EXHIBIT 10.101


 


WHEN RECORDED RETURN TO)


 


Thompson & Knight
L.L.P.

1700 Pacific Avenue 

Suite 3300

Dallas, Texas 75201

Attention: Jeanne M. Burton


 


MORTGAGE AND SECURITY AGREEMENT


 


755098


 


A.        THIS
MORTGAGE AND SECURITY AGREEMENT (as the same may from time to time hereafter be
modified, supplemented or amended, this “Mortgage”) is made as of June
8, 2006, by and between INLAND AMERICAN GREENVILLE PLEASANTBURG, L.L.C., a
Delaware limited liability company, having its principal place of business and
post office address at 2901 Butterfield Road, Oak Brook, Illinois 60523 as “Borrower”,
and PRINCIPAL COMMERCIAL FUNDING, LLC, a Delaware limited liability company, as
“Lender”.


 


WITNESSETH:


 


B.        Borrower
is justly indebted to Lender for money borrowed (the “Loan”) in the
original principal sum of Four Million Two Hundred Eighty Six Thousand and
No/100 Dollars ($4,286,000.00) (the “Loan Amount”) evidenced by Borrower’s
secured promissory note of even date herewith, made payable and delivered to
Lender (as may be modified, amended, supplemented, extended or consolidated in
writing and any note(s) issued in exchange therefor or replacement thereof)
(the “Note”), in which Note Borrower promises to pay to Lender the Loan
Amount together with all accrued and unpaid interest thereon, interest accrued
at the Default Rate (if any), Late Charges (if any), the Make Whole Premium (if
any), and all other obligations and liabilities due or to become due to Lender
pursuant to the Loan Documents and all other amounts, sums and expenses paid by
or payable to Lender pursuant to the Loan Documents and the Environmental
Indemnity (collectively the “Indebtedness”) until the Indebtedness has
been paid, but in any event, the unpaid balance (if any) remaining due on the
Note shall be due and payable on July 1, 2013 (the “Maturity Date”) or
such earlier date resulting from the acceleration of the Indebtedness by
Lender. Capitalized terms used herein and not otherwise defined shall have
those meanings given to them in the other Loan Documents.


 


C.        NOW,
THEREFORE, to secure the payment of the Indebtedness in accordance with the
terms and conditions of the Loan Documents, and all extensions, modifications
and renewals thereof and the performance of the covenants and agreements
contained therein and any and all additional future advances and readvances
pursuant to the provisions of Section 29-3-50, Code of Laws of South Carolina,
1976, as amended, made by Lender under the Note or to protect the lien hereof
with respect to the Premises (as hereinafter defined) or the Premises
themselves as


 


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hereinafter provided, and
also to secure the payment of any and all other Indebtedness, direct or
contingent, that may now or hereafter become owing from Borrower to Lender in
connection with the Loan Documents, and in consideration of the Loan Amount in
hand paid, receipt of which is hereby acknowledged, Borrower does by these
presents mortgage, grant, bargain, sell, convey, assign, transfer, and set over
unto Lender, its successors and assigns forever, that certain real estate and
all of Borrower’s estate, right, title and interest therein, located in the
county of Greenville, state of South Carolina, more particularly described in Exhibit
A attached hereto and made a part hereof (the “Land”), which Land,
together with the following described property, rights and interests, is
collectively referred to herein as the “Premises”.


 


D.        Together
with Borrower’s interest as lessor in and to all Leases and all Rents which are
pledged primarily and on a parity with the Land and not secondarily.


 


E.        Together
with all and singular the tenements, hereditaments, easements, appurtenances,
passages, waters, water courses, riparian rights, direct flow, ditch,
reservoir, well and other water rights, whether or not adjudicated, whether
tributary or nontributary and whether evidenced by deed, water stock, permit or
otherwise, sewer rights, rights in trade names, licenses, permits and
contracts, and all other rights, liberties and privileges of any kind or
character in any way now or hereafter appertaining to the Land, including but
not limited to, homestead and any other claim at law or in equity as well as
any after-acquired title, franchise or license and the reversion and reversions
and remainder and remainders thereof.


 


F.        Together
with the right in the case of foreclosure hereunder of the encumbered property
for Lender to take and use the name by which the buildings and all other
improvements situated on the Premises are commonly known and the right to
manage and operate the said buildings under any such name and variants thereof.


 


G.        Together
with all right, title and interest of Borrower in any and all buildings and
improvements of every kind and description now or hereafter erected or placed
on the said Land and all materials intended for construction, reconstruction,
alteration and repairs of such buildings and improvements now or hereafter
erected thereon, all of which materials shall be deemed to be included within
the Premises immediately upon the delivery thereof to the Premises, and a
security interest in all fixtures now or hereafter owned by Borrower and
attached to or contained in and used in connection with the Premises including,
but not limited to, all machinery, motors, elevators, fittings, radiators,
awnings, shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air-conditioning and sprinkler equipment and
fixtures and appurtenances thereto; and all items of furniture, furnishings, equipment
and personal property owned by Borrower used or useful in the operation of the
Premises; and all renewals or replacements of all of the aforesaid property
owned by Borrower or articles in substitution therefor, whether or not the same
are or shall be attached to said buildings or improvements in any manner
(collectively, the “Improvements”); it being mutually agreed, intended
and declared that all the aforesaid property owned by Borrower and placed by it
on the Land or used in connection with the operation or maintenance of the
Premises shall, so far as permitted by law, be deemed to form a part and parcel
of the Land and for the purpose of this Mortgage to be Land and covered by this
Mortgage, and as to any of the property aforesaid


 


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which does not form a
part and parcel of the Land or does not constitute a “fixture” (as such term is
defined in the Uniform Commercial Code (“UCC”)), this Mortgage and the other
Loan Documents (the terms of which grant a security interest in personal
property or real property, the proceeds of which may become personal property)
are each hereby deemed to be, as well, a security agreement under the UCC for
the purpose of creating a security interest in all items, including, but not
limited to all property and rights which Borrower may grant, assign, bargain,
sell, transfer, set over, deliver, or otherwise convey to Lender, as secured
party, under the terms of this Mortgage or any of the other Loan Documents,
including any and all proceeds thereof (as used herein, Borrower shall mean “Debtor”
under the UCC and Lender shall mean “Secured Party” under the UCC). Borrower
hereby appoints Lender as its attorney-in-fact to execute such documents
necessary to perfect Lender’s security interest and authorizes Lender at any
time until the Indebtedness is paid in full, to prepare and file, at Borrower’s
expense, any and all UCC financing statements, amendments, assignments,
terminations and the like, necessary to create and/or maintain a prior security
interest in such property all without Borrower’s execution of the same.
Furthermore, upon a default under the Loan Documents, Lender will, in addition
to all other remedies provided for in the Loan Documents, have the remedies
provided for under the UCC in effect in the State in which the Premises is
located.


 


H.       Together
with all right, title and interest of Borrower, now or hereafter acquired, in
and to any and all strips and gores of land adjacent to and used in connection
with the Premises and all right, title and interest of Borrower, now owned or
hereafter acquired, in, to, over and under the ways, streets, sidewalks and
alleys adjoining the Premises.


 


I.         Together
with all funds now or hereafter held by Lender under any property reserves
agreement (including any proceeds derived from any letter of credit) or escrow
security agreement or under any of the terms hereof or of the Loan Documents,
including but not limited to funds held under the provisions of the Loan
Agreement.


 


J.         Together
with all of Borrower’s payment intangibles, letter of credit rights, interest
rate cap agreements, tenant in common agreement rights, and any other contract
rights of Borrower related in any manner to the ownership, operation, or
management of the Premises, as well as any and all supporting obligations, and
all proceeds, renewals, replacements and substitutions thereof.


 


K.       Together
with all funds, accounts and proceeds thereof relating to the Premises whether
or not such funds, accounts or proceeds thereof are held by Lender under the
terms of any of the Loan Documents, including, but not limited to bankruptcy
claims of Borrower against any tenant at the Premises, and any proceeds
thereof; proceeds of any Rents, insurance proceeds from all insurance policies
required to be maintained by Borrower under the Loan Documents (subject to the
balance of the terms of this Mortgage) and all awards, decrees, proceeds,
settlements or claims for damage now or hereafter made to or for the benefit of
Borrower by reason of any damage to, destruction of or taking of the Premises
or any part thereof, whether the same shall be made by reason of the exercise
of the right of eminent domain or by condemnation or otherwise (a “Taking”).


 


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L.        TO
HAVE AND TO HOLD the same unto the Lender, its successors and assigns forever,
for the purposes and uses herein expressed.


 


Provided, however, that
the maximum amount of principal secured hereby shall not exceed twice the face
amount of the Note plus interest thereon and all charges and expenses of
collection incurred by Lender.


 


M.       Borrower
represents that it shall forever warrant and defend the title to the Premises
against all claims and demands of all persons whomsoever and will on demand
execute any additional instrument which may be required to give Lender a valid
first lien on all of the Premises, subject to the “Permitted Encumbrances”
set forth in the loan policy of title insurance for the Premises issued to
Lender.


 


N.        Borrower
further represents that (i) the Premises is not subject to any casualty damage;
(ii) Borrower has not received any written notice of any eminent domain or
condemnation proceeding affecting the Premises; and (iii) to the best of
Borrower’s knowledge, following due and diligent inquiry, there are no actions,
suits or proceedings pending, completed or threatened against or affecting
Borrower or any person or entity owning an interest (directly or indirectly) in
Borrower (“Interest Owner(s)”) or any property of Borrower or any
Interest Owner in any court or before any arbitrator of any kind or before or
by any governmental authority (whether local, state, federal or foreign) that,
individually or in the aggregate, could reasonably be expected by Lender to be
material to the transaction contemplated hereby.


 


O.        Borrower
further represents and warrants that as of the date hereof and until the
Indebtedness is paid in full:


 


(a)      Borrower
and each person or entity owning an interest in Borrower is not (i) identified
on the Specially Designated Nationals and Blocked Persons List maintained by
the Office of Foreign Assets Control, Department of the Treasury (“OFAC”)
and/or on any other similar list maintained by OFAC pursuant to any authorizing
statute, executive order or regulation (collectively, the “List”), (ii)
a person or entity with whom a citizen of the United States is prohibited to
engage in transactions by any trade embargo, economic sanction, or other
prohibition of United States law, regulation, or Executive Order of the
President of the United States;


 


(b)      none
of the funds or other assets of Borrower constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person (as
hereinafter defined);


 


(c)       no
Embargoed Person has any interest of any nature whatsoever in Borrower (whether
directly or indirectly);


 


(d)      none
of the funds of Borrower have been derived from any unlawful activity with the
result that the investment in Borrower is prohibited by law or that the
agreement is


 


4

















 


in violation of law,


 


(e)       Borrower
has and will continue to implement procedures, and has consistently and will
continue to consistently apply those procedures, to ensure the foregoing
representations and warranties remain true and correct at all times. The term “Embargoed
Person” means any person, entity or government subject to trade
restrictions under U.S. law, including but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with
the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or
regulations promulgated thereunder with the result that the investment in
Borrower is prohibited by law or Borrower is in violation of law;


 


(f)       Borrower
has complied and will continue to comply with all requirements of law relating
to money laundering, anti-terrorism, trade embargos and economic sanctions, now
or hereafter in effect; and


 


(g)       Borrower
has not and will not use funds from any “Prohibited Person” (as such term is
defined in the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism) to make any payment due to Lender under the Loan Documents


 


Borrower will
immediately notify Lender in writing if any of the representations, warranties
or covenants are no longer true or have been breached or if Borrower has a
reasonable basis to believe that they may no longer be true or have been
breached. In addition, Borrower will, at the request of Lender, provide such
information as may be requested by Lender to determine Borrower’s compliance
with the terms hereof.


 


BORROWER COVENANTS AND
AGREES AS FOLLOWS:


 


1.        Borrower
shall


 


(a)       pay
each item of Indebtedness secured by this Mortgage when due according to the
terms of the Loan Documents;


 


(b)       pay
a Late Charge on any payment of principal, interest, Make Whole Premium or
Indebtedness which is not paid on or before the due date thereof to cover the
expense involved in handling such late payment;


 


(c)       pay
on or before the due date thereof any indebtedness permitted to be incurred by
Borrower pursuant to the Loan Documents and any other claims which could become
a lien on the Premises (unless otherwise specifically addressed in paragraph
1(e) hereof), and upon request of Lender exhibit satisfactory evidence of the
discharge thereof;


 


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(d)       complete
within a reasonable time, the construction of any Improvements now or at any
time in process of construction upon the Land which are required to be
performed by Borrower;


 


(e)       manage,
operate and maintain the Premises and keep the Premises, including but not
limited to, the Improvements, in good condition and repair and free from
mechanics’ liens or other liens or claims for liens, provided however, that
Borrower may in good faith, with reasonable diligence and upon written Notice
to Lender within twenty (20) days after Borrower has knowledge of such lien or
claim, contest the validity or amount of any such lien or claim and defer
payment and discharge thereof during the pendency of such contest in the manner
provided by law, provided that (i) such contest may be made without the payment
thereof; (ii) such contest shall prevent the sale or forfeiture of the Premises
or any part thereof, or any interest therein, to satisfy such lien or claim;
(iii) Borrower shall have obtained a bond over such lien or claim from a
bonding company acceptable to Lender which has the effect of removing such lien
or collection of the claim or lien so contested; and (iv) Borrower shall pay
all costs and expenses incidental to such contest; and further provided, that
in the event of a final, non-appealable ruling or adjudication adverse to
Borrower, and provided the court of jurisdiction has not granted a stay of the
enforcement of the ruling or judgment, Borrower shall promptly pay such claim
or lien, shall indemnify and hold Lender and the Premises harmless from any
loss or damage arising from such contest and shall take whatever action
necessary to prevent sale, forfeiture or any other loss or damage to the
Premises or to the Lender; provided, however, Lender acknowledges and agrees
that performance of the obligations set forth in this Paragraph 1(e) by Major
Tenant (as hereinafter defined) with respect to its leased premises shall be
deemed compliance with such provisions by Borrower with respect to such portion
of the Premises; as used herein, the term “Major Tenant” shall mean the
tenant under the Lease Agreement dated December 21, 2001 in favor of Bi-Lo,
LLC, as amended, or any lease to any replacement tenant under such lease
approved by Lender (a “Replacement Tenant”);


 


(f)       comply,
and cause each lessee or other user of the Premises to comply, with all
requirements of law and ordinance, and all rules and regulations, now or
hereafter enacted, by authorities having jurisdiction of the Premises and the
use thereof, including but not limited to all covenants, conditions and
restrictions of record pertaining to the Premises, the Improvements, and the
use thereof (collectively, “Legal Requirements”); provided, however,
Lender acknowledges and agrees that performance of the obligations set forth in
this Paragraph l(f) by Major Tenant with respect to its leased premises shall be
deemed compliance with such provisions by Borrower with respect to such portion
of the Premises;


 


(g)       subject
to the provisions of paragraph 6 hereof, promptly repair, restore or rebuild
any Improvements, now or hereafter a part of the Premises which may


 


6

















 


become damaged or be
destroyed by any cause whatsoever, so that upon completion of the repair,
restoration and rebuilding of such Improvements there will be no liens of any
nature arising out of the construction and the Premises will be of
substantially the same character and quality as it was prior to the damage or
destruction; provided, however, Lender acknowledges and agrees that performance
of the obligations set forth in this Paragraph 1(g) by Major Tenant with
respect to its leased premises shall be deemed compliance with such provisions
by Borrower with respect to such portion of the Premises;


 


(h)       if
other than a natural person, do all things necessary to preserve and keep in
full force and effect its existence, franchises, rights and privileges under
the laws of the state of its formation and, if other than its state of
formation, the State where the Premises is located. Borrower shall notify
Lender at least thirty (30) days prior to (i) any relocation of Borrower’s
principal place of business to a different state or any change in Borrower’s
state of formation, and/or (ii) if Borrower is an individual, any relocation of
Borrower’s principal residence to a different state;


 


(i)        do
all things necessary to preserve and keep in full force and effect Lender’s
title insurance coverage insuring the lien of this Mortgage as a first and
prior lien, subject only to the Permitted Encumbrances stated in the title
insurance policy issued to Lender and any other exceptions after the date of
this Mortgage approved in writing by Lender, including without limitation,
delivering to Lender not less than 30 days prior to the effective date of any
rate adjustment, modification or extension of the Note or any other Loan Document,
any new policy or endorsement which may be reasonably required to assure Lender
of such continuing coverage;


 


(j)        execute
any and all documents which may be required to perfect the security interest
granted by this Mortgage;


 


(k)       remain
a Single-Purpose Entity; and


 


(l)        on
or before the date which is six (6) months from the date hereof, provide
evidence to Lender of the implementation of an observation and maintenance
program for the Property in form and substance that would be satisfactory to an
institutional real estate lender and in accordance with the provisions set
forth in the Phase I Environmental Site Assessment Report delivered to Lender
by Borrower in connection with the closing of the Loan.


 


2.        Borrower
shall not:


 


(a)       construct
any building or structure nor make any alteration or addition (other than
normal repair and maintenance) to (i) the roof or any structural component of
any Improvements on the Premises, or (ii) the building operating systems,


 


7

















 


including but not limited
to, the mechanical, electrical, heating, cooling, or ventilation systems (other
than replacement with equal or better quality and capacity).


 


Notwithstanding anything
hereinabove to the contrary, the restrictions set forth in this Paragraph 2(a)
shall not be applicable if such activity is (i) required by applicable Legal
Requirements; or (ii) specifically provided for in a Lease approved by Lender
prior to closing of the Loan or thereafter, in which a tenant has the right to
complete any of the above without Borrower’s prior consent in its capacity as
landlord under such Lease. With respect to any Lease in which the above
activities require Borrower’s prior consent (in its capacity as landlord under
such Lease), Borrower shall also obtain Lender’s prior written consent, not to
be unreasonably withheld;


 


(b)       remove
or demolish any material Improvements, or any portion thereof, which at any
time constitutes a part of the Premises.


 


Notwithstanding anything
hereinabove to the contrary, Borrower may construct, remove or demolish tenant
improvements within the then existing building(s) or other structures to the
extent such work is required solely under the terms of any Leases approved by
Lender provided (i) no Event of Default exists under the Loan Documents; (ii)
the work is completed on a timely basis, in a good, workmanlike, lien-free
manner and in accordance with all Legal Requirements, and (iii) such work does
not negatively affect the structural integrity of the Improvements or the value
of the Premises;


 


(c)       cause
or permit any change to be made in the general use of the Premises without
Lender’s prior written consent;


 


(d)       initiate
any or acquiesce to a zoning reclassification or material change in zoning
without Lender’s prior written consent. Borrower shall use all reasonable
efforts to contest any such zoning reclassification or change;


 


(e)       make
or permit any use of the Premises that could with the passage of time result in
the creation of any right of use, or any claim of adverse possession or
easement on, to or against any part of the Premises in favor of any person or
entity or the public;


 


(f)       allow
any of the following to occur (unless a Permitted Transfer) except as expressly
permitted herein:


 


(i)        a
Transfer of all or any portion of the Premises or any interest in the Premises;


 


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(v)      a
merger, consolidation, reorganization or any other business combination; or


 


(vi)     a
conversion to or operation of all or any portion of the Premises as a
cooperative or condominium form of ownership.


 


“Permitted Transfer”
shall mean:


 


(i)        a
minor (as determined by Lender) conveyance of an interest in the Premises by
Borrower, such as a utility easement, and for which Lender has given its prior
written consent and imposed such conditions as Lender deems advisable and
appropriate; provided, however, with regard to those easements for which Lender’s
consent is required, if: (A) Borrower provides Lender with a written request
for consent to such easement and the request is accompanied by a copy of the
proposed easement together with a certificate executed by Borrower confirming
that such easement will not adversely affect the Premises now or in the future;
(B) the request is given in the manner provided for the giving of notices in
this Mortgage; (C) the request is boldly noted as a request for consent to an
easement for which Lender’s consent is required and specifically states that
the easement will be deemed approved if Lender fails to respond within 12
business days (Lender and Borrower hereby agree that such 12 business day
period shall commence on the date of Lender’s actual receipt of all information
reasonably required by Lender in connection with Lender’s review of said
easement); and (D) in the event Lender fails to respond to Borrower’s request
for consent within the time period set forth in subparagraph (C) above, then
said consent shall be deemed to have been given; or;


 


(ii)       a
sale, assignment, transfer or conveyance of all or any portion of the Premises
or an interest in the Premises for which Borrower has complied with all of the
Property Transfer Requirements; or


 


(iii)      any
of the following Transfers for which Borrower has complied with all of the
Ownership Transfer Requirements as applicable and Lender has given its prior
written consent (and in connection with such consent, Lender may impose any
conditions it wishes in its sole discretion);


 


(A)      a
sale, assignment, transfer, or conveyance of an ownership interest or interest therein;


 


(B)      the
issuance or other creation of ownership interests in an entity;


 


(C)      a
reconstitution or conversion from one entity to another type of entity;


 


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(D)      a
merger, consolidation, reorganization or any other business combination;


 


(iv)     with
at least thirty (30) days advance written notice, transfers of ownership
interests in Borrower and entities owning interests in Borrower among Inland
American Real Estate Trust, Inc., a Maryland corporation (“IARETI”), and its
wholly owned Affiliates for which Borrower has complied with all of the
Specific Transfer Requirements - 1;


 


(v)      with
at least thirty (30) days advance written notice, transfers of ownership
interests in Borrower and/or shares in entities owning interests in Borrower to
Qualified New Members (hereinafter defined), for which Borrower has complied
with all of the Specific Transfer Requirements - 2 (for purposes of this
Permitted Transfer, a “Qualified New Member” shall be defined as an institutional
investor or fund managed by an institutional investor having assets of
$100,000,000 or more);


 


(vi)     with
at least thirty (30) days advance written notice, transfers of direct or
indirect ownership interests in Borrower and entities owning interests in
Borrower and transfers of direct or indirect ownership interests in IARETI to a
Qualified Successor (hereinafter defined) for which Borrower has complied with
all of the Specific Transfer Requirements - 3 (for purposes of this Permitted
Transfer, a “Qualified Successor” shall be defined as an entity with a tangible
net worth of $200,000,000 or more; a debt to equity ratio of 1.5 or less; and
management personnel experienced in the ownership and management of retail
properties similar to the Premises);


 


(vii)    transfers
of ownership interests in IARETI or, provided IARETI is the surviving entity,
the merger of IARETI with any of the following entities: (A) Inland Retail Real
Estate Trust, Inc., a Maryland corporation (“IRRETI”), (B) Inland Real Estate
Corporation, a Maryland corporation (“IREC”), (C) Inland Real Estate Investment
Corporation, a Delaware corporation (“IREIC”), (D) Inland Western Retail Real
Estate Trust, Inc., a Maryland corporation (“IWRRETI”), (E) any other real
estate investment trust sponsored by IREIC, or (F) any other entity composed
entirely of any of the foregoing, by merger or other business combination;


 


(viii)   a
one time sale, assignment, transfer or conveyance of the Premises to a
Permitted Inland REIT for which Borrower has complied with all of the One-Time
Permitted Inland REIT Property Transfer Requirements; or


 


(ix)     a
one time sale, assignment, transfer or conveyance of: (a) 100% of the ownership
interests in Borrower to a joint venture of a Permitted Inland REIT, a New
Inland REIT or an Inland Affiliate with a Qualified Entity;


 


10

















 


or (b) up to 99% of the
ownership interests in Borrower to a Qualified Entity, in either case for which
Borrower has complied with all of the One-Time Joint Venture Ownership Transfer
Requirements; or


 


(x)      a
one time sale, assignment, transfer or conveyance of the Premises to a joint
venture of a Permitted Inland REIT, a New Inland REIT or an Inland Affiliate
with a Qualified Entity for which Borrower has complied with all of the
One-Time Joint Venture Property Transfer Requirements.


 


“Permitted Inland REIT”
shall collectively mean: IRRETI, IREC, IWRRETI and IARETI.


 


“Qualified Entity”
shall mean an entity with: (a) a net worth equal to or greater than $25,000,000.00;
and (b) experience in the ownership and management of properties similar to the
Premises.


 


“New Inland REIT”
shall mean: a newly formed real estate investment trust sponsored by or
affiliated with IREIC, a Permitted Inland REIT or The Inland Group, Inc., an
Illinois corporation (“TIGI”).


 


“Inland Affiliates”
shall mean: subsidiaries directly or indirectly wholly owned by a Permitted
Inland REIT or a New Inland REIT, or partnerships, trusts or limited liability
companies or other entities in which all of the equity interests are owned by a
Permitted Inland REIT, a New Inland REIT or TIGI.


 


In the event there is
any: (a) transfer of the Premises; or (b) transfer of direct or indirect
ownership interests in Borrower greater than 49%; then, if required by the
Pooling and Servicing Agreement, Lender may require receipt of written evidence
from such agency(ies) (if required by such agencies) to the effect that the
proposed transfer will not result in a re-qualification, reduction or
withdrawal of any rating in effect immediately prior to such transfer issued in
connection with the securitization transaction.


 


“One-Time Permitted
Inland REIT Property Transfer Requirements” are all of the following:


 


1.        the
Permitted Inland REIT which is to become the successor borrower has a net worth
equal to or greater than such Permitted Inland REIT’s net worth as of the date
hereof.


 


2.        Lender’s
exposure limitations to the successor borrower are acceptable to Lender;


 


3.        an
experienced individual or entity, acceptable to Lender, continues to manage and
lease the Premises;


 


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4.        Borrower
satisfies subparagraphs 3 through 7 of the Property Transfer Requirements set
forth below; and


 


5.        payment
to Lender of an assumption fee equal to one half of one percent (0.5%) of the
principal balance of the Note; provided, however, such fee shall not exceed
$25,000 and shall not be less than $10,000. Lender will require $5,000.00 of
such fee to be paid at the beginning of Lender’s review process, and such sum
shall be nonrefundable and earned upon receipt by Lender whether or not the
transaction is ultimately completed or Lender ultimately approves successor
borrower.


 


“One-Time Joint
Venture Ownership Transfer Requirements” are all of the following:


 


1.        If
the transfer is pursuant to Permitted Transfer (ix)(a) above, IARETI or a
wholly owned Affiliate thereof: (i) maintains at least 1% ownership interests
in such joint venture (which such joint venture entity shall be the sole member
of Borrower); and (ii) maintains operational and managerial control of such
joint venture and the Premises. If the transfer is pursuant to Permitted
Transfer (ix)(b), IARETI or a wholly owned Affiliate thereof: (a) maintains at
least 1% interest in Borrower; and (b) maintains operational and managerial
control of the Premises;


 


2.        Lender’s
receipt of an ownership processing fee equal to: (i) $5,000.00 if IARETI
maintains ten percent (10%) or more of the ownership interests in Borrower or
such joint venture that acquires ownership interests in Borrower; or (ii)
$15,000.00 if IARETI maintains less than 10 percent (10%) of the ownership
interests in Borrower or such joint venture that acquires ownership interests
in Borrower;


 


3.        At
Lender discretion, Lender receives acceptable background and credit checks, at
Borrower’s cost.;


 


4.        Reaffirmation
of the obligations of IARETI under the Guaranty;


 


5.        Lender
receives at least thirty (30) days prior written notice of such transfer along
with appropriate documentation thereof (including organizational documentation
evidencing the formation and existence of any entity to which an interest is
transferred);


 


6.        The
transaction will be processed by outside counsel whose fees and costs, as well
as other applicable professional’s fees and costs, taxes, recording fees and
the like, and any other fees and costs incurred, will be payable by


 


12

















 


Borrower. (Lender shall
not charge any fees beyond the fee referenced in No. 2 above).


 


“One-Time Joint
Venture Property Transfer Requirements” are all of the following:


 


1.        IARETI
or a wholly owned Affiliate thereof: (i) maintains at least 1 % direct or
indirect ownership interests in the joint venture that becomes Borrower; and
(ii) maintains operational and managerial control of the joint venture that
becomes Borrower and the Premises;


 


2.        Lender’s
receipt of a Premises processing fee equal to: (i) $5,000.00 if IARETI
maintains ten percent (10%) or more of the ownership interests in such joint
venture; or (ii) $15,000.00 if IARETI maintains less than 10 percent (10%) of
the ownership interests in such joint venture;


 


3.        Receipt,
at Borrower’s expense, of an endorsement updating the Lender’s existing loan
policy in the full amount of the Loan (and if an acceptable endorsement is not
available, a new ALTA standard loan policy), in form and by an issuer
satisfactory to Lender, and which insures this Mortgage to be a first and prior
lien subject only to those exceptions which were previously approved by Lender
or additional exceptions that are subject to Lender’s reasonable prior
approval;


 


4.        Receipt
by Lender of copies of (a) the organizational documents of the proposed
transferee and an opinion of counsel satisfactory to Lender as to its due formation,
valid existence and authority to enter into and carry out the proposed
transaction; (b) the deeds or other instruments of transfer and documents
relating to the assignment and assumption of Leases; (c) evidence of compliance
with the insurance requirements contained in the Loan Documents; (d) compliance
with the representations and warranties in the Loan Agreement regarding the
proposed transferee’s status as a Single Purpose Entity, and (e) at Lender
discretion, acceptable background and credit checks, at Borrower’s cost;


 


5.        Execution,
delivery, acknowledgment and recordation, as applicable, of assumption
agreements, financing statements, replacement letter(s) of credit (if
applicable), tax identification certification, automatic clearing house payment
form, and UCCs (in form and substance satisfactory to Lender) and reaffirmation
of the obligations of IARETI under the Guaranty;


 


6.        The
transaction will be processed by outside counsel whose fees and costs, as well
as other applicable professional’s fees and costs, taxes, recording fees and
the like, and any other fees and costs incurred, will be payable by


 


13

















 


Borrower. (Lender shall
not charge any fees beyond the fee referenced in No. 2 above.);


 


7.        Receipt
by Lender of 30 days advance written notice of the proposed Transfer in
question;


 


8.        Receipt
by Lender of a waiver from any tenant having a right or option to purchase the
Premises or any portion thereof, waiving such right or option in form and
substance acceptable to Lender; and


 


9.        Borrower
remains a Single Purpose Entity.


 


“Property Transfer
Requirements” are all of the following:


 


1.        Prior
review and approval of the proposed purchaser or other transferee and the
subject transaction by Lender, at Lender’s sole discretion. Review of the
proposed purchaser or other transferee and the subject transaction shall
encompass various factors, including, but not limited to, the proposed
purchaser’s or other transferee’s creditworthiness, financial strength, and
real estate management and leasing expertise as well as the proposed
transaction’s effect on the Premises, the Borrower, and other security for the
Loan;


 


2.        Payment
to Lender of an assumption fee equal to the greater of: (a) one half of one
percent (0.5%) of the principal balance of the Note; or (b) $15,000.00;
provided, however, that Lender will require $15,000.00 of such fee to be paid
at the beginning of Lender’s review process, and such sum shall be
nonrefundable and earned upon receipt by Lender whether or not the transaction
is ultimately completed or Lender ultimately approves the proposed purchaser or
other transferee;


 


3.        Receipt,
at Borrower’s expense, of either (at Lender’s discretion) a new ALTA standard
loan policy or an endorsement updating the Lender’s existing loan policy in the
full amount of the Loan, in form and by an issuer satisfactory to Lender, and
which insures this Mortgage to be a first and prior lien subject only to those
exceptions which were previously approved by Lender and provides coverage
against usury and mechanic’s liens;


 


4.        Receipt
by Lender of copies of all relevant information and documentation relating to
or required by Lender in connection with the proposed transfer including but
not limited to (a) the organizational documents of the proposed transferee and
an opinion of counsel satisfactory to Lender as to its due formation, valid
existence and authority to enter into and carry out


 


14

















 


the proposed transaction;
(b) the deeds or other instruments of transfer and documents relating to the
assignment and assumption of Leases; (c) evidence of compliance with the
insurance requirements contained in the Loan Documents; (d) compliance with the
representations and warranties in the Loan Agreement regarding the proposed
transferee’s status as a Single Purpose Entity, and (e) compliance with such
other closing requirements as are customarily imposed by Lender in connection
with such transactions;


 


5.        Execution,
delivery, acknowledgment and recordation, as applicable, of new, revised and/or
replacement assumption agreements, loan modification agreements,
indemnification agreements, escrow security or property reserves agreements,
security instruments, financing statements, UCCs, new or revised letters of
credit and/or guarantees in form and substance satisfactory to Lender;


 


6.        Payment
of outside counsel fees and costs, other applicable professional’s fees and
costs, taxes, recording fees and the like, and any other fees and costs
incurred;


 


7.        Receipt
by Lender of 60 days advance written notice of the proposed Transfer in
question;


 


8.        Receipt
by Lender of a waiver from any tenant having a right or option to purchase the
Premises or any portion thereof, waiving such right or option in form and
substance acceptable to Lender; and


 


9.        At
Lender’s option, and if required by the procedures promulgated by any rating
agency(ies) associated with a securitization transaction with respect to the
Loan, receipt by Lender of written evidence from such agency(ies) to the effect
that the proposed transfer will not result in a re-qualification, reduction or
withdrawal of any rating in effect immediately prior to such transfer issued in
connection with the securitization transaction.


 


“Ownership Transfer
Requirements” are all of the Property Transfer Requirements which Lender
deems appropriate in its discretion, as well as a reasonable processing fee to
be determined by Lender; provided, however, that (i) with respect to item 2 of
the Property Transfer Requirements, the 0.5% component of the fee shall be
prorated (subject, however, to the $15,000 minimum) based on Lender’s
calculation of the effective percentage interest in Borrower transferred, and
(ii) item 3 of the Property Transfer Requirements shall be required, at Lender’s
discretion, only in the event of (A) a merger, consolidation, reorganization or
any other business combination, or (B) a reconstitution or conversion from one
entity to another type of entity.


 


15

















 


“Specific Transfer
Requirements -1” are all of the following which Borrower agrees to provide
to Lender prior to each proposed transfer: (i) a processing fee of $2,000.00;
(ii) all relevant documentation and information related to the organization,
authority, and validity of the proposed ownership interest purchaser,
transferee and the transaction in general; (iii) all documents and instruments
of conveyance, transfer and assignment; (iv) at Lender’s discretion, a
reaffirmation of the obligations of the Guarantor(s) under the Guaranty; and
(v) evidence of payment of all outside counsel fees, professional fees, title
insurance fees, if any, and any and all other fees, costs and expenses related
to the proposed transfer (provided that no processing fee other than the $2,000
fee stated in (i) above shall be required).


 


“Specific Transfer
Requirements - 2” are all of the following which Borrower agrees to provide
to Lender prior to each proposed transfer: IARETI or a wholly owned Affiliate
thereof (i) (a) retains 51% or more of the ownership interest in the Borrower,
or (b) retains ownership of 20% to 50% of the ownership interest in the
Borrower subject to Lender’s review and approval in each instance of the
proposed transferee and the subject transaction; Lender’s review of the
proposed transferee and the subject transaction shall encompass various
factors, including but not limited to, transferee’s creditworthiness, financial
strength, and real estate management expertise, as well as the proposed
transaction’s effect on the Premises, Borrower and the other security for the
Loan, and (ii) otherwise retains operational and management control of Borrower
as determined by Lender, and further provided Borrower provides Lender each of
the following items prior to each proposed transfer: (a) a transfer fee equal
to the greater of $5,000.00 or the product of the percentage ownership interest
in Borrower to be transferred multiplied by one percent (1%) of the outstanding
principal balance of the Loan; (b) all relevant documentation and information
related to the organization, authority, and validity of the proposed ownership
interest purchaser, transferee and the transaction in general; (c) all
documents and instruments of conveyance, transfer and assignment; (d) a
reaffirmation of the obligations of the Guarantor(s) under the Guaranty; and
(e) evidence of payment of all outside counsel fees, professional fees, title
insurance fees and any and all other fees, costs and expenses related to the
proposed transfer (provided that no assumption or transfer fee other than the
$5,000.00 fee stated in (a) above shall be required).


 


“Specific Transfer
Requirements - 3” are all of the following which Borrower agrees to provide
to Lender prior to each proposed transfer: (i) said transfers are made to
accommodate either the merger of IARETI with the Qualified Successor or the
sale of a majority of IARETI’s assets to the Qualified Successor; and (ii) the
Qualified Successor retains direct or indirect ownership of 51 % or more of the
ownership interests in the Borrower and (iv) the Qualified Successor otherwise
retains operational and management control of Borrower as determined by Lender,
and further provided, Borrower provides Lender with each of the following items
prior to the proposed transfer: (a) a transfer fee of $10,000.00; (b)


 


16

















 


all relevant
documentation and information related to the organization, authority, and
validity of the proposed ownership interest purchaser, transferee and the
transaction in general; (c) all documents and instruments of conveyance,
transfer and assignment; (d) a reaffirmation of the obligations of the
Guarantor(s) under the Guaranty or assumption thereof by an individual(s) or
entity(ies) acceptable to Lender in its sole discretion; and (e) evidence of
payment of all outside counsel fees, professional fees, title insurance fees
and any and all other fees, costs and expenses related to the proposed transfer
(provided that no assumption or transfer fee other than the $10,000.00 fee
stated in (a) above shall be required).


 


(g)       cause,
permit or allow:


 


(i)        any
person or entity to own an interest in Borrower who is (A) identified on the
Specially Designated Nationals and Blocked Persons List maintained by OFAC
and/or on any other similar list maintained by OFAC, or (B) a party with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law, regulation,
or Executive Order of the President of the United States;


 


(ii)       any
of the funds or other assets of Borrower to constitute property of, or be
beneficially owned, directly or indirectly, by any Embargoed Person;


 


(iii)      an
Embargoed Person to have any interest of any nature whatsoever in Borrower
(whether directly or indirectly); or


 


(iv)     any
of its funds to be derived from any unlawful activity with the result that the
investment in Borrower is prohibited by law or that the agreement is in
violation of law.


 


3.        (a)       Borrower
shall pay or cause to be paid when due and before any penalty attaches or
interest accrues all general taxes, special taxes, assessments (including
assessments for benefits from public works or improvements whenever begun or
completed), utility charges, water charges, sewer service charges, common area
maintenance charges, if any, vault or space charges and all other like charges
against or affecting the Premises or against any property or equipment located
on the Premises, or which might become a lien on the Premises, and shall,
within 10 days following Lender’s request, furnish to Lender a duplicate
receipt of such payment. If any such tax, assessment or charge may legally be
paid in installments, Borrower may, at its option, pay such tax, assessment or
charge in installments. Lender acknowledges and agrees that performance of the
obligations set forth in this Paragraph 3(a) by Major Tenant with respect to
its leased premises shall be deemed compliance with such provisions by Borrower
with respect to such portion of the Premises.


 


17

















 


(b)       If
Borrower desires to contest any tax, assessment or charge relating to the
Premises, Borrower may do so by paying the same in full, under protest, in the
manner provided by law; provided, however, that


 


(i)        if
contest of any tax, assessment or charge may be made without the payment
thereof, and


 


(ii)       such
contest shall have the effect of preventing the collection of the tax,
assessment or charge so contested and the sale or forfeiture of the Premises or
any part thereof or any interest therein to satisfy the same,


 


then Borrower may in its
discretion and upon the giving of written notice to Lender of its intended
action and upon the furnishing to Lender of such security or bond as Lender may
require, contest any such tax, assessment or charge in good faith and in the
manner provided by law. All costs and expenses incidental to such contest shall
be paid by Borrower. In the event of a ruling or adjudication adverse to
Borrower, Borrower shall promptly pay such tax, assessment or charge. Borrower
shall indemnify and save harmless the Lender and the Premises from any loss or
damage arising from any such contest and shall, if necessary to prevent sale,
forfeiture or any other loss or damage to the Premises or to Lender, pay such
tax, assessment or charge or take whatever action is necessary to prevent any
sale, forfeiture or loss. Lender acknowledges and agrees that upon compliance
with the foregoing requirements, to the extent permitted under its Lease, Major
Tenant shall have all rights of contest as set forth in this Paragraph 3(b).


 


4.        (a)       Borrower
shall at all times keep or cause to be kept in force (i) property insurance
insuring all Improvements which now are or hereafter become a part of the
Premises for perils covered by a causes of loss-special form insurance policy,
including coverage against terrorism containing both replacement cost and
agreed amount endorsements or equivalent coverage; (ii) commercial general
liability insurance naming Lender as an additional insured protecting Borrower
and Lender against liability for bodily injury or property damage occurring in,
on or adjacent to the Premises in commercially reasonable amounts; (iii) boiler
and machinery insurance if the property has a boiler or is an office building;
(iv) rental value insurance for the perils specified herein for one hundred
percent (100%) of the Rents (including operating expenses, real estate taxes,
assessments and insurance costs which are lessee’s liability) for a period of
twelve (12) months; (v) builders risk insurance during all periods of
construction; and (vi) insurance against all other hazards as may be reasonably
required by Lender, including, without limitation, insurance against loss or
damage by flood. Notwithstanding anything herein above to the contrary, if
neither: (i) property insurance without an exclusion for terrorism, terrorist
acts or similar perils (“Terrorism”) nor; (ii) a separate policy insuring
specifically against Terrorism is available at a cost which is in Lender’s
opinion is


 


18

















 


commercially reasonable,
taking into consideration, among other things: (a) how properties similar in
type, size, quality and location are insured with respect to Terrorism; and (b)
the amount of coverage, premium and deductible applicable to such insurance,
then Lender agrees to waive the requirement to provide insurance covering
Terrorism until such coverage again becomes available at a cost, which in
Lender’s opinion is commercially reasonable.


 


(b)       All
insurance (including deductibles and exclusions) shall be in form, content and
amounts approved by Lender and written by an insurance company or companies
approved by Lender and rated A-, class size VIII or better in the most current
issue of Best’s Insurance Reports and which is licensed to do business in the
State in which the Premises are located or a governmental agency or
instrumentality approved by Lender. The policies for such insurance shall have
attached thereto standard mortgagee clauses in favor of and permitting Lender
to collect any and all proceeds payable thereunder and shall include a 30 day
(except for nonpayment of premium, in which case, a 10 day) notice of cancellation
clause in favor of Lender. All certificates of insurance (or policies if
requested by Lender) shall be delivered to and held by Lender as further
security for the payment of the Note and any other obligations arising under
the Loan Documents, with evidence of renewal coverage delivered to Lender at
least 30 days before the expiration date of any policy. Borrower shall not
carry or permit to be carried separate insurance, concurrent in kind or form
and contributing in the event of loss, with any insurance required in the Loan
Documents.


 


(c)       To
the contrary notwithstanding, so long as there is no Event of Default hereunder
and so long as the lease with Major Tenant or any Replacement Tenant remains in
full force and effect and there are no material breaches thereof beyond the
expiration of any applicable notice and cure periods, Lender will allow Major
Tenant or any said Replacement Tenant to keep in force the insurance required
herein, except with respect to coverage for rental insurance, and such
performance by Major Tenant shall be deemed performance by Borrower with
respect to such required insurance hereunder. All insurance coverages and
requirements that are not maintained by Major Tenant or a Replacement Tenant in
accordance with the Lender’s insurance requirements herein shall at all times
during the Loan be maintained by Borrower.


 


(d)       To
the contrary notwithstanding, so long as there is no Event of Default hereunder
and so long as the lease between Borrower and Major Tenant remains in full force
and effect and there are no material breaches thereof beyond the expiration of
any applicable notice and cure periods, Lender agrees to accept self-insurance
by Major Tenant for its leased premises. Lender will only accept self-insurance
by Major Tenant under the terms of its lease if Major Tenant maintains an
investment grade credit rating as required by its Lease. All insurance
coverages and requirements that are not self insured by Major Tenant in


 


19

















 


accordance
with the Lender’s insurance requirements herein shall at all times during the
Loan be maintained by Major Tenant or Borrower (with the exception of coverage
for rental insurance, which shall be provided by Borrower).


 


5.        Borrower
shall deposit with and pay to Lender the estimated taxes and assessments
assessed or levied against and next due on the Premises and the estimated
premiums for the insurance required pursuant to the Loan Documents, all in
accordance with and subject to the requirements of the Loan Agreement.


 


6.        In
the event of any damage to or destruction of the Premises, or any part thereof:


 


(a)       Borrower
will immediately notify Lender thereof in the manner provided in this Mortgage
for the giving of notices. Lender shall have the right (which may be waived by
Lender in writing) to settle and adjust any claim under such insurance policies
required to be maintained by Borrower. In all circumstances, the proceeds
thereof shall be paid to Lender and Lender is authorized to collect and to give
receipts therefor. Borrower agrees and acknowledges that such proceeds shall be
held by Lender without any allowance of interest and that in any bankruptcy
proceeding of Borrower, all such proceeds shall be deemed to be “Cash
Collateral” as that term is defined in Section 363 of the Bankruptcy Code.
Provided that no Event of Default exists, Borrower shall have the right to
participate in any settlement or adjustment; provided, however, that any
settlement or adjustment shall be subject to the written approval of Lender,
not to be unreasonably withheld.


 


(b)       Such
proceeds, after deducting therefrom any reasonable expenses incurred by Lender
in the collection thereof (including but not limited to reasonable attorneys’
fees and costs), shall be applied by Lender to pay the Indebtedness secured
hereby including, but not limited to the Make Whole Premium, whether or not
then due and payable, provided, however, that if no Event of Default exists at
the time of such application, no Make Whole Premium shall be due.


 


Notwithstanding
anything hereinabove to the contrary,


 


(i)        in
the event the casualty occurs more than six (6) months prior to the Maturity
Date and no Event of Default exists, Lender shall apply such proceeds as
follows:


 


(A)      If
the aggregate amount of such proceeds is less than $250,000, Lender shall pay
such proceeds directly to Borrower, to be held in trust for Lender and applied
to the cost of rebuilding and restoring the Premises.


 


20

















 


(B)      If
the aggregate amount of such proceeds equals or exceeds $250,000 Lender shall
disburse such amounts of the proceeds as Lender reasonably deems necessary for
the repair or replacement of the Premises, subject to the conditions set forth
in paragraph 6(c) below.


 


(ii)       in
the event (x) an Event of Default exists, or (y) the casualty occurs during the
last six (6) months prior to the Maturity Date and Lender determines that the
repair and restoration of such casualty cannot be completed prior to the
Maturity Date, or (z) the conditions set forth in paragraph 6(c) are not met,
then Lender, in its sole and absolute discretion may either:


 


(A)      declare
the entire Indebtedness to be immediately due and payable, provided, however,
that if no Event of Default exists, no Make Whole Premium shall be due. All
proceeds shall be applied toward payment of the Indebtedness in such priority
as Lender elects; or


 


(B)      disburse
such proceeds as Lender reasonably deems necessary for the repair or
replacement of the Premises subject to those conditions set forth in paragraph
6(c) which Lender in its sole and absolute discretion may require.


 


(c)       (i)        In
the event that Borrower is to be reimbursed out of the insurance proceeds or
out of any award or payment received with respect to a Taking, Lender shall
from time to time make available such proceeds, subject to the following
conditions: (a) there continues to exist no Event of Default; (b) the delivery
to Lender of satisfactory evidence of the estimated cost of completion of such
repair and restoration work and any architect’s certificates, waivers of lien,
contractor’s sworn statements, and other evidence of cost and of payment and of
the continued priority of the lien hereof over any potential liens of mechanics
and materialmen (including, without limitation, title policy endorsements) as
Lender may reasonably require and approve; (c) the time required to complete
the repair and restoration work and for the income from the Premises to return
to the level it was prior to the loss will not exceed the coverage period of
the rental value insurance required hereunder; (d) the annual net cash flow
(annual net operating income after deduction for tenant improvements, leasing
commissions, annual replacement reserves and a management fee) shall equal or
exceed 1.5 times the annual debt service on the Note. Only net operating income
from approved executed Leases in effect on the Premises, having at least three
(3) years remaining prior to the expiration of their term, with no uncured
defaults, shall be used in Lender’s determination of the annual net cash flow;
(e) Lender approves the plans


 


21

















 


and specifications of
such work before such work is commenced if the estimated cost of rebuilding and
restoration exceeds 25% of the Indebtedness or involves any structural changes
or modifications. If said plans and specifications substantially comply with
those previously approved by Lender, Lender’s approval shall not be
unreasonably withheld; (f) if the amount of any insurance proceeds, award or
other payment is insufficient to cover the cost of restoring and rebuilding the
Premises, Borrower shall pay such cost in excess of such proceeds, award or
other payment before being entitled to reimbursement out of such funds; (g)
Borrower pays to Lender a non-refundable processing fee equal to the greater of
$5,000.00 or .25% of the amount of such proceeds within sixty (60) days of the
occurrence of any such damage or destruction and before Lender disburses any
proceeds; and (h) such other conditions to such disbursements, in Lender’s
reasonable discretion, as would be customarily required by a construction
lender doing business in the area where the Premises is located or which are
otherwise required by any rating agency rating a securitization transaction
with respect to the Loan.


 


(ii)       No
payment made by Lender prior to the final completion of the repair or
restoration work shall, together with all payments theretofore made, exceed 90%
of the cost of such work performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least sufficient to pay for
the cost of completion of such work free and clear of all liens. Any proceeds
remaining after payment of the cost of rebuilding and restoration shall, at the
option of Lender, either be (a) applied in reduction of the Indebtedness
secured hereby, provided, however, that if no Event of Default exists at the
time of such application, no Make Whole Premium shall be due, or (b) paid to
Borrower.


 


(iii)      Repair
and restoration of the Premises shall be commenced promptly after the
occurrence of the loss and shall be prosecuted to completion diligently, and
the Premises shall be so restored and rebuilt to substantially the same
character and quality as prior to such damage and destruction and shall comply
with all Legal Requirements.


 


(d)       Should
such damage or destruction occur after foreclosure or sale proceedings have
been instituted, the proceeds of any such insurance policy or policies, if not applied
in rebuilding or restoration of the Improvements, shall be used to pay (i) the
Indebtedness then due and owing in the event of a non-judicial sale in such
priority as Lender elects, or (ii) the amount due in accordance with any decree
of foreclosure or deficiency judgment that may be entered in connection with
such proceedings, and the balance, if any, shall be paid to the owner of the
equity of redemption if it shall then be entitled to the same, or otherwise as
any court having jurisdiction may
direct.


 


22

















 


(e)       To
the contrary notwithstanding, so long as there is no Event of Default hereunder
and so long as the Lease with Major Tenant remains in full force and effect,
Lender agrees that the provisions of the Lease with Major Tenant governing the
application of insurance proceeds and restoration shall apply with respect to
the portion of the Premises subject to such Lease.


 


7.        In
the event of the commencement of a Taking affecting the Premises:


 


(a)       Borrower
shall notify Lender thereof in the manner provided in this Mortgage for the
giving of notices. Lender may participate in such proceeding, and Borrower
shall deliver to Lender all documents requested by it to permit such
participation.


 


(b)       Borrower
shall cause the proceeds of any award or other payment made relating to a
Taking, to be paid directly to Lender. Lender, in its sole and absolute
discretion: (i) may apply all such proceeds to pay the Indebtedness in such
priority as Lender elects, provided however, that if no Event of Default exists
at the time of such application no Make Whole Premium shall be due; or (ii)
subject to and in accordance with the provisions set forth in paragraph 6(c)
above, may disburse such amounts of the proceeds as Lender reasonably deems
necessary for the repair or replacement of the Premises.


 


(c)       Notwithstanding
anything herein above to the contrary, provided no Event of Default exists,
Lender agrees to disburse the proceeds received from any Inconsequential
Taking, as hereinafter defined, to Borrower for the repair and/or replacement
of the Premises. An Inconsequential Taking shall be a Taking which (i) results
in less than $250,000 in proceeds; (ii) does not, in Lender’s determination,
materially or adversely affect the Improvements, parking, access, ingress,
egress or use of the Premises; and (iii) does not trigger any rights or options
of tenants under the Leases.


 


(d)       To
the contrary notwithstanding, so long as there is no Event of Default hereunder
and so long as the Lease with Major Tenant remains in full force and effect,
Lender agrees that the provisions of the Lease with Major Tenant governing the
application of the proceeds of a Taking shall apply with respect to that
portion of the Premises subject to such Lease.


 


8.        If
by the laws of the United States of America or of any state or governmental
subdivision having jurisdiction over Borrower or of the Premises or of the Loan
evidenced by the Loan Documents or any amendments or modifications thereof, any
tax or fee is due or becomes due or is imposed upon Lender in respect of the
issuance of the Note hereby secured or the making, recording and registration
of this Mortgage or otherwise in connection with the Loan Documents, the
Environmental Indemnity or the Loan, except for Lender’s income or franchise
tax, Borrower covenants and agrees to pay such
tax or fee in the manner required by such law, and to hold


 


23

















 


harmless and indemnify
Lender, its successors and assigns, against any liability incurred by reason of
the imposition of any such tax or fee.


 


9.        (a)       Upon
the occurrence of any Event of Default, Lender may, but need not, make any
payment or perform any act herein required of Borrower, in any form and manner
deemed expedient and may, but need not, make full or partial payments of
principal or interest on prior encumbrances, if any, and purchase, discharge,
compromise or settle any tax lien or other prior lien or title or claim
thereof, or redeem from any tax sale or forfeiture affecting said Premises, or
contest any tax or assessment. All moneys paid for any of the purposes herein
authorized and all reasonable expenses paid or incurred in connection
therewith, including but not limited to, reasonable attorneys’ fees and costs
and reasonable attorneys’ fees and costs on appeal, and any other money
advanced by Lender to protect the Premises and the lien hereof, shall be so
much additional Indebtedness secured hereby and shall become immediately due
and payable without notice and with interest thereon at the Default Rate from
the date of expenditure or advance until paid.


 


(b)       In
making any payment hereby authorized relating to taxes or assessments or for
the purchase, discharge, compromise or settlement of any prior lien, Lender may
make such payment according to any bill, statement or estimate secured from the
appropriate public office without inquiry into the accuracy thereof or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof or without inquiry as to the validity or amount of any claim for lien
which may be asserted.


 


10.      If
one or more of the following events (herein called an “Event of Default”
or “Events of Default” as the context so requires) shall have occurred:


 


(a)       failure
to pay when due any principal, interest, Make Whole Premium or other
Indebtedness, utilities, taxes or assessments or insurance premiums required
pursuant to the Loan Documents or the Environmental Indemnity, and such failure
shall have continued for 5 days, as to payment of any principal, interest or
taxes or assessments, or insurance premiums or for 5 days after written notice
specifying such default is given by Lender to Borrower as to payment of any
Make Whole Premium; or


 


(b)       Borrower,
Interest Owner or any guarantor voluntarily brings or acquiesces to any of the
following: (A) any action for dissolution, act of dissolution or dissolution or
the like of Borrower, Interest Owner or any guarantor under the Federal
Bankruptcy Code as now or hereafter constituted; (B) the filing of a petition
or answer proposing the adjudication of Borrower, Interest Owner or any
guarantor as a bankrupt or its reorganization or arrangement, or any
composition, readjustment, liquidation, dissolution or similar relief with
respect to it pursuant to any present or future federal or state bankruptcy or
similar law;


 


24

















 


or (C) the appointment by
order of a court of competent jurisdiction of a receiver, trustee or liquidator
of the Premises or any part thereof or of Borrower, Interest Owner or any
guarantor or of substantially all of the assets of Borrower, Interest Owner or
any guarantor; or


 


(c)       one
or more of the items set forth in paragraph 10(b) above occur which were either
not (i) voluntarily brought by Borrower, Interest Owner or any guarantor or
(ii) acquiesced in by Borrower, Interest Owner or any guarantor, and which are
not discharged or dismissed within 90 days after the action, filing or
appointment, as the case may be; or


 


With respect to the
matters in (b) and (c) above for an Interest Owner only, no Event of Default
shall occur until an interested party or Interest Owner asserts a claim or
right against Borrower or the Premises which delays or otherwise affects Lender’s
rights, remedies, or interests granted under the Loan Documents (whether or not
such assertion is successful).


 


(d)       with
respect to the matters not described in the other subparagraphs of this
paragraph 10, failure to duly observe or perform any covenant, condition or
agreement of the Borrower or any guarantor contained in this Mortgage, the Loan
Agreement, the Guaranty, the Note or the Assignment of Leases from Borrower to
Lender or in any other instrument or agreement which evidences or secures the
Loan (the “Loan Documents”), or in the Environmental Indemnity, and such
failure shall have continued for 30 days after Notice specifying such failure
is given by Lender to Borrower; or


 


If any failure to observe
or perform under (d) above shall be of such nature that it cannot be cured or
remedied within 30 days, Borrower shall be entitled to a reasonable period of
time to cure or remedy such failure (not to exceed 90 days following the giving
of Notice), provided Borrower commences the cure or remedy thereof within the
30 day period following the giving of Notice and thereafter proceeds with
diligence, as determined by Lender, to complete such cure or remedy.


 


(e)       the
failure of Borrower to duly observe or perform any of the covenants, conditions
and agreements of the Borrower contained in paragraph 2(f) of this Mortgage; or


 


(f)       any
representation when made by or on behalf of Borrower, Interest Owner or any
guarantor regarding the Premises, the making or delivery of any of the Loan
Documents or the Environmental Indemnity or in any material written information
provided by or on behalf of Borrower, Interest Owner or any guarantor in
connection with the Loan shall prove to be untrue or inaccurate in any material
respect; or


 


25

















 


(g)       the
failure of Borrower to give Notice to Lender within 90 days after the death of
any individual who is personally liable for any obligation under the Loan
Documents or the Environmental Indemnity, as Borrower, indemnitor or guarantor,
whether or not such individual had executed the Note or this Mortgage; or


 


(h)       subject
to the provisions of paragraph 2(f), the failure of Borrower to provide Lender
with an assumption agreement in form and substance and executed by a person(s)
or entity(ies) acceptable to Lender in its sole discretion to assume the
obligations of any deceased individual who is personally liable for any
obligation under the Loan Documents or the Environmental Indemnity, as
Borrower, indemnitor or guarantor, whether or not such individual had executed
the Note or this Mortgage, and such failure shall have continued for 90 days
after the death of such individual; or


 


(i)                   the
failure of Borrower to remain a Single-Purpose Entity;


 


then, in each and every
such case, the whole of said principal sum hereby secured shall, at the option
of the Lender and without further notice to Borrower, become immediately due
and payable together with accrued interest thereon, a Make Whole Premium
calculated in accordance with the provisions of the Loan Documents and all
other Indebtedness, and whether or not Lender has exercised said option,
interest shall accrue on the entire principal balance and any interest or Make
Whole Premium or other Indebtedness then due, at the Default Rate until fully
paid or if Lender has not exercised said option, for the duration of any Event
of Default.


 


11.      Borrower
agrees that if Lender accelerates the whole or any part of the principal sum
hereby secured after the occurrence of an Event of Default, or applies any
proceeds pursuant to the provisions hereof, Borrower waives any right to prepay
the principal sum hereby secured in whole or in part without premium and agrees
to pay, as yield maintenance protection and not as a penalty, a “Make Whole
Premium”. However, in the event any proceeds from a casualty or Taking of
the Premises are applied to reduce the principal balance under the Note, no
Make Whole Premium shall be due so long as no Event of Default exists at the
time of such application.


 


12.      Upon
the occurrence of any Event of Default, in addition to any other rights or
remedies provided in the Loan Documents, at law, in equity or otherwise, Lender
shall have the right to foreclose the lien hereof, and to the extent permitted
herein and by applicable law to sell the Premises by sale independent of the
foreclosure proceedings. In any suit to foreclose the lien hereof, and in any
sale of the Premises, there shall be allowed and included as additional
Indebtedness payable by Borrower to Lender and secured hereby all expenditures
and expenses which may be paid or incurred by or on behalf of Lender for
attorneys’ fees and costs, including attorneys’ fees and costs on appeal,
appraisers’ fees, expenditures for documentary and expert evidence,
stenographer’s charges, publication and advertising costs, survey costs,


 


26

















 


environmental audits and
costs (which may be estimated as to items to be expended after the entry of any
decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies, torrens certificates and similar data
and assurances with respect to title as Lender deems reasonably necessary
either to prosecute such suit or to consummate such sale or to evidence to bidders
at any sale the true condition of the title to or the value of the Premises.


 


13.      The
proceeds of any foreclosure sale, or other sale of the Premises in accordance
with the terms hereof or as permitted by law, shall be distributed and applied
in the following order of priority: first, to the payment of all costs and
expenses incident to the foreclosure and/or sale proceedings, including all
items as are mentioned in any preceding or succeeding paragraph hereof; second,
to the payment of all other items which under the terms hereof constitute
secured Indebtedness in addition to that evidenced by the Note, with interest
thereon as herein provided; third, to the payment of all principal, accrued
interest remaining unpaid on the Note and Make Whole Premium; fourth, any
surplus to the Borrower or Borrower’s successors or assigns as may be ordered
by the court hearing the foreclosure action.


 


14.      Following
the occurrence of an Event of Default, unless the same has been specifically
waived in writing, Borrower shall forthwith upon demand of Lender surrender to
Lender possession of the Premises, and Lender shall be entitled to take actual
possession of the Premises or any part thereof personally or by its agents or
attorneys, and Lender in its discretion may, with or without force and with or
without process of law, enter upon and take and maintain possession of all or
any part of the Premises together with all documents, books, records, papers
and accounts of the Borrower or the then owner of the Premises relating thereto,
and may exclude Borrower, its agents or assigns wholly therefrom, and may as
attorney-in-fact or agent of the Borrower, or in its own name as Lender and
under the powers herein granted:


 


(a)       hold,
operate, maintain, repair, rebuild, replace, alter, improve, manage or control
the Premises as it deems judicious, insure and reinsure the same and any risks
related to Lender’s possession, operation and management thereof and receive
all Rents, either personally or by its agents, and with full power to use such
measures, legal or equitable, as in its discretion it deems proper or necessary
to enforce the payment or security of the Rents, including actions for the
recovery of Rent, actions in forcible detainer and actions in distress for
Rents, hereby granting full power and authority to exercise each and every of
the rights, privileges and powers herein granted at any and all times
hereafter, without notice to Borrower; and


 


(b)       conduct
leasing activity pursuant to the provisions of the Assignment of Leases.


 


Lender shall not be
obligated to perform or discharge, nor does it hereby undertake to perform or
discharge, any obligation, duty or liability under any Lease. Except to the


 


27

















 


extent that the same is
caused solely by Lender’s gross negligence or willful misconduct, should Lender
incur any liability, loss or damage under any Leases, or under or by reason of
the Assignment of Leases, or in the defense of any claims or demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements in any Lease, the amount thereof, including costs, expenses and
reasonable attorneys’ fees and costs, including reasonable attorneys’ fees and
costs on appeal, shall be added to the Indebtedness and secured hereby.


 


15.      Upon
the occurrence of an Event of Default, Lender in the exercise of the rights and
powers conferred upon it shall have the full power to use and apply the Rents,
less costs and expenses of collection to the payment of or on account of the
items listed in (a) – (c) below, at the election of Lender and in such order as
Lender may determine as follows:


 


(a)       to
the payment of (i) the expenses of operating and maintaining the Premises,
including, but not limited to the cost of management, leasing (which shall
include reasonable compensation to Lender and its agent or agents if management
and/or leasing is delegated to an agent or agents), repairing, rebuilding,
replacing, altering and improving the Premises, (ii) premiums on insurance as
hereinabove authorized, (iii) taxes and special assessments now due or which
may hereafter become due on the Premises and (iv) expenses of placing the
Premises in such condition as will, in the sole judgment of Lender, make it
readily rentable;


 


(b)       to
the payment of any principal, interest or any other Indebtedness secured hereby
or any deficiency which may result from any foreclosure sale;


 


(c)       to
the payment of established claims for damages, if any, reasonable attorneys’
fees and costs and reasonable attorneys’ fees and costs on appeal.


 


The manner of the
application of Rents, the reasonableness of the costs and charges to which such
Rents are applied and the item or items which shall be credited thereby shall
be within the sole and unlimited discretion of Lender. To the extent that the
costs and expenses in (a) and (c) above exceed the amounts collected, the
excess shall be added to the Indebtedness and secured hereby.


 


16.      Upon
the occurrence of any Event of Default, unless the same has been specifically
waived in writing, Lender may apply to any court having jurisdiction for the
appointment of a receiver of the Premises. Such appointment may be made either
before or after sale, without notice, without regard to the solvency or
insolvency of Borrower at the time of application for such receiver and without
regard to the then value of the Premises or the adequacy of Lender’s security.
Lender may be appointed as such receiver. The receiver shall have the power to
collect the Rents during the pendency of any foreclosure proceeding and, in case of a sale, during the full


 


28

















 


statutory period
of redemption, if any, as well as during any further times when Borrower,
except for the intervention of such receiver, would be entitled to collect such
Rents. In addition, the receiver shall have all other powers which shall be
necessary or are usual in such cases for the protection, possession, control,
management and operation of the Premises during the whole of said period. The
court from time to time may authorize the receiver to apply the net income in
its possession at Lender’s election and in such order as Lender may determine
in payment in full or in part of those items listed in paragraph 15.


 


17.      (a)       Borrower
agrees that all reasonable costs, charges and expenses, including but not
limited to,


 


reasonable
attorneys’ fees and costs, incurred or expended by Lender arising out of or in
connection with any action, proceeding or bearing, legal, equitable or
quasi-legal, including the preparation therefor and any appeal therefrom, in
any way affecting or pertaining to the Loan Documents, the Environmental
Indemnity or the Premises, shall be promptly paid by Borrower. All such sums
not promptly paid by Borrower shall be added to the Indebtedness secured hereby
and shall bear interest at the Default Rate from the date of such advance and
shall be due and payable on demand.


 


(b)       Borrower
hereby agrees that upon the occurrence of an Event of Default and the
acceleration of the principal sum secured hereby pursuant to this Mortgage, to
the full extent that such rights can be lawfully waived, Borrower hereby waives
and agrees not to insist upon, plead, or in any manner take advantage of, any
notice of acceleration, any stay, extension, exemption, homestead, marshaling
or moratorium law or any law providing for the valuation or appraisement of all
or any part of the Premises prior to any sale or sales thereof under any
provision of this Mortgage or before or after any decree, judgment or order of
any court or confirmation thereof, or claim or exercise any right to redeem all
or any part of the Premises so sold and hereby expressly waives to the full
extent permitted by applicable law on behalf of itself and each and every
person or entity acquiring any right, title or interest in or to all or any
part of the Premises, all benefit and advantage of any such laws which would
otherwise be available to Borrower or any such person or entity, and agrees
that neither Borrower nor any such person or entity will invoke or utilize any
such law to otherwise hinder, delay or impede the exercise of any remedy
granted or delegated to Lender herein but will permit the exercise of such
remedy as though any such laws had not been enacted. Borrower hereby further
expressly waives to the full extent permitted by applicable law on behalf of
itself and each and every person or entity acquiring any right, title or interest
in or to all or any part of the Premises any and all rights of redemption from
any sale or any order or decree of foreclosure obtained pursuant to provisions
of this Mortgage.


 


18.      In
accordance with and subject to the terms and conditions of the Assignment of
Leases, Borrower hereby assigns to Lender directly and absolutely, and not
merely collaterally, the interest of Borrower as lessor under the Leases of the
Premises, and


 


29

















 


the Rents payable
under any Lease and/or with respect to the use of the Premises, or portion
thereof, including any oil, gas or mineral lease, or any installments of money
payable pursuant to any agreement or any sale of the Premises or any part
thereof, subject only to a license, if any, granted by Lender to Borrower with
respect thereto prior to the occurrence of an Event of Default. Borrower has
executed and delivered the Assignment of Leases which grants to Lender specific
rights and remedies in respect of said Leases and governs the collection of
Rents thereunder and from the use of the Premises, and such rights and remedies
so granted shall be cumulative of those granted herein.


 


The collection of such
Rents and the application thereof as aforesaid shall not cure or waive any Event
of Default or notice of default hereunder or invalidate any act done pursuant
to such notice, except to the extent any such Event of Default is fully cured.
Failure or discontinuance of Lender at any time, or from time to time, to
collect any such moneys shall not impair in any manner the subsequent
enforcement by Lender of the right, power and authority herein conferred on
Lender. Nothing contained herein, including the exercise of any right, power or
authority herein granted to Lender, shall be, or be construed to be, an
affirmation by Lender of any tenancy, Lease or option, or an assumption of
liability under, or the subordination of the lien or charge of this Mortgage to
any such tenancy, Lease or option. Borrower hereby agrees that, in the event Lender
exercises its rights as provided for in this paragraph or in the Assignment of
Leases, Borrower waives any right to compensation for the use of Borrower’s
furniture, furnishings or equipment in the Premises for the period such
assignment of rents or receivership is in effect, it being understood that the
Rents derived from the use of any such items shall be applied to Borrower’s
obligations hereunder as above provided.


 


19.      All
rights and remedies granted to Lender in the Loan Documents shall be in addition
to and not in limitation of any rights and remedies to which it is entitled in
equity, at law or by statute, and the invalidity of any right or remedy herein
provided by reason of its conflict with applicable law or statute shall not
affect any other valid right or remedy afforded to Lender. No waiver of any
default or Event of Default under any of the Loan Documents shall at any time
thereafter be held to be a waiver of any rights of the Lender hereunder, nor
shall any waiver of a prior Event of Default or default operate to waive any
subsequent Event of Default or default. All remedies provided for in the Loan
Documents are cumulative and may, at the election of Lender, be exercised
alternatively, successively or concurrently. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision or to proceed against one portion of the
Premises to the exclusion of any other portion. Time is of the essence under
this Mortgage and the Loan Documents.


 


20.      By
accepting payment of any sum secured hereby after its due date, Lender does not
waive its right either to require prompt payment when due of all other sums or


 


30

















 


installments so secured
or to declare a default for failure to pay such other sums or installments.


 


21.      The
usury provisions of paragraph 6 of the Note and the limitation of recourse
liability provisions of paragraph 9 of the Note are fully incorporated herein
by reference as if the same were specifically stated here.


 


22.      In
the event one or more provisions of the Loan Documents shall be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof, and the Loan
Documents shall be construed as if any such provision had never been contained
herein.


 


23.      If
the payment of the Indebtedness secured hereby or of any part thereof shall be
extended or varied, or if any part of the security be released, all persons now
or at any time hereafter liable therefor, or interested in said Premises, shall
be held to assent to such extension, variation or release, and their liability
and the lien and all provisions hereof shall continue in full force, the right
of recourse against all such persons being expressly reserved by Lender
notwithstanding such variation or release.


 


24.      Upon
payment in full of the principal sum, interest and other Indebtedness secured
by the Loan Documents, these presents shall be null and void, and Lender shall
release this Mortgage and the lien hereof by proper instrument executed in
recordable form.


 


25.      (a)       Borrower
hereby grants to Lender and its respective agents, attorneys, employees,
consultants, contractors and assigns an irrevocable license and authorization
to enter upon and inspect the Premises and all facilities located thereon at
reasonable times, subject to the inspection rights provisions afforded to
Borrower under the Leases. Lender shall make reasonable efforts to ensure that
the operations of tenants are not disrupted.


 


(b)       In
connection with any sale or conveyance of this Mortgage, Borrower grants to
Lender and its respective agents, attorneys, employees, consultants,
contractors and assigns an irrevocable license and authorization to conduct, at
Lender’s expense, a Phase I environmental audit of the Premises, subject to the
inspection rights provisions afforded to Borrower under the Leases.


 


(c)       In
the event there has been an Event of Default or in the event Lender has formed
a reasonable belief, based on its inspection of the Premises or other factors
known to it, that Hazardous Materials may be present on the Premises, then
Borrower grants to Lender and its respective agents, attorneys, employees,
consultants, contractors and assigns an irrevocable license and authorization
to conduct, at Borrower’s expense using Professional Industry Services, Inc. or
the firm of Borrower’s choice, subject to Lender’s reasonable approval,
environmental tests of the Premises, including without limitation, a Phase I
environmental audit, subsurface testing, soil and ground water testing, and
other


 


31

















 


tests which may
physically invade the Premises or facilities (the “Tests”). The scope of
the Tests shall be such as Lender, in its sole discretion, determines is
necessary to (i) investigate the condition of the Premises, (ii) protect the
security interests created under this Mortgage, or (iii) determine compliance
with Environmental Laws, the provisions of the Loan Documents and the
Environmental Indemnity and other matters relating thereto. Lender shall make
reasonable efforts to ensure that the operations of the tenants are not
disrupted.


 


(d)       Provided
no Event of Default has occurred, Lender will provide Borrower with reasonable
notice of Lender’s intent to enter, inspect and conduct the Tests provided for
in this paragraph. In addition, Lender shall conduct such inspections and Tests
during normal business hours and use reasonable efforts to minimize disruption
of the lessees’ business operations.


 


The foregoing licenses
and authorizations are intended to be a means of protection of Lender’s
security interest in the Premises and not as participation in the management of
the Premises.


 


26.      Within
15 days after any written request by either party to this Mortgage, the
requested party shall certify, by a written statement duly acknowledged, the
amount of principal, interest and other Indebtedness then owing on the Note,
the terms of payment, Maturity Date and the date to which interest has been
paid. Borrower shall further certify whether any defaults, offsets or defenses
exist against the Indebtedness secured hereby. Borrower shall also furnish to
Lender, within 30 days of its request therefor, tenant estoppel letters from
such tenants of the Premises as Lender may reasonably require; which Lender
shall not request more than one (1) time per annum, nor more than one (1) time
prior to the date of the Securitization Transaction.


 


27.      Each
notice, consent, request, report or other communication under this Mortgage or
any other Loan Document (each a “Notice”) which any party hereto may
desire or be required to give to the other shall be deemed to be an adequate
and sufficient notice if given in writing and service is made by either (i)
registered or certified mail, postage prepaid, in which case notice shall be
deemed to have been received three (3) business days following deposit to U.S.
mail; or (ii) nationally recognized overnight air courier, next day delivery,
prepaid, in which case such notice shall be deemed to have been received one
(1) business day following delivery to such nationally recognized overnight air
courier. All Notices shall be addressed to Borrower at its address given on the
first page hereof or to Lender at c/o Principal Real Estate Investors, LLC, 801
Grand Avenue, Des Moines, Iowa 50392-1450, Attn: Commercial Real Estate
Servicing, Loan No. 755098, or to such other place as either party may by
written notice to the other hereafter designate as a place for service of
notice. Borrower shall not be permitted to designate more than one place for
service of Notice concurrently.


 


32

















 


28.      This
Mortgage and all provisions hereof shall inure to the benefit of the heirs,
successors and assigns of Lender and shall bind the heirs and permitted
successors and assigns of Borrower.


 


29.      With
respect to the fixtures hereinabove described, this Mortgage shall constitute a
security agreement between Borrower, as debtor, and Lender, as secured party,
and, cumulative of all other rights of Lender hereunder, Lender shall have all
of the rights conferred upon secured parties by the South Carolina Uniform
Commercial Code. Further, Borrower and Lender agree that this Mortgage, when
recorded, shall be effective as a financing statement perfecting Lender’s
security interest in the fixtures described in this Mortgage. The address of
the Borrower as set forth above is the mailing address for Borrower, as debtor,
for purposes of the South Carolina Uniform Commercial Code and the address of
the Lender set forth above is the address of the Lender as secured party, from
which information concerning Lender’s security interest granted herein can be
obtained as required under the South Carolina Uniform Commercial Code. Borrower
agrees to pay Lender’s charge to the maximum amount permitted by law, for any
statement by the Lender regarding the obligations secured by this Mortgage
requested by Borrower or on behalf of Borrower. On demand, Borrower will
promptly pay all costs and expenses of filing statements, continuation
statements, partial releases, and termination statements deemed necessary or
appropriate by Lender to establish and maintain the validity and priority of the
security interest of Lender, or any modification thereof, and all costs and
expenses of any searches reasonably required by Lender, Lender may exercise any
or all of the remedies of a secured party available to it under the South
Carolina Uniform Commercial Code with respect to such property and it is
expressly agreed in accordance with the provisions of the South Carolina
Uniform Commercial Code, five (5) days notice by Lender to Borrower shall be
deemed to be reasonable notice under any provision of the South Carolina
Uniform Commercial Code requiring such notice; provided, however, that Lender
may at its option dispose of the collateral in accordance with the Lender’s
rights and remedies in respect to the real property pursuant to the provisions
of this Mortgage, in lieu of proceeding under the South Carolina Uniform
Commercial Code.


 


30.      Borrower
has had the opportunity to fully negotiate the terms hereof and modify the
draftsmanship of the Loan Documents and the Environmental Indemnity. Therefore,
the terms of the Loan Documents and the Environmental Indemnity shall be
construed and interpreted without any presumption, inference, or rule requiring
construction or interpretation of any provision of the Loan Documents and the
Environmental Indemnity against the interest of the party causing the Loan
Documents and the Environmental Indemnity or any portion of it to be drafted.
Borrower is entering into the Loan Documents and the Environmental Indemnity
freely and voluntarily without any duress, economic or otherwise.


 


31.      This
Mortgage shall be governed by, and construed in accordance with the laws of the
state of South Carolina, without regard to its conflicts of law principles.


 


33

















 


32.      As
used herein, the term “Default Rate” means a rate equal to the lesser of
(i) four percent (4%) per annum above the then applicable interest rate payable
under the Note or (ii) the maximum rate allowed by applicable law.


 


33.      BORROWER
AND LENDER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE, TO THE EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTIONS BROUGHT BY BORROWER OR LENDER IN
CONNECTION WITH THIS MORTGAGE, ANY OF THE LOAN DOCUMENTS, THE INDEBTEDNESS
SECURED HEREBY, OR ANY OTHER STATEMENTS OR ACTIONS OF LENDER.


 


34.      This
Mortgage and the Indebtedness secured hereby is for the sole purpose of
conducting or acquiring a lawful business, professional or commercial activity
or for the acquisition or management of real or personal property as a
commercial investment, and all proceeds of such Indebtedness shall be used for
said business or commercial investment purpose. Such proceeds will not be used
for the purchase of any security within the meaning of the Securities Exchange
Act of 1934, as amended, or any regulation issued pursuant thereto, including
without limitation, Regulations U, T and X of the Board of Governors of the
Federal Reserve System. This is not a purchase money mortgage where a seller is
providing financing to a buyer for the payment of all or any portion of the
purchase price, and the Premises secured hereby is not a residence or homestead
or used for mining, grazing, agriculture, timber or farming purposes.


 


35.      Unless
Lender shall otherwise direct in writing, Borrower shall appear in and defend
all actions or proceedings purporting to affect the security hereunder, or any
right or power of the Lender, excluding any Federal regulatory proceedings
against Lender that are not instituted because of any act or omission by
Borrower, any Interest Owner or which result from the Premises. The Lender
shall have the right to appear in such actions or proceedings. Borrower shall
save Lender harmless from all reasonable costs and expenses, including but not
limited to, reasonable attorneys’ fees and costs, and costs of a title search,
continuation of abstract and preparation of survey incurred by reason of any
action, suit, proceeding, hearing, motion or application before any court or
administrative body in and to which Lender may be or become a party by reason
hereof, excluding any Federal regulatory proceedings against Lender that are
not instituted because of any act or omission by Borrower, any Interest Owner
or which result from the Premises. Such proceedings shall include but not be
limited to condemnation, bankruptcy, probate and administration proceedings, as
well as any other action, suit, proceeding, right, motion or application
wherein proof of claim is by law required to be filed or in which it becomes
necessary to defend or uphold the terms of this Mortgage or the Loan Documents
or otherwise purporting to affect the security hereof or the rights or powers
of Lender. All money paid or expended by Lender in that regard, together with
interest thereon from date of


 


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such payment at the
Default Rate shall be additional Indebtedness secured hereby and shall be
immediately due and payable by Borrower without notice.


 


36.      Upon
the occurrence of an Event of Default, unless the same has been specifically
waived in writing, all Rents collected or received by Borrower shall be
accepted and held for Lender in trust and shall not be commingled with the
funds and property of Borrower, but shall be promptly paid over to Lender.


 


37.      If
more than one, all obligations and agreements of Borrower are joint and
several.


 


38.      This
Mortgage may be executed in counterparts, each of which shall be deemed an
original; and such counterparts when taken together shall constitute but one
agreement.


 


REMAINDER OF PAGE INTENTIONALLY BLANK

(Signatures on next page)


 


35

















 


SIGNATURE PAGE OF BORROWER TO

MORTGAGE AND SECURITY AGREEMENT


 


39.      WAIVER
OF APPRAISAL RIGHTS. The laws of South Carolina provide that in any real
estate foreclosure proceeding a defendant against whom a personal judgment is
taken or asked may within thirty days after the sale of the mortgaged property
apply to the court for an order of appraisal. The statutory appraisal value as
approved by the court would be substituted for the high bid and may decrease
the amount of any deficiency owing in connection with the transaction. BORROWER HEREBY WAIVES AND RELINQUISHES THE STATUTORY
APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL
BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED
PROPERTY.


 


IN WITNESS
WHEREOF, Borrower has caused this Mortgage and Security Agreement to be duly
executed and delivered as of the date first above written.


 


	
   

  	
   

  	
  INLAND
  AMERICAN GREENVILLE

  
	
   

  	
   

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

  
	
   

  	
   

  	
  company

  
	
  Witnesses:

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  Inland American Ceruzzi
  Greenville Pleasantburg

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
  company, Sole Member

  
	
    /s/ Ruth E. Winter

  	
   

  	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  Ruth
  E. Winter

  	
   

  	
   

  	
   

  	
  By: 

  	
  Inland American
  Greenville Pleasantburg

  
	
   

  	
   

  	
   

  	
   

  	
  Member II, L.L.C., a
  Delaware limited

  
	
   

  	
   

  	
   

  	
   

  	
  liability company,
  Manager

  
	
    /s/
  Elizabeth A. Irving

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  Elizabeth A. Irving

  	
   

  	
   

  	
   

  	
   

  	
  By: 

  	
  Inland American Real
  Estate Trust,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Inc., a Maryland
  corporation, Sole 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   /s/
  Valerie Medina

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   Valerie
  Medina

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   Assistant
  Secretary

  	
   

  
													



 


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