of Lender’s receipt of a final execution
draft of such Lease (including all exhibits, schedules, supplements, addenda or
other agreements relating thereto) and a written notice from Borrower
requesting Lender’s approval to such Lease, and such Lease shall be deemed
approved, if Lender does not disapprove such Lease within said ten (10)
Business Day period provided such
written notice conspicuously states, in large bold type, that “PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THE
LEASE SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY
WITHIN TEN (10) BUSINESS DAYS OF LENDER’S RECEIPT OF SUCH LEASE AND WRITTEN
NOTICE.” Borrower shall furnish Lender with executed copies of all
Leases. All renewals of Leases and all proposed Leases shall provide for rental
rates comparable to existing local market rates (unless such rental rates are
otherwise set forth in the Leases executed prior to the date hereof).  All proposed Leases shall be on commercially
reasonable terms and shall not contain any terms which would materially affect
Lender’s rights under the Loan Documents. 
All Leases executed after the date hereof shall provide that they are
subordinate to the Mortgage encumbering the Property and that the tenant
thereunder agrees to attorn to Lender or any purchaser at a sale by foreclosure
or power of sale.  Borrower (i) shall
observe and perform the obligations imposed upon the lessor under the Leases in
a commercially reasonable manner; (ii) shall enforce the terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder to be
observed or performed in a commercially reasonable manner and in a manner not
to impair


 


40





















 


the value of the Property
involved except that no termination by Borrower or acceptance of surrender by a
tenant of any Lease shall be permitted unless by reason of a tenant default and
then only in a commercially reasonable manner to preserve and protect the
Property provided, however, that no such termination or surrender
of any Lease covering more than the Relevant Leasing Threshold will be
permitted without the written consent of Lender which consent may be withheld
in the sole discretion of Lender; (iii) shall not collect any of the rents more
than one (1) month in advance (other than security deposits); (iv) shall not
execute any other assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents); (v) shall not alter, modify or
change the terms of the Leases in a manner inconsistent with the provisions of
the Loan Documents without the prior written consent of Lender, which consent
may be withheld in the sole discretion of Lender; and (vi) shall execute and
deliver at the request of Lender all such further assurances, confirmations and
assignment in connection with the Leases as Lender shall from time to time
reasonably require. Notwithstanding the foregoing, Borrower may, without the
prior written consent of Lender, terminate any Lease which demises less than
the Relevant Leasing Threshold under any of the following circumstances: (i)
the tenant under said Lease is in default beyond any applicable grace and cure
period, and Borrower has the right to terminate such Lease; (ii) such
termination is permitted by the terms of the Lease in question and Borrower has
secured an obligation from a third party to lease the space under the Lease to
be terminated at a rental equal to or higher than the rental due under the
Lease to be terminated; and (iii) if the tenant under the Lease to be
terminated has executed a right under said Lease to terminate its lease upon
payment of a termination fee to Borrower, and has in fact terminated its lease
and paid said fee, Borrower may accept said termination.


 


5.1.21      Alterations. Subject
to the rights of tenants to make alterations pursuant to the terms of their
respective Leases, Borrower shall obtain Lender’s prior written consent to any
alterations to any Improvements, which consent shall not be unreasonably
withheld or delayed except with respect to alterations that may have a material
adverse effect on Borrower’s financial condition, the value of the Property or
the Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall
not be required in connection with any alterations that will not have a
material adverse effect on Borrower’s financial condition, the value of the
Property or the Net Operating Income, provided that such alterations are made
in connection with (a) tenant improvement work performed pursuant to the terms
of any Lease executed on or before the date hereof, (b) tenant improvement work
performed pursuant to the terms and provisions of a Lease and not adversely
affecting any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or the exterior of any building
constituting a part of any Improvements, (c) alterations performed in
connection with the restoration of the Property after the occurrence of a
casualty in accordance with the terms and provisions of this Agreement or (d)
any structural alteration which costs less than $50,000.00 in the aggregate for
all components thereof which constitute such alteration or any non-structural
alteration which costs less than $100,000.00 in the aggregate for all
components thereof which constitute such alteration. If the total unpaid
amounts due and payable with respect to alterations to the Improvements at the
Property (other than such amounts to be paid or reimbursed by tenants under the
Leases) shall at any time equal or exceed $350,000.00 (the “Threshold
Amount”), Borrower shall promptly deliver to Lender as security
for the payment of such amounts and as additional security for Borrower’s
obligations under the Loan Documents any of the following: (A) cash, (B) U.S.
Obligations, (C) other securities having a rating acceptable to Lender and that
the applicable Rating Agencies have confirmed in writing will not, in and of
itself, result in a downgrade,


 


41





















 


withdrawal or qualification
of the initial, or, if higher, then current ratings assigned in connection with
any Securitization, or (D) a completion bond or letter of credit issued by a
financial institution having a rating by Standard & Poor’s Ratings Group of
not less than A-1+ if the term of such bond or letter of credit is no longer
than three (3) months or, if such term is in excess of three (3) months, issued
by a financial institution having a rating that is acceptable to Lender and
that the applicable Rating Agencies have confirmed in writing will not, in and
of itself, result in a downgrade, withdrawal or qualification of the initial,
or, if higher, then current ratings assigned in connection with any
Securitization. Such security shall be in an amount equal to the excess of the
total unpaid amounts with respect to alterations to the Improvements on the
Property (other than such amounts to be paid or reimbursed by tenants under the
Leases) over the Threshold Amount and, if cash, may be applied from time to
time, at the option of Borrower, to pay for such alterations. At the option of
Lender, following the occurrence and during the continuance of an Event of
Default, Lender may terminate any of the alterations and use the deposit to
restore the Property to the extent necessary to prevent any material adverse
effect on the value of the Property.


 


5.1.22      Principal Place of Business. Borrower shall not change its principal place of business set forth
on the first page of this Agreement without first giving Lender thirty (30) days
prior written notice.


 


5.1.23      Payments to Tenants.
Borrower shall pay, in accordance with the terms of the respective Leases, the
amounts set forth as required tenant improvement allowances in the tenant
estoppel certificates delivered to Lender in connection with Loan closing by
Panera and Mattress Firm. Borrower shall furnish to Lender copies of the checks
issued to such Tenants for such payments.


 


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


 


5.2.1        Operation of Property.  Borrower shall not, without the prior consent
of Lender, terminate the Management Agreement or otherwise replace the Manager
or enter into any other management agreement with respect to the Property
unless the Manager is in default thereunder beyond any applicable grace or cure
period, in which event no consent by Lender shall be required.  Lender agrees that its consent will not be
unreasonably withheld, delayed or conditioned provided that the Person chosen
by Borrower as the replacement Manager is a Qualifying Manager and provided
further that Borrower shall deliver an acceptable non- consolidation opinion
covering such replacement Manager if any such opinion was delivered at the
closing of the Loan and such Person was not covered by that opinion.


 


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


 


(i)            Permitted Encumbrances;


 


42





















 


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


 


(iii)          Liens for Taxes or Other Charges not yet due.


 


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


 


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


 


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


 


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


 


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


 


5.2.8        Assets. Borrower
shall not purchase or own any properties other than the Property.


 


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


 


5.2.10      No Joint Assessment.
Borrower shall not suffer, permit or initiate the joint assessment of the
Property with (a) any other real property constituting a tax lot separate from the
Property, or (b) any portion of the Property which may be deemed to constitute
personal


 


43





















 


property, or any other
procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Property.


 


5.2.11      Intentionally Deleted.


 


5.2.12      ERISA.


 


(a)                                  Borrower shall not engage in any transaction
which would cause any obligation, or action taken or to be taken, hereunder (or
the exercise by Lender of any of its rights under the Note, this Agreement or
the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under ERISA.


 


(b)                                 Borrower further covenants and agrees to
deliver to Lender such certifications or other evidence from time to time throughout
the term of the Loan, as requested by Lender in its sole discretion, that (A)
Borrower is not and does not maintain an “employee benefit plan” as defined in
Section 3(3) of ERISA, which is subject to Title I of ER1SA, or a “governmental
plan” within the meaning of Section 3(3) of ERISA; (B) Borrower is not subject to
state statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (C) one or more of the following circumstances is true:


 


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


 


(ii)                                Less than twenty-five percent (25%) of each
outstanding class of equity interests in Borrower are held by “benefit plan
investors” within the meaning of 29 C.F.R. §25l0.3-101(f)(2);or


 


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


 


5.2.13
Transfers. Unless such action is permitted by the provisions of this
Section 5.2.13, Borrower will not (i) sell, assign, convey, transfer or
otherwise dispose of its interests in the Property or any part thereof, (ii)
permit any owner, directly or indirectly, of an ownership interest in the
Property, to transfer such interest, whether by transfer of stock or other
interest in Borrower or any entity, or otherwise, (iii) incur Indebtedness,
(iv) mortgage, hypothecate or otherwise encumber or grant a security interest
in the Property or any part thereof, (v) sell, assign, convey, transfer,
mortgage, encumber, grant a security interest in, or otherwise dispose of any
direct or indirect ownership interest in Borrower, or permit any owner of an
interest in Borrower to do the same, or (vi) file a declaration of condominium
with respect to the Property (any of the foregoing transactions, a “Transfer”). For purposes hereof, a “Transfer”
shall not include any issuance, sale or transfer of interests in Inland Western
Retail Real Estate Trust, Inc.


 


(a)                                  On and after the date that is the later of
(i) twelve (12) months following the Closing Date, or (ii) the date of any
payment in connection with an Earnout Closing (as defined in the Purchase
Contract) relating to the Property, but in no event later than the date that is
twenty four (24) months following the Closing Date, Lender shall not withhold
its consent to a Transfer of the Property, provided that the following
conditions are satisfied:


 


44





















 


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


 


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


 


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


 


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


 


(5)           if required or requested by any of the Rating
Agencies, Borrower shall deliver an Additional Insolvency Opinion, and if
required by a Rating Agency, a fraudulent conveyance opinion with respect to
Transferee, which opinion shall be acceptable to Lender in its reasonable
discretion;


 


(6)           Borrower shall have paid (A) an assumption
fee equal to one percent (1.0%) of the then outstanding principal balance of
the Loan, and (B) the reasonable and customary third-party expenses (including
reasonable attorneys’ fees and disbursements) actually incurred by Lender in connection
with such Transfer; provided, however, no assumption fee shall be
required for a Transfer of the Property to a Transferee acceptable to Lender in
connection with a joint venture between Inland Western Retail Real Estate
Trust, Inc. and an institution acceptable to Lender provided Inland Western
Retail Real Estate Trust, Inc., or an Affiliate wholly-owned (directly or indirectly)
by Inland Western Retail Real Estate Trust, Inc., owns at least twenty percent
(20%) of the ownership interests in such Transferee and for which Inland
Western Retail Real Estate Trust, Inc., or an Affiliate wholly-owned (directly
or indirectly) by Inland Western Retail Real Estate Trust, Inc., is the
managing entity and otherwise maintains operational and managerial control of
such Transferee, provided that Borrower shall pay all of Lender’s reasonable and
customary third-party expenses (including reasonable attorneys’ fees and
disbursements) actually incurred by Lender in connection with such Transfer and
a processing fee of $5,000.


 


Lender shall notify Borrower
of its approval or disapproval of a proposed Transfer pursuant to this Section
5.2.13(a) within thirty (30) days after receiving from Borrower a written
request therefor.


 


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(b)           On and after the date that is the later of (i) twelve (12) months
following the Closing Date, or (ii) the date of any payment in connection with
an Earnout Closing (as defined in the Purchase Contact) relating to the
Property, but in no event later than the date that is twenty four (24) months
following the Closing Date, Lender shall not withhold its consent to, and shall
not charge an assumption fee in connection with, (1) a Transfer of up to, in
the aggregate, forty-nine percent (49%) of the ownership interests in Borrower;
or (2) a Transfer of greater than forty-nine percent (49%) of the ownership
interest in Borrower, provided that (A) such transfer is to a Qualified
Entity (as defined below), and (B) Borrower shall pay all of Lender’s
reasonable and customary third-party expenses (including reasonable attorneys’
fees and disbursements) actually incurred by Lender in connection with such
Transfer and a processing fee of $5,000. 
For purposes of this Agreement, a “Qualified Entity” shall mean an entity
(x) with a net worth of $200,000,000 or more, (y) with sufficient experience
(determined by Lender in its reasonable discretion) in the ownership and
management of properties similar to the Property, and (z) which owns or manages
retail properties containing at least 500,000 square feet of gross leasable
area.  If required or requested by any of
the Rating Agencies, Borrower shall deliver a substantive non-consolidation
opinion with respect to any party not now owning more than 49% of the ownership
interests in Borrower acquiring more than 49% of the ownership interests in
Borrower.


 


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


 


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


 


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ARTICLE VI 


 


INSURANCE; CASUALTY; CONDEMNATION


 


Section 6.1      Insurance.


 


(a)           Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
coverages:


 


(i)            comprehensive all risk insurance on the
Improvements and the Personal Property, including contingent liability from
Operation of Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to one hundred percent (100%)
of the “Full Replacement Cost,” which for purposes of this Agreement shall mean
actual replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation, but the amount shall in
no event be less than the outstanding principal balance of the Loan; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Ten Thousand and No/100 Dollars ($10,000) for all such
insurance coverage; and (D) containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement if any of the Improvements or the use of the Property shall at any
time constitute legal non-conforming structures or uses. In addition, Borrower
shall obtain: (y) if any portion of the Improvements is currently or at any
time in the future located in a federally designated “special flood hazard
area,” flood hazard insurance in an amount equal to the lesser of (1) the
outstanding principal balance of the Note or (2) the maximum amount of such
insurance available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended or such greater amount as Lender shall require;
and (z) earthquake insurance in amounts and in form and substance satisfactory
to Lender in the event the Property is located in an area with a high degree of
seismic activity, provided that the insurance pursuant to clauses (y) and (z)
hereof shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i).


 


(ii)           commercial general liability insurance
against claims for personal injury, bodily injury, death or property damage
occurring upon, in or about the Property, such insurance (A) to be on the
so-called “occurrence” form with a combined limit, including umbrella coverage,
of not less than Two Million and No/100 Dollars ($2,000,000.00) in the
aggregate and One Million and No/100 Dollars ($1,000,000.00) per occurrence;
(B) to continue at not less than the aforesaid limit until required to be
changed by Lender in writing by reason of changed economic conditions making
such protection inadequate; and (C) to cover at least the following hazards:
(1) premises and operations; (2) products and completed operations on an “if
any” basis; (3) independent contractors; (4) blanket contractual liability for
all legal contracts; and (5) contractual liability covering the indemnities
contained in Article 9 of the Mortgage to the extent the same is available;


 


(iii)          business income insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered by the
insurance provided for in subsection (i) above; (C)


 


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covering
rental losses or business interruption, as may be applicable, for a period of
at least twelve (12) months after the date of the casualty and containing any
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 six (6) 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; and (D) in an annual amount equal to 100% of the rents
or estimated gross revenues from the operation of the Property (as reduced to
reflect expenses not incurred during Restoration).  The amount of such business income insurance
shall be determined prior to the date hereof and at least once each year
thereafter based on Borrower’s reasonable estimate of the gross income from the
Property for the succeeding twelve (12) month period.  All proceeds payable to Lender pursuant to
this subsection shall be held by Lender and shall be applied to the obligations
secured by the Loan Documents from time to time due and payable hereunder and
under the Note; provided, however, that nothing herein contained
shall be deemed to relieve Borrower of its obligations to pay the obligations
secured by the Loan Documents on the respective dates of payment provided for
in the Note and the other Loan Documents except to the extent such amounts are
actually paid out of the proceeds of such business income insurance;


 


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


 


(v)           workers’ compensation, subject to the
statutory limits of the State;


 


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


 


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


 


(viii)        if any of the policies of insurance covering
the risks required to be covered under subsections (i) through (vii) above
contains an exclusion from coverage for acts of terrorism, Borrower shall
obtain and maintain a separate policy providing such coverages in the event of
any act of terrorism, provided such coverage is commercially available for
properties similar to the Property and located in or around the region in which
the Property is located. Notwithstanding the foregoing, Borrower shall not be
required to


 


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obtain
such a policy, provided (I) Borrower confirms to Lender, in writing, that it
shall protect and hold Lender harmless from any losses associated with such
risks by, among other things, either (A) depositing with Lender sums sufficient
to pay for all uninsured costs related to a Restoration of the Property
following any act of terrorism (which sum shall be treated as a Net Proceeds
Deficiency) and any remaining balance following a Restoration shall be remitted
by Lender to Borrower in accordance with Section 6.4(b)(vii) hereof), or (B) at
the option of Borrower prepaying the Loan in accordance with the terms hereof,
including, without limitation, the payment of any Prepayment Consideration due
in connection therewith; (II) Inland Western Retail Real Estate Trust, Inc. (“Terrorism Insurance Guarantor”) executes a guaranty, in
form and substance satisfactory to Lender, guaranteeing in the event of any act
of terrorism, payment to Lender of any sums that Borrower is obligated to pay
to Lender under clause (I) above (which shall be applied in accordance with
Section 6.4 hereof), and (III) Terrorism Insurance Guarantor maintains a net
worth of at least $300,000,000 (as determined by such entity’s most recent
audited financial statements), such entity maintains a direct or indirect
ownership interest in Borrower, and the aggregate loan-to-value ratio (as
determined by Lender) (“LTV”) for all properties on which such entity has a
direct or indirect ownership interest shall not exceed 55%, however, Terrorism
Insurance Guarantor may exceed the 55% LTV for a period not to exceed six (6)
months out of any twelve (12) month period either 1) during the time period
when Terrorism Insurance Guarantor is offering securities to the public, or 2)
when in the business judgement of Terrorism Insurance Guarantor, exceeding an
LTV of 55% is necessary given existing circumstances of the credit environment,
but in no event shall the LTV exceed 65% if Terrorism Insurance Guarantor
maintains a net worth greater than or equal to $300,000,000, but less than
$400,000,000, or 70% if Terrorism Insurance Guarantor maintains a net worth of
at least $400,000,000.


 


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


 


(b)           All insurance provided for in Section 6.1 (a) shall be obtained under
valid and enforceable policies (collectively, the “Policies” or in the singular, the “Policy”), and shall be subject to the approval of Lender as to insurance
companies, amounts, deductibles, loss payees and insureds. The Policies shall
be issued by financially sound and responsible insurance companies authorized
to do business in the State and having a rating of “A:X” or better in the
current Best’s Insurance Reports and a claims paying ability rating of “AA” or
better by at least two (2) of the Rating Agencies including, (i) Standard &
Poor’s Ratings Group, and (ii) Moody’s Investors Services, Inc. if Moody’s
Investors Service, Inc. is rating the Securities. The Policies described in
Section 6.1 (other than those strictly limited to liability protection) shall
designate Lender as loss payee. Not less than ten (10) days prior to the
expiration dates of the Policies theretofore furnished to Lender, certificates
of insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.


 


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(c)           Any blanket insurance Policy shall specifically allocate to the
Property the amount of coverage from time to time required hereunder and shall
otherwise provide the same protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 6.1(a).


 


(d)           All Policies of insurance provided for or contemplated by Section 6.1(a),
except for the Policy referenced in Section 6.1(a)(v), shall name Borrower, or
the Tenant, as the insured and Lender as the additional insured, as its
interests may appear, and in the case of property damage, boiler and machinery,
flood and earthquake insurance, shall contain a so-called New York standard
non-contributing mortgagee clause in favor of Lender providing that the loss thereunder
shall be payable to Lender.


 


(e)           All Policies of insurance provided for in Section 6.1(a) shall contain clauses
or endorsements to the effect that:


 


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


 


(ii)            the
Policy shall not be materially changed (other than to increase the coverage
provided thereby) or canceled without at least thirty (30) days’ written notice
to Lender and any other party named therein as an additional insured;


 


(iii)           the issuers thereof shall give written notice
to Lender if the Policy has not been renewed fifteen (15) days prior to its
expiration; and


 


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


 


(f)             If at any time Lender is not in receipt of
written evidence that all insurance required hereunder is in full force and
effect, Lender shall have the right, after ten (10) Business Days written
notice to Borrower, to take such action as Lender deems necessary to protect
its interest in the Property, including, without limitation, the obtaining of
such insurance coverage as Lender in its sole discretion deems
appropriate.  All premiums incurred by
Lender in connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Borrower to Lender upon demand and, until
paid, shall be secured by the Mortgage and shall bear interest at the Default
Rate. If Borrower fails in so insuring the Property or in so assigning and
delivering the Policies, Lender may, at its option, obtain such insurance using
such carriers and agencies as Lender shall elect from year to year and pay the
premiums therefor, and Borrower will reimburse Lender for any premium so paid,
with interest thereon as stated in the Note from the time of payment, on
demand, and the amount so owing to Lender shall be secured by the
Mortgage.  The insurance obtained by
Lender may, but need not, protect Borrower’s interest and the coverage that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Property.


 


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Section
6.2            Casualty.  If the Property shall be
damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
Borrower (a) shall give to Lender prompt notice of such damage reasonably
estimated by Borrower to cost more than One Hundred Thousand Dollars ($100,000.00)
to repair, and (b) shall promptly commence and diligently prosecute the
completion of the repair and restoration of the Property as nearly as possible
to the condition the Property was in immediately prior to such fire or other
casualty, with such alterations as may be reasonably approved by Lender (a “Restoration”) and otherwise in accordance
with Section 6.4. Borrower shall pay all costs of such Restoration whether or
not such costs are covered by insurance. Lender may, but shall not be obligated
to make proof of loss if not made promptly by Borrower.


 


Section
6.3             Condemnation.  Borrower
shall promptly give Lender notice of the actual or threatened commencement of
any proceeding for the Condemnation of the Property and shall deliver to Lender
copies of any and all papers served in connection with such proceedings. Lender
may participate in any such proceedings, and Borrower shall from time to time
deliver to Lender all instruments requested by it to permit such participation.
Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and cooperate with them
in the carrying on or defense of any such proceedings. Notwithstanding any
taking by any public or quasi-public authority through Condemnation or
otherwise (including but not limited to any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement and the Debt shall not be reduced until any Award shall have been
actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the Award by the condemning authority but shall
be entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note.  If the Property
or any portion thereof is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute the Restoration of the Property and
otherwise comply with the provisions of Section 6.4. If the Property is sold,
through foreclosure or otherwise, prior to the receipt by Lender of the Award,
Lender shall have the right, whether or not a deficiency judgment on the Note
shall have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.


 


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


 


(a)             If the Net Proceeds shall be less than
Relevant Restoration Threshold and the costs of completing the Restoration
shall be less than the Relevant Restoration Threshold, the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that all of the conditions
set forth in clauses (A), (E), (F), (G), (H), (J) and (L) of Section 6.4(b)(i)
below are met and Borrower delivers to Lender a written undertaking to
expeditiously commence and to satisfactorily complete with due diligence the
Restoration in accordance with the terms of this Agreement.


 


(b)             If the Net Proceeds are equal to or greater
than the Relevant Restoration Threshold or the costs of completing the
Restoration is equal to or greater than the Relevant Restoration Threshold,
then in either case, Lender shall make the Net Proceeds available for the


 


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Restoration
in accordance with the provisions of this Section 6.4(b). The term “Net Proceeds”
for purposes of this Section 6.4 shall mean: (x) the net amount of all
insurance proceeds received by Lender pursuant to Section 6.1 (a)(i), (iv),
(vi) and (viii) as a result of such damage or destruction, after deduction of
its reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same (“Insurance Proceeds”), or (y) the net amount of the
Award, after deduction of its reasonable costs and expenses (including, but not
limited to, reasonable counsel fees), if any, in collecting same (“Condemnation Proceeds”), whichever the case may be.


 


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


 


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


 


(B)           (1) in the event the Net Proceeds are
Insurance Proceeds, and (x) less than twenty-five percent (25%) of the total
floor area of the Improvements on the Property has been damaged, destroyed or
rendered unusable as a result of such fire or other casualty, or (y) Borrower
is required under a Lease exceeding the Relevant Leasing Threshold to use the
Net Proceeds for the restoration of the Property, or (2) in the event the Net
Proceeds are Condemnation Proceeds, and (x) less than ten percent (10%) of the
land constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the Improvements is
located on such land, or (y) Borrower is required under a Lease exceeding the
Relevant Leasing Threshold to use the Net Proceeds for the restoration of the
Property;


 


(C)           Leases demising in the aggregate a percentage
amount equal to or greater than the Rentable Space Percentage of the total
rentable space in the Property which has been demised under executed and
delivered Leases in effect as of the date of the occurrence of such fire or
other casualty or taking, whichever the case may be, shall remain in full force
and effect during and after the completion of the Restoration, notwithstanding
the occurrence of any such fire or other casualty or taking, whichever the case
may be, and will make all necessary repairs and restorations thereto at their
sole cost and expense.  The term “Rentable Space Percentage” shall mean (x) in the event the
Net Proceeds are Insurance Proceeds, a percentage amount equal to fifty percent
(50%) and (y) in the event the Net Proceeds are Condemnation Proceeds, a
percentage amount equal to fifty percent (50%);


 


(D)          Borrower shall commence the Restoration as
soon as reasonably practicable (but in no event later than ninety (90) days
after such damage or destruction or taking, whichever the case may be, occurs)
and shall diligently pursue the same to satisfactory completion;


 


(E)           Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and interest under the
Note, which will be incurred with respect to the Property as a result of the occurrence of any such fire


 


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or
other casualty or taking, whichever the case may be, will be covered out of (1)
the Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(iii),
if applicable, or (3) by other funds of Borrower;


 


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


 


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


 


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


 


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


 


(J)            the Debt Service Coverage Ratio, after giving
effect to the Restoration, shall be equal to or greater than 2.1:1;


 


(K)          Borrower shall deliver or cause to be
delivered to Lender a signed detailed budget approved in writing by Borrower’s
architect or engineer stating the entire cost of completing the Restoration,
which budget should be consistent with restoration budgets of similar retail
properties then owned and operated by nationally recognized owners and
operators of retail properties located in the areas in which the Property is
located; and


 


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


 


(ii)             The
Net Proceeds shall be held by Lender in an interest bearing account and, until
disbursed in accordance with the provisions of this Section 6.4(b), shall
constitute additional security for the Debt and other obligations under the
Loan Documents.  The Net Proceeds shall
be disbursed by Lender to, or as directed by, Borrower from time to time during
the course of the Restoration, upon receipt of


 


53





















 


evidence
satisfactory to Lender that (A) all materials installed and work and labor
performed to be paid for out of the requested disbursement in connection with
the Restoration have been performed, and (B) there exist no notices of
pendency, stop orders, mechanic’s or materialman’s liens or notices of
intention to file same, or any other liens or encumbrances of any nature
whatsoever on the Property which have not either been fully bonded to the
satisfaction of Lender and discharged of record or in the alternative fully
insured to the satisfaction of Lender by the title company issuing the Title
Insurance Policy.


 


(iii)            All
plans and specifications required in connection with the Restoration shall be
subject to prior review and acceptance in all respects by Lender and by an
independent consulting engineer selected by Lender (the “Casualty Consultant”), such review
and acceptance not to be unreasonably withheld or delayed. Lender shall have
the use of the plans and specifications and all permits, licenses and approvals
required or obtained in connection with the Restoration. The identity of the
contractors, subcontractors and rnaterialmen engaged in the Restoration, as
well as the contracts under which they have been engaged, shall be subject to
prior review and acceptance by Lender and the Casualty Consultant, such review
and acceptance not to be unreasonably withheld or delayed. All costs and
expenses incurred by Lender in connection with making the Net Proceeds
available for the Restoration including, without limitation, reasonable counsel
fees and disbursements and the Casualty Consultant’s fees, shall be paid by
Borrower.


 


(iv)            In
no event shall Lender be obligated to make disbursements of the Net Proceeds in
excess of an amount equal to the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the Casualty
Consultant, minus the Casualty Retainage. The term “Casualty Retainage” shall mean an amount equal to ten percent
(10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the Restoration has
been completed. The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 6.4(b), be less than
the amount actually held back by Borrower from contractors, subcontractors and
materialmen engaged in the Restoration. The Casualty Retainage shall not be
released until the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this Section 6.4(b) and
that all approvals necessary for the re-occupancy and use of the Property have
been obtained from all appropriate governmental and quasi-governmental
authorities, and Lender receives evidence satisfactory to Lender that the costs
of the Restoration have been paid in full or will be paid in full out of the
Casualty Retainage; provided, however, that Lender will release
the portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the Restoration as of the
date upon which the Casualty Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily completed all work
and has supplied all materials in accordance with the provisions of the
contractor’s, subcontractor’s or materialman’s contract, the contractor,
subcontractor or materialman delivers the lien waivers and evidence of payment
in full of all sums due to the contractor, subcontractor or materialman as may
be reasonably requested by Lender or by the title company issuing the Title
Insurance Policy, and Lender receives an endorsement


 


54





















 


to
the Title Insurance Policy insuring the continued priority of the lien of the
Mortgage and evidence of payment of any premium payable for such endorsement.
If required by Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any, which has issued a
payment or performance bond with respect to the contractor, subcontractor or
materialman.


 


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


 


(vi)         If at
any time the Net Proceeds or the undisbursed balance thereof shall not, in the
reasonable opinion of Lender in consultation with the Casualty Consultant, be
sufficient to pay in full the balance of the costs which are estimated by the
Casualty Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the “Net
Proceeds Deficiency”) with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 6.4(b) shall constitute additional security for the Debt and other
obligations under the Loan Documents.


 


(vii)         The
excess, if any, of the Net Proceeds and the remaining balance, if any, of the
Net Proceeds Deficiency deposited with Lender after the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance with
the provisions of this Section 6.4(b), and the receipt by Lender of evidence
satisfactory to Lender that all costs incurred in connection with the
Restoration have been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be continuing under
the Note, this Agreement or any of the other Loan Documents.


 


(c)            All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Borrower as excess Net
Proceeds pursuant to Section 6.4(b)(vii) may be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its sole discretion shall deem
proper (provided no Event of Default exists, such Borrower shall not be
required to pay any Prepayment Consideration in connection with such payment),
or, at the discretion of Lender, the same may be paid, either in whole or in
part, to Borrower for such purposes as Lender shall designate, in its discretion.


 


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


 


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(e)            Lender shall with reasonable promptness
following any Casualty or Condemnation notify Borrower whether or not Net
Proceeds are required to be made available to Borrower for restoration pursuant
to this Section 6.4.


 


ARTICLE VII


 


RESERVE FUNDS


 


Section 7.1             Required
Repair Funds.


 


7.1.1         Deposits.   Borrower shall perform the
repairs at the Property, if any, as more particularly set forth on Schedule III
hereto within six (6) months from the date of funding (such repairs hereinafter
referred to as “Required Repairs”).  Borrower shall
complete the Required Repairs on or before the required deadline for each
repair as set forth on Schedule III. It shall be an Event of Default
under this Agreement if (i) Borrower does not complete the Required Repairs at
the Property by the required deadline for each repair as set forth on Schedule
III, and (ii) Borrower does not satisfy each condition contained in Section
7.1.2 hereof. Upon the occurrence of such an Event of Default, Lender, at its
option, may withdraw all Required Repair Funds from the Required Repair Account
and Lender may apply such funds either to completion of the Required Repairs at
the Property or toward payment of the Debt in such order, proportion and
priority as Lender may determine in its sole discretion.  Lender’s right to withdraw and apply Required
Repair Funds shall be in addition to all other rights and remedies provided to Lender
under this Agreement and the other Loan Documents.  On the Closing Date, Borrower shall deposit
with Lender the amount for the Property set forth on such Schedule III
hereto, if any, to perform the Required Repairs for the Property.  Amounts so deposited with Lender, if any,
shall be held by Lender in an interest bearing account. Amounts so deposited,
if any, shall hereinafter be referred to as Borrower’s “Required Repair Fund” and the account, if any, in which
such amounts are held shall hereinafter be referred to as Borrower’s “Required Repair Account.”


 


7.1.2         Release of Required Repair Funds. Lender shall disburse to Borrower the Required
Repair Funds from the Required Repair Account from time to time upon
satisfaction by Borrower of each of the following conditions:  (i) Borrower shall submit a written request
for payment to Lender at least fifteen (15) days prior to the date on which
Borrower requests such payment be made and specifies the Required Repairs to be
paid, (ii) on the date such request is received by Lender and on the date such
payment is to be made, no Default or Event of Default shall exist and remain
uncured, (iii) Lender shall have received a certificate from Borrower (A) stating
that all Required Repairs at the Property to be funded by the requested
disbursement have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority required to commence
and/or complete the Required Repairs, (B) identifying each Person that supplied
materials or labor in connection with the Required Repairs performed at the
Property to be funded by the requested disbursement under a contract in excess
of $50,000, and (C) stating that each Person who has supplied materials or
labor in connection with the Required Repairs to be funded by the requested
disbursement has been paid in full or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment satisfactory to


 


56





















 


Lender,
(iv) at Lender’s option, a title search for the Property indicating that the
Property is free from all liens, claims and other encumbrances not previously
approved by Lender, and (v) Lender shall have received such other evidence as
Lender shall reasonably request that the Required Repairs at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower.  Lender shall not be required to make
disbursements from the Required Repair Account with respect to the Property
more than once each calendar month and such disbursement shall be made only
upon satisfaction of each condition contained in this Section 7.1.2.


 


Section 7.2              Tax
and Insurance Escrow Fund.
Borrower shall pay to Lender on each Payment Date (a) one-twelfth of the Taxes
that Lender estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Lender sufficient funds to pay all such
Taxes at least thirty (30) days prior to their respective due dates and (b)
one-twelfth of the Insurance Premiums that Lender estimates will be payable for
the renewal of the coverage afforded by the Policies upon the expiration
thereof in order to accumulate with Lender sufficient funds to pay all such
Insurance Premiums at least thirty (30) days prior to the expiration of the
Policies, (said amounts in (a) and (b) above are hereinafter called the “Tax and Insurance
Escrow Fund”). The Tax
and Insurance Escrow Fund and the payments of interest or principal or both,
payable pursuant to the Note, shall be added together and shall be paid as an
aggregate sum by Borrower to Lender. Lender will apply the Tax and Insurance
Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to this Agreement and under the Mortgage. In making any
payment relating to the Tax and Insurance Escrow Fund, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums) or from Borrower without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof, provided, however, Lender shall
use reasonable efforts to pay such real property taxes sufficiently early to
obtain the benefit of any available discounts of which it has knowledge. If the
amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums, Lender shall, in its sole discretion, return any
excess to Borrower or credit such excess against future payments to be made to
the Tax and Insurance Escrow Fund. The Tax and Insurance Escrow Fund shall be
held by Lender in an interest-bearing account and shall at Lender’s option be
held in Eligible Account at an Eligible Institution.  Any interest earned on said account shall be
held in said account and credited toward future deposits to the Tax and
Insurance Escrow Fund. Any amount remaining in the Tax and Insurance Escrow
Fund after the Debt has been paid in full shall be returned to Borrower. In
allocating such excess, Lender may deal with the Person shown on the records of
Lender to be the owner of the Property.  If at any time Lender reasonably determines
that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay
Taxes or Insurance Premiums by the dates set forth above, Lender shall notify
Borrower of such determination and Borrower shall increase its monthly payments
to Lender by the amount that Lender estimates is sufficient to make up the
deficiency at least thirty (30) days prior to delinquency of the Taxes or
Insurance Premiums. Notwithstanding anything to the contrary hereinbefore
contained, in the event that Borrower provides (1) evidence satisfactory to
Lender that the Property is insured under a “blanket” policy which is
acceptable to Lender and which otherwise satisfies the requirements of this
Agreement and (2) evidence satisfactory to Lender that the Taxes for the
Property have been paid in accordance with the requirements set forth in this
Agreement, Lender will waive the requirement set forth herein for Borrower to
make


 


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deposits into the Tax and
Insurance Escrow Fund for the payment of Insurance Premiums due on such “blanket”
policy of insurance and for payment of such Taxes, provided, however, Lender
expressly reserves the right to require Borrower to make deposits to the Tax
and Insurance Escrow Fund for the payment of Insurance Premiums if at any time
the Property is not insured under a “blanket” insurance policy which satisfies
the requirements of this Agreement or Taxes are not paid in accordance with the
requirements of this Agreement.


 


Section 7.3              Replacements
and Replacement Reserve.


 


7.3.1          Replacement Reserve Fund.  
Borrower shall pay to Lender on the date hereof and on each Payment Date
one twelfth of the amount (the “Replacement Reserve Monthly Deposit”) reasonably estimated by Lender in
its sole discretion to be due for replacements and repairs required to be made
to the Property during the calendar year (collectively, the “Replacements”), which Replacement Reserve
Monthly Deposit shall be in an amount equal to no less than $0.15 per year per
square foot of gross leasable area. Amounts so deposited shall hereinafter be
referred to as Borrower’s “Replacement Reserve Fund” and the account in which such
amounts are held shall hereinafter be referred to as Borrower’s “Replacement Reserve
Account.”  Lender may reassess its estimate of the
amount necessary for the Replacement Reserve Fund from time to time, and may
increase the monthly amounts required to be deposited into the Replacement
Reserve Fund upon thirty (30) days notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain the proper
maintenance and operation of the Property. 
Any amount held in the Replacement Reserve Account and allocated for the
Property shall be retained by Lender in an interest bearing account, or, at the
option of Lender, in an Eligible Account at an Eligible Institution; provided,
however, that, any interest accrued on the amounts on deposit in the Replacement
Reserve Fund shall be disbursed to Borrower no more than once per calendar year
upon the written request of Borrower. Notwithstanding anything to the contrary
in this Section 7.3, Borrower shall not be required to make Replacement Reserve
Monthly Deposits, provided that: (i) no Event of Default shall have occurred;
and (ii) Borrower makes all necessary Replacements and otherwise maintains the
Property to Lender’s satisfaction. Upon notice from Lender following: (a) an
Event of Default; or (b) the failure of Borrower to make necessary Replacements
or otherwise maintain the Property to Lender’s satisfaction, Borrower shall
begin to deposit the Replacement Reserve Monthly Deposit into the Replacement
Reserve Fund beginning on the Payment Date (as defined herein) immediately
following the date of such notice.


 


7.3.2         Disbursements from Replacement Reserve
Account.


 


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


 


(b)             Lender shall, upon written request from
Borrower and satisfaction of the requirements set forth in this Section 7.3.2,
disburse to Borrower amounts from the Replacement Reserve Account necessary to
pay for the actual approved costs of Replacements or to reimburse


 


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Borrower
therefor, upon completion of such Replacements (or, upon partial completion in
the case of Replacements made pursuant to Section 7.3.2(f)) as determined by
Lender.  In no event shall Lender be
obligated to disburse funds from the Replacement Reserve Account if a Default
or an Event of Default exists.


 


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


 


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


 


(e)            If (i) the cost of a Replacement exceeds
$100,000, (ii) the contractor performing such Replacement requires periodic
payments pursuant to terms of a written contract, and (iii) Lender has approved
in writing in advance such periodic payments, a request for reimbursement from
the Replacement Reserve Account may be made after completion of a portion of
the work under such contract, provided (A) such contract requires payment upon completion
of such portion of the work, (B) the materials for which the request is made
are on site at the Property and are properly secured or have been installed in
the Property, (C) all other conditions in this Agreement for disbursement have
been satisfied, (D) funds remaining in the


 


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Replacement Reserve Account are, in Lender’s judgment, sufficient to
complete such Replacement and other Replacements when required, and (E) if
required by Lender, each contractor or subcontractor receiving payments under
such contract shall provide a waiver of lien with respect to amounts which have
been paid to that contractor or subcontractor.


 


(f)                                    Borrower shall not make a request for
disbursement from the Replacement Reserve Account more frequently than once in
any calendar month and (except in connection with the final disbursement) the
total cost of all Replacements in any request shall not be less than $5,000.00.


 


7.3.3                        Performance of Replacements.


 


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


 


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


 


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


 


(d)                                 In order to facilitate Lender’s completion or
making of the Replacements pursuant to Section 7.3.3(c) above, Borrower
grants Lender the right to enter onto the Property and perform any and all work
and labor necessary to complete or make the Replacements and/or employ watchmen
to protect the Property from damage. All sums so expended by Lender, to the extent
not from the Replacement Reserve Fund, shall be deemed to have been advanced
under the Loan to Borrower and secured by the Mortgage. For this purpose
Borrower constitutes and appoints Lender its true and lawful attorney-in-fact
with full power of substitution to complete or undertake the Replacements in
the name of Borrower. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked but shall only be effective following
an Event of Default. Borrower empowers said attorney-in-fact as follows:  (i) to use any funds in the Replacement
Reserve Account for the purpose of making or completing the Replacements; (ii)
to make such additions, changes and corrections to the Replacements as shall


 


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be
necessary or desirable to complete the Replacements; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all existing
bills and claims which are or may become Liens against the Property, or as may
be necessary or desirable for the completion of the Replacements, or for
clearance of title; (v) to execute all applications and certificates in the
name of Borrower which may be required by any of the contract documents; (vi)
to prosecute and defend all actions or proceedings in connection with the
Property or the rehabilitation and repair of the Property; and (vii) to do any
and every act which Borrower might do in its own behalf to fulfill the terms of
this Agreement.


 


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


 


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


 


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


 


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


 


(i)                                     Before each disbursement from the Replacement
Reserve Account, Lender may require Borrower to provide Lender with a search of
title to the Property effective to the date of the disbursement, which search
shows that no mechanic’s or materialmen’s liens or other liens of any nature
have been placed against the Property since the date of recordation of the


 


61





















 


Mortgage and that title
to the Property is free and clear of all Liens (other than the lien of the
Mortgage and any other Liens previously approved in writing by Lender, if any).


 


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


 


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


 


7.3.4                        Failure to Make Replacements.


 


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


 


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


 


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


 


7.3.6                        Indemnification.          BORROWER SHALL INDEMNIFY LENDER AND HOLD LENDER HARMLESS FROM
AND AGAINST ANY AND ALL ACTIONS, SUITS, CLAIMS, DEMANDS, LIABILITIES, LOSSES,
DAMAGES, OBLIGATIONS AND COSTS AND EXPENSES (INCLUDING LITIGATION COSTS AND REASONABLE
ATTORNEYS FEES AND EXPENSES) ARISING FROM OR IN ANY WAY CONNECTED WITH THE PERFORMANCE
OF THE REPLACEMENTS


 


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UNLESS THE SAME ARE SOLELY DUE TO GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LENDER. BORROWER SHALL ASSIGN TO LENDER ALL RIGHTS AND CLAIMS BORROWER MAY HAVE AGAINST ALL PERSONS OR ENTITIES SUPPLYING LABOR OR MATERIALS
IN CONNECTION WITH THE REPLACEMENTS; PROVIDED, HOWEVER, THAT
LENDER MAY NOT PURSUE ANY SUCH RIGHT OR CLAIM UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND REMAINS UNCURED.


 


Section 7.4                                      Intentionally Deleted.


 


Section 7.5                                      Intentionally Deleted.


 


Section 7.6                                      Intentionally Deleted.


 


Section 7.7                                      Reserve Funds, Generally.


 


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


 


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


 


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


 


7.7.4                        The Reserve Funds shall be held in interest
bearing accounts. All earnings or interest on the Reserve Funds shall be added
to and become a part of such Tax and Insurance Escrow Fund and shall be
disbursed in the same manner as other monies deposited in such Reserve Funds.


 


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


 


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


 


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


 


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ARTICLE VIII 


 


DEFAULTS


 


Section 8.1                                      Event of Default.


 


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


 


(i)                                     if any portion of the Debt is not paid within
five (5) days of the applicable due date;


 


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


 


(iii)                               if the Policies are not kept in full force
and effect, or if certified copies of the Policies are not delivered to Lender
within the time frame provided herein;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(xi)                                if any Purchase Price Adjustment is not
timely paid in accordance with the Purchase Contract following satisfaction of
Borrower’s reasonable documentation requirements of its seller under the
Purchase Contract;


 


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


 


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


 


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


 


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Section 8.2                                      Remedies.


 


(a)                                  Upon the occurrence of an Event of Default,
all or any one or more of the rights, powers, privileges and other remedies
available to Lender against Borrower under this Agreement or any of the other
Loan Documents executed and delivered by, or applicable to, Borrower or at law
or in equity may be exercised by Lender at any time and from time to time, whether
or not all or any of the Debt shall be declared due and payable, and whether or
not Lender shall have commenced any foreclosure proceeding or other action for
the enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its
sole discretion, to the fullest extent permitted by law, without impairing or otherwise
affecting the other rights and remedies of Lender permitted by law, equity or
contract or as set forth herein or in the other Loan Documents. Without
limiting the generality of the foregoing, Borrower agrees that if an Event of
Default is continuing (i) Lender is not subject to any “one action” or “election
of remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against the Property and the Mortgage
has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full. Without limiting the generality of the
foregoing, it is expressly agreed that upon any Event of Default described in
clause (xi) above, in addition to all other remedies available to Lender, Lender
shall have the right to enforce Indemnitor’s guaranty of the payment of the
Purchase Price Adjustment, as set forth in the Indemnity Agreement, without
first resorting to or exhausting any security or collateral or without first
having recourse to any Loan Document or any of the Property through foreclosure
proceedings or otherwise.


 


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


 


(c)                                  Lender shall have the right from time to time
to sever the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents (the “Severed
Loan Documents”) in such denominations
as Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute
and deliver to Lender from time to time, promptly after the request of Lender,
a severance agreement and such other documents as Lender shall request in order
to effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender following the occurrence of an Event of Default as
its true and lawful attorney, coupled with an interest, in


 


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its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender
shall not make or execute any such documents under such power until three (3)
days after notice has been given to Borrower by Lender of Lender’s intent to
exercise its rights under such power. Borrower shall not be obligated to pay
any costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents, and the Severed Loan
Documents shall not contain any representations, warranties or covenants not
contained in the Loan Documents and any such representations and warranties
contained in the Severed Loan Documents will be given by Borrower only as of
the Closing Date.


 


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


 


Section 8.3                                      Remedies Cumulative; Waivers. The rights, powers and remedies of Lender
under this Agreement shall be cumulative and not exclusive of any other right,
power or remedy which Lender may have against Borrower pursuant to this
Agreement or the other Loan Documents, or existing at law or in equity or
otherwise. Lender’s rights, powers and remedies may be pursued singly,
concurrently or otherwise, at such time and in such order as Lender may determine
in Lender’s sole discretion. No delay or omission to exercise any remedy, right
or power accruing upon an Event of Default shall impair any such remedy, right
or power or shall be construed as a waiver thereof, but any such remedy, right
or power may be exercised from time to time and as often as may be deemed
expedient. A waiver of one Default or Event of Default with respect to Borrower
shall not be construed to be a waiver of any subsequent Default or Event of
Default by Borrower or to impair any remedy, right or power consequent thereon.


 


ARTICLE IX 


 


SPECIAL
PROVISIONS


 


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


 


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


 


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appropriate verification
and/or consents of the Provided Information through letters of auditors or
opinions of counsel of independent attorneys acceptable to Lender and the
Rating Agencies;


 


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


 


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


 


(d)                                       execute such amendments to the Loan Documents
and organizational documents as may be reasonably requested by the holder of
the Note or the Rating Agencies or otherwise to effect the Securitization; provided,
however, that Borrower shall not be required to modify or amend any Loan
Document if such modification or amendment would (i) change the interest rate,
the stated maturity or the amortization of principal set forth in the Note, or
(ii) modify or amend any other material economic term of the Loan.


 


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


 


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


 


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


 


Section 9.4                                      Exculpation. Subject to the qualifications below, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Mortgage or the other Loan Documents
by any action or proceeding wherein a money judgment shall be sought against
Borrower, except that Lender or Trustee may bring a foreclosure action, an
action for specific performance or any other appropriate action or proceeding
to enable Lender or Trustee to enforce and realize upon its interest under the
Note, this Agreement, the Mortgage and the other Loan Documents, or in the


 


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


 


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


 


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


 


(iii)                               material physical waste of the Property;


 


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


 


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


 


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


 


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


 


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


 


(ix)                                the breach of Borrower’s indemnification
obligation pursuant to Section 10.13(b) hereof with respect to a Purchase
Price Adjustment.


 


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


 


Section 9.5                                      Termination of Manager. If (a) the amounts evidenced by the Note
have been accelerated pursuant to Section 8.1 (b) hereof, (b) the Manager
shall become insolvent, (c) the Manager is in default under the terms of the
Management Agreement beyond any applicable grace or cure period, or (d) Manager
is not managing the Property in accordance with the management practices of
nationally recognized management companies managing similar properties in
locations comparable to those of the Property, then, in the case of (a), (b),
(c) or (d), Borrower shall, at the request of Lender, terminate the Management
Agreement and replace the Manager with a manager reasonably approved by Lender
on terms and conditions reasonably satisfactory to Lender, it being understood
and agreed that the management fee for such replacement manager shall not
exceed then prevailing market rates. In addition and without limiting the
rights of Lender hereunder or under any of the other Loan Documents, in the
event


 


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


 


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


 


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


 


ARTICLE X 


 


MISCELLANEOUS


 


Section 10.1                                Survival. This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is
expressly set forth herein or in the other Loan Documents. 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,


 


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promises and agreements in this Agreement, by or on behalf of Borrower,
shall inure to the benefit of the legal representatives, successors and assigns
of Lender.


 


Section 10.2                                Lender’s Discretion. Whenever pursuant to this Agreement, Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender, the decision of Lender to approve or
disapprove or to decide whether arrangements or terms are satisfactory or not
satisfactory shall (except as is otherwise specifically herein provided) be in
the sole discretion of Lender and shall be final and conclusive.


 


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


 


Section 10.4                                Modification, Waiver in Writing. No modification, amendment, extension,
discharge, termination or waiver of any provision of this Agreement, or of the
Note, or of any other Loan Document, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in a
writing signed by the party against whom enforcement is sought, and then such
waiver or consent shall be effective only in the specific instance, and for the
purpose, for which given. Except as otherwise expressly provided herein, no
notice to, or demand on Borrower, shall entitle Borrower to any other or future
notice or demand in the same, similar or other circumstances.


 


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


 


Section 10.6                                Notices. All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document except as otherwise provided in Section 1.01
of the Rider to the Mortgage, shall be given in writing and shall be effective
for all purposes if hand delivered or sent by (a) certified or registered
United States mail, postage prepaid, return receipt requested or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed as follows (or at such other address and Person as
shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section):


 


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If to Lender:


 


KeyBank National Association 


911 Main Street, Suite 1500 


Kansas City, Missouri 64105 


Attention: Loan Servicing


 


If to Trustee:


 


Kenneth F. Plifka


Stutzman, Bromberg, Esserman & Plifka 


2323 Bryan Street, 22nd Floor 


Dallas, Texas 75201


 


If to Borrower:


 


Inland Western Cedar Hill Pleasant Run Limited Partnership 


c/o Inland Western Retail Real Estate Trust, Inc.


2901 Butterfield Road 


Oak Brook, IL 60523 


Attention: Roberta Matlin


 


With a copy to:


 


Inland Western Retail Real Estate Trust, Inc.


2901 Butterfield Road 


Oak Brook, IL 60523 


Attention: Robert H. Baum, Esq.


 


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


 


Section 10.7                                Trial by Jury. BORROWER AND LENDER HEREBY AGREE NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM
OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL
BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY BORROWER AND LENDER.


 


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Section 10.8                                Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose.


 


Section 10.9                                Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.


 


Section 10.10                          Preferences. Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.


 


Section 10.11                          Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Agreement or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. Borrower hereby
expressly waives the right to receive any notice from Lender with respect to
any matter for which this Agreement or the other Loan Documents do not
specifically and expressly provide for the giving of notice by Lender to
Borrower.


 


Section 10.12                          Remedies of Borrower. In the event that a claim or adjudication
is made that Lender or its agents have acted unreasonably or unreasonably
delayed acting in any case where by law or under this Agreement or the other
Loan Documents, Lender or such agent, as the case may be, has an obligation to
act reasonably or promptly, Borrower agrees that neither Lender nor its agents
shall be liable for any monetary damages, and Borrower’s sole remedies shall be
limited to commencing an action seeking injunctive relief or declaratory
judgment. The parties hereto agree that any action or proceeding to determine
whether Lender has acted reasonably shall be determined by an action seeking
declaratory judgment.


 


Section 10.13                          Expenses; Indemnity.


 


(a)                                  Borrower covenants and agrees to pay or, if
Borrower fails to pay, to reimburse, Lender upon receipt of written notice from
Lender for all reasonable costs and expenses (including reasonable attorneys’
fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Agreement and the
other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for
Borrower (including without limitation any opinions requested by Lender as to
any legal matters arising under this Agreement


 


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or the other Loan
Documents with respect to the Property); (ii) Borrower’s ongoing performance of
and compliance with Borrower’s respective agreements and covenants contained in
this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date, including, without limitation, confirming
compliance with environmental and insurance requirements; (iii) Lender’s
ongoing performance and compliance with all agreements and conditions contained
in this Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iv) except as otherwise provided in this
Agreement, the negotiation, preparation, execution, delivery and administration
of any consents, amendments, waivers or other modifications to this Agreement
and the other Loan Documents and any other documents or matters reasonably
requested by Lender; (v) securing Borrower’s compliance with any requests made
pursuant to the provisions of this Agreement; (vi) the filing and recording
fees and expenses, title insurance and reasonable fees and expenses of counsel
for providing to Lender all required legal opinions, and other similar expenses
incurred in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (vii) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of
any action or proceeding or other litigation, in each case against, under or
affecting Borrower, this Agreement, the other Loan Documents, the Property, or
any other security given for the Loan; and (viii) enforcing any obligations of
or collecting any payments due from Borrower under this Agreement, the other
Loan Documents or with respect to the Property or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or of any insolvency or bankruptcy
proceedings; provided, however, that Borrower shall not be liable for the
payment of any such costs and expenses to the extent the same arise by reason
of the gross negligence, illegal acts, fraud or willful misconduct of Lender.


 


(b)                                 BORROWER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS LENDER FROM AND AGAINST ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR LENDER
IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING
COMMENCED OR THREATENED, WHETHER OR NOT LENDER SHALL BE DESIGNATED A PARTY
THERETO), THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST LENDER IN
ANY MANNER RELATING TO OR ARISING OUT OF (I) ANY BREACH BY BORROWER OF ITS
OBLIGATIONS UNDER, OR ANY MATERIAL MISREPRESENTATION BY BORROWER CONTAINED IN,
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, (II) THE USE OR INTENDED USE OF THE
PROCEEDS OF THE LOAN OR (III) ANY PURCHASE PRICE ADJUSTMENT (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


 


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PERMITTED TO PAY AND SATISFY UNDER APPLICABLE LAW TO THE
PAYMENT AND SATISFACTION OF ALL INDEMNIFIED LIABILITIES INCURRED BY LENDER.


 


Section 10.14                          Schedules Incorporated. The Schedules annexed hereto are hereby incorporated
herein as a part of this Agreement with the same effect as if set forth in the
body hereof.


 


Section 10.15                          Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to
this Agreement, the Note and the other Loan Documents shall take the same free
and clear of all offsets, counterclaims or defenses which are unrelated to such
documents which Borrower may otherwise have against any assignor of such
documents, and no such unrelated counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon such documents and any such right to interpose or assert any such
unrelated offset, counterclaim or defense in any such action or proceeding is
hereby expressly waived by Borrower.


 


Section 10.16                          No Joint Venture or Partnership; No Third
Party Beneficiaries.


 


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


 


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


 


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


 


76





















 


Section 10.18                          Waiver of Marshalling of Assets. To the fullest extent permitted by law,
Borrower, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Borrower’s partners and others with
interests in Borrower, and of the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the Mortgage or sale of the Property
by power of sale, and agrees not to assert any right under any laws pertaining
to the marshalling of assets, the sale in inverse order of alienation,
homestead exemption, the administration of estates of decedents, or any other
matters whatsoever to defeat, reduce or affect the right of Lender under the
Loan Documents to a sale of the Property for the collection of the Debt without
any prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.


 


Section 10.19                          Waiver of Counterclaim. Borrower hereby waives the right to assert
a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or its agents.


 


Section 10.20                          Conflict; Construction of Documents; Reliance. In the event of any conflict between the
provisions of this Loan Agreement and any of the other Loan Documents, the
provisions of this Loan Agreement shall control. The parties hereto acknowledge
that they were represented by competent counsel in connection with the
negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same. Borrower acknowledges that, with respect
to the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever
in the exercise of any rights or remedies available to it under any of the Loan
Documents or any other agreements or instruments which govern the Loan by
virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender
of any equity interest any of them may acquire in Borrower, and Borrower hereby
irrevocably waives the right to raise any defense or take any action on the
basis of the foregoing with respect to Lender’s exercise of any such rights or
remedies. Borrower acknowledges that Lender engages in the business of real
estate financings and other real estate transactions and investments which may
be viewed as adverse to or competitive with the business of Borrower or its
Affiliates.


 


Section 10.21                          Brokers and Financial Advisors. BORROWER HEREBY REPRESENTS THAT IT HAS DEALT WITH NO
FINANCIAL ADVISORS, BROKERS, UNDERWRITERS, PLACEMENT AGENTS, AGENTS OR FINDERS
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN
INLAND MORTGAGE CORP. BORROWER HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD
LENDER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, COSTS AND
EXPENSES OF ANY KIND (INCLUDING LENDER’S REASONABLE ATTORNEYS’ FEES AND
EXPENSES) IN ANY WAY RELATING TO OR ARISING FROM A CLAIM BY ANY PERSON THAT
SUCH PERSON ACTED ON BEHALF OF BORROWER OR LENDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREIN. THE


 


77





















 


PROVISIONS OF THIS SECTION 10.21 SHALL SURVIVE THE EXPIRATION AND
TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE DEBT.


 


Section 10.22                          Prior Agreements. This Agreement and the other Loan Documents
contain the entire agreement of the parties hereto and thereto in respect of
the transactions contemplated hereby and thereby, and all prior agreements or
understandings among or between such parties, whether oral or written,
including, without limitation, the Commitment Letter dated November 23,
2004 between Borrower and Lender are superseded by the terms of this Agreement
and the other Loan Documents and unless specifically set forth in a writing
contemporaneous herewith the terms, conditions and provisions of such prior
agreement do not survive execution of this Agreement.


 


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


 


[THE BALANCE OF THIS PAGE HAS BEEN
INTENTIONALLY LEFT BLANK]


 


78





















 


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 CEDAR HILL

  
	
   

  	
  PLEASANT
  RUN LIMITED PARTNERSHIP,

  
	
   

  	
  an Illinois limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Inland Western Cedar
  Hill Pleasant Run GP,

  
	
   

  	
   

  	
  L.L.C., a Delaware
  limited liability

  
	
   

  	
   

  	
  company, its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Inland Western Retail
  Real Estate

  
	
   

  	
   

  	
   

  	
  Trust, Inc., a Maryland
  corporation,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Debra A. Palmer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:   Debra
  A. Palmer

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Assistant
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION, a

  
	
   

  	
  national banking
  association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
									



 





















 


ACKNOWLEDGMENT


 


STATE OF ILLINOIS


 


COUNTY OF Du PAGE


 


On this 29 day of
DECEMBER, 2004, before me, DORIS E. AHERN a Notary Public in and for said state,
personally appeared DEBRA A. PALMER who being by me duly sworn did say that she
is the Assistant Secretary of Inland Western Retail Real Estate Trust, Inc., a
Maryland corporation, the sole member of Inland Western Cedar Hill Pleasant Run
GP, L.L.C., a Delaware limited liability company, the general partner of Inland
Western Cedar Hill Pleasant Run Limited Partnership, an Illinois limited
partnership, and that the within instrument was signed and sealed in behalf of
said entities.


 


 


	
  [Notarial Seal]

  	
  /s/ Doris E. Ahern

  
	
   

  	
  Print Name:

  	
  DORIS
  E. AHERN

  



 


 


	
  My commission expires: 

  	
  10/13/08

  	
   

  



 


	
  OFFICIAL SEAL

  
	
  DORIS E AHERN

  
	
  NOTARY PUBLIC
  STATE OF ILLINOIS

  
	
  MY COMMISSION
  EXPIRES 10/13/08

  



 





















 


SCHEDULE I


 


Intentionally
Omitted


 


SCH. X-1





















 


SCHEDULE II


 


RENT
ROLL


 


(next page)


 


SCH. X-2





















 


Pleasant Run Towne
Crossing - Cedar Hill, TX


 


	
  TENANTS

  	
   

  	
  S.F.

  	
   

  	
  ANNUAL

  BASE RENT

  	
   

  	
  MONTHLY

  	
   

  	
  RENT

  	
   

  	
  LEASE 

  COMMENCEMENT 

  DATE

  	
   

  	
  LEASE 

  EXPIRATION

  DATE

  	
   

  
	
  Oshman’s

  	
   

  	
  40,954

  	
   

  	
  409,540.00

  	
   

  	
  34,128.33

  	
   

  	
  $

  	
  10.00

  	
   

  	
  May-04

  	
   

  	
  April-14

  	
   

  
	
  Circuit City

  	
   

  	
  32,570

  	
   

  	
  455,880.00

  	
   

  	
  37,088.33

  	
   

  	
  $

  	
  14.00

  	
   

  	
  November-03

  	
   

  	
  January-18

  	
   

  
	
  Bed Bath & Beyond

  	
   

  	
  22,000

  	
   

  	
  220,000.00

  	
   

  	
  18,333.00

  	
   

  	
  $

  	
  10.00

  	
   

  	
  December-03

  	
   

  	
  January-14

  	
   

  
	
  Michaels

  	
   

  	
  21,390

  	
   

  	
  224,595.00

  	
   

  	
  18,716.25

  	
   

  	
  $

  	
  10.50

  	
   

  	
  November-03

  	
   

  	
  November-13

  	
   

  
	
  Saltgrass Steakhouse

  	
   

  	
  8,500

  	
   

  	
  84,989.06

  	
   

  	
  7,053.33

  	
   

  	
  $

  	
  10.00

  	
   

  	
  June-04

  	
   

  	
  May-24

  	
   

  
	
  Joe's Crab Shack

  	
   

  	
  7,000

  	
   

  	
  75,000.12

  	
   

  	
  8,250.01

  	
   

  	
  $

  	
  10.71

  	
   

  	
  June-04

  	
   

  	
  May-24

  	
   

  
	
  The Maytag Store

  	
   

  	
  5,225

  	
   

  	
  94,050.00

  	
   

  	
  7,837.50

  	
   

  	
  $

  	
  10.00

  	
   

  	
  April-04

  	
   

  	
  April-09

  	
   

  
	
  Panera Bread

  	
   

  	
  4,999

  	
   

  	
  119,976.00

  	
   

  	
  8,888.00

  	
   

  	
  $

  	
  24.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase
  Bank

  	
   

  	
  4,700

  	
   

  	
  84,999.50

  	
   

  	
  7,083.28

  	
   

  	
  $

  	
  18.08

  	
   

  	
  February-04

  	
   

  	
  February-24

  	
   

  
	
  Bombay

  	
   

  	
  4,500

  	
   

  	
  81,000.00

  	
   

  	
  6,750.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
  November-03

  	
   

  	
  November-13

  	
   

  
	
  Half Price Books

  	
   

  	
  10,708

  	
   

  	
  121,295.00

  	
   

  	
  10,108.00

  	
   

  	
  $

  	
  12.00

  	
   

  	
  February-04

  	
   

  	
  January-14

  	
   

  
	
  Brook Mays

  	
   

  	
  6,250

  	
   

  	
  112,600.00

  	
   

  	
  9,375.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mattress Firm

  	
   

  	
  6,000

  	
   

  	
  132,000.00

  	
   

  	
  11,000.00

  	
   

  	
  $

  	
  22.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vitamin Shop

  	
   

  	
  5,000

  	
   

  	
  135,000.00

  	
   

  	
  11,250.00

  	
   

  	
  $

  	
  27.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Limited Too

  	
   

  	
  4,500

  	
   

  	
  51,000.00

  	
   

  	
  6,750.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sleep Experts

  	
   

  	
  4,500

  	
   

  	
  99,000.00

  	
   

  	
  8,250.00

  	
   

  	
  $

  	
  22.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Little Gym

  	
   

  	
  4,000

  	
   

  	
  72,000.00

  	
   

  	
  8,000.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carpet Mills

  	
   

  	
  3,000

  	
   

  	
  54,000.00

  	
   

  	
  4,800.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Zales

  	
   

  	
  3,000

  	
   

  	
  66,000.00

  	
   

  	
  5,500.00

  	
   

  	
  $

  	
  22.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ritz Camera

  	
   

  	
  2,400

  	
   

  	
  55,200.00

  	
   

  	
  4,600.00

  	
   

  	
  $

  	
  23.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASAP Mail

  	
   

  	
  2,000

  	
   

  	
  40,000.00

  	
   

  	
  3,323.33

  	
   

  	
  $

  	
  20.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mothers Work

  	
   

  	
  1,805

  	
   

  	
  36,100.00

  	
   

  	
  3,008.33

  	
   

  	
  $

  	
  20.00

  	
   

  	
  April-04

  	
   

  	
  March-14

  	
   

  
	
  H&R Block

  	
   

  	
  1,500

  	
   

  	
  25,500.00

  	
   

  	
  2,125.00

  	
   

  	
  $

  	
  17.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Luxury Nails

  	
   

  	
  1,200

  	
   

  	
  25,200.00

  	
   

  	
  2,100.00

  	
   

  	
  $

  	
  21.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  7,807

  	
   

  	
  168,140.00

  	
   

  	
  13,178.33

  	
   

  	
  $

  	
  20.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  4,050

  	
   

  	
  72,000.00

  	
   

  	
  8,075.00

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  2,500

  	
   

  	
  55,000.00

  	
   

  	
  4,583.33

  	
   

  	
  $

  	
  22.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  1,547

  	
   

  	
  27,848.00

  	
   

  	
  2,320.50

  	
   

  	
  $

  	
  18.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  1,240

  	
   

  	
  24,800.00

  	
   

  	
  2,088.67

  	
   

  	
  $

  	
  20.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vacant

  	
   

  	
  1,200

  	
   

  	
  24,000.00

  	
   

  	
  2,000.00

  	
   

  	
  $

  	
  20.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals

  	
   

  	
  225,545

  	
   

  	
  3,267,622.58

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


SCHEDULE III


 


REQUIRED
REPAIRS


 


[NONE]


 


SCH. X-3





















 


SCHEDULE IV


 


Intentionally
Omitted


 


SCH. X-4





















 


SCHEDULE V


 


Intentionally
Omitted


 


SCH. X-5





















 


SCHEDULE VI


 


AFFILIATE
AGREEMENTS


 


Management
Agreement


 


Management Agreement with
Inland Southwest Management LLC


 


SCH. X-6





















 


SCHEDULE VII


 


Intentionally
Omitted


 


SCH. X-7





















 


SCHEDULE VIII


 


Intentionally
Omitted


 


SCH. X-8





















 


SCHEDULE IX


 


Intentionally
Omitted


 


SCH. X-9