Document:

Exhibit 10.38

 

RECORD
AND RETURN TO:

 

Cassin Cassin &
Joseph LLP

711 Third Avenue, 20th
Floor

New York, New York 10017

Attn:  Carol M. Joseph, Esq.

 

MORTGAGE,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING

 

 

MB PITTSBURGH
BRIDGESIDE DST, a

Delaware statutory trust, as mortgagor (Borrower)

 

for the benefit of

 

NOMURA CREDIT &
CAPITAL, INC. ,

as
mortgagee, and its successors and assigns (Lender)

 

 

THE COLLATERAL IS OR INCLUDES FIXTURES

 

This
document serves as a fixture filing under the Uniform Commercial Code

 

Borrower’s
Organizational Number:  4065275

Borrower’s
Federal Identification No.:  61-6319685

 

	
  Date:

  	
   

  	
  As
  of February 10, 2006

  
	
   

  	
   

  	
   

  
	
  Location:

  	
   

  	
  Bridgeside
  Point Office Building

  
	
   

  	
   

  	
  100
  Technology Drive, Pittsburgh Technology Center,

  
	
   

  	
   

  	
  Pittsburgh,
  Pennsylvania 15219

  
	
   

  	
   

  	
   

  
	
  County:

  	
   

  	
  Allegheny

  

 

 

 

 

MORTGAGE, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

THIS MORTGAGE, ASSIGNMENT
OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Mortgage”)
is made as of this 10th day of February, 2006, by MB PITTSBURGH BRIDGESIDE DST, a Delaware statutory trust,
having its principal place of business at 2901 Butterfield Road, Oak Brook,
Illinois 60523, as mortgagor (“Borrower”),
for the benefit of NOMURA CREDIT &  CAPITAL, INC., a Delaware corporation,
its successors and assigns, having an address at 2 World Financial Center,
Bldg. B., New York, New York 10281, as mortgagee (“Lender”).

 

W I  T  N  E  S  S
E  T  H:

 

WHEREAS, this Mortgage is
given to secure a loan (the “Loan”) in the
principal sum of SEVENTEEN MILLION THREE HUNDRED TWENTY-FIVE
THOUSAND AND 00/100 DOLLARS ($17,325,000.00) advanced 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”,
and 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”), which Note provides,
among other things, for final payment of principal and interest thereunder, if
not sooner paid or payable as provided therein, to be due on February 11, 2031;

 

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 “Deed of Trust” or “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 1

GRANTS OF SECURITY

 

Section 1.1.            Property Mortgaged. Borrower does hereby irrevocably mortgage,
grant, bargain, pledge, assign, warrant, transfer and convey to Lender and its
successors and assigns, WITH POWER OF SALE and grant a security interest to
Lender its successor and assigns, in 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

 

2

 

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 (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

 

3

 

(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 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;

 

(p)           Accounts. All reserves, escrows, and deposit accounts maintained by Borrower with
respect to the Property, including without limitation, all securities,
investments,

 

4

 

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.

 

Section 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.

 

Section 1.3.            Security Agreement. This Mortgage is both a real property deed of
trust 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 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

 

5

 

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.

 

Section 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.

 

The Borrower hereby
authorizes the 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 the Borrower as authorized by applicable law, as
applicable to all or part of the fixtures or Personal Property. For purposes of
such filings, the Borrower agrees to furnish any information requested by the
Lender promptly upon request by the Lender. The Borrower also ratifies its
authorization for the Lender to have filed any like initial financing
statements, amendments thereto and continuation statements, if filed prior to
the date of this Mortgage. The Borrower hereby irrevocably constitutes and
appoints the Lender and any officer or agent of the 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 the Borrower or in the Borrower’s
own name to execute in the Borrower’s name any documents and otherwise to carry
out the purposes of this Section 1.4, to the extent that the Borrower’s
authorization above is not sufficient. To the extent permitted by law, the
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.

 

Section 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, 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.

 

6

 

CONDITIONS TO GRANT

 

TO HAVE AND TO HOLD the
above granted and described Property unto Lender, and its successors and
assigns, forever;

 

IN TRUST, WITH THE POWER
OF SALE, 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 promptly
thereafter mark the Note “paid in full” and will, at Borrower’s sole cost and
expense, release the lien of this Mortgage (and Lender agrees to make
reasonable efforts to do so within thirty days following the satisfaction of
the conditions herein set forth and Borrower’s written request thereafter to
provide such release); 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 2

DEBT AND OBLIGATIONS SECURED

 

Section 2.1.            Debt.
This Mortgage and the grants, assignments and transfers made in Article 1
are given for the purpose of securing the following, in such order of priority
as Lender may determine in its sole discretion (the “Debt”):

 

(a)           the payment of the indebtedness evidenced by the
Note in lawful money of the United States of America;

 

(b)           the payment of interest, prepayment premiums,
default interest, late charges and other sums, as provided in the Note, the
Loan Agreement, this Mortgage and the other Loan Documents;

 

(c)           the payment of all other moneys agreed or provided
to be paid by Borrower in the Note, the Loan Agreement, this Mortgage or the
other Loan Documents;

 

(d)           the payment of all sums advanced pursuant to this
Mortgage to protect and preserve the Property and the lien and the security
interest created hereby; and

 

(e)           the payment of all sums advanced and costs and
expenses incurred by Lender in connection with the Debt or any part thereof,
any renewal, extension, or change of or substitution for the Debt or any part
thereof, or the acquisition or perfection of the security therefor, whether
made or incurred at the request of Borrower or Lender.

 

7

 

Section 2.2.            Other Obligations. This Mortgage and the grants, assignments and
transfers made in Article 1 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 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.

 

Section 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 3

BORROWER COVENANTS

 

Borrower covenants and
agrees that:

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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 

 

8

 

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.

 

Section 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
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.

 

Section 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.

 

Section 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

 

9

 

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.

 

Section 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 interests 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.

 

Section 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 the 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 4

OBLIGATIONS AND RELIANCES

 

Section 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.

 

10

 

Section 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.

 

Section 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.

 

Section 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 5

FURTHER ASSURANCES

 

Section 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,

 

11

 

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.

 

Section 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.

 

Section 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.

 

12

 

(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.

 

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

 

Section 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 6

DUE ON SALE/ENCUMBRANCE

 

Section 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.

 

Section 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.

 

Section 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 6
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

 

13

 

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 sole member of
Borrower (or the stock of any corporation directly or indirectly controlling
such sole member 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 sole
member’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 membership interest in Borrower; (e) if Borrower, any sole
member 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.

 

Section 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 7

RIGHTS AND REMEDIES UPON DEFAULT

 

Section 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

 

14

 

Property, 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 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

 

15

 

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;

 

(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; or

 

16

 

(m)          under the power of sale granted hereunder or under
applicable law, Lender shall have the discretionary right to cause some or all
of the Property, including any Personal Property, to be sold or otherwise
disposed of in any combination and in any manner permitted by applicable law.

 

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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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

 

17

 

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. The action contemplated by this
Section 7.6 shall be at Lender’s sole cost and expense, unless an Event of
Default shall be continuing, in which event such action shall be at Borrower’s
sole cost and expense.

 

Section 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.

 

Section 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 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

 

18

 

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.

 

Section 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.

 

Section 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 8 or Section 9.4 herein.

 

Section 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.

 

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

 

19

 

ARTICLE 8

ENVIRONMENTAL HAZARDS

 

Section 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 (a) to the best of Borrower’s
knowledge, based on the Environmental Report, 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, applicable 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
applicable 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 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, applicable 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

 

20

 

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 8.

 

Section 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 (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

 

21

 

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 8.

 

Section 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, 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.

 

22

 

ARTICLE 9

INDEMNIFICATIONS

 

Section 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 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 9; (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

 

23

 

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 9, 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,
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).

 

Section 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,

 

24

 

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.

 

Section 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.

 

Section 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 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 

 

25

 

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 8
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 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 8. 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

 

26

 

INDEMNITY SHALL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF
THIS MORTGAGE, SUBJECT TO THE PROVISIONS OF SECTION 10.5.

 

Section 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.

 

ARTICLE 10

WAIVERS

 

Section 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.

 

Section 10.2.          Marshalling and Other Matters. To the fullest extent permitted by applicable
law, Borrower hereby waives 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.

 

Section 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.

 

27

 

Section 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.

 

Section 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 8,
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 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 11

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 12

NOTICES

 

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

 

28

 

ARTICLE 13

APPLICABLE LAW

 

Section 13.1.          GOVERNING LAW. THIS MORTGAGE SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO
THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED AND SHALL IN ALL RESPECTS
BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE WHERE THE PROPERTY IS LOCATED.

 

Section 13.2.          Usury Laws. Notwithstanding anything to the contrary, (a) all agreements and
communications between Borrower and Lender are hereby and shall automatically
be limited so that, after taking into account all amounts deemed interest, the
interest contracted for, charged or received by Lender shall never exceed the
maximum lawful rate or amount, (b) in calculating whether any interest
exceeds the lawful maximum, all such interest shall be amortized, prorated,
allocated and spread over the full amount and term of all principal
indebtedness of Borrower to Lender, and (c) if through any contingency or
event, Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of Borrower to
Lender, or if there is no such indebtedness, shall immediately be returned to
Borrower.

 

Section 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 14

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.

 

29

 

ARTICLE 15

MISCELLANEOUS PROVISIONS

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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.

 

Section 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, 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.

 

Section 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

 

30

 

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.”

 

ARTICLE 16

INTENTIONALLY OMITTED

 

 

[Signature Page to
Follow]

 

31

 

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

 

	
   

  	
  BORROWER:  MB
  PITTSBURGH BRIDGESIDE DST, a 

  Delaware statutory trust 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MINTO BUILDERS (FLORIDA), INC.,
  a

  Florida corporation, Its Signatory Trustee 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Valerie Medina

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Valerie
  Medina

  
	
   

  	
   

  	
  Title:

  	
    Assistant
  Secretary

  
						

 

 

ACKNOWLEDGMENT

 

STATE
OF ILLINOIS

COUNTY
OF DUPAGE

 

On this      day of February, 2006, before me,
a Notary Public the undersigned officer, personally appeared                                    
who acknowledged himself/herself to be the                                    
                                   
 of MINTO BUILDERS (FLORIDA), INC., a Florida corporation,
the signatory trustee of MB PITTSBURGH BRIDGESIDE
DST, a Delaware statutory trust and that he/she as such                                                                      
, being authorized to do so, executed the foregoing instrument for the purposes
therein contained by signing the name of the corporation by himself/herself as                                               .

 

IN
WITNESS WHEREOF, I hereunto set my hand and official seal.

 

	
   

  	
   

  	
   

  	
  (Seal)

  
	
   

  	
   

  	
   

  
	
  Notary
  Public

  	
   

  
					

 

 

EXHIBIT A

LEGAL DESCRIPTIONExhibit 10.39

 

LOAN AGREEMENT 

 

 

Dated as of February 10, 2006

 

Between

 

 

MB PITTSBURGH BRIDGESIDE DST, a

Delaware statutory trust,

as Borrower

 

 

and

 

 

NOMURA CREDIT & CAPITAL, INC.,

as Lender

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
  Section 1.2.

  	
  Principles of Construction

  	
  19

  
	
  ARTICLE II
  GENERAL TERMS

  	
  19

  
	
  Section 2.1.

  	
  Loan Commitment; Disbursement to Borrower

  	
  19

  
	
  Section 2.2.

  	
  Interest; Loan Payments; Late Payment
  Charge

  	
  20

  
	
  Section 2.3.

  	
  Prepayments

  	
  21

  
	
  Section 2.4.

  	
  Intentionally Omitted

  	
  23

  
	
  Section 2.5.

  	
  Release of Property

  	
  23

  
	
  Section 2.6.

  	
  Manner of Making Payments

  	
  23

  
	
  ARTICLE III CONDITIONS PRECEDENT

  	
  24

  
	
  Section 3.1.

  	
  Conditions Precedent to Closing

  	
  24

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES

  	
  27

  
	
  Section 4.1.

  	
  Borrower Representations

  	
  27

  
	
  Section 4.2.

  	
  Survival of Representations

  	
  35

  
	
  ARTICLE V
  BORROWER COVENANTS

  	
  35

  
	
  Section 5.1.

  	
  Affirmative Covenants

  	
  35

  
	
  Section 5.2.

  	
  Negative Covenants

  	
  44

  
	
  ARTICLE VI INSURANCE; CASUALTY;
  CONDEMNATION

  	
  51

  
	
  Section 6.1.

  	
  Insurance

  	
  51

  
	
  Section 6.2.

  	
  Casualty

  	
  55

  
	
  Section 6.3.

  	
  Condemnation

  	
  56

  
	
  Section 6.4.

  	
  Restoration

  	
  56

  
	
  ARTICLE VII RESERVE FUNDS

  	
  61

  
	
  Section 7.1.

  	
  Required Repair Funds

  	
  61

  
	
  Section 7.2.

  	
  Tax and Insurance Escrow Fund

  	
  62

  
	
  Section 7.3.

  	
  Replacements and Replacement Reserve

  	
  63

  
	
  Section 7.4.

  	
  Intentionally Omitted

  	
  68

  
	
  Section 7.5.

  	
  Intentionally Omitted

  	
  68

  
	
  Section 7.6.

  	
  Intentionally Omitted

  	
  68

  
	
  Section 7.7.

  	
  Reserve Funds, Generally

  	
  68

  
	
  ARTICLE VIII DEFAULTS

  	
  69

  
	
  Section 8.1.

  	
  Event of Default

  	
  69

  
	
  Section 8.2.

  	
  Remedies

  	
  71

  
	
  Section 8.3.

  	
  Remedies Cumulative; Waivers

  	
  72

  
	
  ARTICLE IX SPECIAL PROVISIONS

  	
  72

  
	
  Section 9.1.

  	
  Sale of Notes and Securitization

  	
  72

  
	
  Section 9.2.

  	
  Securitization

  	
  73

  
	
  Section 9.3.

  	
  Rating Surveillance

  	
  74

  
	
  Section 9.4.

  	
  Exculpation

  	
  74

  
	
  Section 9.5.

  	
  Termination of Manager

  	
  76

  

 

i

 

	
  Section 9.6.

  	
  Servicer

  	
  76

  
	
  Section 9.7.

  	
  Splitting the Loan

  	
  76

  
	
  ARTICLE X MISCELLANEOUS

  	
  77

  
	
  Section 10.1.

  	
  Survival

  	
  77

  
	
  Section 10.2.

  	
  Lender’s Discretion

  	
  77

  
	
  Section 10.3.

  	
  Governing Law

  	
  77

  
	
  Section 10.4.

  	
  Modification, Waiver in Writing

  	
  77

  
	
  Section 10.5.

  	
  Delay Not a Waiver

  	
  78

  
	
  Section 10.6.

  	
  Notices

  	
  78

  
	
  Section 10.7.

  	
  Trial by Jury

  	
  79

  
	
  Section 10.8.

  	
  Headings

  	
  79

  
	
  Section 10.9.

  	
  Severability

  	
  79

  
	
  Section 10.10.

  	
  Preferences

  	
  79

  
	
  Section 10.11.

  	
  Waiver of Notice

  	
  79

  
	
  Section 10.12.

  	
  Remedies of Borrower

  	
  80

  
	
  Section 10.13.

  	
  Expenses; Indemnity

  	
  80

  
	
  Section 10.14.

  	
  Schedules Incorporated

  	
  81

  
	
  Section 10.15.

  	
  Offsets, Counterclaims and Defenses

  	
  81

  
	
  Section 10.16.

  	
  No Joint Venture or Partnership; No Third
  Party Beneficiaries

  	
  81

  
	
  Section 10.17.

  	
  Publicity

  	
  82

  
	
  Section 10.18.

  	
  Waiver of Marshalling of Assets

  	
  82

  
	
  Section 10.19.

  	
  Waiver of Counterclaim

  	
  82

  
	
  Section 10.20.

  	
  Conflict; Construction of Documents;
  Reliance

  	
  82

  
	
  Section 10.21.

  	
  BROKERS AND FINANCIAL ADVISORS

  	
  83

  
	
  Section 10.22.

  	
  Prior Agreements

  	
  83

  
	
  Section 10.23.

  	
  Transfer of Loan

  	
  83

  
	
  Section 10.24.

  	
  Joint and Several Liability

  	
  83

  

 

	
  SCHEDULES

  	
   

  	
   

  
	
  Schedule I

  	
  -

  	
  Form of Tenant Direction Letter

  
	
  Schedule II

  	
  -

  	
  Intentionally Reserved

  
	
  Schedule III

  	
  -

  	
  Required Repairs

  
	
  Schedule IV

  	
  -

  	
  Rent Roll

  

 

ii

 

LOAN AGREEMENT

 

THIS LOAN
AGREEMENT,
dated as of this 10th day of February, 2006 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this “Agreement”), between NOMURA CREDIT & CAPITAL, INC., a Delaware
corporation, having an address at Two World Financial Center, Building B, New
York, New York 10281 (“Lender”),
and MB PITTSBURGH BRIDGESIDE DST, a
Delaware statutory trust, having an address at 2901 Butterfield Road, Oak
Brook, Illinois  60523 (“Borrower”).

W I T N E S S E T H:

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

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

 

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

 

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

 

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

 

“Anchor Tenant” shall mean FISCHER SCIENTIFIC INTERNATIONAL INC., pursuant to the
Anchor Tenant Lease.

 

“Anchor Tenant Lease” shall mean
that certain lease by and between Borrower (or its predecessor in title), as
landlord, and Anchor Tenant, as tenant, as the same may be amended, restated,
renewed, substituted or replaced (but only to the extent permitted under this
Agreement).

 

“Anticipated Repayment Date” shall mean February 11,
2011.

 

 

“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 PITTSBURGH BRIDGESIDE DST, a Delaware statutory trust,
together with its permitted successors and assigns.

 

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

 

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

 

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

 

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

 

“Casualty/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.

 

2

 

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

 

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

 

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

 

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

 

(a)           the numerator is the Net Operating Income
(excluding interest on credit accounts) for such period as set forth in the
statements required hereunder, without deduction for (i) actual management
fees incurred in connection with the operation of the Property, (ii) amounts
paid to the Reserve Funds, less (A) management fees equal to the greater
of (1) assumed management fees of four and one-half percent (4.5%) of
Gross Income from Operations or (2) the actual management fees incurred, (B) assumed
Replacement Reserve Fund contributions equal to $0.20 per square foot of gross
leaseable area at the Property; and (C) assumed reserves for tenant
improvements and leasing commissions equal to $0.58 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 or Hyper-Am Interest Rate, as applicable.

 

“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

 

3

 

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

 

“Eligible Institution” shall mean a
depository institution or trust company insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or commercial
paper of which are rated at least A-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).

 

“Embargoed Person” shall mean any
person, entity or government subject to trade restrictions under U.S. law,
including, but not limited to, The USA PATRIOT Act (including the anti-terrorism
provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Orders or regulations promulgated thereunder including
those related to Specially Designated Nationals and Specially Designated Global
Terrorists, with the result that the investment in Borrower, Principal or
Guarantor, as applicable (whether directly or indirectly), is prohibited by law
or the Loan made by the Lender is in violation of law.

 

“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 have
the meaning as defined in the Environmental Indemnity executed by the Borrower.

 

“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.

 

4

 

“Gross Income from Operations” shall
mean all sustainable income as reported on the financial statements delivered
by the Borrower in accordance with this Agreement, computed in accordance with
accounting principles reasonably acceptable to Lender, consistently applied,
derived from the ownership and operation of the Property from whatever source, including, but not limited to, (i) Rents
from Tenants that are in occupancy, open for business and paying unabated Rent,
(ii) utility charges, (iii) escalations, (iv) intentionally
omitted; (v) service fees or charges, (vi) license fees, (vii) parking
fees, and (viii) other required pass-throughs but excluding
(i) Rents from Tenants that are subject to any bankruptcy proceeding
(unless such Tenant has affirmed its Lease or Sole Member has master leased
such Tenant’s premises for full contract rent for a period not less than three
years, and the net worth of Sole Member (as determined by Lender) is not less
than such entity’s net worth as of September 30, 2004), or are not in
occupancy, open for business or paying unabated Rent, (ii) sales, use and
occupancy or other taxes on receipts required to be accounted for by Borrower
to any Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales
of furniture, fixtures and equipment, (v) Insurance Proceeds (other than
business interruption or other loss of income insurance), (vi) Awards, (vii) unforfeited
security deposits, (viii) utility and other similar deposits and (ix) 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.

 

“Hyper-Am Interest Rate” shall mean
a rate per annum equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) two (2%) percent above the Interest Rate.

 

“Hyper-Am Prepayment” shall mean any
application of Excess Cash Flow to the Debt pursuant to Section 2.2.4.

 

“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.

 

“Indemnitor” shall mean collectively
Inland Western Retail Real Estate Trust, Inc. and Minto Builders (Florida), Inc.,
until such time as Minto Builders (Florida), Inc. shall attain a net worth
of at least $300,000,000.00 at which time Inland Western Retail Real Estate
Trust, Inc. shall be automatically released as an Indemnitor under the
Indemnity Agreement.

 

“Indemnity Agreement” shall mean
that certain Indemnity Agreement dated as of the Closing Date by Borrower, Indemnitor
and Minto Builders (Florida), Inc. in favor of Lender.

 

5

 

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

 

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

 

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

 

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

 

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

 

“Interest Rate” shall mean Five and
Twenty hundreths percent (5.20%) 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.

 

6

 

“Lender” shall mean Nomura Credit &
Capital, Inc., together with its successors and assigns.

 

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

 

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

 

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

 

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

 

“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 OFFICE MANAGEMENT, LLC, a Delaware limited
liability company.

 

“Maturity Date” shall mean February 11, 2031, or such other date on which the
final payment of principal of the Note becomes due and payable as therein or
herein provided, whether at such stated maturity date, by declaration of
acceleration, or otherwise.

 

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

 

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

 

“Monthly Debt Service Payment Amount”
shall mean an amount equal to $75,075.00.

 

“Mortgage” shall mean, with respect
to the Property, that certain first priority Mortgage, Assignment of Rents,
Security Agreement and Fixture Filing, dated the Closing Date, executed and
delivered by Borrower as security for the Loan and encumbering the Property, as

 

7

 

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 5%, less actual vacancy.  Notwithstanding the foregoing, if actual
vacancy exceeds market vacancy and underwritten vacancy, then there shall be no
adjustment for a vacancy allowance.

 

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

 

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

 

“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 SEVENTEEN MILLION THREE HUNDRED TWENTY-FIVE THOUSAND AND 00/100 DOLLARS
($17,325,000.00) 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.

 

8

 

“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.

 

“Payment Date” shall mean the
eleventh (11th) 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, and (d) such other title
and survey exceptions as Lender has approved or may approve in writing in
Lender’s reasonable discretion, which Permitted Encumbrances in the aggregate
do not materially adversely affect the value or use of the Property or Borrower’s
ability to repay the Loan.

 

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

 

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

 

(ii)           Federal Housing Administration debentures;

 

(iii)          obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated

 

9

 

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

 

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

 

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

 

(vi)          debt obligations with maturities of not more than 365 days and at all
times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and
of itself, result in a downgrade, qualification or withdrawal of the initial,
or, if higher, then current ratings assigned to the Securities) in its highest
long-term unsecured rating category; provided, however, that the

 

10

 

investments described in this clause must (A) have
a predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;

 

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

 

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

 

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

 

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

 

“Permitted Prepayment Date” shall
mean the date that is the eleventh day of the month occurring after the date
which is three (3) years following Securitization of the Loan.

 

11

 

“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”.

 

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

 

“Purchase Contract” means that
certain Purchase and Sale Agreement between BRIDGESIDE
POINT ASSOCIATES, LTD., a Pennsylvania limited partnership, Seller,
and Inland Real Estate Acquisitions, Inc., an Illinois corporation, as
Purchaser, and pertaining to the Property, and as assigned to Borrower.

 

12

 

“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 and/or office 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 Three Hundred Fifty Thousand and No/100 dollars
($350,000.00).

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“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 Agreement with the Lender,
refinancing the Property in connection with a permitted repayment of the Loan,
and transacting lawful business that is incident, necessary and appropriate to
accomplish the foregoing; or (B) acting as a general partner of the
limited partnership that owns the Property, a member of the limited liability
company that owns the Property or the beneficiary or trustee of a Delaware
statutory trust that owns the Property;

 

(ii)           is not engaged and will not engage in any business unrelated to (A) the
acquisition, development, ownership, management or operation of the Property,

 

14

 

(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 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 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;

 

(vi)          if such entity is a corporation, 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;

 

(vii)         if such entity is a limited liability company and such limited liability
company has more than one member, such limited liability company has as its
manager a 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 a board
of directors with not less than one (1) Independent Director, and (d) will
not cause or allow its board of directors to take any action related to a bankruptcy
or insolvency proceeding or a voluntary dissolution without the unanimous
affirmative vote of 100% of the members of its board of directors, including
the Independent Director;

 

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

 

15

 

limited partnership, has 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 Agreement;

 

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

 

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

 

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

 

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

 

(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

 

16

 

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 Sole Member, then such Person may be included in
the consolidated financial statement of Sole Member provided such consolidated
financial statement contains a note indicating that it maintains separate
financial records for each Person controlled by Sole Member;

 

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

 

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

 

(xxi)         has and will have no Indebtedness (including loans (whether or not such
loans are evidenced by a written agreement) between Borrower and any Affiliates
of Borrower and relating to the management of funds in the custodial account
maintained by the Manager) other than (i) the Loan, (ii) liabilities
incurred in the ordinary course of business relating to the ownership and
operation of the Property and the routine administration of Borrower, which
liabilities are not more than sixty (60) days past the date incurred (unless
disputed in accordance with applicable law), are not evidenced by a note and
are paid when due, and which amounts are normal and reasonable under the
circumstances and do not in any event exceed $100,000 in the aggregate, and (iii) such
other liabilities that are permitted pursuant to this Agreement;

 

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

 

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

 

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

 

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

 

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

 

(xxvii)      has held itself out and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its own name or in a
name franchised or licensed to it by an entity other than an Affiliate of
Borrower and not as a division or part

 

17

 

of any other Person, except for services
rendered by Manager under the Management Agreement, so long as Manager holds
itself out as an agent of the Borrower;

 

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

 

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

 

(xxx)        has not identified and will not identify its partners, members,
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;

 

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

 

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

 

“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.

 

“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.

 

18

 

“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.

 

“Transfer Restriction Period” shall
mean the period commencing on the date which is thirty (30) days prior to any
Securitization and ending on the date which is thirty (30) days following such
Securitization.

 

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

 

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

 

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

 

ARTICLE II

GENERAL TERMS

 

Section 2.1.            Loan Commitment; Disbursement to Borrower.

 

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

 

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

 

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

 

19

 

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

 

Section 2.2.            Interest; Loan Payments; Late Payment Charge.

 

2.2.1        Interest Generally. Interest on the outstanding principal balance of
the Loan shall accrue from the Closing Date to but excluding the Anticipated
Repayment Date at the Interest Rate and from the Anticipated Repayment 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 date of Loan
proceeds disbursement up to but not including February 11,
2006, and (b) on March 11,
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 payment period at the Interest Rate.

 

2.2.4        Payments after Anticipated Repayment Date. On each Payment Date after the Anticipated
Repayment Date up to but not including the Maturity Date, in addition to the
Monthly Debt Service Payment Amount, Borrower shall pay to Lender any Excess
Cash Flow for the calendar month preceding such Payment Date.  Each such payment of Excess Cash Flow,
together with any remaining amount of the Monthly Debt Service Payment Amount
paid on such date after the payment of interest on the outstanding principal
balance of the Loan at the Interest Rate, shall be applied (i) first, to
the prepayment of outstanding principal until the Loan has been paid in full,
and (ii) next, to the payment of the difference, if any, between (y) the
sum of (i) interest accrued and unpaid on the principal amount of the Loan
at the Hyper-Am Rate and (ii) interest on such accrued and unpaid interest
at the Hyper-Am Rate and (z) the interest paid at the Interest Rate on such
Payment Date.

 

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

 

20

 

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

 

2.2.7        Late Payment Charge.  If any
principal, interest or any other sums due under the Loan Documents is not paid
by Borrower on or prior to the date 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 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 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 the Hyper-Am
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 Agreement, prepay the
unpaid principal balance of the Loan in

 

21

 

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 then due under this Agreement, the Note, the Mortgage and the other
Loan Documents, and (iv) if prepayment occurs prior to the Anticipated
Repayment Payment Date which is three 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 Agreement including, but not limited to, principal and
interest on the Anticipated Repayment Maturity Date (with each such payment
discounted to its present value at the date of prepayment at the rate which,
when compounded monthly, is equivalent to the Prepayment Rate), over (2) the
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 Anticipated Repayment Date, and on each day thereafter through the
Maturity Date, Borrower may, at its option, prepay the Debt, in whole or in
part (including a Hyper-Am Prepayment),
without payment of any Prepayment Consideration; provided, however, if such
prepayment (other than a Hyper-Am Prepayment) is not paid on a regularly
scheduled Payment Date, such prepayment shall include interest that would have
accrued on such prepayment through and including the day immediately preceding
the next Payment Date.  Except in
connection with a Hyper-Am Prepayment, 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 or Anchor Tenant pursuant to this Agreement for
the restoration of the Property, Borrower shall, at Lender’s option, prepay the
outstanding principal balance of the Note in an amount equal to one hundred
percent (100%) of such Net Proceeds.  No
Prepayment Consideration 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

 

22

 

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

 

Section 2.4.            Intentionally Omitted.

 

Section 2.5.            Release of Property.  Except as
set forth in this Section 2.5, no repayment or prepayment of all or any
portion of the 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 New York Clearing House Interbank Payments System or other funds
immediately available to Lender by 1:00 p.m., New York City time, on the
date such payment is due, to Lender by deposit to such account as Lender may
designate by

 

23

 

written
notice to Borrower.  Whenever any payment
hereunder or under the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day.

 

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

 

ARTICLE III

CONDITIONS PRECEDENT

 

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

 

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

 

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

 

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

 

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

 

24

 

without
cost to Lender.  Lender also shall have
received evidence that all premiums in respect of such Title Insurance Policy
have been paid.

 

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

 

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

 

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

 

(f)            Zoning.  With respect to the Property,
Lender shall have received, at Lender’s option, (i) letters 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.

 

25

 

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

 

3.1.7        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 Agreement and other Loan Documents and all
documents incidental thereto shall be reasonably satisfactory in form and
substance to Lender, and Lender shall have received all such counterpart
originals or certified copies of such documents as Lender may reasonably
request.

 

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

 

3.1.11      Tenant Estoppels.  Borrower shall exercise
reasonable commercial efforts to deliver estoppel letters from Tenants
occupying not less than eighty percent (80%) of the gross leasable area of the
Property; Borrower shall deliver to Lender an estoppel letter executed by
Anchor Tenant, reasonably acceptable to Lender).

 

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.

 

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.

 

26

 

3.1.15      Subordination and Attornment.  Lender
shall have received an appropriate instrument, acceptable to Lender in its
commercially reasonable discretion, subordinating the Anchor Tenant Lease(s)
and any leases of record prior to the Mortgage and including an agreement by
such Tenant(s) 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.

 

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:

 

27

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

29

 

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

 

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

 

4.1.10      Compliance.  To Borrower’s knowledge, Borrower
and the Property and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes (including, without limitation, number of parking
spaces).  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, 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 an office building, 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.

 

30

 

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

 

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

 

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

 

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
Agreement.  To the best of Borrower’s
knowledge, no claims have

 

31

 

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

 

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

 

4.1.26      Leases.  The Property is not subject to
any Leases other than the Anchor Tenant Lease (and subleases permitted under
the Anchor Tenant Lease).  No Person has
any possessory interest in the Property or right to occupy the same except
under and pursuant to the

 

32

 

provisions
of the Anchor Tenant Lease.  The Anchor
Tenant Lease is 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.  No
Rent (including security deposits) has been paid more than one (1) month
in advance of its due date.  To best of
Borrower’s knowledge, all work to
be performed by Borrower under the Anchor Tenant Lease has been performed as
required and has been accepted by the Anchor 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 the Anchor Tenant have already
been received by the Anchor Tenant. 
There has been no prior sale, transfer or assignment, hypothecation or
pledge of the Anchor Tenant Lease or of the Rents received therein which is
outstanding.  To Borrower’s knowledge
after inquiry, except as set forth on Schedule IV, the Anchor Tenant has not
assigned the Anchor Tenant Lease or sublet all or any portion of the premises
demised thereby, nor does anyone except the Anchor Tenant and its employees
occupy such leased premises.  Except as
set forth on Schedule IV, The Anchor Tenant does not have a right or
option pursuant to the Anchor Tenant Lease to purchase all or any part of the
leased premises or the building of which the leased premises are a part.  Except as disclosed in the Environmental
Report delivered to Lender in connection herewith, to Borrower’s actual
knowledge, 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 Anchor Tenant on or about the leased premises
nor does Borrower have any knowledge of Anchor 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 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 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

 

33

 

continue
to be a Special Purpose Entity.  If
Borrower consists of more than one Person, each such Person shall be a Special
Purpose Entity.

 

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

 

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

 

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

 

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

 

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

 

4.1.34      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
Agreement without

 

34

 

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

 

4.1.36      Service and Maintenance Contracts.  There are
no service or maintenance contracts binding upon the Property which are not
terminable, without penalty, upon not more than thirty (30) days notice.

 

4.1.37      Embargoed Person.  As of the Closing Date, to the
best of Borrower’s knowledge, (a) none of the funds or other assets of
Borrower constitute property of, or are beneficially owned, directly or
indirectly, by any Embargoed Person; (b) no Embargoed Person has any
interest of any nature whatsoever in Borrower with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law; and (c) none of the funds of Borrower
have been derived from any unlawful activity with the result that the
investment in Borrower (whether directly or indirectly), is prohibited by law
or the Loan is in violation of law. 
Borrower covenants and agrees to deliver to Lender any certification or
other evidence requested from time to time by Lender in its reasonable
discretion, confirming Borrower’s compliance with this Section 5.2.37.

 

4.1.38      Purchase Contract.  Borrower
has delivered to Lender a true and complete copy of the Purchase Contract,
including all amendments and modifications thereto and there are no agreements
or understandings between the parties thereto except as set forth in such
Purchase Contract.

 

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

 

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 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

 

35

 

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 Agreement. Borrower shall operate, or cause the tenant
to operate, any Property that is the subject of an O&M Agreement (if any) in
accordance with the terms and provisions thereof in all material respects.  After prior written notice to Lender,
Borrower, at its own expense, may contest by appropriate legal proceeding
promptly initiated and conducted in good faith and with due diligence, the
validity of any Legal Requirement, the applicability of any Legal Requirement
to Borrower or the Property or any alleged violation of any Legal Requirement,
provided that (i) no Event of Default has occurred and remains uncured; (ii) intentionally
omitted; (iii) such proceeding shall be permitted under and be conducted
in accordance with the provisions of any instrument to which Borrower is
subject and shall not constitute a default thereunder and such proceeding shall
be conducted in accordance with 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 (provided,
however, if Anchor Tenant is conducting the contest pursuant to the Anchor
Tenant Lease, and is not required under the Anchor Tenant Lease to post any
such security, then this clause (vii) shall not apply).  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 escrows for Taxes pursuant to 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

 

36

 

delinquent
if not paid (provided, however, that Borrower is not required to
furnish such receipts for payment of Taxes in the event that such Taxes have
been paid by Lender pursuant to Section 7.2 hereof).  If Borrower pays or causes to be paid all
Taxes and Other Charges and provides a copy of the receipt evidencing the
payment thereof to Lender, then Lender shall reimburse Borrower, provided that
there are then sufficient proceeds in the Tax and Insurance Escrow Fund and
provided that the Taxes are being paid pursuant to Section 7.2.  Upon written request of Borrower, if Lender
has paid such Taxes pursuant to Section 7.2 hereof, Lender shall provide
Borrower with evidence that such Taxes have been paid.  Borrower shall not suffer and shall promptly
cause to be paid and discharged any Lien or charge whatsoever which may be or
become a Lien or charge against the Property, and shall promptly pay for all
utility services provided to the Property. 
After prior written notice to Lender, Borrower, at its own expense, may
contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any Taxes or Other Charges, provided that (i) Borrower
is permitted to do so under the provisions of any mortgage or deed of trust
superior in lien to the Mortgage; (ii) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument
to which Borrower is subject and shall not constitute a default thereunder and
such proceeding shall be conducted in accordance with all applicable statutes,
laws and ordinances; (iii) the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, cancelled or
lost; (iv) Borrower shall promptly upon final determination thereof pay
the amount of any such Taxes or Other Charges, together with all costs,
interest and penalties which may be payable in connection therewith; (v) such
proceeding shall suspend the collection of such contested Taxes or Other
Charges from the Property; and (vi) Borrower shall furnish such security
as may be required in the proceeding, or as may be reasonably requested by
Lender, to insure the payment of any such Taxes or Other Charges, together with
all interest and penalties thereon (provided, however, if Anchor Tenant is
conducting the contest pursuant to the Anchor Tenant Lease, and is not required
under the Anchor Tenant Lease to post any such security, then this clause (vi) shall
not apply).  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

 

37

 

under any
of the other Loan Documents and, in connection therewith, permit Lender, at its
election, to participate in any such proceedings.

 

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

 

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

 

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

 

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

 

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

 

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

 

5.1.10      Intentionally Omitted.

 

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

 

38

 

(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 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

 

39

 

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

 

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

 

(f)            Borrower shall furnish to Lender, within ten (10) Business
Days after Lender’s request (or as soon thereafter as may be reasonably
possible), financial and sales information from 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, financial statements audited by an independent
certified public accountant, which shall include an annual balance sheet and
profit and loss statement of Indemnitor, in the form reasonably required by
Lender.

 

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

 

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

 

40

 

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 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
Anchor Tenant (and/or any replacement tenant leasing space at the Property from
Borrower) and such other commercial tenant as Lender may request in form and
substance reasonably satisfactory to Lender provided that Borrower shall not be
required to deliver such certificates more frequently than one (1) time in
any calendar year or with respect to the Anchor Tenant only, the maximum
frequency set forth in the Anchor Tenant Lease, whichever is less frequent.

 

(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

 

41

 

consent of
Lender.  Borrower shall observe and
perform, and cause Seller to observe and perform, its surviving obligations
under the Purchase Contract.

 

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, other than a Lease for all or substantially all of
the Property which shall not be subject to such ten business-day period, 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 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

 

42

 

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.  In addition, the requirements set forth in
this Section 5.1.20 shall not apply to any sublease by Anchor Tenant
pursuant to the relevant provisions of the Anchor Tenant Lease.

 

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
Agreement or (d) any structural alteration which costs less than
$50,000.00 in the aggregate for all components thereof which constitute such
alteration or any non-structural alteration which costs less than $100,000.00
in the aggregate for all components thereof which constitute such
alteration.  If the total unpaid amounts
due and payable with respect to alterations to the Improvements at the Property
(other than such amounts to be paid or reimbursed by tenants under the Leases)
shall at any time equal or exceed $350,000.00 (the “Threshold Amount”), Borrower, 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

 

43

 

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.

 

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
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.

 

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

 

(i)            Permitted Encumbrances;

 

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

 

(iii)          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

 

44

 

standing
in any jurisdiction or (e) cause the Sole Member to (i) dissolve,
wind up or liquidate or take any action, or omit to take an action, as a result
of which the Sole Member would be dissolved, wound up or liquidated in whole or
in part, or (ii) amend, modify, waive or terminate the certificate of
limited liability company or limited liability company operating agreement of
the Borrower, 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.

 

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

 

45

 

(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 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 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 Sole Member 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 Sole Member 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 Retail Real Estate Trust, Inc., a Maryland corporation,
Inland American 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 by
merger; provided, however, Lender shall receive not less than thirty (30) days
prior written notice of such proposed transfer and, in connection with a merger
hereinabove described, the net worth of the entity surviving the merger shall
not be less than the net worth of the Sole Member immediately prior to such
merger and the entity surviving the merger shall be publicly traded.

 

(a)           On and after the Closing Date, Lender shall not
withhold its consent to a Transfer of the Property, as part of a single
transaction, provided that the following conditions are satisfied:

 

46

 

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

 

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

 

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

 

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

 

(5)             if
required or requested by any of the Rating Agencies, Borrower shall deliver an
Additional Insolvency Opinion, and if required by a Rating Agency, a fraudulent
conveyance opinion 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;

 

(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,

 

(A)          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 Sole Member and
an entity acceptable to Lender, provided Sole Member or an Affiliate
wholly-owned (directly or indirectly) by Sole Member owns at least ten percent
(10%) of the ownership interests in such Transferee and for which Sole Member
or an Affiliate wholly owned (directly or indirectly) by Sole Member, is the
managing entity and otherwise maintains operational and managerial control of
such Transferee, and Inland Western Retail Real Estate Trust, Inc. or
Minto Builders (Florida), Inc., as applicable pursuant to the terms of the
Indemnity Agreement, remains as Indemnitor, 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.

 

47

 

(B)           for
a Transfer as described in clause 6(a) immediately above, except solely
that such Transfer results in Inland American Real Estate Trust, Inc. or
an Affiliate wholly-owned (directly or indirectly) by Inland American Real
Estate Trust, Inc., owing less than ten (10%) percent and not less than
one (1%) percent of ownership interests in such Transferee, the assumption fee
payable shall be $15,000.00.

 

(7)             the
proposed Transfer is not requested during, and shall not occur during a
Transfer Restriction Period.

 

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)           On and after the Closing Date, and provided the
proposed Transfer is not requested during, and shall not occur during, a
Transfer Restriction Period, 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 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 office properties containing at least 1,000,000 square
feet of gross leasable area.  If required
or requested by any of the Rating Agencies, Borrower shall deliver a
substantive non-consolidation opinion with respect to any party not now owning
more than 49% of the ownership interests in Borrower acquiring more than 49% of
the ownership interests in Borrower.

 

(c)           Notwithstanding anything in this Section 5.2.13 to the
contrary, on or after the date that is twelve (12) months after the Closing
Date, Borrower shall be permitted to Transfer the entire Property in a single
transaction to one newly-formed Special Purpose Entity which shall be a
wholly-owned subsidiary of Sole Member (“Permitted Affiliate
Transferee”) which shall be approved by Lender in its reasonable
discretion (“Permitted Affiliate

 

48

 

Transfer”), provided (1) no Event of Default shall have occurred and be
continuing, (2) the creditworthiness of Sole Member, 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.

 

Section 5.3.            Cash Management.  (a) At the Closing, Borrower
shall execute and deliver to Lender, and thereafter, as herein provided,
following the execution and delivery of any other Lease with any other
replacement tenant(s) which may hereafter occupy all or any portion of the
premises demised to Anchor Tenant as of the date hereof, a letter (“Tenant
Direction Letter”) instructing such tenant to pay Rent directly to Lender’s
servicer (or as Lender may otherwise direct from time to time).  A form of such Tenant Direction Letter is
attached hereto as Schedule I; Borrower shall, at any time and from time
to time as requested by Lender, execute and deliver to Lender a new Tenant
Direction Letter in order to reflect changes to Lender’s servicing agent and/or
the Lockbox Account set forth in the form. 
Lender shall hold the Tenant Direction Letter(s) so delivered until such
time as a Restrictive Condition occurs, in which event Lender may, in Lender’s
sole and absolute discretion, deliver any such Tenant Direction Letters.  Borrower covenants and agrees to execute and
deliver to Lender a Tenant Direction Letter for each new tenant at the Property
within thirty (30) days after the execution of the lease with such new tenant.  Without the prior written consent of Lender,
which Lender may give or withhold in its sole discretion, Borrower shall not
terminate, amend, revoke or modify any Tenant Direction Letter in any manner
whatsoever, nor shall Borrower permit or consent to, directly or by
acquiescence, any failure or refusal of Anchor Tenant or any Replacement Tenant
to pay Rent as provided pursuant to the Tenant Direction Letter (or as Lender
may otherwise direct in writing from time to time).  Any Rents which may be received by Borrower
from Anchor Tenant, any Replacement Tenant or otherwise from the Property on or
after the occurrence of any Restrictive Condition, whether or not any such
Tenant Direction Letter shall have been delivered to any tenant of the
Property, shall be deemed to be collateral held in trust for the benefit of
Lender, shall not be commingled with any other funds or property of Borrower,

 

49

 

and shall
be delivered by Borrower to Lender within one (1) Business Days following
receipt thereof.

 

(b)           Following the occurrence of a Restrictive
Condition, Rents shall be deposited into an escrow account (the “Lockbox
Account”) established by Lender and under Lender’s sole dominion and control
for such purpose.  The Lockbox Account
shall be interest-bearing and will, at Lender’s option and in Lender’s sole
discretion, be an Eligible Account at an Eligible Institution.  Interest, if any, accrued on the funds in the
Lockbox Account shall remain in and constitute part of the Lockbox Account
funds and shall be disbursed as provided for herein.  Borrower shall have no right of withdrawal or
direction with respect to the Lockbox Account and Lender shall have the sole
right to withdraw and/or direct the disbursement of funds from such Lockbox
Account.  On each Payment Date following
the occurrence of a Restrictive Condition, funds in the Lockbox Account shall
be applied by Lender to pay debt services, taxes, insurance premiums and any
required reserve amounts, if any, hereunder in such order and amount as Lender
shall deem appropriate in Lender’s sole discretion provided, however, that
notwithstanding the foregoing to the contrary, provided no event of default has
occurred under the Anchor Tenant Lease which remains uncured, Lender will, if
any only to the extent funds then in the Lockbox Account are sufficient
therefore, first pay the Taxes and Insurance then due and payable, if any.  Any funds remaining in the Lockbox Account
following payment of any of the foregoing shall be distributed to Borrower only
to the extent of operating expenses for the Property approved by Lender, in
Lender’s sole discretion, and after payment of such operating expenses, if any,
Lender and/or Lender’s servicing agent shall have no obligation to remit all or
any portion of any Excess Rent Proceeds remaining in the Lockbox Account to
Borrower and Lender may, at its sole election and in its sole discretion,
retain such Excess Rent Proceeds as security for Borrower’s payment and
performance of its obligations under the Loan Documents.

 

(c)           Upon the earlier to occur of repayment in full of
the Loan in accordance with the terms hereof and a Cash Management Termination
Event, the balance of funds, if any, on deposit with Lender and/or Lender’s
servicer pursuant to this provision shall be distributed to Borrower.

 

(d)           Borrower shall be responsible for all costs
associated with the cash management arrangements, including Lender’s cost and
expense, if any, for any accounts therefore.

 

(e)           The insufficiency of funds, if any, delivered to
or deposited with Lender or Lender’s servicer pursuant to these provisions
shall not relieve Borrower, in whole or in part, of any of its obligations
pursuant to this Loan Agreement or the other Loan Documents, including without
limitation, the obligation to make payments as and when due and payable
pursuant to the Loan Documents.

 

(f)            For purposes of this Section 5.3, the
following terms shall have the meanings set forth below:

 

(1)           “Commitment”
shall mean and refer to a fully executed written commitment for the refinancing
of the entire outstanding principal balance

 

50

 

of the Loan, together with all accrued interest thereon, from an
institutional lender.

 

(2)             “Excess
Rent Proceeds” shall mean, as of any date of determination thereof, the excess,
if any, of (A) Rent received by Lender or its servicer for such month,
over (B) all amounts due and payable by Borrower hereunder and under the
other Loan Documents, including without limitation, the monthly payment of
interest and any monthly deposits to reserves required hereunder or under the
other Loan Documents, if any.  Excess
Rent Proceeds shall be determined by Lender or its servicer as of each Payment
Date.

 

(3)             “Restrictive
Condition” shall mean and refer to the occurrence of any of the following:  (A) an Event of Default hereunder or
under any of the other Loan Documents, (B) Borrower (i) fails to
provide Lender with a Commitment on or prior to the Refinance Notification
Date, or (ii) provides Lender with a Commitment on or prior to the
Refinance Notification Date and the Void Commitment Date occurs, but in all
events if not then in effect, a Restrictive Condition shall commence on the
Maturity Anticipated Repayment Date.

 

(4)             “Refinance
Notification Date” shall mean three (3) months prior to the Maturity
Anticipated Repayment Date.

 

(5)             “Void
Commitment Date” shall mean the date, if any, upon which the Commitment lapses,
terminates or is otherwise withdrawn.

 

(6)             “Cash
Management Termination Event” shall mean that Lender has accepted in writing
Borrower’s cure of the Event of Default which was the basis for the occurrence
of the Restrictive Condition (it being understood that this provision does not,
and is not intended to, create or impose any obligation on Lender’s part to
accept such cure), and there shall not then exist any other Event of Default,
provided, however, that under no circumstances shall there be more than two (2) Cash
Management Termination Events during the term of the Loan.

 

ARTICLE VI

INSURANCE; CASUALTY; CONDEMNATION

 

Section 6.1.            Insurance.  (a)  Borrower shall obtain
and maintain or shall cause Anchor Tenant to 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

 

51

 

of this Agreement shall mean actual
replacement value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver 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 Ten Thousand and No/100 Dollars ($10,000) for all such
insurance coverage; and (D) containing an “Ordinance or Law Coverage” or “Enforcement”
endorsement if any of the Improvements or the use of the Property shall at any
time constitute legal non-conforming structures or uses.  In addition, Borrower shall obtain: (y) if
any portion of the Improvements is currently or at any time in the future
located in a federally designated “special flood hazard area”, flood hazard
insurance in an amount equal to the lesser of (1) the outstanding
principal balance of the Note or (2) the maximum amount of such insurance
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as
each may be amended or such greater amount as Lender shall require; and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender in the
event the Property is located in an area with a high degree of seismic
activity, provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i).

 

(ii)           commercial general liability insurance against claims for personal injury,
bodily injury, death or property damage occurring upon, in or about the
Property, such insurance (A) to be on the so-called “occurrence” form with
a combined limit, including umbrella coverage, of not less than 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
containing an extended period of indemnity endorsement which provides that
after the physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of six
(6) months from the date that the Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; and (D) in an annual
amount equal to (100%) of the rents or estimated gross revenues from the
operation of the Property (as reduced to reflect expenses not incurred during 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

 

52

 

and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured by the Loan Documents on the
respective dates of payment provided for in the Note and the other Loan
Documents except to the extent such amounts are actually paid out of the
proceeds of such business income insurance;

 

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

 

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

 

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

 

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

 

(viii)        if any of the policies of insurance covering the risks required to be
covered under subsections (i) through (vii) above contains an
exclusion from coverage for acts of terrorism, Borrower shall obtain and maintain
a separate policy providing such coverages in the event of any act of
terrorism, provided such coverage is commercially available for properties
similar to the Property and located in or around the region in which the
Property is located. Notwithstanding the
foregoing, Borrower shall not be required to 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) Sole Member (“Terrorism Insurance Guarantor”)
executes a guaranty, in form and substance satisfactory to Lender, guaranteeing
in the event of any act of terrorism, payment to Lender of any sums that
Borrower is obligated to pay to Lender under clause (I) above (which shall be
applied in accordance with Section 6.4 hereof) and (III) Terrorism
Insurance Guarantor maintains a net worth of at least $300,000,000 (as determined
by such entity’s most recent audited financial statements), such entity
maintains a direct or indirect ownership interest in Borrower, and the
aggregate loan-to-value ratio (as determined by Lender) (“LTV”) for all
properties on which such entity has a direct or indirect ownership interest
shall not exceed 60%,

 

53

 

however, Terrorism
Insurance Guarantor may exceed the 60% LTV for a period not to exceed six (6) months
out of any twelve (12) month period either 1) during the time period when
Terrorism Insurance Guarantor is offering securities to the public, or 2) when
in the business judgement of Terrorism Insurance Guarantor, exceeding an LTV of
60% is necessary given existing circumstances of the credit environment, but in
no event shall the LTV exceed 65% if Terrorism Insurance Guarantor maintains a
net worth greater than or equal to $300,000,000, but less than $400,000,000, or
70% if Terrorism Insurance Guarantor maintains a net worth of at least $400,000,000

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

(f)            If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, after ten (10) Business Days written notice
to Borrower, to take such action as Lender deems necessary to protect its
interest in the Property, including, without limitation, the obtaining of such
insurance coverage as Lender in its sole discretion deems appropriate.  All premiums incurred by Lender in connection
with such action or in obtaining such insurance and keeping it in effect shall
be paid by Borrower to Lender upon demand and, until paid, shall be secured by
the Mortgage and shall bear interest at the Default Rate.  If Borrower fails in so insuring the Property
or in so assigning and delivering the Policies, Lender may, at its option,
obtain such insurance using such carriers and agencies as Lender shall elect
from year to year and pay the premiums therefor, and Borrower will reimburse
Lender for any premium so paid, with interest thereon as stated in the Note
from the time of payment, on demand, and the amount so 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 herein to the contrary,
provided no default shall exist under the Anchor Tenant Lease, and further
provided that Anchor Tenant shall maintain a credit rating issued by Standard
and Poor’s of BB or better (or an equivalent rating issued by another
nationally recognized rating agency reasonably acceptable to Lender), Anchor
Tenant shall be permitted to self-insure with respect to the coverage required
hereunder in strict accordance with the Anchor Tenant Lease, and such
self-insurance shall be deemed to satisfy the requirements of this Section 6.1.

 

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 (or cause Anchor Tenant to 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.  Notwithstanding the foregoing, in the

 

55

 

event of a
conflict between the foregoing requirements and the provisions of the Anchor
Tenant Lease, the Anchor Tenant Lease shall control.

 

Section 6.3.            Condemnation.

 

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

 

(b)           Notwithstanding the foregoing, with respect to the
Property, provided the Anchor Tenant Lease continues to be in full force and
effect, Anchor Tenant remains the Tenant under the Anchor Tenant Lease, and no
default shall then exist under the Anchor Tenant Lease, in the event of a
conflict between the terms set forth in subsection 6.3(a) and the
terms of the Anchor Tenant Lease, the Anchor Tenant Lease shall govern and
control.

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

(J)            the
Debt Service Coverage Ratio, after giving effect to the Restoration, shall be
equal to or greater than 2.28:1.0;

 

(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 office properties then owned and operated by
nationally recognized owners and operators of office 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,

 

58

 

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 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

 

59

 

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.

 

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

 

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

 

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

 

60

 

(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 Ten Million
Three Hundred Ninety-Five Thousand and 00/100 Dollars ($10,395,000.00);
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).

 

(f)            Notwithstanding the foregoing, provided the Anchor
Tenant Lease continues to be in full force and effect, Anchor Tenant remains
the Anchor Tenant under the Anchor Tenant Lease, and no default shall then exist
under the Anchor Tenant Lease, the Anchor Tenant Lease shall govern and control
in the event of a conflict between the provisions of this Section 6.4 and
the Anchor Tenant Lease regarding Restoration of the Property.

 

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 earlier time as specified on Schedule III. 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 six (6) months
from the Closing Date, or such earlier time as specified on Schedule III,
Borrower shall deposit with Lender the amount for the Property set forth on
such Schedule III hereto, 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
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 nine (9) 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

 

61

 

such funds
either to completion of the Required Repairs at the Property or toward payment
of the Debt in such order, proportion and priority as Lender may determine in
its sole discretion.  Lender’s right to
withdraw and apply Required Repair Funds shall be in addition to all other
rights and remedies provided to Lender under this Agreement and the other Loan
Documents.

 

7.1.2        Release of Required Repair Funds.  Lender
shall disburse to Borrower the Required Repair Funds from the Required Repair
Account from time to time upon satisfaction by Borrower of each of the
following conditions:  (i) Borrower
shall submit a written request for payment to Lender at least fifteen (15) days
prior to the date on which Borrower requests such payment be made and specifies
the Required Repairs to be paid, (ii) on the date such request is received
by Lender and on the date such payment is to be made, no Default or Event of
Default shall exist and remain uncured, (iii) Lender shall have received a
certificate from Borrower (A) stating that all Required Repairs at the
Property to be funded by the requested disbursement have been completed in good
and workmanlike manner and in accordance with all applicable federal, state and
local laws, rules and regulations, such certificate to be accompanied by a
copy of any license, permit or other approval by any Governmental Authority
required to commence and/or complete the Required Repairs, (B) identifying
each Person that supplied materials or labor in connection with the Required
Repairs performed at the Property to be funded by the requested disbursement
under a contract in excess of $50,000, and (C) stating that each Person
who has supplied materials or labor in connection with the Required Repairs to
be funded by the requested disbursement has been paid in full or will be paid
in full upon such disbursement, such certificate to be accompanied by lien
waivers or other evidence of payment satisfactory to Lender, (iv) at
Lender’s option, a title search for the Property indicating that the Property
is free from all liens, claims and other encumbrances not previously approved
by Lender, and (v) Lender shall have received such other evidence as
Lender shall reasonably request that the Required Repairs at the Property to be
funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower.  Lender shall not be required to make
disbursements from the Required Repair Account with respect to the Property
more than once each calendar month and such disbursement shall be made only
upon satisfaction of each condition contained in this Section 7.1.2.

 

Section 7.2.            Tax and Insurance Escrow Fund.  Borrower
shall pay to Lender on each Payment Date (a) one-twelfth of the Taxes that
Lender estimates will be payable during the next ensuing twelve (12) months in
order to accumulate with Lender sufficient funds to pay all such Taxes at least
thirty (30) days prior to their respective due dates and (b) one-twelfth
of the Insurance Premiums that Lender estimates will be payable for the renewal
of the coverage afforded by the Policies upon the expiration thereof in order
to accumulate with Lender sufficient funds to pay all such Insurance Premiums
at least thirty (30) days prior to the expiration of the Policies, (said
amounts in (a) and (b) above are hereinafter called the “Tax and Insurance Escrow Fund”).  The Tax and Insurance Escrow Fund and the
payments of interest or principal or both, payable pursuant to the Note, shall
be added together and shall be paid as an aggregate sum by Borrower to
Lender.  Lender will apply the Tax and
Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to
be made by Borrower pursuant to this Agreement and under the Mortgage.  In making any payment relating to the Tax and
Insurance Escrow Fund, Lender may do so according to any bill, statement or
estimate procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums) or from Borrower without
inquiry into the accuracy of such bill, statement or

 

62

 

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.

 

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 Agreement and (2) evidence
satisfactory to Lender that the Taxes for the Property have been paid in
accordance with the requirements set forth in this Agreement, Lender will waive
the requirement set forth herein for Borrower to make 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 Agreement or Taxes are not paid in
accordance with the requirements of this Agreement.

 

Section 7.3.            Replacements and Replacement Reserve.

 

7.3.1        Replacement Reserve Fund.  Borrower
shall pay to Lender on the 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 $0.15 per
year per square foot of gross leasable area. 
Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund” and the
account in which such amounts are held shall hereinafter be referred to as
Borrower’s “Replacement Reserve Account”.
 Lender may reassess its estimate of the
amount necessary for the Replacement Reserve Fund from time to time, and may
increase the monthly amounts required to be deposited into the Replacement
Reserve Fund upon thirty (30) days notice to Borrower if Lender determines in
its reasonable discretion that an increase is necessary to maintain the proper
maintenance and operation of the Property. 
Any amount held in the Replacement Reserve Account and allocated for the
Property shall be retained by Lender in an interest bearing account, or, at the
option of Lender, in an Eligible Account at an Eligible Institution; provided,
however,

 

63

 

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) either (A) Borrower
makes all necessary Replacements and otherwise maintains the Property to Lender’s
satisfaction, or (B) Anchor Tenant maintains the Property as required
pursuant to the Anchor Tenant Lease. 
Upon notice from Lender following: (a) an Event of Default; or (b) the
failure of Borrower to make necessary Replacements and otherwise maintain the
Property to Lender’s satisfaction, or the failure of Anchor Tenant to maintain
the Property as required pursuant to the Anchor Tenant Lease, as applicable,
Borrower shall begin to deposit the Replacement Reserve Monthly Deposit into
the Replacement Reserve Fund beginning on the Payment Date (as defined herein)
immediately following the date of such notice.

 

7.3.2        Disbursements from Replacement Reserve Account.

 

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

 

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

 

64

 

only after
completion of the Replacement for which disbursement is requested.  Borrower shall provide Lender evidence of
completion satisfactory to Lender in its reasonable judgment.

 

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

 

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

 

65

 

(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 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 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

 

66

 

hours
(subject to the rights of tenants under their Leases) to inspect the progress
of any Replacements and all materials being used in connection therewith, to
examine all plans and shop drawings relating to such Replacements which are or
may be kept at the Property, and to complete any Replacements made pursuant to
this Section 7.3.3.  Borrower shall
cause all contractors and subcontractors to cooperate with Lender or Lender’s
representatives or such other persons described above in connection with
inspections described in this Section 7.3.3(f) or the completion of
Replacements pursuant to this Section 7.3.3.

 

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

 

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

 

(i)            Before each disbursement from the Replacement
Reserve Account, Lender may require Borrower to provide Lender with a search of
title to the Property effective to the date of the disbursement, which search
shows that no mechanic’s or materialmen’s liens or other liens of any nature
have been placed against the Property since the date of recordation of the
Mortgage and that title to the Property is free and clear of all Liens (other
than the lien of the Mortgage and any other Liens previously approved in writing
by Lender, if any).

 

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

 

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

 

7.3.4        Failure to Make Replacements.  (a) 
It shall be an Event of Default under this Agreement if Borrower fails to
comply with any provision of this Section 7.3 and such failure is not
cured within thirty (30) days after notice from Lender; provided, however,
if such failure is not capable of being cured within said thirty (30) day
period, then provided that

 

67

 

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

 

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

 

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

 

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

 

68

 

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 Agreement and the other Loan Documents,
Lender shall disburse to Borrower all remaining Reserve Funds.

 

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 on 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

 

69

 

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;

 

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

 

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

 

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

 

(xi)           if any of the assumptions contained in any substantive
non-consolidation opinion required to be delivered in connection herewith
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 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

 

70

 

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

 

(b)           Upon the occurrence of an Event of Default (other
than an Event of Default described in clauses (vi), (vii) or (viii) above)
and at any time thereafter Lender may, in addition to any other rights or
remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, 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.

 

Section 8.2.            Remedies.  (a)  Upon the occurrence of
an Event of Default, all or any one or more of the rights, powers, privileges
and other remedies available to Lender against Borrower under this Agreement or
any of the other Loan Documents executed and delivered by, or applicable to,
Borrower or at law or in equity may be exercised by Lender at any time and from
time to time, whether or not all or any of the Debt shall be declared due and
payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to the Property.  Any such actions taken by Lender shall be
cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as Lender
may determine in its sole discretion, to the fullest extent permitted by law,
without impairing or otherwise affecting the other rights and remedies of
Lender permitted by law, equity or contract or as set forth herein or in the
other Loan Documents.  Without limiting
the generality of the foregoing, Borrower agrees that if an Event of Default is
continuing (i) Lender is not subject to any “one action” or “election of
remedies” law or rule, and (ii) all liens and other rights, remedies or
privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against the Property and the Mortgage
has been foreclosed, sold and/or otherwise realized upon in satisfaction of the
Debt or the Debt has been paid in full.

 

(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

 

71

 

such other
sums secured by the Mortgage as Lender may elect.  Notwithstanding one or more partial
foreclosures, the Property shall remain subject to the Mortgage to secure
payment of sums secured by the Mortgage and not previously recovered.

 

(c)           Lender shall have the right from time to time to
sever the Note and the other Loan Documents into one or more separate notes,
mortgages and other security documents (the “Severed
Loan Documents”) in such denominations as Lender shall determine
in its sole discretion for purposes of evidencing and enforcing its rights and
remedies provided hereunder.  Borrower
shall execute and deliver to Lender from time to time, promptly after the
request of Lender, a severance agreement and such other documents as Lender
shall request in order to effect the severance described in the preceding
sentence, all in form and substance reasonably satisfactory to Lender.  Borrower hereby absolutely and irrevocably
appoints Lender following the occurrence of an Event of Default as its true and
lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect the aforesaid severance,
Borrower ratifying all that its said attorney shall do by virtue thereof; provided,
however, Lender shall not make or execute any such documents under such
power until three (3) days after notice has been given to Borrower by
Lender of Lender’s intent to exercise its rights under such power.  Borrower shall not be obligated to pay any
costs or expenses incurred in connection with the preparation, execution,
recording or filing of the Severed Loan Documents, and the Severed Loan
Documents shall not contain any representations, warranties or covenants not
contained in the Loan Documents and any such representations and warranties
contained in the Severed Loan Documents will be given by Borrower only as of
the Closing Date.

 

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

 

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

 

ARTICLE IX

SPECIAL PROVISIONS

 

Section 9.1.            Sale of Notes and Securitization.  At the
request of the holder of the Note and, to the extent not already required to be
provided by Borrower under this Agreement, Borrower shall cooperate with Lender
to allow Lender to satisfy the market standards to which the holder of the Note
customarily adheres or which may be reasonably

 

72

 

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 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.

 

73

 

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

 

Section 9.4.            Exculpation.  Subject to the qualifications
below, Lender shall not enforce the liability and obligation of Borrower to
perform and observe the obligations contained in the Note, this Agreement, the
Mortgage or the other Loan Documents by any action or proceeding wherein a
money judgment shall be sought against Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon its interest
under the Note, this 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 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, and Lender, by accepting the Note,
this Agreement, the Mortgage and the other Loan Documents, agrees that it shall
not sue for, seek or demand any deficiency judgment against Borrower in any
such action or proceeding under or by reason of or under or in connection with
the Note, this Agreement, the Mortgage or the other Loan Documents.  The provisions of this section shall
not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by any of the Loan Documents; (b) impair
the right of Lender 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 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 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 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 guarantor in connection with the Loan;

 

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

 

(iii)          material physical waste of the Property;

 

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

 

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

 

74

 

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

 

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

 

(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 Agreement, the Note or any of the Loan
Documents, (A) the Debt shall be fully recourse to the Borrower and (B) Lender
shall not be deemed to have waived any right which Lender may have under Section 506(a),
506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to
file a claim for the full amount of the Debt secured by the Mortgage or to
require that all collateral shall continue to secure all of the Debt owing to
Lender in accordance with the Loan Documents in the event that the (I) first
full monthly payment under the Note is not paid within five (5) days of
notice that such payment is late (provided, however, that such grace period
relates only to the recourse trigger described in this paragraph), or (II)
failure of Borrower to permit on-site inspections of the Property subject to
the rights of 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 (III) failure of Borrower to comply
with Section 4.1.30 hereof, or (IV) failure of Borrower to obtain Lender’s
prior written consent (to extent such consent is required) to any subordinate
financing or other voluntary lien encumbering the Property, or (V) failure of
Borrower to obtain Lender’s prior written consent to any assignment, transfer
or conveyance of the Property, or any portion thereof, or any interest therein
as required by this Agreement. 
Notwithstanding the provision set forth in clause (IV) 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.  Notwithstanding the foregoing
provisions of this Section 9.4, upon the acceptance by Lender of any cure
by Borrower of a recourse trigger described in clauses (I), (II) or (IV) above,
the Debt shall no longer be fully recourse to Borrower solely as a result of
such trigger.  Upon the acceptance by
Lender of any cure by Borrower of a recourse trigger described in clauses (III)
or (V) above, the Debt shall no longer be fully recourse to Borrower solely as
a result of such

 

75

 

trigger,
provided, however, Borrower shall remain liable 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 such trigger.  Notwithstanding
any provision herein or in any of the other Loan Documents to the contrary, the
provisions in this paragraph (i.e., the last paragraph contained within this Section 9.4)
shall apply to and inure only to the benefit of the original Borrower named
herein and any other entity which hereafter may become the Borrower which
either (x) is an Affiliate wholly-owned
(directly or indirectly) by Sole Member, (y) is a Qualified Entity, or (z) a
transferee described in Section 5.2.13(a)(6) hereof.

 

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, (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, or (e) if
Manager shall assign the Management Agreement without Lender’s consent (if such
consent is required pursuant to the Assignment and Subordination of Management
Agreement between Manager, Lender and Borrower), then, in the case of (a), (b),
(c), (d), or (e), 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 Agreement and the other Loan Documents to the
Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between Lender and Servicer.  Lender shall be responsible for any set-up fees
or any other costs relating to or arising under the Servicing Agreement.

 

Section 9.7.            Splitting the Loan.  At the
election of Lender in its sole discretion, the Loan or any individual Note
making up the Loan shall be split and severed into two or more loans which, at
Lender’s election, shall not be cross-collateralized or cross-defaulted with
each other.  Borrower hereby agrees to
deliver to Lender to effectuate such severing of the Loan or any individual
Note, as the case may be, as reasonably requested by Lender, (a) additional

 

76

 

executed
documents, or amendments and modifications to the applicable Loan Documents, (b) new
opinions or updates to the opinions delivered to Lender in connection with the
closing of the Loan, (c) endorsements and/or updates to the title
insurance policies delivered to Lender in connection with the closing of the
Loan, and (d) any other certificates, instruments and documentation
reasonably determined by Lender as necessary or appropriate to such severance
(the items described in subsections (a) through (d) collectively
hereinafter shall be referred to as “Severing
Documentation”), which Severing Documentation shall be acceptable to
Lender in form and substance in its reasonable discretion.  Lender hereby agrees to be responsible for
all reasonable third-party expenses incurred in connection with the preparation
and delivery of the Severing Documentation and the effectuation of the uncrossing
of the Loan from the additional Loans. 
Borrower hereby acknowledges and agrees that upon such severing of the
Loan, Lender may effect, in its sole discretion, one or more Securitizations of
which the severed loans may be a part.

 

ARTICLE X

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

77

 

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

 

Section 10.6.          Notices.  All notices, consents, approvals
and requests required or permitted hereunder or under any other Loan Document
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:

 

Nomura Credit &
Capital, Inc.

Two World
Financial Center, Building B

New York, New
York 10281

Attention: N.
Dante LaRocca

 

with a copy
to:

 

Cassin Cassin &
Joseph LLP 

711 Third
Avenue, 20th Floor 

New York, New
York 10017

Attention:
Carol M. Joseph

 

If to
Borrower:

 

MB Pittsburgh
Bridgeside DST

2901
Butterfield Road

Oak Brook, IL
60523

Attention:  Roberta S. Matlin

 

with a copy
to:

 

Inland Western
Retail Real Estate Trust, Inc.

2901
Butterfield Road

Oak Brook, IL
60523

Attention:
Robert H. Baum, Esq.

 

78

 

and with a copy
to:

 

Inland Western
Retail Real Estate Trust, Inc.

2901
Butterfield Road

Oak Brook, IL
60523

Attention:
Roberta S. Matlin

 

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

 

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

 

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

 

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

 

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

 

Section 10.11.        Waiver of Notice.  Borrower shall not be entitled to any notices
of any nature whatsoever from Lender except with respect to matters for which
this Agreement or

 

79

 

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

 

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

 

Section 10.13.        Expenses; Indemnity.

 

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

 

80

 

costs and
expenses to the extent the same arise by reason of the gross negligence,
illegal acts, fraud or willful misconduct of Lender.

 

(b)           BORROWER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS LENDER FROM AND AGAINST ANY AND ALL OTHER LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR LENDER
IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING
COMMENCED OR THREATENED, WHETHER OR NOT LENDER SHALL BE DESIGNATED A PARTY
THERETO), THAT MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST LENDER
IN ANY MANNER RELATING TO OR ARISING OUT OF (I) ANY BREACH BY BORROWER OF ITS
OBLIGATIONS UNDER, OR ANY MATERIAL MISREPRESENTATION BY BORROWER CONTAINED IN,
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, 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 Agreement with the same effect as if set
forth in the body hereof.

 

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

 

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

 

(a)           Borrower and Lender intend that the relationships
created hereunder and under the other Loan Documents be solely that of borrower
and lender.  Nothing herein or therein is
intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy

 

81

 

relationship
between Borrower and Lender nor to grant Lender any interest in the Property
other than that of mortgagee, beneficiary or lender.

 

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

 

Section 10.17.        Publicity.  All news releases, publicity or advertising
by Borrower or their Affiliates through any media intended to reach the general
public which refers to the Loan Documents or the financing evidenced by the
Loan Documents, to Lender, Nomura Credit & Capital, Inc., 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, Borrower’s partners and others with
interests in Borrower, and of the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the Mortgage or sale of the Property
by power of sale, and agrees not to assert any right under any laws pertaining
to the marshalling of assets, the sale in inverse order of alienation,
homestead exemption, the administration of estates of decedents, or any other
matters whatsoever to defeat, reduce or affect the right of Lender under the
Loan Documents to a sale of the Property for the collection of the Debt without
any prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.

 

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

 

Section 10.20.        Conflict; Construction of Documents; Reliance.  In the
event of any conflict between the provisions of this Loan Agreement and any of
the other Loan Documents, the provisions of this Loan Agreement shall
control.  The parties hereto acknowledge
that they were represented by competent counsel in connection with the
negotiation, drafting and execution of the Loan Documents and that such Loan
Documents shall not be subject to the principle of construing their meaning
against the party which drafted same.

 

82

 

Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. 
Lender shall not be subject to any limitation whatsoever in the exercise
of any rights or remedies available to it under any of the Loan Documents or
any other agreements or instruments which govern the Loan by virtue of the
ownership by it or any parent, subsidiary or Affiliate of Lender of any equity
interest any of them may acquire in Borrower, and Borrower hereby irrevocably
waives the right to raise any defense or take any action on the basis of the
foregoing with respect to Lender’s exercise of any such rights or
remedies.  Borrower acknowledges that
Lender engages in the business of real estate financings and other real estate
transactions and investments which may be viewed as adverse to or competitive
with the business of Borrower or its Affiliates.

 

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

 

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

 

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

 

Section 10.24.        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)

 

83

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MB PITTSBURGH BRIDGESIDE DST, a

  
	
   

  	
    Delaware statutory trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MINTO BUILDERS (FLORIDA), INC., a

  
	
   

  	
   

  	
    Florida corporation, Its Signatory Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Valerie Medina

  	
   

  
	
   

  	
   

  	
  Name:  Valerie Medina

  
	
   

  	
   

  	
  Title:  Assistant Secretary

  

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  NOMURA CREDIT & CAPITAL, INC., a

  
	
   

  	
    Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Debra Paoli

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
					

 

 

SCHEDULE I

 

[Form of Tenant Direction Letter]

 

[BORROWER
LETTERHEAD]

 

February        ,
2006

 

Fischer
Scientific International Inc.

2000 Park Lane

Pittsburgh,
Pennsylvania 15275

Attention:  Bill Jenkins

 

RE:      Lease
by and among Bridgeside Point Associates, Ltd. (“Original Landlord”),
and Fischer Scientific International Inc. (“Tenant”) dated as of March 8,
2001, (as amended to from time to time, the “Lease”)

 

Dear Sir or
Madam:

 

You
are hereby notified that MB PITTSBURGH BRIDGESIDE
DST, a Delaware statutory trust (“Borrower”) has granted a security
interest in the captioned lease and all rents, additional rent and all other
monetary obligations to the landlord thereunder (collectively, “Rent”)
in favor of Nomura Credit & Capital, Inc., as lender (“Lender”),
to secure a loan made by Lender to Borrower (the “Loan”).  In connection with the Loan, Borrower hereby
irrevocably instructs and authorizes you to disregard any and all previous
notices sent to you in connection with Rent and hereafter to remit all rent,
additional rent, common area expenses or any other charge or expense payable by
you under the Lease directly to Lender’s servicer as follows:

 

If
rent will be delivered via regular U.S. Mail, please send to:

 

ARCap
Servicing, Inc.

P.O. Box
915054

Dallas, Texas
75391-5054

Reference:  Nomura/Bridgeside (Loan No. CF3366500)

 

If
rent will be delivered by courier/overnight delivery, please send to:

 

J.P. Morgan
Chase Bank - Texas 

Dallas
Wholesale Lockbox Department 

Maxus Energy
Tower 

717 N. Harwood
Street, 6th Floor 

Dallas, Texas
75201-6507 

Attn: ARCap
Servicing, Inc. 

Lockbox #             

Reference:
Nomura/Bridgeside (Loan No. CF3366500)

 

 

In order to
induce Lender to accept these arrangements, we have agreed that this
notification and the directions set forth herein are irrevocable and are not
subject to modification in any manner, except that Lender, or any successor
lender so identified by Lender, may by written notice to you (i) rescind the
directions contained herein or (ii) change the account to which Rent shall
be sent, and you shall comply with any such direction(s) received from
Lender.  Lender shall have no control
over the management or operation of the Property and shall have no liability
under the Lease.  Rent (and other sums)
paid to any party other than as set forth above will not be credited as being
paid under your Lease.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MB PITTSBURGH BRIDGESIDE DST, a

  
	
   

  	
    Delaware statutory trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MINTO BUILDERS (FLORIDA), INC., a

  
	
   

  	
   

  	
    Florida corporation, Its Signatory Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

cc:           Jeff
Jochins

 

 

SCHEDULE II

 

Intentionally Reserved

 

 

SCHEDULE III

 

REQUIRED REPAIRS

 

None

 

 

SCHEDULE IV

 

Rent Roll

 

[exhibit follows this page]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]