Document:

Exhibit 10.40

 

MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

 

 

 

 

MB
LONGVIEW TRIANGLE, L.L.C.,

a Delaware limited
liability company, as mortgagor (Borrower)

 

for the benefit of

 

LASALLE
BANK NATIONAL ASSOCIATION, a national banking association,

as beneficiary
(Lender)

 

 

This document
serves as a Fixture Filing under the Uniform Commercial Code.

 

 

Borrower’s
Organizational No.:  4062188

 

	
  Dated:

  	
   

  	
  As of February 9, 2006

  
	
  Location:

  	
   

  	
  Longview, Washington

  
	
  County:

  	
   

  	
  Cowlitz

  

 

Borrower’s Federal Tax
I.D. No.:  20-3827062

 

	
  PREPARED BY AND UPON

  
	
  RECORDATION RETURN TO:

  
	
   

  
	
  Katten Muchin Rosenman LLP

  
	
  525 West Monroe Street

  
	
  Chicago, Illinois 60661-3693

  
	
  Attention: 
  Victoria Shusterman, Esq.

  

 

 

THIS MORTGAGE, SECURITY
AGREEMENT AND FIXTURE FILING (this “Mortgage”)
is made as of this 9th day of February, 2006 by MB LONGVIEW TRIANGLE, L.L.C., a Delaware limited liability
company,  having its principal place of
business at 2901 Butterfield Road, Oak Brook, Illinois 60523, as mortgagor
(“Borrower”), in favor of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, having an address at
135 South LaSalle Street, Suite 2905, Chicago, Illinois 60603, as
beneficiary (“Lender”).

 

W I T N E S S E T
H:

 

WHEREAS, pursuant to that certain Loan Agreement dated
as of the date hereof between Borrower and Lender (as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, the “Loan Agreement”), Borrower has
agreed to borrow from Lender the sum of TWENTY-THREE MILLION SIX HUNDRED THOUSAND
AND NO/100 DOLLARS ($23,600,000.00)
(the “Loan”) as evidenced by that certain
Promissory Note dated the date hereof made by Borrower to Lender (such Note,
together with all extensions, renewals, replacements, restatements or
modifications thereof being hereinafter referred to as the “Note”).  The final payment of the principal and
interest due under the Note, if not sooner paid or payable as provided therein,
is due on March 1, 2011;

 

WHEREAS, Borrower desires to secure the payment of the
Debt (as defined in the Loan Agreement) and the performance of all of its
obligations under the Note, the Loan Agreement and the other Loan Documents;
and

 

WHEREAS, this Mortgage is that certain “Mortgage” as
defined in the Loan Agreement, and payment, fulfillment, and performance by
Borrower of its obligations thereunder and under the other Loan Documents are,
subject to the limitations set forth herein, secured hereby, and each and every
term and provision of the Loan Agreement and the Note, including the rights, remedies,
obligations, covenants, conditions, agreements, indemnities, representations
and warranties of the parties therein, are hereby incorporated by reference
herein as though set forth in full and shall be considered a part of this
Mortgage (the Loan Agreement, the Note, this Mortgage, that certain Assignment
of Leases and Rents of even date herewith made by Borrower in favor of Lender
(the “Assignment of Leases”) and all
other documents evidencing or securing the Debt are hereinafter referred to
collectively as the “Loan Documents”).

 

NOW THEREFORE, in consideration of the making of the
Loan by Lender and the covenants, agreements, representations and warranties
set forth in this Mortgage:

 

ARTICLE I

 

GRANTS OF SECURITY

 

1.1                                 Property
Mortgaged.  Borrower does hereby
irrevocably mortgage, give, grant, bargain, sell, alienate, enfeoff, convey,
confirm, warrant, pledge, assign, hypothecate and

 

 

grant a security interest in and to Lender the
following property, rights, interests and estates now owned, or hereafter
acquired by Borrower (collectively, the “Property”):

 

(a)                                  Land.  The real property described in Exhibit A
attached hereto and made a part hereof (the “Land”);

 

(b)                                 Additional
Land.  All additional lands, estates
and development rights hereafter acquired by Borrower for use in connection
with the Land and the development of the Land and all additional lands and
estates therein which may, from time to time, by supplemental mortgage or
otherwise be expressly made subject to the lien of this Mortgage;

 

(c)                                  Improvements.  The buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter erected or located on the Land (collectively, the
“Improvements”);

 

(d)                                 Easements.  All easements, rights-of-way or use, rights,
strips and gores of land, streets, ways, alleys, passages, sewer rights, water,
water courses, water rights and powers, air rights and development rights, and
all estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and
all land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;

 

(e)                                  Equipment.  All “equipment,” as such term is defined in Article 9
of the Uniform Commercial Code, now owned or hereafter acquired by Borrower,
which is used at or in connection with the Improvements or the Land or is
located thereon or therein (including, but not limited to, all machinery,
equipment, furnishings, and electronic data-processing and other office
equipment now owned or hereafter acquired by Borrower and any and all
additions, substitutions and replacements of any of the foregoing), together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto (collectively, the “Equipment”).  Notwithstanding the foregoing, Equipment
shall not include any property belonging to tenants under leases except to the
extent that Borrower shall have any right or interest therein;

 

(f)                                    Fixtures.  All Equipment now owned, or the ownership of
which is hereafter acquired, by Borrower which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or real
property under the law of the particular state in which the Equipment is
located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment, appliances, machinery,
plant equipment, fittings, apparatuses, fixtures and other items now or
hereafter attached to, installed in or used in connection with

 

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(temporarily or permanently) any of the Improvements
or the Land, including, but not limited to, engines, devices for the operation
of pumps, pipes, plumbing, cleaning, call and sprinkler systems, fire
extinguishing apparatuses and equipment, heating, ventilating, plumbing,
laundry, incinerating, electrical, air conditioning and air cooling equipment
and systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds, and water, gas,
electrical, storm and sanitary sewer facilities, utility lines and equipment
(whether owned individually or jointly with others, and, if owned jointly, to
the extent of Borrower’s interest therein) and all other utilities whether or
not situated in easements, all water tanks, water supply, water power sites,
fuel stations, fuel tanks, fuel supply, and all other structures, together with
all accessions, appurtenances, additions, replacements, betterments and
substitutions for any of the foregoing and the proceeds thereof (collectively,
the “Fixtures”).  Notwithstanding the foregoing, “Fixtures”
shall not include any property which tenants are entitled to remove pursuant to
leases except to the extent that Borrower shall have any right or interest
therein;

 

(g)                                 Personal
Property.  All furniture,
furnishings, objects of art, machinery, goods, tools, supplies, appliances,
general intangibles, contract rights, accounts, accounts receivable,
franchises, licenses, certificates and permits, and all other personal property
of any kind or character whatsoever (as defined in and subject to the
provisions of the Uniform Commercial Code as hereinafter defined), other than
Fixtures, which are now or hereafter owned by Borrower and which are located
within or about the Land and the Improvements, together with all accessories,
replacements and substitutions thereto or therefor and the proceeds thereof
(collectively, the “Personal Property”),
and the right, title and interest of Borrower in and to any of the Personal
Property which may be subject to any security interests, as defined in the
Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (the “Uniform Commercial Code”),
superior in lien to the lien of this Mortgage and all proceeds and products of
the above;

 

(h)                                 Leases
and Rents.  All leases, subleases or
sub-subleases, lettings, licenses, concessions or other agreements (whether
written or oral) pursuant to which any Person is granted a possessory interest
in, or right to use or occupy all or any portion of the Land and the
Improvements, and every modification, amendment or other agreement relating to
such leases, subleases, sub-subleases, or other agreements entered into in
connection with such leases, subleases, sub-subleases, or other agreements and
every guarantee, of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto,
heretofore or hereafter entered into, whether before or after the filing by or
against Borrower of any petition for relief under 11 U.S.C. §101 et seq.,
as the same may be amended from time to time (the “Bankruptcy
Code”) (collectively, the “Leases”)
and all right, title and interest of Borrower, its successors and assigns
therein and thereunder, including, without limitation, cash or securities
deposited thereunder to secure the performance by the lessees of their
obligations thereunder and all rents, additional rents, revenues, issues and
profits (including all oil and gas or other mineral royalties and bonuses) from
the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any

 

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petition for relief under the Bankruptcy Code
(collectively, the “Rents”) and
all proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt;

 

(i)                                     Condemnation
Awards.  All awards or payments,
including interest thereon, which may heretofore and hereafter be made with
respect to the Property, whether from the exercise of the right of eminent
domain (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of the right), or for a change of grade, or for
any other injury to or decrease in the value of the Property subject to the
terms, provisions and conditions of the Loan Agreement;

 

(j)                                     Insurance
Proceeds.  All proceeds in respect of
the Property under any insurance policies covering the Property, including,
without limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage to the
Property subject to the terms, provisions and conditions of the Loan Agreement;

 

(k)                                  Tax
Certiorari.  All refunds, rebates or
credits in connection with reduction in real estate taxes and assessments
charged against the Property as a result of tax certiorari or any applications
or proceedings for reduction;

 

(l)                                     Conversion.  All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including, without limitation, proceeds of
insurance and condemnation awards, into cash or liquidation claims;

 

(m)                               Rights.  Subject to the terms, provisions and
conditions of the Loan Agreement, the right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding brought with respect
to the Property and to commence any action or proceeding to protect the
interest of Lender in the Property;

 

(n)                                 Agreements.  All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Borrower thereunder, in each case, to
the extent assignable;

 

(o)                                 Trademarks.  All tradenames, trademarks, servicemarks,
logos, copyrights, goodwill, books and records and all other general
intangibles relating to or used in connection with the operation of the
Property (excluding, however, the name “Inland” and any mark registered to The
Inland Group, Inc., or any of its affiliates), in each case, to the extent
assignable;

 

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(p)                                 Accounts.  All reserves, escrows and deposit accounts
maintained by Borrower with respect to the Property, including without
limitation, all securities, investments, property and financial assets held
therein from time to time and all proceeds, products, distributions or
dividends or substitutions thereon and thereof;

 

(q)                                 Letter
of Credit.  All letter-of-credit
rights (whether or not the letter of credit is evidenced by a writing) Borrower
now has or hereafter acquires relating to the properties, rights, titles and
interests referred to in this Section 1.1;

 

(r)                                    Tort
Claims.  All commercial tort claims
Borrower now has or hereafter acquires relating to the properties, rights,
titles and interests referred to in this Section 1.1; and

 

(s)                                  Other
Rights.  Any and all other rights of
Borrower in and to the items set forth in Subsections (a) through (r)
above.

 

AND without limiting any
of the other provisions of this Mortgage, to the extent permitted by applicable
law, Borrower expressly grants to Lender, as secured party, a security interest
in the portion of the Property which is or may be subject to the provisions of
the Uniform Commercial Code which are applicable to secured transactions; it being
understood and agreed that the Improvements and Fixtures are part and parcel of
the Land (the Land, the Improvements and the Fixtures collectively referred to
as the “Real Property”) appropriated
to the use thereof and, whether affixed or annexed to the Real Property or not,
shall for the purposes of this Mortgage be deemed conclusively to be real
estate and mortgaged hereby.

 

1.2                                 Assignment
of Rents.  Borrower hereby absolutely
and unconditionally assigns to Lender all of Borrower’s right, title and interest
in and to all current and future Leases and Rents; it being intended by
Borrower that this assignment constitutes a present, absolute assignment and
not an assignment for additional security only. 
Nevertheless, subject to the terms of the Assignment of Leases and Section 7.1(h) of
this Mortgage, Lender grants to Borrower a revocable license to collect,
receive, use and enjoy the Rents. 
Borrower shall hold the Rents, or a portion thereof sufficient to
discharge all current sums due on the Debt, for use in the payment of such
sums.

 

1.3                                 Security
Agreement.  This Mortgage is both a
real property mortgage and a “security agreement” within the meaning of the
Uniform Commercial Code.  The Property
includes both real and personal property and all other rights and interests,
whether tangible or intangible in nature, of Borrower in the Property.  By executing and delivering this Mortgage,
Borrower hereby grants to Lender, as security for the Obligations (hereinafter
defined), a security interest in the Fixtures, the Equipment and the Personal
Property and other property constituting the Property, whether now owned or
hereafter acquired, to the full extent that the Fixtures, the Equipment and the
Personal Property may be subject to the Uniform Commercial Code (said portion
of the Property so subject to the Uniform Commercial Code being called the “Collateral”).  THE
COLLATERAL IS OR INCLUDES FIXTURES. If an Event of
Default shall occur and be continuing, Lender, in addition to any other rights
and remedies which it may have, shall have and may exercise immediately and
without demand, any and all rights and

 

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remedies granted to a secured party upon default under
the Uniform Commercial Code, including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Lender may deem necessary for the care,
protection and preservation of the Collateral. 
Upon request or demand of Lender after the occurrence and during the
continuance of an Event of Default, Borrower shall, at its expense, assemble
the Collateral and make it available to Lender at a convenient place (at the
Land if tangible property) reasonably acceptable to Lender.  Borrower shall pay to Lender on demand any and
all expenses, including reasonable legal expenses and attorneys’ fees, incurred
or paid by Lender in protecting its interest in the Collateral and in enforcing
its rights hereunder with respect to the Collateral after the occurrence and
during the continuance of an Event of Default. 
Any notice of sale, disposition or other intended action by Lender with
respect to the Collateral sent to Borrower in accordance with the provisions
hereof at least ten (10) business days prior to such action, shall, except
as otherwise provided by applicable law, constitute commercially reasonable
notice to Borrower.  The proceeds of any
disposition of the Collateral, or any part thereof, may, except as otherwise
required by applicable law, be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem
proper.  Borrower’s (Debtor’s) principal
place of business is as set forth on page one hereof and the address of
Lender (Secured Party) is as set forth on page one hereof.

 

1.4                                 Fixture
Filing.  Certain of the Property is
or will become “fixtures” (as that term is defined in the Uniform Commercial
Code) on the Land, described or referred to in this Mortgage, and this
Mortgage, upon being filed for record in the real estate records of the city or
county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable
provisions of said Uniform Commercial Code upon such of the Property that is or
may become fixtures.

 

Borrower
hereby authorizes Lender at any time and from time to time to file any initial
financing statements, amendments thereto and continuation statements with or
without the signature of Borrower as authorized by applicable law, as
applicable to all or part of the fixtures or Personal Property.  For purposes of such filings, Borrower agrees
to furnish any information requested by Lender promptly upon request by
Lender.  Borrower also ratifies its
authorization for Lender to have filed any like initial financing statements,
amendments thereto and continuation statements, if filed prior to the date of
this Mortgage.  Borrower hereby
irrevocably constitutes and appoints Lender and any officer or agent of Lender,
with full power of substitution, as its true and lawful attorneys- in-fact with
full irrevocable power and authority in the place and stead of Borrower or in
Borrower’s own name to execute in Borrower’s name any documents and otherwise
to carry out the purposes of this Section 1.4, to the extent that Borrower’s
authorization above is not sufficient. 
To the extent permitted by law, Borrower hereby ratifies all acts said
attorneys-in-fact have lawfully done in the past or shall lawfully do or cause
to be done in the future by virtue hereof. 
This power of attorney is coupled with an interest and shall be
irrevocable.

 

1.5                                 Pledges
of Monies Held.  Borrower hereby
pledges to Lender any and all monies now or hereafter held by Lender or on
behalf of Lender, including, without limitation,

 

6

 

any sums deposited in the Lockbox Account (if any),
the Reserve Funds and Net Proceeds, as additional security for the Obligations
until expended or applied as provided in this Mortgage or in the Loan
Agreement.

 

CONDITIONS TO GRANT

 

TO HAVE AND TO HOLD the
above granted and described Property and to the use and benefit of Lender and
its successors and assigns, forever;

 

IN
TRUST, to secure payment to Lender of the Debt at the time and in the manner
provided for in the Note, the Loan Agreement, and this Mortgage;

 

PROVIDED, HOWEVER, these
presents are upon the express condition that, if Borrower shall well and truly
pay to Lender the Debt at the time and in the manner provided in the Note, the
Loan Agreement and this Mortgage, shall well and truly perform the Other
Obligations as set forth in this Mortgage and shall well and truly abide by and
comply with each and every covenant and condition set forth herein and in the
Note, the Loan Agreement and the other Loan Documents, these presents and the
estate hereby granted shall cease, terminate and be void and Lender shall mark
the Note “paid in full” and will, at Borrower’s sole cost and expense, release
the lien of this Mortgage; provided, however, that Borrower’s obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall
survive any such payment or release.

 

ARTICLE II

 

DEBT AND OBLIGATIONS SECURED

 

2.1                                 Debt.  This Mortgage and the grants, assignments and
transfers made in Article I are given for the purpose of securing the debt
evidenced by the Note (the “Debt”).

 

2.2                                 Other
Obligations.  This Mortgage and the
grants, assignments and transfers made in Article I are also given for the
purpose of securing the following (the “Other Obligations”):

 

(a)                                  the
performance of all other obligations of Borrower contained herein;

 

(b)                                 the
performance of each obligation of Borrower contained in the Loan Agreement, the
Note and any other Loan Document; and

 

(c)                                  the
performance of each obligation of Borrower contained in any renewal, extension,
amendment, modification, consolidation, change of, or substitution or
replacement for, all or any part of the Note, the Loan Agreement or any other
Loan Document.

 

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2.3                                 Debt
and Other Obligations.  Borrower’s
obligations for the payment of the Debt and the performance of the Other
Obligations shall be referred to collectively herein as the “Obligations.”

 

ARTICLE III

 

BORROWER COVENANTS

 

Borrower covenants and
agrees that:

 

3.1                                 Payment
of Debt.  Borrower will pay the Debt
at the time and in the manner provided in the Loan Agreement, the Note and this
Mortgage.

 

3.2                                 Incorporation
by Reference.  All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the
Note and (c) all and any of the other Loan Documents, are hereby made a
part of this Mortgage to the same extent and with the same force as if fully
set forth herein.

 

3.3                                 Insurance.  Borrower shall obtain and maintain, or cause
to be maintained, in full force and effect at all times insurance with respect
to Borrower and the Property as required pursuant to the Loan Agreement.

 

3.4                                 Maintenance
of Property.  Borrower shall cause
the Property to be maintained in a good and safe condition and repair.  The Improvements, the Fixtures, the Equipment
and the Personal Property shall not be removed, demolished or materially
altered except as provided for in the Loan Agreement (except for normal
replacement of the Fixtures, the Equipment or the Personal Property, tenant
finish and refurbishment of the Improvements) without the consent of Lender as
provided for in the Loan Agreement. 
Borrower shall promptly repair, replace or rebuild any part of the
Property which may be destroyed by any casualty, or become damaged, worn or
dilapidated and shall complete and pay for any structure at any time in the
process of construction or repair on the Land except as set forth in the Loan
Agreement.

 

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

 

3.6                                 Payment
for Labor and Materials.  (a) 
Subject to the terms, provisions and conditions of the Loan Agreement, Borrower
will promptly pay or cause to be paid when due all bills and costs for labor,
materials, and specifically fabricated materials (“Labor and
Material Costs”) incurred in connection with the Property and never
permit to exist beyond the due date

 

8

 

thereof in respect of the Property or any part thereof
any lien or security interest, even though inferior to the liens and the security
interests hereof, and in any event never permit to be created or exist in
respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof except for
the Permitted Encumbrances.

 

(b)                                 Subject
to the terms, provisions and conditions of the Loan Agreement, after prior
written notice to Lender, Borrower, or any tenant of the Property pursuant to
the terms of such tenant’s lease, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith
and with due diligence, the amount or validity or application in whole or in
part of any of the Labor and Material Costs, provided that (i) no Event of
Default has occurred and is continuing under the Loan Agreement, the Note, this
Mortgage or any of the other Loan Documents, (ii) Borrower is permitted to
do so under the provisions of any other mortgage, deed of trust or deed to
secure debt affecting the Property, (iii) such proceeding shall suspend
the collection of the Labor and Material Costs from Borrower and from the
Property or Borrower shall have paid all of the Labor and Material Costs under
protest, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (v) neither the
Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall
have furnished the security as may be required in the proceeding, or as may be
reasonably requested by Lender to insure the payment of any contested Labor and
Material Costs, together with all interest and penalties thereon.

 

3.7                                 Performance
of Other Agreements.  Borrower shall
observe and perform each and every term, covenant and provision to be observed
or performed by Borrower pursuant to the Loan Agreement, any other Loan
Document and any other agreement or recorded instrument affecting or pertaining
to the Property and any amendments, modifications or changes thereto.

 

3.8                                 Change
of Name, Identity or Structure. 
Except as set forth in the Loan Agreement, Borrower shall not change
Borrower’s name, identity (including its trade name or names) or, if not an
individual, Borrower’s corporate, partnership or other structure without
notifying Lender of such change in writing at least thirty (30) days prior to
the effective date of such change and, in the case of a change in Borrower’s
structure, without first obtaining the prior written consent of Lender which
consent will not be unreasonably withheld, delayed or conditioned provided that
such action is otherwise in compliance with the Loan Agreement.  Borrower shall execute and deliver to Lender,
prior to or contemporaneously with the effective date of any such change, any
financing statement or financing statement change reasonably required by Lender
to establish or maintain the validity, perfection and priority of the security
interest granted herein.  At the request
of Lender, Borrower shall execute a certificate in form reasonably satisfactory
to Lender listing the trade names under which Borrower intends to operate the
Property, and representing and warranting that Borrower does business under no
other trade name with respect to the Property.

 

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3.9                                 Title.  Borrower has good and indefeasible fee simple
title to the real property comprising part of the Property and good title to
the balance of such Property, free and clear of all Liens (as defined in the
Loan Agreement) whatsoever except the Permitted Encumbrances (as defined in the
Loan Agreement), such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents.  To Borrower’s actual knowledge, the Permitted
Encumbrances in the aggregate do not materially adversely affect the value,
operation or use of the Property of Borrower’s ability to repay the Loan.  This Mortgage, when properly recorded in the
appropriate records, together with any Uniform Commercial Code financing
statements required to be filed in connection therewith, will create (a) a
valid, perfected first priority lien, security title and security interest on
the Property, to the extent such security interest can be perfected by filing;
subject only to any applicable Permitted Encumbrances, such other Liens as are
permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents.  There are no claims for
payment for work, labor or materials affecting the Property which are past due
and are or may become a lien prior to, or of equal priority with, the Liens
created by the Loan Documents unless such claims for payments are being
contested in accordance with the terms and conditions of this Mortgage.

 

3.10                           Letter
of Credit Rights.  If Borrower is at
any time a beneficiary under a letter of credit relating to the properties,
rights, titles and interests referenced in Section 1.1 of this Mortgage
now or hereafter issued in favor of Borrower, Borrower shall promptly notify
Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either (i) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to Lender of the proceeds of any drawing under the letter of credit
or (ii) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case that the proceeds of any
drawing under the letter of credit are to be applied as provided in Section 7.2
of this Mortgage.

 

ARTICLE IV

 

OBLIGATIONS AND RELIANCES

 

4.1                                 Relationship
of Borrower and Lender.  The
relationship between Borrower and Lender is solely that of debtor and creditor,
and Lender has no fiduciary or other special relationship with Borrower, and no
term or condition of any of the Loan Agreement, the Note, this Mortgage and the
other Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of debtor and creditor.

 

4.2                                 No
Reliance on Lender.  The general
partners, members, principals and (if Borrower is a trust) beneficial owners of
Borrower are experienced in the ownership and operation of properties similar
to the Property, and Borrower and Lender are relying solely upon such expertise
and business plan in connection with the ownership and operation of the
Property.  Borrower is not relying on
Lender’s expertise, business acumen or advice in connection with the Property.

 

10

 

4.3                                 No
Lender Obligations.  (a) Notwithstanding
the provisions of Subsections 1.1(h) and (n) or Section 1.2, Lender
is not undertaking the performance of (i) any obligations under the
Leases; or (ii) any obligations with respect to such agreements,
contracts, certificates, instruments, franchises, permits, trademarks, licenses
and other documents.

 

(b)                                 By
accepting or approving anything required to be observed, performed or fulfilled
or to be given to Lender pursuant to this Mortgage, the Loan Agreement, the
Note or the other Loan Documents, including, without limitation, any officer’s
certificate, balance sheet, statement of profit and loss or other financial
statement, survey, appraisal, or insurance policy, Lender shall not be deemed
to have warranted, consented to, or affirmed the sufficiency, the legality or
effectiveness of same, and such acceptance or approval thereof shall not
constitute any warranty or affirmation with respect thereto by Lender.

 

4.4                                 Reliance.  Borrower recognizes and acknowledges that in
accepting the Loan Agreement, the Note, this Mortgage and the other Loan
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the warranties and representations set forth in Section 4.1 of the Loan
Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Lender; that such reliance
existed on the part of Lender prior to the date hereof, that the warranties and
representations are a material inducement to Lender in making the Loan; and
that Lender would not be willing to make the Loan and accept this Mortgage in
the absence of the warranties and representations as set forth in Section 4.1
of the Loan Agreement.

 

ARTICLE V

 

FURTHER ASSURANCES

 

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

 

11

 

5.2                                 Further
Acts, Etc.  Borrower will, at the
cost of Borrower, and without expense to Lender, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, deeds of trust,
mortgages, assignments, notices of assignments, transfers and assurances as
Lender shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Mortgage or for filing, registering or recording this
Mortgage, or for complying with all Legal Requirements.  Borrower, on demand, will execute and
deliver, and in the event it shall fail to so execute and deliver, hereby
authorizes Lender to execute in the name of Borrower or without the signature
of Borrower to the extent Lender may lawfully do so, one or more financing
statements to evidence more effectively the security interest of Lender in the
Property.  Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender
at law and in equity following an Event of Default, including without
limitation such rights and remedies available to Lender pursuant to this Section 5.2.  Nothing contained in this Section 5.2
shall be deemed to create an obligation on the part of Borrower to pay any
costs and expenses incurred by Lender in connection with the Securitization or
other sale or transfer of the Loan.

 

5.3                                 Changes
in Tax, Debt, Credit and Documentary Stamp Laws.  (a)  If any law is enacted or adopted or
amended after the date of this Mortgage which deducts the Debt from the value
of the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender’s interest in the Property,
Borrower will pay the tax, with interest and penalties thereon, if any.  If Lender is advised by counsel chosen by it
that the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury then Lender shall
have the option by written notice of not less than one hundred eighty (180)
days to declare the Debt immediately due and payable.

 

(b)                                 Borrower
will not claim or demand or be entitled to any credit or credits on account of
the Debt for any part of the Taxes or Other Charges assessed against the
Property, or any part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Property, or any part thereof, for real
estate tax purposes by reason of this Mortgage or the Debt.  If such claim, credit or deduction shall be
required by law, Lender shall have the option, by written notice of not less
than one hundred eighty (180) days, to declare the Debt immediately due and
payable.

 

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

 

12

 

5.4                                 Splitting
of Mortgage.  The provisions of Section 9.7
of the Loan Agreement are hereby incorporated by reference herein.

 

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

 

ARTICLE VI

 

DUE ON SALE/ENCUMBRANCE

 

6.1                                 Lender
Reliance.  Borrower acknowledges that
Lender has examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning
and operating properties such as the Property in agreeing to make the Loan, and
will continue to rely on Borrower’s ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the performance of the Other Obligations. 
Borrower acknowledges that Lender has a valid interest in maintaining
the value of the Property so as to ensure that, should Borrower default in the
repayment of the Debt or the performance of the Other Obligations, Lender can
recover the Debt by a sale of the Property conducted in accordance with the
terms of the Loan Documents and applicable law.

 

6.2                                 No
Sale/Encumbrance.  Except as set
forth in Section 5.2.13 of the Loan Agreement, Borrower agrees that
Borrower shall not, without the prior written consent of Lender, sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the
Property or any part thereof, including, but not limited to, a grant of an
easement, restriction, covenant, reservation or right of way (except as
expressly permitted in Section 5.2.13 of the Loan Agreement), or permit
the Property or any part thereof to be sold, conveyed, mortgaged, granted, bargained,
encumbered, pledged, assigned, or otherwise transferred, unless Lender shall
consent thereto in accordance with Section 6.4 hereof.

 

6.3                                 Sale/Encumbrance
Defined.  Except as permitted
pursuant to the terms of Section 5.2.13 of the Loan Agreement, a sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer within the meaning of this Article VI shall be deemed to include,
but not be limited to, (a) an installment sales agreement wherein Borrower
agrees to sell the Property or any part thereof for a price to be paid in
installments; (b) an agreement by Borrower leasing all or a substantial
part of the Property for other than actual occupancy by a space tenant
thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower’s right, title and interest in and to any Leases
or any Rents; (c) the voluntary or involuntary sale, conveyance, transfer
or pledge of the stock of the general partner of Borrower (or the stock of any
corporation directly or indirectly controlling such

 

13

 

general partner by operation of law or otherwise) or
the creation or issuance of new stock by which an aggregate of more than ten
percent (10%) of such general partner’s stock shall be vested in a party or
parties who are not now stockholders; (d) the voluntary or involuntary
sale, conveyance, transfer or pledge of any general or limited partnership
interest in Borrower; (e) if Borrower, any general partner of Borrower,
any guarantor or any indemnitor is a limited liability company, the change,
removal or resignation of a member or managing member or the transfer or pledge
of the interest of any member or managing member or any profits or proceeds
relating to such interest; or (f) any other transfer prohibited by the
terms of the Loan Agreement.

 

6.4                                 Lender’s
Rights.  Except as set forth in the
Loan Agreement, Lender reserves the right to condition the consent required
hereunder upon (a) a modification of the terms hereof and of the Loan
Agreement, the Note or the other Loan Documents; (b) an assumption of the
Loan Agreement, the Note, this Mortgage and the other Loan Documents as so
modified by the proposed transferee, subject to the provisions of Section 9.4
of the Loan Agreement; (c) payment of all of Lender’s reasonable expenses
incurred in connection with such transfer including, without limitation, the
cost of any third party reports, legal fees, rating agency or required legal
opinions; (d) the payment of an assumption fee equal to one percent (1%)
of the outstanding principal balance of the Loan; (e) the confirmation in
writing by the applicable Rating Agencies that the proposed transfer will not,
in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned in connection with any
Securitization; (f) intentionally deleted; (g) the proposed
transferee’s continued compliance with the representations and covenants set
forth in Section 4.1.30 and 5.2.12 of the Loan Agreement; (h) the
delivery of evidence satisfactory to Lender that the single purpose nature and
bankruptcy remoteness of Borrower following such transfers are in accordance
with the then current standards of Lender and the Rating Agencies, or (i) such
other conditions as Lender shall determine in its reasonable discretion to be
in the interest of Lender, including, without limitation, the creditworthiness,
reputation and qualifications of the transferee with respect to the Loan and
the Property.  Lender shall not be
required to demonstrate any actual impairment of its security or any increased
risk of default hereunder in order to declare the Debt immediately due and
payable upon Borrower’s sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property without Lender’s consent (to
the extent such consent is required hereunder or under the Loan
Agreement).  This provision shall apply
to every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether voluntary or not,
or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.

 

ARTICLE VII

 

RIGHTS AND REMEDIES UPON DEFAULT

 

7.1                                 Remedies.  Upon the occurrence and during the
continuance of any Event of Default, Borrower agrees that Lender may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against Borrower and in and to the Property,

 

14

 

including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in
such order as Lender may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Lender:

 

(a)                                  declare
the entire unpaid Debt to be immediately due and payable;

 

(b)                                 institute
proceedings, judicial or otherwise, for the complete foreclosure of this
Mortgage under any applicable provision of law, in which case the Property or
any interest therein may be sold for cash or upon credit in one or more parcels
or in several interests or portions and in any order or manner;

 

(c)                                  with
or without entry, to the extent permitted and pursuant to the procedures
provided by applicable law, institute proceedings for the partial foreclosure
of this Mortgage for the portion of the Debt then due and payable, subject to
the continuing lien and security interest of this Mortgage for the balance of
the Debt not then due, unimpaired and without loss of priority;

 

(d)                                 sell
for cash or upon credit the Property or any part thereof and all estate, claim,
demand, right, title and interest of Borrower therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, as an
entity or in parcels, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law;

 

(e)                                  institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note, the Loan
Agreement or in the other Loan Documents;

 

(f)                                    recover
judgment on the Note either before, during or after any proceedings for the
enforcement of this Mortgage or the other Loan Documents;

 

(g)                                 apply
for the appointment of a receiver, trustee, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security
for the Debt and without regard for the solvency of Borrower, any guarantor,
indemnitor with respect to the Loan or of any Person, liable for the payment of
the Debt;

 

(h)                                 the
license granted to Borrower under Section 1.2 hereof shall automatically
be revoked and Lender may, to the extent permitted pursuant to procedures
provided by applicable law, enter into or upon the Property, either personally
or by its agents, nominees or attorneys and dispossess Borrower and its agents
and servants therefrom, without liability for trespass, damages or otherwise
and exclude Borrower and its agents or servants wholly therefrom, and take
possession of all books, records and accounts relating thereto and Borrower
agrees to surrender possession of the Property and of such books, records and accounts
to Lender upon demand, and thereupon Lender may (i) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal with all and
every part of the Property and conduct the business thereat; (ii) complete
any construction on the Property in such manner and form as

 

15

 

Lender deems advisable; (iii) make alterations,
additions, renewals, replacements and improvements to or on the Property; (iv) exercise
all rights and powers of Borrower with respect to the Property, whether in the
name of Borrower or otherwise, including, without limitation, the right to
make, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi) require
Borrower to vacate and surrender possession of the Property to Lender or to
such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property
to the payment of the Debt, in such order, priority and proportions as Lender
shall deem appropriate in its sole discretion after deducting therefrom all
expenses (including reasonable attorneys’ fees) incurred in connection with the
aforesaid operations and all amounts necessary to pay the Taxes, Other Charges,
insurance and other expenses in connection with the Property, as well as just
and reasonable compensation for the services of Lender, its counsel, agents and
employees;

 

(i)                                     exercise
any and all rights and remedies granted to a secured party upon default under
the Uniform Commercial Code, including, without limiting the generality of the
foregoing: (i) the right to take possession of the Fixtures, the
Equipment, the Personal Property or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Fixtures, the Equipment, the Personal Property, and (ii) request
Borrower at its expense to assemble the Fixtures, the Equipment, the Personal
Property and make it available to Lender at a convenient place acceptable to
Lender.  Any notice of sale, disposition
or other intended action by Lender with respect to the Fixtures, the Equipment,
the Personal Property sent to Borrower in accordance with the provisions hereof
at least five (5) days prior to such action, shall constitute commercially
reasonable notice to Borrower;

 

(j)                                     apply
any sums then deposited or held in escrow or otherwise by or on behalf of
Lender in accordance with the terms of the Loan Agreement, this Mortgage or any
other Loan Document to the payment of the following items in any order in its
uncontrolled discretion:

 

(i)                                     Taxes
and Other Charges;

 

(ii)                                  Insurance
Premiums;

 

(iii)                               Interest on the unpaid
principal balance of the Note;

 

(iv)                              Amortization
of the unpaid principal balance of the Note;

 

(v)                                 All
other sums payable pursuant to the Note, the Loan Agreement, this Mortgage and
the other Loan Documents, including without limitation advances made by Lender
pursuant to the terms of this Mortgage;

 

(k)                                  pursue
such other remedies as Lender may have under applicable law; or

 

16

 

(l)                                     apply
the undisbursed balance of any Net Proceeds Deficiency deposit, together with
interest thereon, to the payment of the Debt in such order, priority and
proportions as Lender shall deem to be appropriate in its discretion.

 

In the event of a
sale, by foreclosure, power of sale or otherwise, of less than all of Property,
this Mortgage shall continue as a lien and security interest on the remaining
portion of the Property unimpaired and without loss of priority.

 

7.2                                 Application
of Proceeds.  The purchase money,
proceeds and avails of any disposition of the Property, and or any part
thereof, or any other sums collected by Lender pursuant to the Note, this
Mortgage or the other Loan Documents, may be applied by Lender to the payment
of the Debt in such priority and proportions as Lender in its discretion shall
deem proper.

 

7.3                                 Right
to Cure Defaults.  Upon the
occurrence and during the continuance of any Event of Default or if Borrower
fails to make any payment or to do any act as herein provided, Lender may, but
without any obligation to do so and without notice to or demand on Borrower and
without releasing Borrower from any obligation hereunder, make or do the same
in such manner and to such extent as Lender may deem necessary to protect the
security hereof.  Lender is authorized to
enter upon action or proceeding to the Property for such purposes, or appear
in, defend, or bring any action or proceeding to protect its interest in the
Property or to foreclose this Mortgage or collect the Debt, and the cost and
expense thereof (including reasonable attorneys’ fees to the extent permitted
by law), with interest as provided in this Section 7.3, shall constitute a
portion of the Debt and shall be due and payable to Lender upon demand.  All such costs and expenses incurred by
Lender in remedying such Event of Default or such failed payment or act or in appearing
in, defending, or bringing any such action or proceeding shall bear interest at
the Default Rate, for the period after notice from Lender that such cost or
expense was incurred to the date of payment to Lender.  All such costs and expenses incurred by
Lender together with interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by this Mortgage and
the other Loan Documents and shall be immediately due and payable upon demand
by Lender therefor.

 

7.4                                 Actions
and Proceedings.  Lender has the
right to appear in and defend any action or proceeding brought with respect to
the Property and to bring any action or proceeding, in the name and on behalf
of Borrower, which Lender, in its discretion, decides should be brought to
protect its interest in the Property.

 

7.5                                 Recovery
of Sums Required to Be Paid.  Lender
shall have the right from time to time to take action to recover any sum or
sums which constitute a part of the Debt as the same become due, without regard
to whether or not the balance of the Debt shall be due, and without prejudice
to the right of Lender thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Borrower existing at the time such
earlier action was commenced.

 

17

 

7.6                                 Examination
of Books and Records.  At reasonable
times and upon reasonable notice, Lender, its agents, accountants and attorneys
shall have the right to examine the records, books, management and other papers
of Borrower which reflect upon their financial condition, at the Property or at
any office regularly maintained by Borrower where the books and records are
located.  Lender and its agents shall
have the right to make copies and extracts from the foregoing records and other
papers.  In addition, at reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Borrower pertaining
to the income, expenses and operation of the Property during reasonable
business hours at any office of Borrower where the books and records are
located.  This Section 7.6 shall
apply throughout the term of the Note and without regard to whether an Event of
Default has occurred or is continuing. 
Unless an Event of Default shall be continuing, in which event the
action contemplated by this Section 7.6 shall be at Borrower’s sole cost
and expense hereunder.

 

7.7                                 Other
Rights, Etc.  (a)  The failure
of Lender to insist upon strict performance of any term hereof shall not be
deemed to be a waiver of any term of this Mortgage.  Borrower shall not be relieved of Borrower’s
obligations hereunder by reason of (i) the failure of Lender to comply
with any request of Borrower or any guarantor or indemnitor with respect to the
Loan to take any action to foreclose this Mortgage or otherwise enforce any of
the provisions hereof or of the Note or the other Loan Documents, (ii) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof, or (iii) any
agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Mortgage or the other
Loan Documents.

 

(b)                                 It
is agreed that the risk of loss or damage to the Property is on Borrower, and
Lender shall have no liability whatsoever for decline in value of the Property,
for failure to maintain the Policies, or for failure to determine whether
insurance in force is adequate as to the amount of risks insured.  Possession by Lender shall not be deemed an
election of judicial relief, if any such possession is requested or obtained,
with respect to any Property or collateral not in Lender’s possession.

 

(c)                                  Lender may resort for the payment of the Debt to any other security held
by Lender in such order and manner as Lender, in its discretion, may
elect.  Lender may take action to recover
the Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Lender thereafter to foreclose this Mortgage.  The rights of Lender under this Mortgage
shall be separate, distinct and cumulative and none shall be given effect to
the exclusion of the others.  No act of
Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision. 
Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

 

7.8                                 Right
to Release Any Portion of the Property. 
Lender may release any portion of the Property for such consideration as
Lender may require without, as to the remainder

 

18

 

of the Property, in any way impairing or affecting the
lien or priority of this Mortgage, or improving the position of any subordinate
lienholder with respect thereto, except to the extent that the obligations
hereunder shall have been reduced by the actual monetary consideration, if any,
received by Lender for such release, and may accept by assignment, pledge or
otherwise any other property in place thereof as Lender may require without
being accountable for so doing to any other lienholder.  This Mortgage shall continue as a lien and
security interest in the remaining portion of the Property.

 

7.9                                 Violation
of Laws.  If the Property is not in
material compliance with Legal Requirements, Lender may impose additional
requirements upon Borrower in connection herewith including, without
limitation, monetary reserves or financial equivalents.

 

7.10                           Recourse
and Choice of Remedies. 
Notwithstanding any other provision of this Mortgage or the Loan
Agreement, including, without limitation, Section 9.4 of the Loan
Agreement, Lender and other Indemnified Parties (as hereinafter defined) are
entitled to enforce the obligations of Borrower, any guarantor or indemnitor
contained in Sections 9.2, 9.3 and 9.4 herein and Section 9.4 of the Loan
Agreement without first resorting to or exhausting any security or collateral
and without first having recourse to the Note or any of the Property, through
foreclosure or acceptance of a deed in lieu of foreclosure or otherwise, and in
the event Lender commences a foreclosure action against the Property, Lender is
entitled to pursue a deficiency judgment with respect to such obligations
against Borrower and any guarantor or indemnitor with respect to the Loan.  The provisions of Sections 9.2, 9.3 and 9.4
herein and Section 9.4 of the Loan Agreement are exceptions to any
non-recourse or exculpation provisions in the Loan Agreement, the Note, this
Mortgage or the other Loan Documents, and Borrower and any guarantor or
indemnitor with respect to the Loan are fully and personally liable for the
obligations pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.4
of the Loan Agreement.  The liability of
Borrower and any guarantor or indemnitor with respect to the Loan pursuant to
Sections 9.2, 9.3 and 9.4 herein and Section 9.4 of the Loan Agreement is
not limited to the original principal amount of the Note.  Notwithstanding the foregoing, nothing herein
shall inhibit or prevent Lender from foreclosing or exercising any other rights
and remedies pursuant to the Loan Agreement, the Note, this Mortgage and the
other Loan Documents, whether simultaneously with foreclosure proceedings or in
any other sequence.  A separate action or
actions may be brought and prosecuted against Borrower pursuant to Sections
9.2, 9.3 and 9.4 herein and Section 9.4 of the Loan Agreement, whether or
not action is brought against any other Person or whether or not any other
Person is joined in the action or actions. 
In addition, Lender shall have the right but not the obligation to join
and participate in, as a party if it so elects, any administrative or judicial
proceedings or actions initiated in connection with any matter addressed in Article VIII
or Section 9.4 herein.

 

7.11                           Right
of Entry.  Upon reasonable notice to
Borrower, Lender and its agents shall have the right to enter and inspect the
Property at all reasonable times.

 

19

 

7.12                           Release.  Upon payment of all sums secured by this
Mortgage, Lender shall release this Mortgage. 
Borrower shall pay Lender’s reasonable costs incurred in releasing this
Mortgage.

 

ARTICLE VIII

ENVIRONMENTAL HAZARDS

 

 8.1                              Environmental
Representations and Warranties.  To
the best of Borrower’s knowledge, and except as otherwise disclosed by that
certain Environmental Site Assessment of the Property delivered to Lender (such
report is referred to below as the “Environmental Report”),
Borrower hereby represents and warrants that (a) there are no Hazardous
Substances (defined below) or underground storage tanks in, on, or under the
Property, except those that are both (i) in compliance with Environmental
Laws (defined below) and with permits issued pursuant thereto and (ii) fully
disclosed to Lender in writing pursuant the Environmental Report; (b) there
are no past, present or threatened Releases (defined below) of Hazardous
Substances in, on, under or from the Property which has not been fully
remediated in accordance with Environmental Law; (c) there is no threat of
any Release of Hazardous Substances migrating to the Property; (d) there
is no past or present non-compliance with Environmental Laws, or with permits
issued pursuant thereto, in connection with the Property which has not been
fully remediated in accordance with Environmental Law; (e) Borrower does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below)
thereof, of possible liability of any Person pursuant to any Environmental Law,
other environmental conditions in connection with the Property, or any actual
or potential administrative or judicial proceedings in connection with any of
the foregoing; and (f) Borrower has truthfully and fully provided to
Lender, in writing, any and all information relating to conditions in, on,
under or from the Property that is known to Borrower and that is contained in
Borrower’s files and records, including but not limited to any reports relating
to Hazardous Substances in, on, under or from the Property and/or to the
environmental condition of the Property.

 

“Environmental
Law” means any present and future federal, State and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.  Environmental Law includes, but is not
limited to, the following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any State or local statutes,
ordinances, rules, regulations and the like addressing similar issues:  the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air 

 

20

 

Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act.  Environmental Law also includes, but is not
limited to, any present and future federal, State and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law:  conditioning transfer of property upon a
negative declaration or other approval of a governmental authority of the
environmental condition of the Property; requiring notification or disclosure
of Releases of Hazardous Substances or other environmental condition of the
Property to any governmental authority or other Person, whether or not in
connection with transfer of title to or interest in property; imposing
conditions or requirements in connection with permits or other authorization
for lawful activity; relating to nuisance, trespass or other causes of action
related to the Property; and relating to wrongful death, personal injury, or
property or other damage in connection with any physical condition or use of
the Property.

 

“Hazardous
Substances” include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives, but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purpose
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.

 

“Release”
of any Hazardous Substance includes but is not limited to any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Substances.

 

“Remediation”
includes but is not limited to any response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, any actions to prevent, cure or mitigate any
Release of any Hazardous Substance, any action to comply with any Environmental
Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in Article VIII.

 

“State” shall mean the State of
Washington.

 

8.2                                 Environmental
Covenants.  Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other Person, shall be in compliance with all Environmental
Laws and permits issued pursuant thereto; (b) Borrower shall not cause or
permit the Release of any Hazardous Substances in, on, under or from the
Property; (c) there shall be no Hazardous Substances in, on, or under the
Property, except those that are both (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto and

 

21

 

(ii) fully disclosed to Lender in writing; (d) Borrower
shall keep the Property free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission
of Borrower or any other Person (the “Environmental Liens”);
(e) Borrower shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to Section 8.3 below, including but
not limited to providing all relevant information and making knowledgeable
persons available for interviews; (f) Borrower shall, at its sole cost and
expense, perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender made in the event that Lender has a good
faith reason to believe based upon credible evidence or information that an
environmental hazard exists on or affects the Property (including but not
limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Lender the reports and other results thereof, and Lender and other
Indemnified Parties shall be entitled to rely on such reports and other results
thereof; (g) Borrower shall, at its sole cost and expense, comply with all
reasonable written requests of Lender made in the event that Lender has a good
faith reason to believe based upon credible evidence or information that an
environmental hazard exists on or affects the Property to (i) reasonably
effectuate Remediation of any condition (including but not limited to a Release
of a Hazardous Substance) in, on, under or from the Property; (ii) comply
with any Environmental Law; (iii) comply with any directive from any
governmental authority; and (iv) take any other reasonable action
necessary or appropriate for protection of human health or the environment; (h) Borrower
shall not do or knowingly allow any tenant or other user of the Property to do
any act that materially increases the dangers to human health or the
environment, poses an unreasonable risk of harm to any Person (whether on or
off the Property), impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify
Lender in writing of (A) any presence or Releases or threatened Releases
of Hazardous Substances in, on, under, from or migrating towards the Property; (B) any
non-compliance with any Environmental Laws related in any way to the Property; (C) any
actual or potential Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any Person pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with anything referred to
in this Article VIII.

 

8.3                                 Lender’s
Rights.  In the event that Lender has
a good faith reason to believe based upon credible evidence or information that
an environmental hazard exists on the Property, upon reasonable notice from
Lender, Borrower shall, at Borrower’s expense, promptly cause an engineer or
consultant satisfactory to Lender to conduct any environmental assessment or
audit (the scope of which shall be determined in Lender’s sole and absolute
discretion) and take any samples of soil, groundwater or other water, air, or
building materials or any other invasive testing requested by Lender and
promptly deliver the results of any such assessment,

 

22

 

audit, sampling or other testing; provided, however,
if such results are not delivered to Lender within a reasonable period, upon
reasonable notice to Borrower, Lender and any other Person designated by
Lender, including but not limited to any receiver, any representative of a
governmental entity, and any environmental consultant, shall have the right,
but not the obligation, to enter upon the Property at all reasonable times to
assess any and all aspects of the environmental condition of the Property and
its use, including but not limited to conducting any environmental assessment
or audit (the scope of which shall be determined in Lender’s sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing.  Borrower shall cooperate with and provide
access to Lender and any such Person designated by Lender.

 

ARTICLE IX

INDEMNIFICATION

 

 9.1                              GENERAL INDEMNIFICATION.  BORROWER SHALL, AT ITS SOLE COST AND EXPENSE,
PROTECT, DEFEND, INDEMNIFY, RELEASE AND HOLD HARMLESS THE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL CLAIMS, SUITS, LIABILITIES (INCLUDING, WITHOUT
LIMITATION, STRICT LIABILITIES), ACTIONS, PROCEEDINGS, OBLIGATIONS, DEBTS,
DAMAGES, LOSSES, COSTS, EXPENSES, DIMINUTIONS IN VALUE, FINES, PENALTIES,
CHARGES, FEES, EXPENSES, JUDGMENTS, AWARDS, AMOUNTS PAID IN SETTLEMENT,
PUNITIVE DAMAGES, FORESEEABLE AND UNFORESEEABLE CONSEQUENTIAL DAMAGES, OF
WHATEVER KIND OR NATURE (INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEYS’
FEES AND OTHER COSTS OF DEFENSE) (COLLECTIVELY, THE “LOSSES”) IMPOSED
UPON OR INCURRED BY OR ASSERTED AGAINST ANY INDEMNIFIED PARTIES AND DIRECTLY OR
INDIRECTLY ARISING OUT OF OR IN ANY WAY RELATING TO ANY ONE OR MORE OF THE
FOLLOWING: (A) OWNERSHIP OF THIS MORTGAGE, THE PROPERTY OR ANY INTEREST
THEREIN OR RECEIPT OF ANY RENTS; (B) ANY AMENDMENT TO, OR RESTRUCTURING
OF, THE DEBT, AND THE NOTE, THE LOAN AGREEMENT, THIS MORTGAGE, OR ANY OTHER
LOAN DOCUMENTS; (C) ANY AND ALL LAWFUL ACTION THAT MAY BE TAKEN BY
LENDER IN CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF THIS MORTGAGE OR
THE LOAN AGREEMENT OR THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER OR
NOT SUIT IS FILED IN CONNECTION WITH SAME, OR IN CONNECTION WITH BORROWER, ANY
GUARANTOR OR INDEMNITOR AND/OR ANY PARTNER, JOINT VENTURER OR SHAREHOLDER
THEREOF BECOMING A PARTY TO A VOLUNTARY OR INVOLUNTARY FEDERAL OR STATE
BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING; (D) ANY ACCIDENT, INJURY TO
OR DEATH OF PERSONS OR LOSS OF OR DAMAGE TO PROPERTY OCCURRING IN, ON OR ABOUT
THE PROPERTY OR ANY PART THEREOF OR ON THE ADJOINING SIDEWALKS, CURBS,
ADJACENT PROPERTY OR ADJACENT PARKING AREAS, STREETS OR 

 

23

 

WAYS; (E) PERFORMANCE OF ANY
LABOR OR SERVICES OR THE FURNISHING OF ANY MATERIALS OR OTHER PROPERTY IN
RESPECT OF THE PROPERTY OR ANY PART THEREOF; (F) THE FAILURE OF ANY
PERSON TO FILE TIMELY WITH THE INTERNAL REVENUE SERVICE AN ACCURATE FORM 1099-B,
STATEMENT FOR RECIPIENTS OF PROCEEDS FROM REAL ESTATE, BROKER AND BARTER
EXCHANGE TRANSACTIONS, WHICH MAY BE REQUIRED IN CONNECTION WITH THIS
MORTGAGE, OR TO SUPPLY A COPY THEREOF IN A TIMELY FASHION TO THE RECIPIENT OF
THE PROCEEDS OF THE TRANSACTION IN CONNECTION WITH WHICH THIS MORTGAGE IS MADE;
(G) ANY FAILURE OF THE PROPERTY TO BE IN COMPLIANCE WITH ANY LEGAL
REQUIREMENTS; (H) THE ENFORCEMENT BY ANY INDEMNIFIED PARTY OF THE
PROVISIONS OF THIS ARTICLE IX; (I) ANY AND ALL CLAIMS AND DEMANDS
WHATSOEVER WHICH MAY BE ASSERTED AGAINST LENDER BY REASON OF ANY ALLEGED
OBLIGATIONS OR UNDERTAKINGS ON ITS PART TO PERFORM OR DISCHARGE ANY
OF THE TERMS, COVENANTS, OR AGREEMENTS CONTAINED IN ANY LEASE; (J) THE PAYMENT
OF ANY COMMISSION, CHARGE OR BROKERAGE FEE TO ANYONE CLAIMING THROUGH BORROWER
WHICH MAY BE PAYABLE IN CONNECTION WITH THE FUNDING OF THE LOAN; OR (K)
ANY MISREPRESENTATION MADE BY BORROWER IN THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT.  NOTWITHSTANDING THE FOREGOING,
BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES UNDER THIS SECTION 9.1
FOR ANY LOSSES TO WHICH THE INDEMNIFIED PARTIES MAY BECOME SUBJECT TO THE
EXTENT SUCH LOSSES ARISE BY REASON OF THE GROSS NEGLIGENCE, ILLEGAL ACTS, FRAUD
OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTIES OR LOSSES RESULTING FROM ACTS
OR OMISSIONS ARISING AFTER A COMPLETED FORECLOSURE OF THE PROPERTY OR
ACCEPTANCE BY LENDER OF A DEED IN LIEU OF FORECLOSURE.  ANY AMOUNTS PAYABLE TO LENDER BY REASON OF
THE APPLICATION OF THIS SECTION 9.1 SHALL BECOME IMMEDIATELY DUE AND
PAYABLE AND SHALL BEAR INTEREST AT THE DEFAULT RATE FROM THE DATE LOSS OR
DAMAGE IS SUSTAINED BY LENDER UNTIL PAID. 
FOR PURPOSES OF THIS ARTICLE IX, THE TERM “INDEMNIFIED PARTIES”
MEANS LENDER AND ANY PERSON WHO IS OR WILL HAVE BEEN INVOLVED IN THE
ORIGINATION OF THE LOAN, ANY PERSON WHO IS OR WILL HAVE BEEN INVOLVED IN THE
SERVICING OF THE LOAN SECURED HEREBY, ANY PERSON IN WHOSE NAME THE ENCUMBRANCE
CREATED BY THIS MORTGAGE IS OR WILL HAVE BEEN RECORDED, PERSONS AND ENTITIES
WHO MAY HOLD OR ACQUIRE OR WILL HAVE HELD A FULL OR PARTIAL INTEREST IN
THE LOAN SECURED HEREBY (INCLUDING, BUT NOT LIMITED TO, INVESTORS OR
PROSPECTIVE INVESTORS IN THE SECURITIES, AS WELL AS CUSTODIANS, TRUSTEES AND
OTHER FIDUCIARIES WHO HOLD OR HAVE HELD A FULL OR PARTIAL INTEREST IN THE LOAN
SECURED HEREBY FOR THE BENEFIT OF THIRD PARTIES) AS WELL AS THE RESPECTIVE
DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS,

 

24

 

EMPLOYEES, AGENTS, SERVANTS,
REPRESENTATIVES, CONTRACTORS, SUBCONTRACTORS, AFFILIATES, SUBSIDIARIES,
PARTICIPANTS, SUCCESSORS AND ASSIGNS OF ANY AND ALL OF THE FOREGOING (INCLUDING
BUT NOT LIMITED TO ANY OTHER PERSON WHO HOLDS OR ACQUIRES OR WILL HAVE HELD A
PARTICIPATION OR OTHER FULL OR PARTIAL INTEREST IN THE LOAN, WHETHER DURING THE
TERM OF THE LOAN OR AS A PART OF OR FOLLOWING A FORECLOSURE OF THE LOAN
AND INCLUDING, BUT NOT LIMITED TO, ANY SUCCESSORS BY MERGER, CONSOLIDATION OR
ACQUISITION OF ALL OR A SUBSTANTIAL PORTION OF LENDER’S ASSETS AND BUSINESS).

 

9.2                                 Mortgage
and/or Intangible Tax.  Borrower
shall, at its sole cost and expense, protect, defend, indemnify, release and
hold harmless the Indemnified Parties from and against any and all Losses
imposed upon or incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to any tax on the
making and/or recording of this Mortgage, the Note or any of the other Loan
Documents, but excluding any income, franchise or other similar taxes.  Borrower hereby agrees that, in the event
that it is determined that any documentary stamp taxes or intangible personal
property taxes are due hereon or on any mortgage or promissory note executed in
connection herewith (including, without limitation, the Note), Borrower shall
indemnify and hold harmless the Indemnified Parties for all such documentary
stamp and/or intangible taxes, including all penalties and interest assessed or
charged in connection therewith.

 

9.3                                 ERISA INDEMNIFICATION.  BORROWER SHALL, AT ITS SOLE COST AND EXPENSE,
PROTECT, DEFEND, INDEMNIFY, RELEASE AND HOLD HARMLESS THE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL LOSSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE, AND
SETTLEMENT OF LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN
THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED
TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE
DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF
A DEFAULT UNDER SECTIONS 4.1.9 OR 5.2.12 OF THE LOAN AGREEMENT.

 

9.4                                 ENVIRONMENTAL INDEMNIFICATION.  BORROWER SHALL, AT ITS SOLE COST AND EXPENSE,
PROTECT, DEFEND, INDEMNIFY, RELEASE AND HOLD HARMLESS THE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL LOSSES AND COSTS OF REMEDIATION (WHETHER OR NOT
PERFORMED VOLUNTARILY), ENGINEERS’ FEES, ENVIRONMENTAL CONSULTANTS’ FEES, AND
COSTS OF INVESTIGATION (INCLUDING BUT NOT LIMITED TO SAMPLING, TESTING, AND
ANALYSIS OF SOIL, WATER, AIR, BUILDING MATERIALS AND OTHER MATERIALS AND
SUBSTANCES WHETHER SOLID, LIQUID OR GAS) IMPOSED UPON OR INCURRED BY OR
ASSERTED 

 

25

 

AGAINST ANY INDEMNIFIED PARTIES, AND
DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY RELATING TO ANY ONE OR MORE
OF THE FOLLOWING: (A) ANY PRESENCE OF ANY HAZARDOUS SUBSTANCES IN, ON,
ABOVE, OR UNDER THE PROPERTY; (B) ANY PAST, PRESENT OR THREATENED RELEASE
OF HAZARDOUS SUBSTANCES IN, ON, ABOVE, UNDER OR FROM THE PROPERTY; (C) ANY
ACTIVITY BY BORROWER, ANY PERSON AFFILIATED WITH BORROWER OR ANY TENANT OR
OTHER USER OF THE PROPERTY IN CONNECTION WITH ANY ACTUAL, PROPOSED OR
THREATENED USE, TREATMENT, STORAGE, HOLDING, EXISTENCE, DISPOSITION OR OTHER
RELEASE, GENERATION, PRODUCTION, MANUFACTURING, PROCESSING, REFINING, CONTROL,
MANAGEMENT, ABATEMENT, REMOVAL, HANDLING, TRANSFER OR TRANSPORTATION TO OR FROM
THE PROPERTY OF ANY HAZARDOUS SUBSTANCES AT ANY TIME LOCATED IN, UNDER, ON OR
ABOVE THE PROPERTY; (D) ANY ACTIVITY BY BORROWER, ANY PERSON AFFILIATED
WITH BORROWER OR ANY TENANT OR OTHER USER OF THE PROPERTY IN CONNECTION WITH
ANY ACTUAL OR PROPOSED REMEDIATION OF ANY HAZARDOUS SUBSTANCES AT ANY TIME
LOCATED IN, UNDER, ON OR ABOVE THE PROPERTY, WHETHER OR NOT SUCH REMEDIATION IS
VOLUNTARY OR PURSUANT TO COURT OR ADMINISTRATIVE ORDER, INCLUDING BUT NOT
LIMITED TO ANY REMOVAL, REMEDIAL OR CORRECTIVE ACTION; (E) ANY PAST OR
PRESENT NON-COMPLIANCE OR VIOLATIONS OF ANY ENVIRONMENTAL LAWS (OR PERMITS
ISSUED PURSUANT TO ANY ENVIRONMENTAL LAW) IN CONNECTION WITH THE PROPERTY OR
OPERATIONS THEREON, INCLUDING BUT NOT LIMITED TO ANY FAILURE BY BORROWER, ANY
AFFILIATE OF BORROWER OR ANY TENANT OR OTHER USER OF THE PROPERTY TO COMPLY
WITH ANY ORDER OF ANY GOVERNMENTAL AUTHORITY IN CONNECTION WITH ANY
ENVIRONMENTAL LAWS; (F) THE IMPOSITION, RECORDING OR FILING OF ANY
ENVIRONMENTAL LIEN ENCUMBERING THE PROPERTY; (G) ANY ADMINISTRATIVE
PROCESSES OR PROCEEDINGS OR JUDICIAL PROCEEDINGS IN ANY WAY CONNECTED WITH ANY
MATTER ADDRESSED IN ARTICLE VIII AND THIS SECTION 9.4; (H) ANY
PAST, PRESENT OR THREATENED INJURY TO, DESTRUCTION OF OR LOSS OF NATURAL
RESOURCES IN ANY WAY CONNECTED WITH THE PROPERTY, INCLUDING BUT NOT LIMITED TO
COSTS TO INVESTIGATE AND ASSESS SUCH INJURY, DESTRUCTION OR LOSS; (I) ANY ACTS
OF BORROWER OR OTHER USERS OF THE PROPERTY IN ARRANGING FOR DISPOSAL OR
TREATMENT, OR ARRANGING WITH A TRANSPORTER FOR TRANSPORT FOR DISPOSAL OR
TREATMENT, OF HAZARDOUS SUBSTANCES OWNED OR POSSESSED BY SUCH BORROWER OR OTHER
USERS, AT ANY FACILITY OR INCINERATION VESSEL OWNED OR OPERATED BY ANOTHER
PERSON AND CONTAINING SUCH OR ANY SIMILAR HAZARDOUS SUBSTANCE; (J) ANY ACTS OF
BORROWER OR OTHER USERS OF THE PROPERTY, IN ACCEPTING ANY HAZARDOUS SUBSTANCES
FOR TRANSPORT TO DISPOSAL OR TREATMENT FACILITIES, INCINERATION VESSELS OR
SITES SELECTED

 

26

 

BY BORROWER OR SUCH OTHER USERS, FROM
WHICH THERE IS A RELEASE, OR A THREATENED RELEASE OF ANY HAZARDOUS SUBSTANCE
WHICH CAUSES THE INCURRENCE OF COSTS FOR REMEDIATION; (K) ANY PERSONAL INJURY,
WRONGFUL DEATH, OR PROPERTY DAMAGE ARISING UNDER ANY STATUTORY OR COMMON LAW OR
TORT LAW THEORY, INCLUDING BUT NOT LIMITED TO DAMAGES ASSESSED FOR THE
MAINTENANCE OF A PRIVATE OR PUBLIC NUISANCE OR FOR THE CONDUCTING OF AN
ABNORMALLY DANGEROUS ACTIVITY ON OR NEAR THE PROPERTY; AND (1) ANY
MISREPRESENTATION OR INACCURACY IN ANY REPRESENTATION OR WARRANTY OR MATERIAL
BREACH OR FAILURE TO PERFORM ANY COVENANTS OR OTHER OBLIGATIONS PURSUANT
TO ARTICLE VIII.  NOTWITHSTANDING
THE FOREGOING, BORROWER SHALL NOT BE LIABLE UNDER THIS SECTION 9.4 FOR ANY
LOSSES OR COSTS OF REMEDIATION TO WHICH THE INDEMNIFIED PARTIES MAY BECOME
SUBJECT TO THE EXTENT SUCH LOSSES OR COSTS OF REMEDIATION ARISE BY REASON OF
THE GROSS NEGLIGENCE, ILLEGAL ACTS, FRAUD OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTIES OR LOSSES RESULTING FROM ACTS OR OMISSIONS ARISING AFTER A
COMPLETED FORECLOSURE OF THE PROPERTY OR ACCEPTANCE BY LENDER OF A DEED IN LIEU
OF FORECLOSURE.  THIS INDEMNITY SHALL
SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THIS MORTGAGE, SUBJECT
TO THE PROVISIONS OF SECTION 10.5.

 

9.5                                 Duty
to Defend; Attorneys’ Fees and Other Fees and Expenses.  Upon written request by any Indemnified
Party, Borrower shall defend such Indemnified Party (if requested by any
Indemnified Party, in the name of the Indemnified Party) by attorneys and other
professionals approved by the Indemnified Parties.  Notwithstanding the foregoing, if the
defendants in any such claim or proceeding include both Borrower and any
Indemnified Party and Borrower and such Indemnified Party shall have reasonably
concluded that there are any legal defenses available to it and/or other Indemnified
Parties that are different from or additional to those available to Borrower,
such Indemnified Party shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such Indemnified Party, provided that no compromise or
settlement shall be entered without Borrower’s consent, which consent shall not
be unreasonably withheld.  Upon demand,
Borrower shall pay or, in the sole and absolute discretion of the Indemnified
Parties, reimburse, the Indemnified Parties for the payment of reasonable fees
and disbursements of attorneys, engineers, environmental consultants,
laboratories and other professionals in connection therewith.

 

9.6                                 Indemnification
for Negligence.  WITHOUT LIMITATION, THE FOREGOING INDEMNITEES PROVIDED
IN THIS ARTICLE 9 SHALL APPLY TO THE INDEMNIFIED PARTIES WITH RESPECT TO
MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE
NEGLIGENCE OF THE INDEMNIFIED PARTIES, HOWEVER, SUCH INDEMNITEES SHALL NOT
APPLY

 

27

 

TO THE INDEMNIFIED PARTIES TO THE
EXTENT THAT SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTIES.

 

ARTICLE X

WAIVERS

 

10.1                           Waiver
of Counterclaim.  To the extent
permitted by applicable law, Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against it by Lender arising out of or in any way
connected with this Mortgage, the Loan Agreement, the Note, any of the other
Loan Documents, or the Obligations.

 

10.2                           Marshalling
and Other Matters.  To the extent
permitted by applicable law, Borrower hereby waives, to the extent permitted by
law, the benefit of all appraisement, valuation, stay, extension, reinstatement
and redemption laws now or hereafter in force and all rights of marshalling in
the event of any sale hereunder of the Property or any part thereof or any
interest therein.  Further, Borrower
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Mortgage on behalf of Borrower, and on
behalf of each and every person acquiring any interest in or title to the Property
subsequent to the date of this Mortgage and on behalf of all persons to the
extent permitted by applicable law.

 

10.3                           Waiver
of Notice.  To the extent permitted
by applicable law, Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Mortgage
specifically and expressly provides for the giving of notice by Lender to
Borrower and except with respect to matters for which Lender is required by applicable law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender with respect to
any matter for which this Mortgage does not specifically and expressly provide
for the giving of notice by Lender to Borrower.

 

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

 

10.5                           Survival.  The indemnifications made pursuant to
Sections 9.3 and 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article VIII, shall continue
indefinitely in full force and effect and shall survive and shall in no way be
impaired by:  any satisfaction or other
termination of this Mortgage, any assignment or other transfer of all or any
portion of this Mortgage or Lender’s interest in the Property (but, in such
case, shall benefit both Indemnified Parties and any assignee or transferee),
any exercise of Lender’s rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Loan Agreement, the Note or
any of the other Loan Documents, any transfer of all or any

 

28

 

portion of the Property (whether by Borrower or by
Lender following foreclosure or acceptance of a deed in lieu of foreclosure or
at any other time), any amendment to this Mortgage, the Loan Agreement, the
Note or the other Loan Documents, and any act or omission that might otherwise
be construed as a release or discharge of Borrower from the obligations
pursuant hereto.  Notwithstanding
anything to the contrary contained in this Mortgage or the other Loan
Documents, Borrower shall not have any obligations or liabilities under the
indemnification under Section 9.4 herein or other indemnifications with
respect to Hazardous Substances contained in the other Loan Documents with
respect to those obligations and liabilities that Borrower can prove arose
solely from Hazardous Substances that (i) were not present on or a threat
to the Property prior to the date that Lender or its nominee acquired title to
the Property, whether by foreclosure, exercise by power of sale, acceptance of
a deed-in-lieu of foreclosure or otherwise and (ii) were not the result of
any act or negligence of Borrower or any of Borrower’s affiliates, agents or
contractors.

 

ARTICLE XI

EXCULPATION

 

The provisions of Section 9.4
of the Loan Agreement are hereby incorporated by reference into this Mortgage
to the same extent and with the same force as if fully set forth herein.

 

ARTICLE XII

NOTICES

 

All notices or other
written communications hereunder shall be delivered in accordance with Section 10.6
of the Loan Agreement.

 

ARTICLE XIII

APPLICABLE LAW

 

13.1                           GOVERNING
LAW.  THIS MORTGAGE SHALL BE GOVERNED
BY, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND BORROWER
AGREES THAT THE PROPER VENUE FOR ANY MATTERS IN CONNECTION HEREWITH SHALL BE IN
THE STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS AS LENDER MAY ELECT
AND BORROWER HEREBY SUBMITS ITSELF TO THE JURISDICTION OF SUCH COURTS FOR THE
PURPOSE OF ADJUDICATING ANY MATTERS RELATED TO THE LOAN, PROVIDED, HOWEVER,
THAT TO THE EXTENT THE MANDATORY PROVISIONS OF THE LAWS OF ANOTHER JURISDICTION
RELATING TO (i)THE PERFECTION OR THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTERESTS IN ANY OF THE PROPERTY, (ii)THE LIEN, ENCUMBRANCE OR
OTHER INTEREST IN

 

29

 

THE PROPERTY GRANTED OR CONVEYED BY THIS ASSIGNMENT,
OR (iii)THE AVAILABILITY OF AND PROCEDURES RELATING TO ANY REMEDY HEREUNDER OR
RELATED TO THIS ASSIGNMENT ARE REQUIRED TO BE GOVERNED BY SUCH OTHER
JURISDICTION’S LAWS, SUCH OTHER LAWS SHALL BE DEEMED TO GOVERN AND CONTROL.

 

13.2                           Usury.  All agreements between Lender and Borrower
(including, without limitation, those contained in this Mortgage, the Note and
any other Loan Documents) are expressly limited so that in no event whatsoever
shall the amount paid or agreed to be paid to Lender exceed the highest lawful
rate of interest permissible under the laws of the State of Illinois.  If, from any circumstances whatsoever,
fulfillment of any provision hereof or of the Note or any other Loan Documents,
at the time performance of such provision shall be due, shall involve the
payment of interest exceeding the highest rate of interest permitted by law
which a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligation to be fulfilled shall be reduced to the highest lawful
rate of interest permissible under the laws of the State of Illinois; and if
for any reason whatsoever, Lender shall ever receive as interest an amount
which would be deemed unlawful, such interest shall be applied to the payment
of the last maturing installment or installments of the indebtedness secured
hereby (whether or not then due and payable) and not to the payment of
interest.

 

13.3                           Provisions
Subject to Applicable Law.  All
rights, powers and remedies provided in this Mortgage may be exercised only to
the extent that the exercise thereof does not violate any applicable provisions
of law and are intended to be limited to the extent necessary so that they will
not render this Mortgage invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law.  If any term of this Mortgage or any
application thereof shall be invalid or unenforceable, the remainder of this
Mortgage and any other application of the term shall not be affected thereby.

 

ARTICLE XIV

DEFINITIONS

 

All capitalized terms not
defined herein shall the respective meanings set forth in the Loan
Agreement.  Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Mortgage may be used interchangeably in singular or plural
form and the word “Borrower”
shall mean “each Borrower and any subsequent owner or owners of the Property or
any part thereof or any interest therein,” the word “Lender”
shall mean “Lender and any subsequent holder of the Note,” the word “Note” shall mean “the Note and any
other evidence of indebtedness secured by this Mortgage,” the word “Property” shall include any portion
of the Property and any interest therein, and the phrases “attorneys’
fees”, “legal fees”
and “counsel fees” shall include any and
all attorneys’, paralegal and law clerk fees and disbursements, including, but
not limited to, fees and disbursements at the pre-trial, trial and appellate
levels incurred or paid by Lender in protecting its interest in the Property,
the Leases and the Rents and enforcing its rights hereunder.

 

30

 

ARTICLE XV

MISCELLANEOUS PROVISIONS

 

15.1                           No
Oral Change.  This Mortgage, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

 

15.2                           Successors
and Assigns.  This Mortgage shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.

 

15.3                           Inapplicable
Provisions.  If any term, covenant or
condition of the Loan Agreement, the Note or this Mortgage is held to be
invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note
and this Mortgage shall be construed without such provision.

 

15.4                           Headings,
Etc.  The headings and captions of
various Sections of this Mortgage are for convenience of reference only and are
not to be construed as defining or limiting, in any way, the scope or intent of
the provisions hereof.

 

15.5                           Number
and Gender.  Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.

 

15.6                           Subrogation.  If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance
and discharge of Borrower’s obligations hereunder, under the Loan Agreement,
the Note and the other Loan Documents and the performance and discharge of the
Other Obligations.

 

15.7                           Entire
Agreement.  The Note, the Loan
Agreement, this Mortgage and the other Loan Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior
written or oral understandings and agreements between Borrower and Lender with
respect thereto.  Borrower hereby
acknowledges that, except as incorporated in writing in the Note, the Loan Agreement,
this Mortgage and the other Loan Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings,

 

31

 

stipulations, agreements or promises, oral or written,
with respect to the transaction which is the subject of the Note, the Loan
Agreement, this Mortgage and the other Loan Documents.

 

15.8                           Limitation
on Lender’s Responsibility.  No
provision of this Mortgage shall operate to place any obligation or liability
for the control, care, management or repair of the Property upon Lender, nor
shall it operate to make Lender responsible or liable for any waste committed
on the Property by the tenants or any other Person, or for any dangerous or
defective condition of the Property, or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss or injury or death
to any tenant, licensee, employee or stranger. 
Nothing herein contained shall be construed as constituting Lender a “mortgagee
in possession.”

 

15.9                           Cross-Default/Cross-Collateralization.  All the terms and conditions set forth in Section 9.8
of the Loan Agreement are hereby made a part of this Mortgage to the same
extent and with the same force as if fully set forth herein.

 

ARTICLE XVI

SPECIAL WASHINGTON PROVISIONS

 

16.1                           Special
State Provisions.  In the event of
any inconsistencies or conflicts between the terms and conditions of this Article XVI
and any other terms and conditions of this Mortgage, the terms and conditions
of this Article XVI shall control and be binding.

 

[Signature
Page Follows]

 

32

 

IN WITNESS WHEREOF, this
Mortgage has been executed by Borrower the day and year first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MB
  LONGVIEW TRIANGLE, L.L.C.,a 

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Minto Builders
  (Florida), Inc.,

  
	
   

  	
   

  	
  a Florida
  corporation, its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra Palmer

  
	
   

  	
   

  	
  Name:

  	
  Debra Palmer

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Secretary

  
						

 

33

 

ACKNOWLEDGMENT

 

STATE OF ILLINOIS
                 

 

COUNTY OF
                               

 

This document was acknowledged before me on February      ,
2006, by
                              ,
the                               
of Minto Builders (Florida), Inc., a Florida corporation, the sole member
of MB Longview Triangle, LLC, a Delaware limited liability company, on behalf
of said entity.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public, State of 

  	
   

  	
   

  
	
  My
  Commission Expires:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

34

 

EXHIBIT A

 

LEGAL
DESCRIPTION

 

(the legal description
follows on next page)Exhibit 10.41

 

LOAN
AGREEMENT

 

 

Dated
as of February 9, 2006

 

 

Between

 

 

MB
LONGVIEW TRIANGLE, L.L.C.,

a
Delaware limited liability company,

as Borrower

 

 

and

 

 

LASALLE
BANK NATIONAL ASSOCIATION,

a national banking association, as Lender

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
  1

  
	
  Section 1.1

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
  Principles of
  Construction

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GENERAL
  TERMS

  	
  16

  
	
  Section 2.1

  	
  Loan Commitment;
  Disbursement to Borrower.

  	
  16

  
	
  Section 2.2

  	
  Interest; Loan
  Payments; Late Payment Charge.

  	
  17

  
	
  Section 2.3

  	
  Prepayments.

  	
  18

  
	
  Section 2.4

  	
  Intentionally Omitted.

  	
  20

  
	
  Section 2.5

  	
  Release of Property

  	
  20

  
	
  Section 2.6

  	
  Manner of Making
  Payments.

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS
  PRECEDENT

  	
  21

  
	
  Section 3.1

  	
  Conditions Precedent to
  Closing

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  25

  
	
  Section 4.1

  	
  Borrower
  Representations

  	
  25

  
	
  Section 4.2

  	
  Survival of
  Representations

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  BORROWER
  COVENANTS

  	
  33

  
	
  Section 5.1

  	
  Affirmative Covenants

  	
  33

  
	
  Section 5.2

  	
  Negative Covenants

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  INSURANCE;
  CASUALTY; CONDEMNATION

  	
  46

  
	
  Section 6.1

  	
  Insurance.

  	
  46

  
	
  Section 6.2

  	
  Casualty

  	
  50

  
	
  Section 6.3

  	
  Condemnation

  	
  50

  
	
  Section 6.4

  	
  Restoration

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  RESERVE
  FUNDS

  	
  56

  
	
  Section 7.1

  	
  Required Repair Funds.

  	
  56

  
	
  Section 7.2

  	
  Tax and Insurance
  Escrow Fund

  	
  57

  
	
  Section 7.3

  	
  Replacements and
  Replacement Reserve.

  	
  58

  
	
  Section 7.4

  	
  Intentionally Omitted.

  	
  63

  
	
  Section 7.5

  	
  Intentionally Omitted.

  	
  63

  
	
  Section 7.6

  	
  Intentionally Omitted.

  	
  63

  
	
  Section 7.7

  	
  Reserve Funds,
  Generally.

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  DEFAULTS

  	
  64

  
	
  Section 8.1

  	
  Event of Default.

  	
  64

  
	
  Section 8.2

  	
  Remedies.

  	
  66

  

 

i

 

	
  Section 8.3

  	
  Remedies Cumulative;
  Waivers

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SPECIAL
  PROVISIONS

  	
  67

  
	
  Section 9.1

  	
  Sale of Notes and
  Securitization

  	
  67

  
	
  Section 9.2

  	
  Securitization

  	
  67

  
	
  Section 9.3

  	
  Rating Surveillance

  	
  68

  
	
  Section 9.4

  	
  Exculpation

  	
  68

  
	
  Section 9.5

  	
  Termination of Manager

  	
  70

  
	
  Section 9.6

  	
  Servicer

  	
  70

  
	
  Section 9.7

  	
  Splitting the Loan

  	
  70

  
	
  Section 9.8

  	
  Cross Default Election

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  71

  
	
  Section 10.1

  	
  Survival

  	
  71

  
	
  Section 10.2

  	
  Lender’s Discretion

  	
  71

  
	
  Section 10.3

  	
  Governing Law

  	
  71

  
	
  Section 10.4

  	
  Modification, Waiver in
  Writing

  	
  72

  
	
  Section 10.5

  	
  Delay Not a Waiver

  	
  72

  
	
  Section 10.6

  	
  Notices

  	
  72

  
	
  Section 10.7

  	
  Trial by Jury

  	
  73

  
	
  Section 10.8

  	
  Headings

  	
  74

  
	
  Section 10.9

  	
  Severability

  	
  74

  
	
  Section 10.10

  	
  Preferences

  	
  74

  
	
  Section 10.11

  	
  Waiver of Notice

  	
  74

  
	
  Section 10.12

  	
  Remedies of Borrower

  	
  75

  
	
  Section 10.13

  	
  Expenses; Indemnity.

  	
  75

  
	
  Section 10.14

  	
  Schedules Incorporated

  	
  76

  
	
  Section 10.15

  	
  Offsets, Counterclaims
  and Defenses

  	
  76

  
	
  Section 10.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries.

  	
  76

  
	
  Section 10.17

  	
  Publicity

  	
  77

  
	
  Section 10.18

  	
  Waiver of Marshalling
  of Assets

  	
  77

  
	
  Section 10.19

  	
  Waiver of Counterclaim

  	
  77

  
	
  Section 10.20

  	
  Conflict; Construction
  of Documents; Reliance

  	
  77

  
	
  Section 10.21

  	
  BROKERS AND FINANCIAL
  ADVISORS

  	
  78

  
	
  Section 10.22

  	
  Prior Agreements

  	
  78

  
	
  Section 10.23

  	
  Sale of Loan

  	
  78

  
	
  Section 10.24

  	
  Customer Identification
  – USA Patriot Act Notice

  	
  79

  
	
  Section 10.25

  	
  Joint and Several Liability

  	
  79

  

 

ii

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule II

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule III

  	
  -

  	
  Required Repairs

  
	
  Schedule IV

  	
  -

  	
  Rent Roll

  
	
  Schedule V

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule VI

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule VII

  	
  -

  	
  Property Affected by Section 4.1.22

  
	
  Schedule VIII

  	
  -

  	
  Intentionally Omitted

  
	
  Schedule IX

  	
  -

  	
  List of Loans Subject to Section 9.8

  
	
  Schedule X

  	
  -

  	
  Other Contract Funds Agreements

  

 

iii

 

LOAN
AGREEMENT

 

THIS LOAN AGREEMENT, dated as of
this 9th day of February, 2006 (as amended, restated, replaced,
supplemented or otherwise modified from time to time, this “Loan Agreement”), between LASALLE
BANK NATIONAL ASSOCIATION, a national banking association, having an address at
135 South LaSalle Street, Suite 2905, Chicago, Illinois 60603 (“Lender”), and MB LONGVIEW
TRIANGLE, L.L.C., a Delaware limited liability company, having an address
at 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Borrower”).

 

W I T N E S S E T H:

 

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

 

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

 

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

 

ARTICLE I

 

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

“Borrower”
shall mean MB LONGVIEW TRIANGLE, L.L.C., a Delaware limited liability
company, together with its permitted successors and assigns.

 

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

 

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

 

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

 

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

 

“Casualty/Condemnation
Prepayment” shall have the meaning specified in Section 6.4(e) hereof.

 

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

 

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

 

“Closing Date”
shall mean the date hereof.

 

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

 

“Condemnation”
shall mean a temporary or permanent taking by any Governmental Authority as the
result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain, of all or any part of the Property, or any
interest therein or

 

2

 

right accruing thereto,
including any right of access thereto or any change of grade affecting the
Property or any part thereof.

 

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

 

“Crossing Event”
shall have the meaning set forth in Section 9.8 hereof.

 

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

 

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

 

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

 

(a)           the numerator is the Net Operating
Income (excluding interest on credit accounts) for such period as set forth in
the statements required hereunder, without deduction for (i) actual
management fees incurred in connection with the operation of the Property, (ii) amounts
paid to the Reserve Funds, less (A) management fees equal to the greater
of (1) assumed management fees of four percent (4%) of Gross Income from
Operations or (2) the actual management fees incurred, (B) assumed
Replacement Reserve Fund contributions equal to $0.25 per square foot of gross
leaseable area at the Property; and (C) assumed reserves for tenant
improvements and leasing commissions equal to $0.38 per square foot of gross
leaseable area at the Property; and

 

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

 

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

 

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

 

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

 

“Eligible Account”
shall mean a separate and identifiable account from all other funds held by the
holding institution that is either (a) an account or accounts maintained
with a federal or state-chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated
trust account or accounts maintained with a federal or state chartered
depository institution or trust company acting in its fiduciary capacity which,
in the case of a state chartered depository institution or trust company, is
subject to

 

3

 

regulations substantially
similar to 12 C.F.R. §9.10(b), having in either case a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authority.  An Eligible
Account will not be evidenced by a certificate of deposit, passbook or other
instrument.

 

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

 

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

 

“Environmental Report”
shall mean that certain Phase I environmental report (or Phase II environmental
report, if required) in respect of the Property delivered to Lender in
connection herewith.

 

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

 

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

 

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

 

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

 

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

 

“Gross Income from
Operations” shall mean all sustainable income as reported on the
financial statements delivered by the Borrower in accordance with this Loan
Agreement, computed in accordance with accounting principles reasonably
acceptable to Lender, consistently applied, derived from the ownership and
operation of the Property from whatever source, including,
but not limited to, (i) Rents from Tenants that are in occupancy, open for
business and paying unabated Rent, (ii) utility charges, (iii) escalations,
(iv) intentionally omitted; (v) service fees or charges, (vi) license
fees, (vii) parking fees, and (viii) other required pass-throughs but
excluding  (A) Rents from Tenants
that are subject to any bankruptcy proceeding (unless such Tenant has affirmed
its Lease or Inland American Real Estate Trust, Inc. has master leased
such Tenant’s premises for full contract rent for a period not less than three
years, and the net worth of Inland American Real Estate Trust, Inc. (as
determined by Lender) is not less than such entity’s net worth as of December 31,
2004), or are not in occupancy, open for

 

4

 

business or paying
unabated Rent, (B) sales, use and occupancy or other taxes on receipts
required to be accounted for by Borrower to any Governmental Authority, (C) refunds
and uncollectible accounts, (D) sales of furniture, fixtures and
equipment, (E) Insurance Proceeds (other than business interruption or
other loss of income insurance), (F) Awards, (G) unforfeited security
deposits, (H) utility and other similar deposits and (I) any disbursements
to Borrower from the Reserve Funds. 
Gross income shall not be diminished as a result of the Mortgage or the
creation of any intervening estate or interest in the Property or any part
thereof.

 

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

 

“Indebtedness”
of a Person, at a particular date, means the sum (without duplication) at such
date of (a) indebtedness or liability for borrowed money; (b) obligations
evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations
for the deferred purchase price of property or services (including trade
obligations); (d) obligations under letters of credit; (e) obligations
under acceptance facilities; (f) all guaranties, endorsements (other than
for collection or deposit in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds, to
invest in any Person or entity, or otherwise to assure a creditor against loss;
and (g) obligations secured by any Liens, whether or not the obligations
have been assumed.

 

“Indemnified
Liabilities” shall have the meaning set forth in Section 10.13(b) hereof.

 

“Indemnitor”
shall mean Inland Western Retail Real Estate Trust, Inc., a Maryland
corporation or, provided all of the conditions set forth in the Indemnity
Agreement with respect to the substitution of the Indemnitor have been met,
Substitute Indemnitor.

 

“Indemnity Agreement”
shall mean that certain Indemnity Agreement dated as of the date hereof by and
between Indemnitor and Borrower in favor of Lender.

 

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

 

5

 

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

 

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

 

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

 

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

 

“Interest Rate”
shall mean four and eighty-three hundredths percent (4.83%) per annum.

 

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

 

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

 

“Lender”
shall mean LaSalle Bank National Association, a national banking association,
together with its successors and assigns.

 

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

 

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

 

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

 

6

 

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

 

“Losses”
shall have the meaning set forth in the Indemnity Agreement.

 

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

 

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

 

“Maturity Date”
shall mean March 1, 2011, or such other date on which the final
payment of principal of the Note becomes due and payable as therein or herein
provided, whether at such stated maturity date, by declaration of acceleration,
or otherwise.

 

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

 

“Monthly Debt Service
Payment Amount” shall mean an amount equal to $94,990.00.

 

“Mortgage”
shall mean, with respect to the Property, that certain first priority Mortgage,
Security Agreement and Fixture Filing, dated the Closing Date, executed and
delivered by Borrower as security for the Loan and encumbering the Property, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

“Net Cash Flow”
shall mean, with respect to the Property for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.

 

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

 

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

 

“Net Operating Income”
shall mean the amount obtained by subtracting from Gross Income from Operations
(i) Operating Expenses, and (ii) a vacancy allowance equal to the
greater of (x) market vacancy (as reasonably determined by Lender), less actual
vacancy, and (y) underwritten vacancy of five percent (5%), less actual
vacancy.  Notwithstanding the foregoing,

 

7

 

if actual vacancy exceeds
market vacancy and underwritten vacancy, then there shall be no adjustment for
a vacancy allowance.

 

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

 

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

 

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

 

“Note” shall
mean that certain Promissory Note of even date herewith in the principal amount
of TWENTY-THREE MILLION SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($23,600,000.00), made by Borrower in favor of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

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

 

“Operating Expenses”
shall mean the total of all expenditures, computed in accordance with
accounting principles reasonably acceptable to Lender, consistently applied, of
whatever kind relating to the operation, maintenance and management of the
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, property taxes and assessments, advertising expenses,
management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Lender, and other
similar costs, but excluding depreciation, Debt Service, Capital Expenditures
and contributions to the Reserve Funds.

 

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

 

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

 

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

 

“Permitted Encumbrances”
shall mean, with respect to the Property, collectively, (a) the Liens and
security interests created by the Loan Documents, (b) all Liens,
encumbrances and other matters disclosed in the Title Insurance Policy relating
to the Property or any part thereof, (c) Liens, if any, for Taxes imposed
by any Governmental Authority not yet due or delinquent, (d) utility
easements granted pursuant to Section 5.2.13(d), and (e) such other
title and survey exceptions as Lender has approved or may approve in writing in
Lender’s

 

8

 

reasonable discretion,
which Permitted Encumbrances in the aggregate do not materially adversely
affect the value or use of the Property or Borrower’s ability to repay the
Loan.

 

“Permitted Prepayment Date”
shall mean the date that is two (2) years from the first day of the
calendar month immediately following the Closing Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

“Property
Condition Report” shall have the meaning set forth in Schedule III
hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Relevant Restoration Threshold”
shall mean Five Hundred Thousand and No/100 dollars ($500,000.00).

 

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

 

“Rents”
shall mean, with respect to the Property, all rents, rent equivalents, moneys
payable as damages or in lieu of rent or rent equivalents, royalties
(including, without limitation, all oil and gas or other mineral royalties and
bonuses), income, receivables, receipts, revenues, deposits (including, without
limitation, security, utility and other deposits), accounts, cash, issues,
profits, charges for services rendered, and other consideration of whatever
form or nature received by or paid to or for the account of or benefit of
Borrower or its agents or employees from any and all sources arising from or
attributable to the Property, and proceeds, if any, from business interruption
or other loss of income insurance, including the Other Contract Funds.

 

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

 

10

 

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

 

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

 

“Replacements”
shall have the meaning set forth in Section 7.3.1(a) hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Severed Loan Documents”
shall have the meaning set forth in Section 9.7 hereof.

 

“Sole Member”
shall mean Minto Builders (Florida), Inc., a Florida corporation.

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

(vii)         if such entity is a limited liability
company and such limited liability company has more than one member, such
limited liability company has as its manager that Special Purpose Entity that
is a corporation and that owns at least 1.0% (one percent) of the equity of the
limited liability company;

 

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

 

(ix)           if such entity is (a) a limited
liability company, has articles of organization, a certificate of formation
and/or an operating agreement, as applicable, (b) a

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(xviii)      has maintained and will maintain its
balance sheets, operating statements and other entity documents separate from
any other Person and has not permitted and will

 

13

 

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

 

(xix)         has maintained and will maintain
separate books and records for the Property;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Substitute
Indemnitor” shall mean Inland American Real Estate Trust, Inc.,
a Maryland corporation, so long as said corporation (a) has not been a
party to any bankruptcy proceeding, voluntary or involuntary, made an
assignment for the benefit of creditors or taken advantage of any insolvency
act, or any act for the benefit of debtors within seven (7) years prior to
the date of the proposed substitution, (b) shall have no material
convictions, judgments, litigation or regulatory action pending or threatened
against it, and shall not be on any so-called “prohibited persons” list, and (c) shall
have a net worth of not less than $300,000,000 as reflected in such entity’s
most recent financial statements, reviewed by an independent certified public
accountant, and reported to the Securities and Exchange Commission.

 

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

 

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

 

15

 

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

 

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

 

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

 

“Title Insurance Policy”
shall mean, with respect to the Property, an ALTA mortgagee title insurance
policy in the form (acceptable to Lender) (or, if the Property is in a State
which does not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Lender) issued with respect to the Property
and insuring the lien of the Mortgage encumbering the Property.

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

 

GENERAL TERMS

 

Section 2.1             Loan Commitment; Disbursement to
Borrower.

 

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

 

16

 

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

 

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

 

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

 

Section 2.2             Interest; Loan Payments; Late
Payment Charge.

 

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

 

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

 

2.2.3        Payments Generally.  Borrower shall pay to Lender (a) on the
Closing Date, an amount equal to interest only on the outstanding principal
balance of the Loan from the Closing Date up to but not including the first
Payment Date following the Closing Date, and (b) on April 1, 2006 and
each Payment Date thereafter up to but not including the Maturity Date, an
amount equal to the Monthly Debt Service Payment Amount, which shall be applied
to interest on the outstanding principal amount of the Loan for the prior
calendar month at the Interest Rate.

 

2.2.4        Intentionally Omitted.

 

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

 

2.2.6        Payments after Default.  Upon the occurrence and during the
continuance of an Event of Default, interest on the outstanding principal
balance of the Loan and, to the extent permitted by law, overdue interest and
other amounts due in respect of the Loan, shall accrue at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein.  Interest
at the Default Rate shall be computed from the occurrence of the Event of
Default until the earlier of (i) in the event of a non-monetary default,
the cure of such Event of Default by Borrower and acceptance of such cure by
Lender, and (ii) in the event of a monetary default, the actual receipt
and collection of the Debt (or that portion thereof that is then due).  To the extent permitted by applicable law,
interest at the Default Rate

 

17

 

shall be added to the Debt, shall itself accrue
interest at the same rate as the Loan and shall be secured by the
Mortgage.  This paragraph shall not be
construed as an agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy accruing to Lender by reason
of the occurrence of any Event of Default and Lender retains its rights under
the Note and this Loan Agreement to accelerate and to continue to demand
payment of the Debt upon the happening and continuance of any Event of Default.

 

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

 

2.2.8        Usury Savings.  This Loan Agreement and the Note are subject
to the express condition that at no time shall Borrower be obligated or
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate.  If,
by the terms of this Loan Agreement or the other Loan Documents, Borrower is at
any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the Interest Rate, or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder. 
All sums paid or agreed to be paid to Lender for the use, forbearance, or
detention of the sums due under the Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Loan until payment in full so that the rate or amount
of interest on account of the Loan does not exceed the Maximum Legal Rate of
interest from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.

 

Section 2.3             Prepayments.

 

2.3.1        Voluntary Prepayments.

 

(a)           Except as otherwise provided herein,
Borrower shall not have the right to prepay the Loan in whole or in part prior
to the Permitted Prepayment Date.  On or
after the Permitted Prepayment Date, Borrower may, provided it has given Lender
prior written notice in accordance with the terms of this Loan Agreement,
prepay the unpaid principal balance of the Loan in whole, but not in part, by
paying, together with the amount to be prepaid, (i) interest accrued and
unpaid on the outstanding principal balance of the Loan being prepaid to and
including the date of prepayment, (ii) unless prepayment is tendered on a
Payment Date, an amount equal to the interest that would have accrued on the
amount being prepaid after the date of prepayment through and including the
next Payment Date had the prepayment not been made (which amount shall constitute
additional consideration for the prepayment), (iii) all other sums

 

18

 

then due under this Loan Agreement, the Note, the
Mortgage and the other Loan Documents, and (iv) if prepayment occurs prior
to the Payment Date which is three (3) months prior to the Maturity Date,
a prepayment consideration (the “Prepayment Consideration”)
equal to the greater of (A) one percent (1%) of the outstanding principal
balance of the Loan being prepaid or (B) the excess, if any, of (1) the
sum of the present values of all then-scheduled payments of principal and
interest under this Loan Agreement including, but not limited to, principal and
interest due on February 1, 2011 (with each such payment discounted
to its present value at the date of prepayment at the rate which, when
compounded monthly, is equivalent to the Prepayment Rate), over (2) the
outstanding principal amount of the Loan. Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment consideration.

 

(b)           On the Payment Date that is three (3) months
prior to the Maturity Date, and on each day thereafter through the Maturity
Date, Borrower may, at its option, prepay the Debt without payment of any
Prepayment Consideration or other penalty or premium; provided, however,
if such prepayment is not paid on a regularly scheduled Payment Date, the Debt
shall include interest that would have accrued on such prepayment through and
including the day immediately preceding the Maturity Date.  Borrower’s right to prepay any portion of the
principal balance of the Loan shall be subject to (i) Borrower’s
submission of a notice to Lender setting forth the amount to be prepaid and the
projected date of prepayment, which date shall be no less than thirty (30) days
from the date of such notice, and (ii) Borrower’s actual payment to Lender
of the amount to be prepaid as set forth in such notice on the projected date
set forth in such notice or any day following such projected date occurring in
the same calendar month as such projected date.

 

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

 

(b)           On the date on which Borrower tenders
a Casualty/Condemnation Prepayment pursuant to Section 6.4(e) below,
such tender shall include (a) all accrued and unpaid interest and the
principal indebtedness being prepaid, including interest on the outstanding
principal amount of the applicable Note through the last day of the month
within which such tender occurs, and (b) any other sums due hereunder
relating to the applicable Note.  Except
as set forth in this Section 2.3.2(b), other than following an Event of
Default, no Prepayment Consideration or other penalty or premium shall be due
in connection with any Casualty/Condemnation Prepayment.

 

2.3.3        Prepayments after Default.  Following an Event of Default, if Borrower or
anyone on Borrower’s behalf makes a tender of payment of all or any portion of
the Debt at any time prior to a foreclosure sale (including a sale under the
power of sale under the Mortgage), or during any redemption period after
foreclosure, (i) the tender of payment shall constitute an evasion of
Borrower’s obligation to pay any Prepayment Consideration due under this Loan

 

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Agreement and such payment shall, therefore, to the
maximum extent permitted by law, include a premium equal to the Prepayment
Consideration that would have been payable on the date of such tender had the
Loan not been so accelerated, or (ii) if at the time of such tender a
prepayment of the principal amount of the Loan would have been prohibited under
this Loan Agreement had the principal amount of the Loan not been so
accelerated, the tender of payment shall constitute an evasion of such
prepayment prohibition and shall, therefore, to the maximum extent permitted by
law, include an amount equal to the greater of (i) 1% of the then
principal amount of the Loan (or the relevant portion thereof being prepaid)
and (ii) an amount equal to the excess of (A) the sum of the present
values of a series of payments payable at the times and in the amounts equal to
the payments of principal and interest (including, but not limited to the
principal and interest payable on the Maturity Date) which would have been
scheduled to be payable after the date of such tender under this Loan Agreement
had the Loan (or the relevant portion thereof) not been accelerated, with each
such payment discounted to its present value at the date of such tender at the
rate which when compounded monthly is equivalent to the Prepayment Rate, over (B) the
then principal amount of the Loan.

 

Section 2.4             Intentionally Omitted.

 

Section 2.5             Release of Property.  Except as set forth in this Section 2.5,
no repayment or prepayment of all or any portion of the Loan shall cause, give
rise to a right to require, or otherwise result in, the release of any Lien of
the Mortgage on the Property.  If
Borrower has elected to prepay the entire amount of the Loan pursuant to Section 2.3.1
and the requirements of this Section 2.5 have been satisfied, the Property
shall be released from the Lien of the Mortgage.

 

2.5.1        Release on Payment in Full.  Lender shall, upon the written request and at
the expense of Borrower, upon payment in full of all principal and interest on
the Loan and all other amounts due and payable under the Loan Documents in
accordance with the terms and provisions of Section 2.3.1 of this Loan
Agreement, release the Lien of the Mortgage on the Property not theretofore
released.

 

2.5.2        Intentionally Omitted.

 

Section 2.6             Manner of Making Payments.

 

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

 

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

 

20

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)           Survey.  Lender shall have received a title survey for
the Property, certified to the title company and Lender and their successors
and assigns, in form and content satisfactory to Lender and prepared by a
professional and properly licensed land surveyor satisfactory to Lender in
accordance with the most recent Minimum Standard Detail

 

21

 

Requirements for ALTA/NSPS Land Title Surveys.  The following additional items from the list
of “Optional Survey Responsibilities and Specifications” (Table A) should be
added to each survey: 1, 2, 3, 4, 6, 8, 9, 10, 11, 13, 14, 15, 16, 17 and
18.  The survey shall reflect the same
legal description contained in the Title Insurance Policy relating to the
Property referred to in clause (ii) above and shall include, among other
things, a legal description of the real property comprising part of such
Property reasonably satisfactory to Lender. 
The surveyor’s seal shall be affixed to each survey and the surveyor
shall provide a certification for each survey in form and substance acceptable
to Lender.

 

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

 

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

 

(f)            Zoning.  With respect to the Property, Lender shall
have received, at Lender’s option, (i) letters or other evidence with
respect to the Property from the appropriate municipal authorities (or other
Persons) concerning applicable zoning and building laws, (ii) an ALTA 3.1
zoning endorsement to the Title Insurance Policy, if available or (iii) other
evidence of zoning compliance, in each case in substance reasonably
satisfactory to Lender.

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

3.1.11      Tenant Estoppels. Borrower shall
exercise reasonable commercial efforts to deliver estoppel certificates from
Tenants occupying not less than eighty percent (80%) of the gross leasable area
of the Property; provided, however, that, in the event that Borrower is unable
to deliver some or all of the estoppels described above in this Section 3.1.11,
Lender agrees that the requirement to deliver such letters to Lender shall be
waived by Lender as a condition precedent to the closing of the Loan so long as
Borrower delivers on or before the Closing Date, a certificate executed by
Borrower with respect to all applicable leases which shall be in substantially
the same form and contain the same terms as set forth in Lender’s standard form
of estoppel certificate.  At any time and
from time to time, Lender may request that Borrower obtain estoppel
certificates from Tenants occupying the Property.  If requested by Lender Borrower agrees to use
commercially reasonable efforts to obtain the estoppel certificates that Lender
is requesting, which estoppel certificates shall be in form and substance
acceptable to Lender in its reasonable discretion.

 

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

 

3.1.13      Material Adverse Change.  There shall have been no material adverse
change in the financial condition or business condition of Borrower or the
Property since the date of the most recent financial statements delivered to
Lender.  The income and expenses of the
Property, the occupancy leases thereof, and all other features of the
transaction shall be as represented to Lender without material adverse
change.  Neither Borrower, any of its
constituent Persons, shall be the subject of any bankruptcy, reorganization, or
insolvency proceeding.

 

23

 

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

 

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

 

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

 

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

 

3.1.18      Management Agreement.  Lender shall have received a certified copy
of the Management Agreement with respect to the Property which shall be
satisfactory in form and substance to Lender. 
Lender acknowledges that it has reviewed the Management Agreement, and
as drafted, such Management Agreement does not violate Borrower’s covenant that
affiliated agreements be on terms which are intrinsically fair, commercially
reasonable and are no less favorable to it than would be obtained in a
comparable arm’s length transaction with an unrelated third party.

 

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

 

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

 

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

 

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

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

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

 

4.1.3        No Conflicts.  The execution, delivery and performance of
this Loan Agreement and the other Loan Documents by Borrower will not conflict
with or result in a breach of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the
property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, partnership agreement or other
agreement or instrument to which Borrower is a party or by which any of
Borrower’s property or assets is subject, nor will such action result in any
violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
Borrower or any of Borrower’s properties or assets, and any consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental agency or body required for the
execution, delivery and performance by Borrower of this Loan Agreement or any
other Loan Documents has been obtained and is in full force and effect.

 

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

 

25

 

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

 

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

 

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

 

26

 

constituent Person in the last seven (7) years
has ever made an assignment for the benefit of creditors or taken advantage of
any insolvency act for the benefit of debtors. 
Neither Borrower nor any of its constituent Persons are contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of Borrower’s
assets or property, and Borrower has no knowledge of any Person contemplating
the filing of any such petition against it or such constituent Persons.

 

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

 

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

 

4.1.10      Compliance.  To Borrower’s knowledge, Borrower and the
Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes.  Borrower is
not in default or violation of any order, writ, injunction, decree or demand of
any Governmental Authority.  There has
not been committed by Borrower or, to Borrower’s knowledge, any other Person in
occupancy of or involved with the operation or use of the Property any act or omission
affording the federal government or any other Governmental Authority the right
of forfeiture as against the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents.

 

4.1.11      Financial Information.  All financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Property (i) are, to the
best of Borrower’s knowledge, true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the
Property as of the date of such reports, and (iii) to the extent prepared
or audited by an independent certified public accounting firm, have been
prepared in accordance with accounting principles reasonably acceptable to
Lender, consistently applied throughout the periods covered, except as
disclosed therein; provided, however, that if any financial data
is delivered to Lender by any Person other than Borrower, Indemnitor or any of
their Affiliates, or if such financial data has been prepared by or at the
direction of any Person other than Borrower, Indemnitor or any of their
Affiliates, then the foregoing representations with respect to such financial
data shall be to the best of Borrower’s knowledge, after due inquiry.  Borrower does not have any contingent
liabilities,

 

27

 

liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a
materially adverse effect on the Property or the operation thereof as a retail
shopping center, except as referred to or reflected in said financial
statements.  Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operations or business of Borrower from that set forth in
said financial statements.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

4.1.23      Flood
Zone. To the best of Borrower’s knowledge, after due inquiry, no
Improvements on the Property are located in an area identified by the Federal
Emergency Management Agency as an area having special flood hazards.

 

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

 

4.1.25      Boundaries.
To the best of Borrower’s knowledge, after due inquiry, all of the improvements
which were included in determining the appraised value of the Property lie
wholly within the boundaries and building restriction lines of the Property,
and no improvements

 

29

 

on adjoining
properties encroach upon the Property, and no easements or other encumbrances
upon the Property encroach upon any of the improvements, so as to affect the
value or marketability of the Property except those which are insured against
by title insurance.

 

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

 

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

 

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

 

4.1.29      Filing
and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or
other amounts in the nature of transfer taxes required to be paid by any Person
under

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

4.1.33      No
Change in Facts or Circumstances; Disclosure. All information submitted by
Borrower to Lender and in all financial statements, rent rolls, reports,
certificates and other documents submitted in connection with the Loan or in
satisfaction of the terms thereof and all statements of fact made by Borrower
in this Loan Agreement or in any other Loan Document, are accurate, complete
and correct in all material respects, provided, however, that if such
information was provided to Borrower by non-affiliated third parties, Borrower
represents that such information is, to the best of its knowledge after due
inquiry, accurate, complete and correct in all material respects. There has
been no material adverse change in any condition, fact, circumstance or event
that would make any such information inaccurate, incomplete or otherwise
misleading in any material respect or that otherwise materially and adversely
affects or might materially and adversely affect the Property or the business
operations or the financial condition of Borrower. Borrower has disclosed to
Lender all material facts and has not failed to disclose any material fact that
could cause any representation or warranty made herein to be materially
misleading.

 

31

 

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

 

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

 

4.1.36      OFAC.
Borrower represents and covenants that it is not and will not become a person
(individually, a “Prohibited Person”
and collectively “Prohibited Persons”)
listed on the Specially Designated Nationals and Blocked Persons List
maintained by the Office of Foreign Asset Control, U.S. Department of the
Treasury (the “OFAC List”)
or otherwise subject to any other prohibitions or restriction imposed by laws,
rules, regulations or executive orders, including Executive Order No. 13224,
administered by OFAC (as may be amended from time to time, collectively the “OFAC Rules”). Borrower represents and
covenants that it also (i) is not and will not become owned or controlled by a
Prohibited Person, (ii) is not acting and will not act for or on behalf of a
Prohibited Person, (iii) is not otherwise associated with and will not become
associated with a Prohibited Person, (iv) is not providing and will not provide
any material, financial or technological support for or financial or other
service to or in support of acts of terrorism or a Prohibited Person. Borrower
will not transfer any interest in Borrower to or enter into a Lease with any
Prohibited Person. Borrower shall immediately notify Lender if Borrower has
actual knowledge (after commercially reasonable due diligence and inquiry) that
any Indemnitor or any member or beneficial owner of Borrower or any Indemnitor
is or becomes a Prohibited Person or (A) is indicted on or (B) arraigned and
held over on charges involving money laundering or predicate crimes to money
laundering. Borrower will not enter into any Lease or any other transaction or
undertake any activities related to the Loan in violation of the federal Bank
Secrecy Act (as amended from time to time, the “BSA”), 31 U.S.C. § 5311, et seq. or any federal or state
laws, rules, regulations or executive orders, including but not limited to 18
U.S.C. §§ 1956, 1957 and 1960, prohibiting money laundering and terrorist
financing (as amended from time to time, collectively the “Anti-Money Laundering Laws”). Borrower
shall (a) not use or permit the use of any proceeds of the Loan in any way that
will violate OFAC Rules or Anti-Money Laundering Laws, (b) comply and cause all
of its subsidiaries to comply with applicable OFAC Rules and Anti-Money
Laundering Laws, (c) provide information as Lender may require from time to
time to permit Lender to satisfy its obligations under the OFAC Rules and/or
the Anti-Money Laundering Laws and (d) not engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of avoiding, or
attempts to violate any of the foregoing. Borrower shall immediately notify
Lender if to Borrower’s actual knowledge

 

32

 

(after
commercially reasonable due diligence and inquiry) any Tenant becomes a
Prohibited Person or (A) is convicted of, (B) pleads nolo contendere to, (C) is
indicted on, or (D) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. In addition to the
foregoing, Borrower agrees to indemnify, defend and hold harmless Lender for
any actual Losses suffered or incurred (as applicable) by Lender if Borrower
does not comply with this Section 4.1.36 and/or any of the provisions and
requirements of  the OFAC Rules, BSA
and/or any Anti-Money Laundering Laws.

 

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

 

ARTICLE V

BORROWER COVENANTS

 

Section 5.1             Affirmative
Covenants. From the Closing Date and until payment and performance in full
of all obligations of Borrower under the Loan Documents or the earlier release
of the Lien of the Mortgage encumbering the Property (and all related obligations)
in accordance with the terms of this Loan Agreement and the other Loan
Documents, Borrower hereby covenants and agrees with Lender that:

 

5.1.1        Existence;
Compliance with Legal Requirements; Insurance. Borrower shall do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its existence, rights, licenses, permits and franchises and comply with
all Legal Requirements applicable to it and the Property. Borrower shall not
commit, nor shall Borrower permit any other Person in occupancy of or involved
with the operation or use of the Property to commit, any act or omission
affording the federal government or any state or local government the right of
forfeiture as against the Property or any part thereof or any monies paid in
performance of Borrower’s obligations under any of the Loan Documents. Borrower
hereby covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture. Borrower shall at all times
maintain, preserve and protect all its franchises and trade names and preserve
all the remainder of its property used or useful in the conduct of its business
and shall keep the Property in good working order and repair, and from time to
time make, or cause to be made, all reasonably necessary repairs, renewals,
replacements, betterments and improvements thereto, all as more fully provided
in the Mortgage. Borrower shall keep the Property insured at all times by
financially sound and reputable insurers, to such extent and against such
risks, and maintain liability and such other insurance, as is more fully
provided in this Loan Agreement. Borrower shall operate, or cause the tenant to
operate, any Property that is the subject of an O&M Agreement (if any) in
accordance with the terms and provisions thereof in all material respects. After
prior written notice to Lender, Borrower, at its own expense, may contest by
appropriate legal proceeding promptly initiated and conducted in good faith and
with due diligence, the validity of any Legal Requirement, the applicability of
any Legal Requirement

 

33

 

to Borrower or the
Property or any alleged violation of any Legal Requirement, provided that (i)
no Event of Default has occurred and remains uncured; (ii) intentionally
omitted; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any instrument to which Borrower is subject
and shall not constitute a default thereunder and such proceeding shall be
conducted in accordance with all applicable statutes, laws and ordinances; (iv)
the Property or any part thereof or interest therein will not be in danger of
being sold, forfeited, terminated, cancelled or lost; (v) Borrower shall
promptly upon final determination thereof comply with any such Legal
Requirement determined to be valid or applicable or cure any violation of any
Legal Requirement; (vi) such proceeding shall suspend the enforcement of the
contested Legal Requirement against Borrower or the Property; and (vii)
Borrower shall furnish such security as may be required in the proceeding, or
as may be requested by Lender, to insure compliance with such Legal
Requirement, together with all interest and penalties payable in connection therewith.
Lender may apply any such security, as necessary to cause compliance with such
Legal Requirement at any time when, in the reasonable judgment of Lender, the
validity, applicability or violation of such Legal Requirement is finally
established or the Property (or any part thereof or interest therein) shall be
in danger of being sold, forfeited, terminated, cancelled or lost.

 

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

 

34

 

shall suspend the
collection of such contested Taxes or Other Charges from the Property; and (vi)
Borrower shall furnish such security as may be required in the proceeding, or
as may be reasonably requested by Lender, to insure the payment of any such
Taxes or Other Charges, together with all interest and penalties thereon. Lender
may pay over any such cash deposit or part thereof held by Lender to the
claimant entitled thereto at any time when, in the reasonable judgment of
Lender, the entitlement of such claimant is established.

 

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

 

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

 

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

 

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

 

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

 

5.1.8        Insurance
Benefits. Borrower shall cooperate with Lender in obtaining for Lender the
benefits of any Insurance Proceeds lawfully or equitably payable in connection
with the Property, and Lender shall be reimbursed for any expenses incurred in
connection therewith (including reasonable attorneys’ fees and disbursements,
and the payment by Borrower of the expense of an appraisal on behalf of Lender
in case of a fire or other casualty affecting the Property or any part thereof)
out of such Insurance Proceeds.

 

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

 

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

 

(b)           execute
and deliver to Lender such documents, instruments, certificates, assignments
and other writings, and do such other acts necessary or desirable, to evidence,

 

35

 

preserve and/or
protect the collateral at any time securing or intended to secure the
obligations of Borrower under the Loan Documents, as Lender may reasonably
require; and

 

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

 

5.1.10      Intentionally
Omitted.

 

5.1.11      Financial
Reporting. (a)  Borrower will keep
and maintain or will cause to be kept and maintained on a Fiscal Year basis, in
accordance with the requirements for a Special Purpose Entity set forth above,
proper and accurate books, records and accounts reflecting all of the financial
affairs of Borrower and all items of income and expense in connection with the
operation on an individual basis of the Property. Lender shall have the right
from time to time at all times during normal business hours upon reasonable
notice to examine such books, records and accounts at the office of Borrower or
other Person maintaining such books, records and accounts and to make such
copies or extracts thereof as Lender shall desire. After the occurrence and
during the continuance of an Event of Default, Borrower shall pay any costs and
expenses incurred by Lender to examine Borrower’s accounting records with
respect to the Property, as Lender shall reasonably determine to be necessary
or appropriate in the protection of Lender’s interest.

 

(b)           Borrower
will furnish to Lender annually, within ninety (90) days following the end of
each Fiscal Year of Borrower, either (i) a complete copy of Borrower’s annual
financial statements audited by an accounting firm or other independent
certified public accountant reasonably acceptable to Lender in accordance with
the requirements for a Special Purpose Entity set forth above, or (ii) a
consolidated and annotated financial statement of Borrower and Sole Member (as
applicable), audited by an accounting firm or other independent certified
public accountant reasonably acceptable to Lender in accordance with the
requirements for a Special Purpose Entity set forth above, together with
unaudited financial statements relating to the Borrower and the Property. Such
financial statements for the Property for such Fiscal Year and shall contain
statements of profit and loss for Borrower and the Property and a balance sheet
for Borrower. Such statements shall set forth the financial condition and the
results of operations for the Property for such Fiscal Year, and shall include,
but not be limited to, amounts representing annual Net Cash Flow, Net Operating
Income, Gross Income from Operations and Operating Expenses. Borrower’s annual
financial statements shall be accompanied by (i) a comparison of the budgeted
income and expenses and the actual income and expenses for the prior Fiscal
Year, (ii) a certificate executed by the chief financial officer of Borrower or
Sole Member, as applicable, stating that each such annual financial statement
presents fairly the financial condition and the results of operations of
Borrower and the Property being reported upon and has been prepared in
accordance with accounting principles reasonably acceptable to Lender,
consistently applied, (iii) an unqualified opinion of an accounting firm or
other independent certified public accountant reasonably acceptable to Lender,
(iv) a certified rent roll containing current rent, lease expiration dates and
the square footage occupied by each tenant; (v) a schedule audited by such
independent certified public accountant reconciling Net Operating Income to Net
Cash Flow (the “Net Cash Flow Schedule”),
which shall itemize all adjustments

 

36

 

made to Net
Operating Income to arrive at Net Cash Flow deemed material by such independent
certified public accountant. Together with Borrower’s annual financial
statements, Borrower shall furnish to Lender an Officer’s Certificate
certifying as of the date thereof whether there exists an event or circumstance
which constitutes a Default or Event of Default under the Loan Documents
executed and delivered by, or applicable to, Borrower, and if such Default or
Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same.

 

(c)           Borrower
will furnish, or cause to be furnished, to Lender on or before forty five (45)
days after the end of each calendar quarter the following items, accompanied by
a certificate of the chief financial officer of Borrower or Sole Member, as
applicable, stating that such items are true, correct, accurate, and complete
and fairly present the financial condition and results of the operations of
Borrower and the Property (subject to normal year-end adjustments) as
applicable: (i) a rent roll for the subject month accompanied by an Officer’s
Certificate with respect thereto; (ii) quarterly and year-to-date operating
statements (including Capital Expenditures) prepared for each calendar quarter,
noting Net Operating Income, Gross Income from Operations, and Operating
Expenses (not including any contributions to the Replacement Reserve Fund, and
other information necessary and sufficient to fairly represent the financial
position and results of operation of the Property during such calendar month,
and containing a comparison of budgeted income and expenses and the actual
income and expenses together with a detailed explanation of any variances of
five percent (5%) or more between budgeted and actual amounts for such periods,
all in form satisfactory to Lender; (iii) a calculation reflecting the annual
Debt Service Coverage Ratio for the immediately preceding twelve (12) month
period as of the last day of such month accompanied by an Officer’s Certificate
with respect thereto; and (iv) a Net Cash Flow Schedule (such Net Cash Flow for
the Borrower may be unaudited if it is certified by an officer of the Borrower).
In addition, such certificate shall also be accompanied by a certificate of the
chief financial officer of Borrower or Sole Member stating that the
representations and warranties of Borrower set forth in Section 4.1.30(a) are
true and correct as of the date of such certificate.

 

(d)           Intentionally
deleted.

 

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

 

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

 

(g)           Borrower
will cause Indemnitor to furnish to Lender annually, within one hundred twenty
(120) days following the end of each Fiscal Year of Indemnitor, Indemnitor’s
10K and/or 10Q filings.

 

37

 

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

 

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

 

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

 

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

 

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

 

(b)           Borrower
shall use commercially reasonable efforts to deliver to Lender upon request,
tenant estoppel certificates from each commercial tenant leasing space at the
Property in form and substance reasonably satisfactory to Lender provided that
Borrower shall

 

38

 

not be required to
deliver such certificates more frequently than one (1) time in any calendar
year.

 

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

 

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

 

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

 

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

 

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

 

5.1.20      Leasing
Matters. Any Leases with respect to the Property written after the Closing
Date for more than the Relevant Leasing Threshold square footage shall be
subject to the prior written approval of Lender, which approval may be given or
withheld in the sole discretion of Lender. Lender shall approve or disapprove
any such Lease within ten (10) Business Days of Lender’s receipt of a final
execution draft of such Lease (including all exhibits, schedules, supplements,
addenda or other agreements relating thereto) and a written notice from
Borrower requesting Lender’s approval to such Lease, and such Lease shall be
deemed approved, if Lender does not disapprove such Lease within said ten (10)
Business Day period provided such
written notice conspicuously states, in large bold type, that “PURSUANT TO SECTION 5.1.20 OF THE LOAN AGREEMENT, THE LEASE SHALL BE
DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN TEN (10)
BUSINESS DAYS OF LENDER’S RECEIPT OF SUCH LEASE AND WRITTEN NOTICE”. Borrower
shall furnish Lender with executed copies of all Leases. All renewals of Leases
and all proposed Leases shall provide for rental rates comparable to existing
local market rates (unless such rental rates are otherwise set forth in the
Leases executed prior to the Closing Date). All proposed Leases shall be on
commercially reasonable terms and shall not contain any terms

 

39

 

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

 

5.1.21      Alterations.
Subject to the rights of tenants to make alterations pursuant to the terms of
their respective Leases, Borrower shall obtain Lender’s prior written consent
to any alterations to any Improvements, which consent shall not be unreasonably
withheld or delayed except with respect to alterations that may have a material
adverse effect on Borrower’s financial condition, the value of the Property or
the Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall
not be required in connection with any alterations that will not have a
material adverse effect on Borrower’s financial condition, the value of the
Property or the Net Operating Income, provided that such alterations are made
in connection with (a) tenant improvement work performed pursuant to the terms
of any Lease executed on or before the Closing Date, (b) tenant improvement
work performed pursuant to the terms and provisions of a Lease and not
adversely affecting any structural component of any Improvements, any utility
or HVAC system contained in any Improvements or the exterior of any building
constituting a part of any Improvements, (c) alterations performed in
connection with the restoration of the Property after the occurrence of a
casualty in accordance with the terms and provisions of this Loan Agreement or
(d) any structural alteration which costs less than $100,000.00 in the
aggregate for all components thereof which constitute such alteration or any
non-structural alteration which costs less than $250,000.00 in the aggregate
for all components thereof which constitute such

 

40

 

alteration. If the
total unpaid amounts due and payable with respect to alterations to the
Improvements at the Property (other than such amounts to be paid or reimbursed
by tenants under the Leases) shall at any time equal or exceed $500,000.00 (the
“Threshold Amount”), Borrower, upon
Lender’s request, shall promptly deliver to Lender as security for the payment
of such amounts and as additional security for Borrower’s obligations under the
Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other
securities having a rating acceptable to Lender and that the applicable Rating
Agencies have confirmed in writing will not, in and of itself, result in a
downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization, or (D) a
completion bond or letter of credit issued by a financial institution having a
rating by Standard & Poor’s Ratings Group of not less than A-1+ if the term
of such bond or letter of credit is no longer than three (3) months or, if such
term is in excess of three (3) months, issued by a financial institution having
a rating that is acceptable to Lender and that the applicable Rating Agencies
have confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization. Such security shall be in an
amount equal to the excess of the total unpaid amounts with respect to
alterations to the Improvements on the Property (other than such amounts to be
paid or reimbursed by tenants under the Leases) over the Threshold Amount and,
if cash, may be applied from time to time, at the option of Borrower, to pay
for such alterations. At the option of Lender, following the occurrence and
during the continuance of an Event of Default, Lender may terminate any of the
alterations and use the deposit to restore the Property to the extent necessary
to prevent any material adverse effect on the value of the Property.

 

5.1.22      Intentionally
Omitted.

 

5.1.23      Intentionally
Omitted.

 

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

 

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

 

41

 

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

 

(a)           Permitted
Encumbrances;

 

(b)           Liens
created by or related to Indebtedness permitted pursuant to the Loan Documents;
and

 

(c)           Liens
for Taxes or Other Charges not yet due (or that Borrower is contesting in
accordance with the terms of Section 5.1.2 hereof).

 

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

 

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

 

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

 

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

 

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

 

42

 

5.2.8        Assets.
Borrower shall not purchase or own any properties other than the Property owned
by Borrower as of the Closing Date as reflected in the applicable Title
Insurance Policy.

 

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

 

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

 

5.2.11      Intentionally
Omitted.

 

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

 

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

 

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

 

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

 

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

 

5.2.13      Transfers.     Unless
such action is permitted by the provisions of this Section 5.2.13, Borrower
agrees that it will not (i) sell, assign, convey, transfer or otherwise dispose
of its interests in the Property or any part thereof, (ii) permit any owner,
directly or indirectly, of an ownership interest in the Property, to transfer
such interest, whether by transfer of stock or other interest in Borrower or
any entity, or otherwise, (iii) incur Indebtedness (other than the Indebtedness
permitted pursuant to the terms of this Loan Agreement), (iv) mortgage,
hypothecate or otherwise encumber or grant a security interest in the Property
or any part thereof, (v) sell, assign, convey, transfer, mortgage, encumber,
grant a security interest in, or otherwise dispose of any direct or indirect
ownership interest in Borrower, or permit any owner

 

43

 

of an interest in
Borrower to do the same, or (vi) file a declaration of condominium with respect
to the Property (any of the foregoing transactions, a “Transfer”). For purposes hereof, a “Transfer” shall not include  (A) any issuance, sale or transfer of
interests in Inland American Real Estate Trust, Inc. or any successor entity
resulting from any merger permitted hereunder, (B) a transfer by devise or
descent or by operation of law upon the death of a member or partner of
Borrower, or (C) the merger of the Inland American Real Estate Trust, Inc. with
any of the following entities:  Inland
Retail Real Estate Trust, Inc., a Maryland corporation, Inland Real Estate
Corporation, a Maryland corporation, Inland Real Estate Investment Corporation,
a Delaware corporation, Inland Western Real Estate Trust, Inc., a Maryland
corporation, any other real estate investment trust sponsored by Inland Real
Estate Investment Corporation, or any other entity composed entirely of any of
the foregoing; provided, however, (i) Lender shall receive not less than thirty
(30) days prior written notice of any such proposed merger, (ii) the net worth
of the entity surviving such merger shall equal or exceed the net worth of the
Inland American Real Estate Trust, Inc. immediately prior to such merger, and
(iii) immediately following such merger, the entity surviving the merger shall
be publicly traded.

 

(a)           Lender
shall not withhold its consent to a Transfer of the Property, provided that the
following conditions are satisfied:

 

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

 

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

 

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

 

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

 

(5)                                  if
a substantive non-consolidation opinion was required in connection with the initial
Loan closing, Borrower shall deliver an Additional Insolvency Opinion, and if
required by a Rating Agency, a fraudulent conveyance opinion, which in each
case may be relied upon by the holder of the Note, the Ratings Agencies and
their respective counsel, agents and representatives with respect to the
proposed transaction, including the Transferee, which opinion shall be
acceptable to Lender in its reasonable discretion;

 

44

 

 

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

 

Lender shall approve or disapprove any proposed Transfer governed by
this Section 5.2.13(a) within thirty (30) days of Lender’s receipt of a written
notice from Borrower requesting Lender’s approval, provided such notice
includes all information necessary to make such decision, and further provided
that such written notice from Borrower shall conspicuously state, in large bold
type, that “PURSUANT TO SECTION 5.2.13 OF THE LOAN
AGREEMENT, A RESPONSE IS REQUIRED WITHIN THIRTY (30) DAYS OF LENDER’S RECEIPT
OF THIS WRITTEN NOTICE”. If Lender fails to disapprove any such
matter within such period, Borrower shall provide a second written notice
requesting approval, which written notice shall conspicuously state, in large
bold type, that “PURSUANT TO SECTION 5.2.13 OF THE LOAN
AGREEMENT, THE MATTER DESCRIBED HEREIN SHALL BE DEEMED APPROVED IF LENDER DOES
NOT RESPOND TO THE CONTRARY WITHIN TEN (10) DAYS OF LENDER’S RECEIPT OF THIS
WRITTEN NOTICE”. Thereafter, if Lender does not disapprove such
matter within said ten (10) day period such matter shall be deemed approved.

 

(b)           Lender
shall not withhold its consent to, and shall not charge an assumption fee in
connection with, (1) a Transfer of up to, in the aggregate, forty-nine percent
(49%) of the direct or indirect ownership interests in Borrower, or (2) a
Transfer of greater than forty-nine percent (49%) of the direct or indirect
ownership interest in Borrower, provided that (A) such transfer is to a
Qualified Entity (as defined below), and (B) Borrower shall pay all of Lender’s
reasonable and customary third-party expenses (including reasonable attorneys’
fees and disbursements) actually incurred by Lender in connection with such
Transfer and a processing fee of $5,000. For purposes of this Loan Agreement, a
“Qualified Entity” shall mean an
entity (x) with a net worth of $200,000,000 or more, (y) with sufficient
experience (determined by Lender in its reasonable discretion) in the ownership
and management of properties similar to the Property, and (z) which owns or
manages retail properties containing at least 1,000,000 square feet of gross
leasable area. If a substantive non-

 

45

 

consolidation
opinion was required in connection with the initial Loan closing, Borrower
shall deliver a substantive non-consolidation opinion with respect to any party
not now owning more than 49% of the ownership interests in Borrower acquiring
more than 49% of the ownership interests in Borrower.

 

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

 

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

 

ARTICLE VI

 

INSURANCE; CASUALTY; CONDEMNATION

 

Section 6.1             Insurance.

 

(a)           Borrower
shall obtain and maintain insurance for Borrower and the Property providing at
least the following coverages:

 

(i)            comprehensive
all risk insurance on the Improvements and the Personal Property, including
contingent liability from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements, in each case (A) in an amount
equal to one hundred percent (100%) of the “Full Replacement Cost,” which for
purposes of this Loan Agreement shall mean actual replacement value (exclusive
of costs of excavations, foundations, underground utilities and footings) with
a waiver

 

46

 

of depreciation; (B)
containing an agreed amount endorsement with respect to the Improvements and
Personal Property waiving all co-insurance provisions; (C) providing for no
deductible in excess of Twenty-Five Thousand and No/100 Dollars ($25,000.00)
for all such insurance coverage; and (D) containing an “Ordinance or Law
Coverage” or “Enforcement” endorsement if any of the Improvements or the use of
the Property shall at any time constitute legal non-conforming structures or
uses. In addition, Borrower shall obtain: (y) if any portion of the
Improvements is currently or at any time in the future located in a federally
designated “special flood hazard area”, flood hazard insurance in an amount
equal to the lesser of (1) the outstanding principal balance of the Note or (2)
the maximum amount of such insurance available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as each may be amended or such
greater amount as Lender shall require; and (z) earthquake insurance in amounts
and in form and substance satisfactory to Lender in the event the Property is
located in an area with a high degree of seismic activity, provided that the
insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent
with the comprehensive all risk insurance policy required under this subsection
(i).

 

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

 

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

 

47

 

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

 

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

 

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

 

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

 

(viii)        automobile
insurance to cover all owned or non-owned automobiles in an amount not less
than One Million and No/100 Dollars ($1,000,000.00) per occurrence;

 

(ix)           if
any of the policies of insurance covering the risks required to be covered
under subsections (i) through (vii) above contains an exclusion from coverage
for acts of terrorism, Borrower shall obtain and maintain a separate policy
providing such coverages in the event of any act of terrorism, provided such
coverage is commercially available for properties similar to the Property and
located in or around the region in which the Property is located.
Notwithstanding the foregoing, Borrower shall not be required to obtain such a
policy, provided (I) Borrower confirms to Lender, in writing, that it shall
protect and hold Lender harmless from any losses associated with such risks by,
among other things, either (A) depositing with Lender sums sufficient to pay
for all uninsured costs related to a Restoration of the Property following any
act of terrorism (which sum shall be treated as a Net Proceeds Deficiency), or
(B) provided such act of terrorism occurs on or after the Permitted Prepayment
Date, prepaying the Loan in accordance with the terms hereof; (II) Inland
American Real Estate Trust, Inc. (“Terrorism Insurance
Guarantor”) executes a guaranty, in form and substance
satisfactory to Lender, guaranteeing in the event of any act of terrorism,
payment to Lender of any sums that Borrower is obligated to pay to Lender under
clause (I) above (which shall be applied in accordance with Section 6.4 hereof)
and (III) Terrorism Insurance Guarantor maintains a net worth of at least
$400,000,000 (as determined by such entity’s most recent audited financial
statements), such entity maintains a direct or indirect ownership interest in
Borrower, and the aggregate loan to value ratio (as determined by Lender) (“LTV”) for all properties on which such
entity has a direct or indirect ownership interest shall not exceed 55%,
however, Terrorism Insurance Guarantor may exceed the 55% LTV for a period not
to exceed six (6) months out of any twelve (12) month period either 1) during
the time period when Terrorism Insurance Guarantor is offering securities to
the public,

 

48

 

or 2) when in the
business judgment of Terrorism Insurance Guarantor, exceeding an LTV of 55% is
necessary given existing circumstances of the credit environment, but in no
event shall the LTV exceed 70%.

 

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

 

(b)           All
insurance provided for in Section 6.1(a) shall be obtained under valid and
enforceable policies (collectively, the “Policies”
or in the singular, the “Policy”),
and shall be subject to the approval of Lender as to insurance companies,
amounts, deductibles, loss payees and insureds. The Policies shall be issued by
financially sound and responsible insurance companies authorized to do business
in the State and having a rating of “A:X” or better in the current Best’s
Insurance Reports and a claims paying ability rating of “AA” or better by at
least two (2) of the Rating Agencies including, (i) Standard & Poor’s
Ratings Group, and (ii) Moody’s Investors Services, Inc. if Moody’s Investors
Service, Inc. is rating the Securities. The Policies described in Section 6.1
(other than those strictly limited to liability protection) shall designate
Lender as loss payee. Not less than thirty (30) days prior to the expiration
dates of the Policies theretofore furnished to Lender, certificates of
insurance evidencing the Policies accompanied by evidence satisfactory to
Lender of payment of the premiums due thereunder (the “Insurance
Premiums”), shall be delivered by Borrower to Lender.

 

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

 

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

 

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

 

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

 

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

 

49

 

 

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

 

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

 

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

 

(g)           Notwithstanding
anything contained herein to the contrary, provided no default shall exist
under this Loan Agreement.

 

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

 

Section 6.3             Condemnation.
Borrower shall promptly give Lender notice of the actual or threatened
commencement of any proceeding for the Condemnation of the Property and shall
deliver to Lender copies of any and all papers served in connection with such
proceedings. Lender may participate in any such proceedings, and Borrower shall
from time to time deliver to Lender all instruments requested by it to permit
such participation. Borrower shall, at its expense, diligently prosecute any
such proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding
any taking by any public or quasi-public authority through Condemnation or
otherwise (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of such taking), Borrower shall continue to pay
the Debt at the time and in the manner provided for its payment in the Note and
in this Loan Agreement and the Debt shall not be

 

50

 

reduced until any
Award shall have been actually received and applied by Lender, after the
deduction of expenses of collection, to the reduction or discharge of the Debt.
Lender shall not be limited to the interest paid on the Award by the condemning
authority but shall be entitled to receive out of the Award interest at the
rate or rates provided herein or in the Note. If the Property or any portion
thereof is taken by a condemning authority, Borrower shall promptly commence
and diligently prosecute the Restoration of the Property and otherwise comply
with the provisions of Section 6.4. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender
shall have the right, whether or not a deficiency judgment on the Note shall
have been sought, recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.

 

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

 

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

 

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

 

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

 

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

 

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

 

51

 

the Improvements is located on such land, or (y)
Borrower is required under a Lease exceeding the Relevant Leasing Threshold to use
the Net Proceeds for the restoration of the Property;

 

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

 

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

 

(E)           Lender
shall be satisfied that any operating deficits, including all scheduled
payments of principal and interest under the Note, which will be incurred with
respect to the Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, will be covered out of (1) the
Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(iii), if
applicable, or (3) by other funds of Borrower;

 

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

 

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

 

52

 

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

 

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

 

(J)            the
Debt Service Coverage Ratio, after giving effect to the Restoration, shall be
equal to or greater than 2:06:1.00;

 

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

 

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

 

(ii)           The
Net Proceeds shall be held by Lender in an interest bearing account and, until
disbursed in accordance with the provisions of this Section 6.4(b), shall
constitute additional security for the Debt and other obligations under the
Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence satisfactory to Lender that (A) all materials
installed and work and labor performed to be paid for out of the requested
disbursement in connection with the Restoration have been performed, and (B)
there exist no notices of pendency, stop orders, mechanic’s or materialman’s
liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property which have not either been fully
bonded to the satisfaction of Lender and discharged of record or in the
alternative fully insured to the satisfaction of Lender by the title company
issuing the Title Insurance Policy.

 

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

 

53

 

counsel fees and disbursements and the Casualty Consultant’s fees,
shall be paid by Borrower.

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

(e)           Lender
shall with reasonable promptness following any Casualty or Condemnation notify
Borrower whether or not Net Proceeds are required to be made available to
Borrower for restoration pursuant to this Section 6.4. All Net Proceeds not
required to be made available for Restoration shall be retained and applied by
Lender in accordance with Section 2.3.2(a) hereof (a “Net Proceeds Prepayment”). If such Net
Proceeds Prepayment shall be equal to or greater than Fourteen Million One
Hundred Sixty Thousand and 00/100 Dollars ($14,160,000.00), Borrower shall have
the right to elect to prepay the remaining outstanding principal balance of the
Note (a “Casualty/Condemnation Prepayment”)
in accordance with Section 2.3.2(b) hereof upon satisfaction of the
following conditions:  (i) within thirty
(30) days following the date of the Net Proceeds Prepayment, Borrower shall
provide Lender with written notice of Borrower’s intention to pay the Note in
full, (ii) Borrower shall prepay the Note in accordance with Section 2.3.2(b)
hereof on or before the second Payment Date occurring following the date of the
Net Proceeds Prepayment, and (iii) no Event of Default shall exist on the date
of such Casualty/Condemnation Prepayment. Notwithstanding anything in Section
6.2 or Section 6.3 to the contrary, Borrower shall have no obligation to
commence Restoration of the Property upon delivery of the written notice set
forth in clause (i) of the preceding sentence (unless Borrower subsequently
shall fail to satisfy the requirement of clause (ii) of the preceding
sentence).

 

55

 

ARTICLE VII

 

RESERVE FUNDS

 

Section 7.1             Required
Repair Funds.

 

7.1.1        Deposits.
Borrower shall perform the repairs at the Property, if any, as more
particularly set forth on Schedule III hereto (such repairs hereinafter
referred to as “Required Repairs”)
within nine (9) months from the Closing Date (or such longer time as Borrower
and Lender may mutually agree to), or such earlier time as specified on Schedule
III, provided that the estimated cost to complete the Required Repairs is
less than One Hundred Thousand and 00/100 Dollars ($100,000.00) in the
aggregate, unless otherwise agreed to by Lender. If Borrower has not delivered
to Lender evidence reasonably satisfactory to Lender that it has completed all
Required Repairs on or before the date that is nine (9) months from the Closing
Date, or such earlier time as specified on Schedule III or if the
estimated cost to complete the Required Repairs is equal to or greater than One
Hundred Thousand and 00/100 Dollars ($100,000.00), unless otherwise agreed to
by Lender, Borrower shall deposit with Lender one hundred twenty five percent
(125%) of the estimated cost to complete such repairs as determined by Lender’s
structural consultant, if any (less the amount allocated to the performance of
Required Repairs for which evidence of completion has been delivered to
Lender), to perform the Required Repairs for the Property. Amounts so deposited
with Lender, if any, shall be held by Lender in an interest bearing account. Amounts
so deposited, if any, shall hereinafter be referred to as Borrower’s “Required Repair Fund” and the
account, if any, in which such amounts are held shall hereinafter be referred
to as Borrower’s “Required Repair Account”.
It shall be an Event of Default under this Loan Agreement if Borrower does not
either (i) does not deposit with Lender the Required Repair Fund as set forth
above, or (ii) complete the Required Repairs at the Property within twelve (12)
months from the Closing Date. Upon the occurrence of such an Event of Default,
Lender, at its option, may withdraw all Required Repair Funds from the Required
Repair Account and Lender may apply such funds either to completion of the
Required Repairs at the Property or toward payment of the Debt in such order,
proportion and priority as Lender may determine in its sole discretion. Lender’s
right to withdraw and apply Required Repair Funds shall be in addition to all
other rights and remedies provided to Lender under this Loan Agreement and the
other Loan Documents.

 

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

 

56

 

disbursement under
a contract in excess of $50,000, and (C) stating that each Person who has
supplied materials or labor in connection with the Required Repairs to be
funded by the requested disbursement has been paid in full or will be paid in
full upon such disbursement, such certificate to be accompanied by lien waivers
or other evidence of payment satisfactory to Lender, (iv) at Lender’s option, a
title search for the Property indicating that the Property is free from all
liens, claims and other encumbrances not previously approved by Lender, and (v)
Lender shall have received such other evidence as Lender shall reasonably request
that the Required Repairs at the Property to be funded by the requested
disbursement have been completed and are paid for or will be paid upon such
disbursement to Borrower. Lender shall not be required to make disbursements
from the Required Repair Account with respect to the Property more than once
each calendar month and such disbursement shall be made only upon satisfaction
of each condition contained in this Section 7.1.2.

 

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

 

57

 

Notwithstanding anything
to the contrary hereinbefore contained, in the event that Borrower provides (1)
evidence satisfactory to Lender that the Property is insured in accordance with
Section 6.1 of this Loan Agreement, (2) evidence satisfactory to Lender
that the Taxes for the Property have been paid in accordance with the
requirements set forth in this Loan Agreement and (3) so long as no Event of
Default exists, Lender will waive the requirement set forth herein for Borrower
to make deposits into the Tax and Insurance Escrow Fund for the payment of
Insurance Premiums and for payment of such Taxes, provided, however, Lender
expressly reserves the right to require Borrower to make deposits to the Tax and
Insurance Escrow Fund for the payment of Insurance Premiums if at any time the
Property is not insured in accordance with Section 6.1 of this Loan
Agreement, Taxes are not paid in accordance with the requirements of this Loan
Agreement or an Event of Default exists.

 

Section 7.3             Replacements
and Replacement Reserve.

 

7.3.1        Replacement
Reserve Fund. Borrower shall pay to Lender on the Closing Date and on each
Payment Date one twelfth of the amount (the “Replacement
Reserve Monthly Deposit”) reasonably estimated by Lender in its
sole discretion to be due for replacements and repairs required to be made to
the Property during the calendar year (collectively, the “Replacements”),
which Replacement Reserve Monthly Deposit shall be in an amount equal to no
less than $0.25 per year per square foot of gross leasable area. Amounts so
deposited shall hereinafter be referred to as Borrower’s “Replacement
Reserve Fund” and the account in which such amounts are held
shall hereinafter be referred to as Borrower’s “Replacement
Reserve Account”. Lender may reassess its estimate of the amount
necessary for the Replacement Reserve Fund from time to time, and may increase
the monthly amounts required to be deposited into the Replacement Reserve Fund
upon thirty (30) days notice to Borrower if Lender determines in its reasonable
discretion that an increase is necessary to maintain the proper maintenance and
operation of the Property. Any amount held in the Replacement Reserve Account
and allocated for the Property shall be retained by Lender in an interest
bearing account, or, at the option of Lender, in an Eligible Account at an
Eligible Institution; provided, however, that, any interest
earned on said account shall accrue in said account for the benefit of
Borrower, but shall remain in and constitute part of the Replacement Reserve
Fund, and shall be disbursed in accordance with the terms hereof.

 

Notwithstanding anything
to the contrary in this Section 7.3, Borrower shall not be required to make
Replacement Reserve Monthly Deposits, provided that: (i) no Event of Default
shall have occurred; and (ii) Borrower makes all necessary Replacements and
otherwise maintains the Property to Lender’s satisfaction. Upon notice from
Lender following: (a) an Event of Default; or (b) the failure of Borrower to
make necessary Replacements or otherwise maintain the Property to Lender’s
satisfaction, Borrower shall begin to deposit the Replacement Reserve Monthly
Deposit into the Replacement Reserve Fund beginning on the Payment Date (as
defined herein) immediately following the date of such notice.

 

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

 

58

 

(b)                                 Lender
shall, upon written request from Borrower and satisfaction of the requirements
set forth in this Section 7.3.2, disburse to Borrower amounts from the
Replacement Reserve Account necessary to pay for the actual approved costs of
Replacements or to reimburse Borrower therefor, upon completion of such
Replacements (or, upon partial completion in the case of Replacements made
pursuant to Section 7.3.2(f)) as determined by Lender.  In no event shall Lender be obligated to
disburse funds from the Replacement Reserve Account if a Default or an Event of
Default exists.

 

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

 

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

 

(e)                                  If
(i) the cost of a Replacement exceeds $100,000, (ii) the contractor
performing such Replacement requires periodic payments pursuant to terms of a
written contract, and (iii) Lender has approved in writing in advance such
periodic payments, a request for reimbursement from the Replacement Reserve
Account may be made after completion of a portion of the work under such
contract, provided (A) such contract requires payment upon

 

59

 

completion of such portion of the work, (B) the
materials for which the request is made are on site at the Property and are
properly secured or have been installed in the Property, (C) all other
conditions in this Loan Agreement for disbursement have been satisfied, (D) funds
remaining in the Replacement Reserve Account are, in Lender’s judgment,
sufficient to complete such Replacement and other Replacements when required,
and (E) if required by Lender, each contractor or subcontractor receiving
payments under such contract shall provide a waiver of lien with respect to
amounts which have been paid to that contractor or subcontractor.

 

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

 

7.3.3                        Performance
of Replacements.

 

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

 

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

 

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

 

(d)                                 In
order to facilitate Lender’s completion or making of the Replacements pursuant
to Section 7.3.3(c) above, Borrower grants Lender the right to enter
onto the Property and perform any and all work and labor necessary to complete
or make the Replacements and/or employ watchmen to protect the Property from
damage, subject to the rights of Tenants. 
All sums so expended by Lender, to the extent not from the Replacement
Reserve Fund, shall be deemed to have been advanced under the Loan to Borrower
and secured by the Mortgage.  For this
purpose Borrower constitutes and appoints Lender its true and lawful
attorney-in-fact with full power of substitution to complete or undertake the
Replacements in the name of Borrower. 
Such power of attorney shall be deemed to be a power coupled with an
interest and cannot be

 

60

 

revoked but shall only be effective following an Event
of Default.  Borrower empowers said
attorney-in-fact as follows:  (i) to
use any funds in the Replacement Reserve Account for the purpose of making or
completing the Replacements; (ii) to make such additions, changes and
corrections to the Replacements as shall be necessary or desirable to complete
the Replacements; (iii) to employ such contractors, subcontractors,
agents, architects and inspectors as shall be required for such purposes; (iv) to
pay, settle or compromise all existing bills and claims which are or may become
Liens against the Property, or as may be necessary or desirable for the
completion of the Replacements, or for clearance of title; (v) to execute
all applications and certificates in the name of Borrower which may be required
by any of the contract documents; (vi) to prosecute and defend all actions
or proceedings in connection with the Property or the rehabilitation and repair
of the Property; and (vii) to do any and every act which Borrower might do
in its own behalf to fulfill the terms of this Loan Agreement.

 

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

 

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

 

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

 

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

 

(i)                                     Before
each disbursement from the Replacement Reserve Account, Lender may require
Borrower to provide Lender with a search of title to the Property effective to
the

 

61

 

date of the disbursement, which search shows that no
mechanic’s or materialmen’s liens or other liens of any nature have been placed
against the Property since the date of recordation of the Mortgage and that
title to the Property is free and clear of all Liens (other than the lien of
the Mortgage and any other Liens previously approved in writing by Lender, if
any).

 

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

 

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

 

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

 

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

 

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

 

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

 

62

 

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

 

Section 7.4                                      Intentionally
Omitted.

 

Section 7.5                                      Intentionally
Omitted.

 

Section 7.6                                      Intentionally
Omitted.

 

Section 7.7                                      Reserve
Funds, Generally.

 

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

 

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

 

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

 

7.7.4                        Intentionally
omitted.

 

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

 

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

 

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

 

63

 

ARTICLE VIII

 

DEFAULTS

 

Section 8.1                                      Event
of Default.

 

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

 

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

 

(ii)                                  if
any of the Taxes or Other Charges are not paid prior to the date when the same
become delinquent, except to the extent that Borrower is contesting same in
accordance with the terms of Section 5.1.2 hereof, or there are sufficient
funds in the Tax and Insurance Escrow Fund to pay such Taxes or Other Charges
and Lender fails to or refuses to release the same from the Tax and Insurance
Escrow Fund;

 

(iii)                               if the Policies are not
kept in full force and effect, or if certified copies of the Policies are not
delivered to Lender within ten (10) days of request;

 

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

 

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

 

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

 

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

 

64

 

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

 

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

 

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

 

(xi)                                if
any of the assumptions contained in any Insolvency Opinion or Additional
Insolvency Opinion are or shall become untrue in any material respect;

 

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

 

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

 

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

 

65

 

Section 8.2                                      Remedies.

 

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

 

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

 

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

 

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

 

66

 

ARTICLE IX

 

SPECIAL PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 9.2                                      Securitization.  Borrower understands that certain of the
Provided Information may be included in disclosure documents in connection with
the Securitization, including, without limitation, a prospectus, prospectus
supplement or private placement memorandum (each, a “Disclosure
Document”) and may also be included in filings with the

 

67

 

Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Securities Act”),
or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or provided or made
available to investors or prospective investors in the Securities, the Rating
Agencies, and service providers relating to the Securitization.  In the event that the Disclosure Document is
required to be revised prior to the sale of all Securities, Borrower will
cooperate with the holder of the Note in updating the Disclosure Document by
providing all current information necessary to keep the Disclosure Document
accurate and complete in all material respects.

 

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

 

Section 9.4                                      Exculpation.  Subject to the qualifications below, Lender
shall not enforce the liability and obligation of Borrower to perform and
observe the obligations contained in the Note, this Loan Agreement, the
Mortgage or the other Loan Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, except that Lender or Trustee
may bring a foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Lender or Trustee to enforce and
realize upon its interest under the Note, this Loan Agreement, the Mortgage and
the other Loan Documents, or in the Property, the Rents following an Event of
Default, or any other collateral given to Lender or Trustee pursuant to the
Loan Documents; provided, however, that, except as specifically provided
herein, any judgment in any such action or proceeding shall be enforceable
against Borrower only to the extent of Borrower’s interest in the Property, in
the Rents following an Event of Default and in any other collateral given to
Lender or Trustee, and Lender or Trustee, by accepting the Note, this Loan
Agreement, the Mortgage and the other Loan Documents, agrees that it shall not
sue for, seek or demand any deficiency judgment against Borrower in any such
action or proceeding under or by reason of or under or in connection with the
Note, this Loan Agreement, the Mortgage or the other Loan Documents.  The provisions of this section shall
not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by any of the Loan Documents; (b) impair
the right of Lender or Trustee to name Borrower as a party defendant in any
action or suit for foreclosure and sale under any of the Mortgage; (c) affect
the validity or enforceability of or any guaranty made in connection with the
Loan or any of the rights and remedies of Lender thereunder; (d) impair
the right of Lender or Trustee to obtain the appointment of a receiver; (e) impair
the enforcement of any of the Assignment of Leases following an Event of
Default; (f) constitute a prohibition against Lender or Trustee commencing
any other appropriate action or proceeding in order for Lender to exercise its
remedies against the Property; or (g) constitute a waiver of the right of
Lender or Trustee to enforce the liability and obligation of Borrower, by money
judgment or otherwise, to the extent of any loss, damage, cost, expense,
liability, claim or other obligation incurred by Lender (including attorneys’
fees and costs reasonably incurred) arising out of or in connection with the
following:

 

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

 

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

 

68

 

(iii)                               material physical waste
of the Property;

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding anything to the contrary in this Loan
Agreement, the Note, the Indemnity Agreement or any of the Loan Documents, (A) the
Debt shall be fully recourse to the Borrower and (B) Lender shall not be
deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to
file a claim for the full amount of the Debt secured by the Mortgage or to
require that all collateral shall continue to secure all of the Debt owing to
Lender in accordance with the Loan Documents in the event that (I) the first
full monthly payment under the Note is not paid within five (5) days of
notice that such payment is late (provided, however, that such five (5) day
grace period relates only to the recourse trigger described in this paragraph),
or (II) Borrower fails to permit on-site inspections of the Property subject to
the rights of Tenants and any applicable cure period set forth in the Loan
Documents, to provide financial information as required under the Loan
Documents subject to any applicable cure period (except for financial
information required to be delivered by a tenant pursuant to the applicable
Lease that has not been delivered to Borrower, provided Borrower has requested
such financial information from such tenant), or to comply with Section 4.1.30
hereof, or (III) Borrower fails to obtain Lender’s prior written consent (to
the extent such consent is required) to any subordinate financing or other
voluntary lien encumbering the Property, or (IV) Borrower fails to obtain
Lender’s prior written consent to any assignment, transfer or conveyance of the
Property, or any portion thereof, or any interest therein as required by this
Loan Agreement, so long as any of the events described in clauses (I), (II),
(III) or (IV) of this paragraph continue to exist.  Notwithstanding the provision set forth in

 

69

 

clause (III) of this
paragraph, a voluntary lien other than a lien securing an extension of
credit filed against the Property shall not constitute a recourse trigger for
purposes of this paragraph provided such lien (A) is fully bonded to the
satisfaction of Lender and discharged of record within ninety (90) days of
filing, or (B) within such ninety (90) day period, Lender receives
affirmative title insurance from the title insurance company insuring the lien of
the Mortgage that such lien is subject and subordinate to the lien of the
Mortgage and no enforcement action is commenced by the applicable lien holder.

 

Section 9.5                                      Termination
of Manager.  If (a) the amounts
evidenced by the Note have been accelerated pursuant to Section 8.1(b) hereof,
(b) the Manager shall become insolvent, (c) the Manager is in default
under the terms of the Management Agreement beyond any applicable grace or cure
period, or (d) Manager is not managing the Property in accordance with the
management practices of nationally recognized management companies managing
similar properties in locations comparable to those of the Property, then, in
the case of (a), (b), (c) or (d), Borrower shall, at the request of
Lender, terminate the Management Agreement and replace the Manager with a
manager reasonably approved by Lender on terms and conditions reasonably
satisfactory to Lender, it being understood and agreed that the management fee
for such replacement manager shall not exceed then prevailing market
rates.  In addition and without limiting
the rights of Lender hereunder or under any of the other Loan Documents, in the
event that (i) the Management Agreement is terminated, (ii) the
Manager no longer manages the Property, or (iii) a receiver, liquidator or
trustee shall be appointed for Manager or if Manager shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Manager,
or if any proceeding for the dissolution or liquidation of Manager shall be
instituted, then Borrower (at Borrower’s sole cost and expense) shall
immediately, in its name, establish new deposit accounts separate from any
other Person with a depository satisfactory to Lender into which all Rents and
other income from the Property shall be deposited and shall grant Lender a
first priority security interest in such account pursuant to documentation
satisfactory in form and substance to Lender.

 

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

 

Section 9.7                                      Splitting
the Loan.  Lender shall have the
right from time to time to sever the Note and the other Loan Documents into one
or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such
denominations as Lender shall determine in its sole discretion for purposes of
evidencing and enforcing its rights and remedies provided hereunder.  Borrower shall execute and deliver to Lender
from time to time, promptly after the request of Lender, a severance agreement
and such other documents as Lender shall request in order to effect the
severance described in the preceding sentence, all in form and substance
reasonably satisfactory to Lender. 
Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make
and execute all documents necessary or desirable to effect the aforesaid
severance,

 

70

 

Borrower ratifying all that its said attorney shall do
by virtue thereof; provided, however, Lender shall not make or execute any such
documents under such power until three (3) days after notice has been
given to Borrower by Lender of Lender’s intent to exercise its rights under
such power.  Except as may be required in
connection with a Securitization pursuant to Section 9.1 hereof, (i) Borrower
shall not be obligated to pay any costs or expenses incurred in connection with
the preparation, execution, recording or filing of the Severed Loan Documents,
and (ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.

 

Section 9.8                                      Cross
Default Election.  At any time prior
to Securitization, Borrower hereby agrees that at the election of Lender in its
sole discretion, this Loan shall be cross-defaulted and cross-collateralized with
those certain other loans listed on Schedule IX being made by Lender to
several Affiliates of Borrower and/or Indemnitor (each such election a “Crossing Event”).  Borrower agrees that upon the election of
Lender to undertake a Crossing Event, Borrower shall (x)  promptly upon request, execute, or cause to
be executed, any documentation reasonably requested by Lender to effectuate the
cross-default and cross-collateralization of the Loan with such other  loans, and (y)  promptly take, or cause to be taken, any
reasonable steps (including, without limitation, the delivery of any additional
documents or information as may be reasonably requested by Lender in connection
herewith) requested by Lender to effectuate the Crossing Event.  Lender may, at is sole discretion, withdraw
loans from the pool of loans that are subject to this provision.  Notwithstanding  anything to the contrary contained herein,
the aggregate principal amount of the loans that are subject to this
provision,  including the Loan, shall in
no event exceed $98,000,000.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1                                Survival.  This Loan Agreement and all covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and
the execution and delivery to Lender of the Note, and shall continue in full
force and effect so long as all or any of the Debt is outstanding and unpaid
unless a longer period is expressly set forth herein or in the other Loan
Documents.  Whenever in this Loan
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party.  All covenants, promises and
agreements in this Loan Agreement,  by or
on behalf of Borrower, shall inure to the benefit of the legal representatives,
successors and assigns of Lender.

 

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

 

Section 10.3                                Governing
Law.  THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF

 

71

 

ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.  BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY COURT OF COMPETENT
JURISDICTION LOCATED IN THE CITY OF CHICAGO AND STATE OF ILLINOIS IN CONNECTION
WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

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

 

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

 

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

 

If to Lender:

 

LaSalle Bank National Association

135 South LaSalle Street, Suite 2905

Chicago, Illinois 60603

Attention:  Real Estate Capital Markets

Inland Triangle Center

Fax:  (312) 904-0900

 

72

 

with a copy to:

 

Katten Muchin Rosenman
LLP

525 W. Monroe Street

Chicago, Illinois 60661

Attention: David R.
Dlugie, Esq.

Fax:  (312) 577-8666

 

If to Borrower:

 

MB Longview Triangle, L.L.C.

c/o Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, Illinois  60523

Attention:  Lori Foust

Fax:  (630) 645-7242

 

with a copy to:

 

Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention:  General Counsel 

Fax:  (630) 218-4900

 

and with a copy to:

 

Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention:  Steve Grimes

Fax:  (630) 218-4955

 

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

 

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

 

73

 

OTHERWISE ACCRUE.  LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER AND LENDER.  THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY
BORROWER AND BY LENDER, AND BORROWER ACKNOWLEDGES ON BEHALF OF ITSELF AND ITS
PARTNERS, MEMBERS, SHAREHOLDERS, AS THE CASE MAY BE, THAT NEITHER LENDER
NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF FACT
TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT.  BORROWER
AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT BORROWER AND LENDER HAVE ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THE LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE
TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  BORROWER AND LENDER FURTHER ACKNOWLEDGE THAT
THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN
THE SIGNING OF THE LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

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

 

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

 

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

 

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

 

74

 

Agreement or the other Loan Documents do not
specifically and expressly provide for the giving of notice by Lender to
Borrower.

 

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

 

Section 10.13                          Expenses;
Indemnity.

 

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

 

75

 

(b)                                 BORROWER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS
LENDER FROM AND AGAINST ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR LENDER IN CONNECTION WITH
ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING COMMENCED OR
THREATENED, WHETHER OR NOT LENDER SHALL BE DESIGNATED A PARTY THERETO), THAT MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST LENDER IN ANY MANNER RELATING TO
OR ARISING OUT OF (I) ANY BREACH BY BORROWER OF ITS OBLIGATIONS UNDER, OR ANY
MATERIAL MISREPRESENTATION BY BORROWER CONTAINED IN, THIS LOAN AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR (II) THE USE OR INTENDED USE OF THE PROCEEDS OF THE
LOAN (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED, HOWEVER,
THAT BORROWER SHALL NOT HAVE ANY OBLIGATION TO LENDER HEREUNDER TO THE EXTENT
THAT SUCH INDEMNIFIED LIABILITIES ARISE FROM THE GROSS NEGLIGENCE, ILLEGAL
ACTS, FRAUD OR WILLFUL MISCONDUCT OF LENDER. 
TO THE EXTENT THAT THE UNDERTAKING TO INDEMNIFY, DEFEND AND HOLD
HARMLESS SET FORTH IN THE PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE
IT VIOLATES ANY LAW OR PUBLIC POLICY, BORROWER SHALL PAY THE MAXIMUM PORTION
THAT IT IS PERMITTED TO PAY AND SATISFY UNDER APPLICABLE LAW TO THE PAYMENT AND
SATISFACTION OF ALL INDEMNIFIED LIABILITIES INCURRED BY LENDER.

 

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

 

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

 

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

 

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

 

76

 

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

 

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

 

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

 

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

 

Section 10.20                          Conflict;
Construction of Documents; Reliance. 
In the event of any conflict between the provisions of this Loan
Agreement and any of the other Loan Documents, the provisions of this Loan
Agreement shall control.  The parties
hereto acknowledge that they were represented by competent counsel in
connection with the negotiation, drafting and execution of the Loan Documents
and that such Loan Documents shall not be subject to the principle of
construing their meaning against the party which drafted same.  Borrower acknowledges that, with respect to
the Loan, Borrower shall rely solely on its own judgment and advisors in
entering into the Loan without relying in any manner on any statements, representations
or recommendations of Lender or any parent, subsidiary or Affiliate of
Lender.  Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available
to it under any of the Loan Documents or any other agreements or instruments
which

 

77

 

govern the Loan by virtue of the ownership by it or
any parent, subsidiary or Affiliate of Lender of any equity interest any of
them may acquire in Borrower, and Borrower hereby irrevocably waives the right
to raise any defense or take any action on the basis of the foregoing with
respect to Lender’s exercise of any such rights or remedies.  Borrower acknowledges that Lender engages in
the business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.

 

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

 

Section 10.22                          Prior
Agreements.  This Loan Agreement and
the other Loan Documents contain the entire agreement of the parties hereto and
thereto in respect of the transactions contemplated hereby and thereby, and all
prior agreements or understandings among or between such parties, whether oral
or written, are superseded by the terms of this Loan Agreement and the other
Loan Documents and unless specifically set forth in a writing contemporaneous
herewith the terms, conditions and provisions of such prior agreement do not
survive execution of this Loan Agreement.

 

Section 10.23                          Sale
of Loan.  Lender, at any time and
without the consent of Borrower or Indemnitor, may grant participation in or
sell, transfer, assign and convey all or any portion of its right, title and
interest in and to the Loan, the servicing of the Loan, this Loan Agreement and
the other Loan Documents, any guaranties given in connection with the Loan and
any collateral given to secure the Loan. 
Borrower covenants to cooperate with Lender’s efforts in the
securitization of the Loan; such cooperation includes Borrower’s obligation to (a) make
non-material modifications of the Loan Documents (such modifications shall not (i) increase
the amount of the Indebtedness, (ii) change the schedule and/or the
amount of the monthly payment and (iii) change the Interest Rate), (b) provide
additional information regarding Borrower’s financial statements, (c) deliver
updated information regarding Borrower and the Property, (d) cooperate
with any third parties, including, but not limited to, rating agencies and
potential investors to facilitate the rating and securitization of the Loan, (e) review
Lender’s securitization offering materials to the extent such materials relate
to Borrower, the Property or the Loan and (f) respond to any inquiries of
Lender or other party relating thereto. 
Borrower agrees to represent and warrant the absence of misstatements
and/or omissions in the information relating to Borrower, the Property and the
Loan that is contained in the offering materials and which has

 

78

 

been furnished to or approved by Borrower.  Borrower shall not be liable for Lender’s
post-closing costs incurred pursuant to any securitization of the Loan by
Lender.

 

Section 10.24                          Customer
Identification – USA Patriot Act Notice. 
Lender hereby notifies Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26,
2001), as amended (the “Act”),
and Lender’s policies and practices, Lender is required to obtain, verify and
record certain information and documentation that identifies Borrower, which
information includes the name and address of Borrower and such other
information that will allow Lender to identify Borrower in accordance with the
Act.

 

Section 10.25                          Joint
and Several Liability.  If Borrower
consists of more than one person or party, the obligations and liabilities of
each person or party shall be joint and several.

 

(THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT
BLANK)

 

79

 

IN WITNESS WHEREOF, the parties hereto have caused
this Loan Agreement to be duly executed by their duly authorized
representatives, all as of the day and year first above written.

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
   

  	
  MB LONGVIEW TRIANGLE, L.L.C.,
  a

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Minto Builders (Florida), Inc.,

  
	
   

  	
   

  	
  a Florida corporation,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Debra Palmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Debra Palmer

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
											

 

 

SCHEDULE I

 

Intentionally Omitted

 

1

 

SCHEDULE II

 

Intentionally Omitted

 

1

 

SCHEDULE III

 

REQUIRED
REPAIRS

 

1.             Modify sidewalk for
drainage in accordance with the requirements set forth in that certain Property
Condition Assessment of Triangle Center prepared by McClain Consulting Services, Inc.,
as Project No. 25001A, and dated as of        ,
2005 (“Property Condition Report”).

 

2.                                       Install stop signs and enclosure in
accordance with the requirements of the Property Condition Report.

 

3.                                       Re-paint and clean exterior finishes in
accordance with the requirements of the Property Condition Report.

 

4.                                       Repair and/or replace the RiteAide roof in
accordance with the requirements of the Property Condition Report.

 

5.                                       Seal penetrations to the electrical system
and replace lights in accordance with the requirements of the Property
Condition Report.

 

6.                                       Perform vacant space renovations in accordance
with the requirements of the Property Condition Report.

 

7.                                       Replace signs and path-of-travel for disabled
persons in accordance with the requirements of the Property Condition Report.

 

1

 

SCHEDULE IV

 

RENT
ROLL

 

[To Be
Attached]

 

1

 

SCHEDULE V

 

Intentionally Omitted

 

1

 

SCHEDULE VI

 

Intentionally Omitted

 

1

 

SCHEDULE VII

 

PROPERTY
AFFECTED BY SECTION 4.1.22

 

NONE

 

1

 

SCHEDULE VIII

 

Intentionally Omitted

 

1

 

SCHEDULE IX

 

LIST
OF LOANS AFFECTED BY SECTION 9.8

 

1.               Eckerds Portfolio,
Iowa $13,808,000

 

2.               Wicks Murrieta,
California $5,432,557

 

3.               Stonebridge Plaza
$4,278,000

 

4.               Southwest Crossing
$14,691,000

 

5.               Crosswell-Cypress
$9,847,100

 

6.               Raytheon Co
$11,840,690

 

7.               Humblewood
$9,558,000

 

8.               Petsmart, Ottawa,
Illinois $23,731,497

 

9.               Diebold Warehouse
$7,240,480

 

10.         Citizens Property
Insurance $5,997,350

 

11.         Hartford Insurance
Company $9,613,703

 

12.         Rasmussen College
$3,053,250

 

13.         Shops at 5 $40,179,000

 

1

 

SCHEDULE X

 

OTHER CONTRACT FUNDS AGREEMENTS

 

None.

 

1

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