Exhibit 10.99


 


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


 


755086


 


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 SICKLERVILLE,
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 (“Borrower”), as mortgagor, and PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation (“Lender”), as mortgagee.


 


WITNESSETH:


 


B.                       Borrower is justly indebted to Lender for money borrowed (the “Loan”)
in the original principal sum of Eight Million Five Hundred Thirty Five
Thousand and No/100 Dollars ($8,535,000.00) (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. All of the terms
and conditions of the Note are hereby incorporated by reference as though set
forth at length herein. 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 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.


 


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Borrower does by these presents mortgage,
give, grant, bargain, and sell, with mortgage covenants, 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 Camden,
state of New Jersey designated as Lot No. 4.01, Block 502, on the tax map
of Winslow Township in said county, 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 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
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


 


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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”).


 


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


 


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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 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,


 


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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, which late
charge Borrower acknowledges is not a penalty but rather is a charge that
reasonably estimates the additional expense to be incurred by Lender 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;


 


(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


 


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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 l(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 Giant of Maryland, 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 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 l(g) by Major


 


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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; and


 


(k)                    remain
a Single-Purpose Entity.


 


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, 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;


 


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(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;


 


(ii)                    a
Transfer of any ownership interest in Borrower or any entity which owns, directly
or indirectly, an interest in Borrower at any level of the ownership structure;
or


 


(iii)                 in addition to (i) and (ii) above,
if the Borrower is a trust, or if a trust owns an interest, directly or
indirectly, in any entity which owns an interest in Borrower at any level of
the ownership structure, the addition, deletion or substitution of a trustee of
such trust; or


 


If any of such events occur, it shall be null and void
and shall constitute an Event of Default under the Loan Documents.


 


It is understood and agreed that the Indebtedness
evidenced by the Note is personal to Borrower and in reliance upon the
ownership structure of Borrower


 


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and in accepting the same Lender has relied upon what
it perceived as the willingness and ability of Borrower and the Interest Owners
to perform its obligations under the Loan Documents and the Environmental
Indemnity and as lessor under the Leases of the Premises. Furthermore, Lender may consent
to a Transfer and expressly waive Borrower’s covenants contained in this
paragraph 2(f), in writing to Borrower; however any such consent and waiver
shall not constitute any consent or waiver of such covenants as to any Transfer
other than that for which the consent and waiver was expressly granted.
Furthermore, Lender’s willingness to consent to any Transfer and waive Borrower’s
covenants contained in this paragraph 2(f), implies no standard of
reasonableness in determining whether or not such consent shall be granted and
the same may be based upon what Lender solely deems to be in its best
interest.


 


For purposes of the Loan Documents, the following
terms shall have the respective meanings set forth below:


 


“Transfer” or “Transferred” shall mean
with respect to the Premises, an interest in the Premises, or an ownership
interest or interest therein:


 


(i)                       a
sale, assignment, transfer, conveyance or other disposition (whether voluntary,
involuntary or by operation of law);


(ii)                    the
creation, sufferance or granting of any lien, encumbrance, security interest or
collateral assignment (whether voluntarily, involuntarily or by operation of
law), other than the lien hereof, the leases of the Premises assigned to
Lender, the Permitted Encumbrances, the granting of a lien on a tenant’s interest
under any Lease in accordance with the terms specifically set forth therein,
and those liens which Borrower is contesting in accordance with the provisions
of paragraph l(e);


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


(iv)                the
reconstitution or conversion from one entity to another type of entity;


(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


 


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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;


 


(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);


 


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(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; or


 


(viii)          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; 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.


 


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“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;


 


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:


 


12

















 


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 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;


 


13

















 


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 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:


 


14

















 


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 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;


 


15

















 


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.


 


“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


 


16

















 


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) 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


 


17

















 


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. Borrower shall not claim or demand or be entitled to
any credit on account of the Indebtedness secured hereby for any part of
the taxes paid with respect to the Premises or part thereof, and no
deduction shall otherwise be made or claimed from the taxable value of the
Premises, or any part thereof, by reason of this Mortgage. Further, in the
event of the passage of any law of the United States or of the State of New
Jersey providing for the taxation of any mortgages or debts secured by
mortgage, for federal, state or local purposes, so as to affect this Mortgage,
Borrower shall pay when due, or reimburse Lender on demand for the payment of,
such tax. 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.


 


(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


 


18

















 


(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
covenants that the buildings on the Premises shall be kept insured against loss
by fire for the benefit of Lender. Further, 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 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


 


19

















 


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 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).


 


20

















 


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.


 


(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.


 


21

















 


(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 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


 


22

















 


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.


 


(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.


 


23

















 


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 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


 


24

















 


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; 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


 


25

















 


(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


 


(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


 


26

















 


(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,
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


 


27

















 


the true condition of the title to or the value of the
Premises. Further, Lender shall have the right, upon the occurrence of an Event
of Default, to exercise any or all of the remedies available to a secured party
under the Uniform Commercial Code as now or hereafter adopted in the State
of New Jersey.


 


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 their rights may appear.


 


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 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


 


28

















 


under or by reason of the Assignment of Leases, or in
the defense of my 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 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


 


29

















 


such Rents. Borrower hereby consents to the foregoing
and waives any right to object to such appointment. 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 hearing, 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.
Such expenses shall include but not be limited to reasonable expenses
(including the reasonable fees and expenses of legal counsel for Lender)
incurred in connection with (a) the preservation and enforcement of Lender’s
liens and security interests under this Mortgage, (b) the protection,
exercise or enforcement of Lender’s rights with respect to the Premises
including (without limitation) Lender’s rights to (i) collect or take
possession of the Premises and the proceeds thereof, (ii) hold the
Premises, (iii) prepare the Premises for sale or other disposition and (iv) sell
or otherwise dispose of the Premises, and (c) the assertion, protection,
exercise or enforcement of Lender’s rights in any proceeding under the United
States Bankruptcy Code, including (without limitation) the preparation, filing
and prosecution of (i) proofs of claim, (ii) motions for relief from
the automatic stay, (iii) motions for adequate protection, and (iv) complaints,
answers and other pleadings in adversary proceedings by or against Lender or
relating in any way to the Premises. 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


 


30

















 


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. To the
extent permitted by law, Borrower hereby waives and releases all procedural
errors, defects and imperfections in any proceedings instituted by Lender under
the terms of this Mortgage, the Note and the other Loan Documents.


 


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 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


 


31

















 


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
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.


 


32

















 


(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 EMG Corp. 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 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


 


33

















 


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. 755086,
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.


 


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.                 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.


 


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


 


31.                 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.
Borrower acknowledges that the Default Rate is not a penalty, but rather is a
rate of interest negotiated by the parties to compensate Lender for the
increased credit risk to which Lender is subjected by reason of the occurrence
of one or more Events of Default.


 


32.                 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.


 


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33.                 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.


 


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


 


35.                 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.


 


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


 


37.                 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.


 


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38.                 Borrower
and Lender may agree to change the interest rate, Maturity Date, or other
term or terms of this Mortgage, or any of the Loan Documents, or of the
Indebtedness secured hereby. Any such agreement shall be in writing, duly
executed by both Borrower and Lender. In the event that any such agreement
shall occur, it shall, to the extent permitted by law, be deemed a “modification”
as defined in N.J.S.A. §46:9-8.1 et  seq., and this
Mortgage shall be subject to, and Lender shall be the beneficiary of, the
mortgage lien priority provisions of N.J.S.A. §46:9-8.2. Further, all
advances made under the Loan Documents, including any future advances, whether
or not entitled to priority under N.J.S.A. §46:9-8.2, shall be deemed to
be obligatory advances when made, shall be secured hereby, and shall, to the
maximum extent possible under the law, relate back as to lien priority to the
date when this Mortgage was left for recording with the Camden County recorder
of deeds. By placing or accepting any lien or encumbrance against any or all of
the Premises, the holder thereof shall be deemed to have agreed to the maximum
extent possible under the law that its lien or encumbrance shall be subject and
subordinate in lien priority to this Mortgage and to any subsequent advances
made under the Loan Documents, to all accrued and unpaid interest and to all
other sums secured hereby.


 


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


 


REMAINDER OF PAGE INTENTIONALLY BLANK 

(Signatures on next page)


 


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SIGNATURE PAGE OF BORROWER TO 

MORTGAGE AND SECURITY AGREEMENT


 


 


	
   

  	
   

  	
  INLAND AMERICAN SICKLERVILLE, L.L.C., 

  a Delaware limited liability company

  
	
  



  	
   

  	
  

  By:

  	
  

  Inland American Ceruzzi
  Sicklerville Member,

  L.L.C., a Delaware limited liability company, Sole

  Member

  
	
   

  	
   

  	
   

  	
  

  By:

  	
  

  Inland American Sicklerville Member II,

  L.L.C., a Delaware limited liability

  company, Manager

  
	
  Attest:

  	
   

  	
   

  	
   

  	
  

  By:

  	
  

  Inland American Real
  Estate Trust,

  Inc., a Maryland corporation, Sole

  Member



  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Valerie Medina

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Valerie
  Medina

  
	
  /s/ Ruth E. Winter

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant
  Secretary

  
	
  Ruth E. Winter

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									



 


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