|
|
|
|
Document Preview Mortgage, Assignment of Leases and Rents and Security Agreement (Collateral Includes Fixtures) |
||||
|
|
||||
|
Click "Add to Cart" button to purchase document. |
||||
|
|
||||
|
Title: |
Mortgage, Assignment of Leases and Rents and Security Agreement (Collateral Includes Fixtures) |
|||
|
Entities: |
Inland Western Retail Real Estate Trust Inc.; Quarles & Brady LLP; Inland Western Spartanburg, L.L.C.; John Hancock Life Insurance Company |
|||
|
Date: |
2004 |
|||
|
Size: |
232KB total |
|||
|
Price: |
$77 |
|||
|
ID: |
#250409 |
|||
|
|
||||
|
||||
|
|
||||
|
Start of Preview |
||||
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT
(COLLATERAL INCLUDES FIXTURES)
Dated as of April 9, 2004
INLAND WESTERN SPARTANBURG, L.L.C.
(Mortgagor)
TO
JOHN HANCOCK LIFE INSURANCE COMPANY
(Mortgagee)
LOCATION OF PROPERTY:
121 Dorman Centre Drive
Spartanburg, South Carolina
Spartanburg County
THIS MORTGAGE COVERS GOODS WHICH ARE OR ARE TO BECOME FIXTURES,
IS EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING
AND IS TO BE FILED IN THE REAL ESTATE RECORDS.
Record and Return To:
Quarles & Brady LLP
500 West Madison Street
Suite 3700
Chicago, Illinois 60661
Attention: Peter A. Sarasek, Esq.
{Page}
Loan No. 6518291
TABLE OF CONTENTS
{Table}
{Caption}
Page
----
{S} {C}
1. Payment of Indebtedness and Incorporation of Covenants, Conditions and Agreements.........................6
2. Warranty of Title.........................................................................................6
3. Insurance; Casualty.......................................................................................6
4. Payment of Taxes, Etc. ..................................................................................11
5. Reserve Fund.............................................................................................12
6. Condemnation.............................................................................................15
7. Leases and Rents.........................................................................................15
8. Maintenance and Use of Mortgaged Property ...............................................................17
9. Transfer or Encumbrance of the Mortgaged Property or Interests in the Mortgagor; Other Indebtedness......18
10. Estoppel Certificates....................................................................................24
11. No Cooperative or Condominium............................................................................25
12. Changes in the Laws Regarding Taxation ..................................................................25
13. No Credits on Account of the Indebtedness................................................................25
14. Documentary Stamps.......................................................................................25
15. Right of Entry...........................................................................................25
16. Books and Records........................................................................................26
17. Performance of Other Agreements..........................................................................26
18. Representations and Covenants Concerning Loan............................................................26
19. Single Purpose Entity/Separateness.......................................................................29
20. Events of Default; Remedies..............................................................................32
21. Additional Remedies......................................................................................34
22. Right to Cure Defaults...................................................................................36
23. Late Payment Charge......................................................................................36
24. Prepayment...............................................................................................37
25. Prepayment After Event of Default........................................................................37
26. Appointment of Receiver..................................................................................37
27. Security Agreement.......................................................................................37
28. Authority................................................................................................38
29. Actions and Proceedings..................................................................................39
{/Table}
- i -
{Page}
Loan No. 6518291
{Table}
{S} {C}
30. Further Acts, Etc. ......................................................................................39
31. Recording of Mortgage, Etc. .............................................................................39
32. Usury Laws...............................................................................................39
33. Sole Discretion of Mortgagee.............................................................................40
34. Recovery of Sums Required To Be Paid.....................................................................40
35. Marshalling and Other Matters............................................................................40
36. Waiver of Notice.........................................................................................40
37. Remedies of Mortgagor....................................................................................40
38. Reporting Requirements...................................................................................41
39. Hazardous Materials......................................................................................41
40. Asbestos.................................................................................................44
41. Bankruptcy or Insolvency.................................................................................44
42. Compliance with ERISA and State Statutes on Governmental Plans...........................................45
43. Assignments..............................................................................................46
44. Cooperation..............................................................................................46
45. Indemnification for Non-Recourse Carveout Obligations....................................................46
46. Exculpation..............................................................................................47
47. Notices..................................................................................................48
48. Non-Waiver...............................................................................................49
49. Joint and Several Liability..............................................................................49
50. Severability.............................................................................................49
51. Duplicate Originals......................................................................................49
52. Indemnity and Mortgagee's Costs..........................................................................49
53. Certain Definitions......................................................................................50
54. No Oral Change...........................................................................................50
55. No Foreign Person........................................................................................50
56. Separate Tax Lot.........................................................................................51
57. Right to Release Any Portion of the Mortgaged Property...................................................51
58. Subrogation..............................................................................................51
59. Administrative Fees......................................................................................51
60. Disclosure...............................................................................................51
61. Headings, Etc. ..........................................................................................51
62. Address of Real Property.................................................................................51
{/Table}
- ii -
{Page}
Loan No. 6518291
{Table}
{S} {C}
63. Intentionally Deleted....................................................................................52
64. Publicity................................................................................................52
65. Relationship.............................................................................................52
66. Homestead................................................................................................52
67. No Third Party Beneficiaries.............................................................................52
68. Compliance with Regulation U.............................................................................52
69. Entire Agreement.........................................................................................52
70. Servicer.................................................................................................52
71. Governing Law; Consent to Jurisdiction...................................................................52
72. Phase II Property; Amendment to Mortgage.................................................................53
73. Special State Provisions.................................................................................54
{/Table}
- iii -
{Page}
Loan No. 6518291
INDEX OF DEFINED TERMS
{Table}
{S} {C}
Additional Land...............................................................................................1
Architect.....................................................................................................7
Assignee.....................................................................................................14
Assignment of Leases and Rents...............................................................................14
Assignor.....................................................................................................14
Bankruptcy Code...............................................................................................3
Code.........................................................................................................35
Collateral...................................................................................................34
Depository....................................................................................................9
Equipment.....................................................................................................2
ERISA........................................................................................................41
GAAP.........................................................................................................28
Guarantors...................................................................................................27
Guaranty.....................................................................................................46
Improvements..................................................................................................2
Indebtedness..................................................................................................1
Land..........................................................................................................1
Late Charge..................................................................................................33
Leases........................................................................................................3
Loan..........................................................................................................1
Loan Documents...............................................................................................46
Management Agreement.........................................................................................25
Manager......................................................................................................25
Mortgage......................................................................................................1
Mortgaged Property........................................................................................1, 47
Mortgagee.................................................................................................1, 46
Mortgagor.................................................................................................1, 46
Non-Recourse Carveout Obligations............................................................................43
Note......................................................................................................1, 46
Other Charges................................................................................................10
Permitted Encumbrances........................................................................................5
Person.......................................................................................................46
Policies......................................................................................................6
Rating Agencies..............................................................................................19
Real Property.................................................................................................2
Rents.....................................................................................................3, 14
Repair and Remediation Reserve Fund..........................................................................13
Replacement Reserve Agreement................................................................................12
Replacement Reserve Fund.....................................................................................11
Reserve Fund.................................................................................................13
Restoration...................................................................................................6
Secondary Market Transactions................................................................................42
Servicer.....................................................................................................49
Small Lease..................................................................................................15
Tax and Insurance Fund.......................................................................................11
{/Table}
{Page}
Loan No. 6518291
{Table}
{S} {C}
Taxes........................................................................................................10
Tenant Improvement and Leasing Commission Reserve............................................................12
Tenant Improvement and Leasing Commission Reserve Fund.......................................................12
Termination Amount.......................................................................................... 15
Transferee...................................................................................................18
Uniform Commercial Code.......................................................................................2
{/Table}
- ii -
{Page}
Loan No. 6518291
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
(this "MORTGAGE"), made as of the 9th day of April, 2004, by INLAND WESTERN
SPARTANBURG, L.L.C., a Delaware limited liability company, having its principal
place of business at 2901 Butterfield Road, Oak Brook, Illinois 60523
("MORTGAGOR"), to and for the benefit OF JOHN HANCOCK LIFE INSURANCE COMPANY, a
Massachusetts corporation having its principal place of business at John Hancock
Tower, T-56, 200 Clarendon Street, Boston, Massachusetts 02116 ("MORTGAGEE").
WITNESSETH:
For the consideration of Ten Dollars and other good and valuable
consideration received to its full satisfaction and to secure the payment of an
indebtedness in the principal sum of Twenty-seven Million Six Hundred Ten
Thousand and No/100 Dollars ($27,610,000.00), lawful money of the United States
of America, to be paid with interest and all other sums and fees payable
according to a certain mortgage note dated the date hereof made by Mortgagor to
Mortgagee (the mortgage note, together with all extensions, renewals or
modifications thereof, being hereinafter collectively called the "NOTE"; and the
loan evidenced by the Note being hereinafter referred to as the "LOAN") and all
indebtedness, obligations, liabilities and expenses due hereunder and under any
other Loan Document (as hereinafter defined) (the indebtedness, interest, other
sums, fees, obligations and all other sums due under the Note and/or hereunder
and/or any other Loan Document being collectively called the "INDEBTEDNESS"),
Mortgagor has mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned, hypothecated, remised, released,
transferred, delivered, warranted and confirmed and by these presents does
mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm, pledge,
assign, hypothecate, remise, release, transfer, deliver, setover, warrant and
confirm unto Mortgagee and hereby grants unto Mortgagee a security interest in
the following property and rights, whether now owned or held or hereafter
acquired (collectively, the "MORTGAGED PROPERTY"):
GRANTING CLAUSE ONE
All right, title and interest in and to the real property or
properties described on EXHIBIT A hereto (collectively, the "LAND").
GRANTING CLAUSE TWO
All additional lands, estates and development rights hereafter
acquired by Mortgagor 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 thereof (collectively, the "ADDITIONAL LAND").
- 2 -
{Page}
Loan No. 6518291
GRANTING CLAUSE THREE
Any and all buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter located on the Land or any part thereof (collectively, the
"IMPROVEMENTS"; the Land, the Additional Land and the Improvements hereinafter
collectively referred to as the "REAL PROPERTY").
GRANTING CLAUSE FOUR
All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
oil, gas and mineral rights, air rights and development rights, zoning rights,
tax credits or benefits and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances of any nature whatsoever
in any way now or hereafter belonging, relating or pertaining to the Real
Property or any part thereof 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 or any part thereof 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 in law and in equity, of Mortgagor in, of and to the Real
Property and every part and parcel thereof, with the appurtenances thereto.
GRANTING CLAUSE FIVE
All machinery, equipment, fixtures and other property of every kind
and nature whatsoever owned by Mortgagor or in which Mortgagor has or shall have
an interest (to the extent of such interest) now or hereafter located upon the
Real Property or appurtenant thereto and usable in connection with the present
or future operation and occupancy of the Real Property and all building
equipment, materials and supplies of any nature whatsoever owned by Mortgagor or
in which Mortgagor has or shall have an interest (to the extent of such
interest) now or hereafter located upon the Real Property or appurtenant thereto
or usable in connection with the present or future operation and occupancy of
the Real Property, including but not limited to all heating, ventilating, air
conditioning, plumbing, lighting, communications and elevator machinery,
equipment and fixtures (hereinafter collectively called the "EQUIPMENT") and the
right, title and interest of Mortgagor in and to any of the Equipment which may
be subject to any security agreements (as defined in the Uniform Commercial Code
of the State in which the Mortgaged Property is located (the "UNIFORM COMMERCIAL
CODE")) superior, inferior or PARI PASSU in lien to the lien of this Mortgage.
In connection with Equipment which is leased to Mortgagor or which is subject to
a lien or security interest which is superior to the lien of this Mortgage, this
Mortgage shall also cover all right, title and interest of each Mortgagor in and
to all deposits and the benefit of all payments now or hereafter made with
respect to such Equipment.
GRANTING CLAUSE SIX
All awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Real Property or any part
thereof, whether from the exercise of the right of eminent domain (including but
not limited to any transfer made in lieu of
- 3 -
{Page}
Loan No. 6518291
or in anticipation of the exercise of said right), or for a change of grade or
for any other injury to or decrease in the value of the Real Property.
GRANTING CLAUSE SEVEN
All leases and subleases (including, without limitation, all
guarantees thereof) and other agreements affecting the use, enjoyment and/or
occupancy of the Real Property or any part thereof, now or hereafter entered
into (including any use or occupancy arrangements created pursuant to Section
365(h) of Title 11 of the United States Code (the "BANKRUPTCY CODE") or
otherwise in connection with the commencement or continuance of any bankruptcy,
reorganization, arrangement, insolvency, dissolution, receivership or similar
proceedings or any assignment for the benefit of creditors in respect of any
tenant or occupant of any portion of the Real Property), together with any
extension or renewal of the same (the "LEASES") and all income, rents, issues,
profits, revenues and proceeds including, but not limited to, all oil and gas or
other mineral royalties and bonuses from the Real Property (including any
payments received pursuant to Section 502(b) of the Bankruptcy Code or otherwise
in connection with the commencement or continuance of any bankruptcy,
reorganization, arrangement, insolvency, dissolution, receivership or similar
proceedings or any assignment for the benefit of creditors in respect of any
tenant or occupant of any portion of the Real Property and all claims as a
creditor in connection with any of the foregoing) (the "RENTS") and all
proceeds from the sale, cancellation, surrender or other disposition of the
Leases and the right to receive and apply the Rents to the payment of the
Indebtedness.
GRANTING CLAUSE EIGHT
All proceeds of and any unearned premiums on any insurance policies
covering the Real Property or any part thereof 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 Real Property or any part
thereof.
GRANTING CLAUSE NINE
All tax refunds, including interest thereon, tax credits and tax
abatements and the right to receive or benefit from the same, which may be
payable or available with respect to the Real Property.
GRANTING CLAUSE TEN
The right, in the name and on behalf of Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Real Property or any
part thereof and to commence any action or proceeding to protect the interest of
Mortgagee in the Real Property or any part thereof.
- 4 -
{Page}
Loan No. 6518291
GRANTING CLAUSE ELEVEN
All accounts receivable, utility or other deposits, intangibles,
contract rights, interests, estates or other claims, both in law and in equity,
which Mortgagor now has or may hereafter acquire in the Real Property or any
part thereof.
GRANTING CLAUSE TWELVE
All rights which Mortgagor now has or may hereafter acquire to be
indemnified and/or held harmless from any liability, loss, damage, cost or
expense (including, without limitation, attorneys' fees and disbursements)
relating to the Real Property or any part thereof.
GRANTING CLAUSE THIRTEEN
All plans and specifications, maps, surveys, studies, reports,
contracts, subcontracts, service contracts, management contracts, franchise
agreements and other agreements, franchises, trade names (excluding any trade
names to the extent they include therein the name "Inland"), trademarks
(excluding any trademarks to the extent they include therein the name "Inland"),
symbols, service marks, approvals, consents, permits, special permits, licenses
and rights, whether governmental or otherwise, respecting the use, occupation,
development, construction and/or operation of the Real Property or any part
thereof or the activities conducted thereon or therein, or otherwise pertaining
to the Real Property or any part thereof.
GRANTING CLAUSE FOURTEEN
All proceeds, products, offspring, rents and profits from any of the
foregoing, including without limitation, those from sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement of any of the
foregoing.
WITH RESPECT to any portion of the Mortgaged Property which is not
real estate under the laws of the State in which the Mortgaged Property is
located, Mortgagor hereby grants, bargains, sells and conveys the same to
Mortgagee for the purposes set forth hereunder and Mortgagee shall be vested
with all rights, power and authority granted hereunder or by law to Mortgagee
with respect thereto.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the use and benefit of Mortgagee and the successors and assigns of
Mortgagee forever.
PROVIDED, HOWEVER, these presents are upon the express condition, if
Mortgagor shall well and truly pay to Mortgagee the Indebtedness at the time and
in the manner provided in the Note and this Mortgage and shall well and truly
abide by and comply with each and every covenant and condition set forth herein,
in the Note and in the other Loan Documents, this Mortgage and the estate hereby
granted shall be released and canceled of record at the request and at the cost
of Mortgagor.
- 5 -
{Page}
Loan No. 6518291
This Mortgage covers goods which are or are to become fixtures, is
effective as a financing statement filed as a fixture filing and is to be filed
in the real estate records.
AND Mortgagor represents to, covenants with and warrants to Mortgagee
that:
PART 1 - GENERAL PROVISIONS
1. PAYMENT OF INDEBTEDNESS AND INCORPORATION OF COVENANTS,
CONDITIONS AND AGREEMENTS. Mortgagor shall pay the Indebtedness at the time and
in the manner provided in the Note, this Mortgage and the other Loan Documents.
All the covenants, conditions and agreements contained in the Note and 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.
2. WARRANTY OF TITLE. Mortgagor has good and marketable title to the
Mortgaged Property; Mortgagor has the right to mortgage, give, grant, bargain,
sell, alienate, enfeoff, convey, confirm, pledge, lease, assign, hypothecate and
grant a security interest in the Mortgaged Property; Mortgagor possesses an
indefeasible fee estate in the Real Property; and Mortgagor owns the Mortgaged
Property free and clear of all liens, encumbrances and charges whatsoever except
those exceptions shown in the title insurance policy insuring the lien of this
Mortgage (this Mortgage and the liens, encumbrances and charges shown as
exceptions in such title policy, hereinafter collectively referred to as the
"PERMITTED ENCUMBRANCES"). Mortgagor shall forever warrant, defend and preserve
such title and the validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against the claims of all
persons whomsoever.
3. INSURANCE; CASUALTY.
(a) Mortgagor, at its sole cost and expense, shall keep the
Mortgaged Property insured during the term of this Mortgage for the mutual
benefit of Mortgagor and Mortgagee against loss or damage by any peril covered
by a standard "special perils" or "all-risk-of-physical-loss" insurance policy
including, without limitation, riot and civil commotion, acts of terrorism,
vandalism, malicious mischief, burglary, theft and mysterious disappearance in
an amount (i) equal to at least one hundred percent (100%) of the then "full
replacement cost" of the Improvements and Equipment, without deduction for
physical depreciation and (ii) such that the insurer would not deem Mortgagor a
coinsurer under such policies. The policies of insurance carried in accordance
with this PARAGRAPH 3 shall be paid annually in advance and shall contain the
"Replacement Cost Endorsement" with a waiver of depreciation, and shall have a
deductible no greater than $10,000 unless so agreed by Mortgagee.
(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain during the
term of this Mortgage the following policies of insurance:
(i) Flood insurance if any part of the Real Property is located
in an area identified by the Secretary of Housing and Urban Development as
an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (and any
successor act thereto) in an amount at
- 6 -
{Page}
Loan No. 6518291
least equal to the outstanding principal amount of the Note or the maximum
limit of coverage available with respect to the Improvements and Equipment
under said Act, whichever is less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages.
(iii) Rental loss insurance in an amount equal to at least one
hundred percent (100%) of the aggregate annual amount of all rents and
additional rents payable by all of the tenants under the Leases (whether or
not such Leases are terminable in the event of a fire or casualty), such
rental loss insurance to cover rental losses for a period of at least one
(1) year after the date of the fire or casualty in question. The amount of
such rental loss insurance shall be adjusted no less frequently than
annually during the term of this Mortgage to reflect all increased rent and
increased additional rent payable by all of the tenants under renewal
Leases entered into in accordance with the terms of this Mortgage and all
rent and additional rent payable by all of the tenants under new Leases
entered into in accordance with the terms of this Mortgage.
(iv) Insurance against loss or damage from explosion of steam
boilers, air conditioning equipment, high pressure piping, machinery and
equipment, pressure vessels or similar apparatus now or hereafter installed
in the Improvements.
(v) Such other insurance (including, without limitation,
earthquake insurance) as may from time to time be reasonably required by
Mortgagee in order to protect its interests or, in the event of a Secondary
Market Transaction, as required by the Rating Agencies (as such terms are
hereinafter defined).
(c) All policies of insurance (the "POLICIES") required
pursuant to this PARAGRAPH 3 (i) shall be issued by an insurer satisfactory to
Mortgagee (and, in the event of a Secondary Market Transaction, to the Rating
Agencies), (ii) shall contain the standard New York mortgagee non-contribution
clause naming Mortgagee as the person to which all payments made by such
insurance company shall be paid, (iii) shall be maintained throughout the term
of this Mortgage without cost to Mortgagee, (iv) shall be delivered to
Mortgagee, (v) shall contain such provisions as Mortgagee deems reasonably
necessary or desirable to protect its interest including, without limitation,
endorsements providing that neither Mortgagor, Mortgagee nor any other party
shall be a co-insurer under such Policies and that Mortgagee shall receive at
least thirty (30) days prior written notice of any modification or cancellation
and (vi) shall be reasonably satisfactory in form and substance to Mortgagee
(and, in the event of a Secondary Market Transaction, to the Rating Agencies)
and shall be approved by Mortgagee (and, in the event of a Secondary Market
Transaction, by the Rating Agencies) as to amounts, form, risk coverage,
deductibles, loss payees and insureds. All amounts recoverable thereunder are
hereby assigned to the Mortgagee. Not later than thirty (30) days prior to the
expiration date of each of the Policies, Mortgagor will deliver to Mortgagee
satisfactory evidence of the renewal of each of the Policies.
- 7 -
{Page}
Loan No. 6518291
(d) If the Improvements shall be damaged or destroyed, in whole
or in part, by fire or other casualty, Mortgagor shall give prompt notice
thereof to Mortgagee and prior to the making of any repairs thereto. Following
the occurrence of fire or other casualty, Mortgagor, regardless of whether
insurance proceeds are payable under the Policies or, if paid, are made
available to Mortgagor by Mortgagee, shall promptly proceed with the repair,
alteration, restoration, replacement or rebuilding of the Improvements as near
as possible to their value, utility, condition and character prior to such
damage or destruction. Such repairs, alterations, restoration, replacement and
rebuilding are herein collectively referred to as the "RESTORATION". The
Restoration shall be performed in accordance with the following provisions:
(i) Mortgagor shall procure, pay for and furnish to Mortgagee
true copies of all required governmental permits, certificates and
approvals with respect to the Restoration.
(ii) Mortgagor shall furnish Mortgagee, within thirty (30) days
of the casualty, evidence reasonably satisfactory to Mortgagee of the cost
to complete the Restoration.
(iii) If the Restoration involves structural work or the
estimated cost to complete the Restoration exceeds five percent (5%) of the
original principal amount of the Loan, the Restoration shall be conducted
under the supervision of an architect (the "ARCHITECT") selected by
Mortgagor and approved by Mortgagee (which approval shall not be
unreasonably withheld), and no such Restoration shall be made except in
accordance with detailed plans and specifications, detailed cost estimates
and detailed work schedules approved by Mortgagee (which approval shall not
be unreasonably withheld).
(iv) If the estimated cost of the Restoration shall exceed
twenty-five percent (25%) of the fair market value of the Mortgaged
Property, at the request of Mortgagee, Mortgagor, before commencing any
work, shall cause to be furnished to Mortgagee a surety bond or bonds, in
form and substance reasonably satisfactory to Mortgagee, naming Mortgagor
and Mortgagee as co-obligees, in an amount that is not less than the
estimated cost of the Restoration, issued by a surety company or companies
reasonably satisfactory to Mortgagee.
(v) The Restoration shall be prosecuted to completion with all
due diligence and in an expeditious and first class workmanlike manner and
in compliance with all laws and other governmental requirements, all
permits, certificates and approvals, all requirements of fire underwriters
and all insurance policies then in force with respect to the Real Property.
(vi) At all times when any work is in progress, Mortgagor shall
maintain all insurance then required by law or customary with respect to
such work, and, prior to the commencement of any work, shall furnish to
Mortgagee duplicate originals or certificates of the policies therefor.
- 8 -
{Page}
Loan No. 6518291
(vii) Upon completion of the Restoration, Mortgagor shall obtain
(A) any occupancy permit which may be required for the Improvements and (B)
all other governmental permits, certificates and approvals and all permits,
certificates and approvals of fire underwriters which are required for or
with respect to the Restoration, and shall furnish true copies thereof to
Mortgagee.
(viii) An Event of Default (as hereinafter defined) shall be
deemed to have occurred under this Mortgage if Mortgagor, after having
commenced demolition or construction of any Improvements, shall abandon
such demolition or the construction work or shall fail to complete such
demolition and construction within a reasonable time after the commencement
thereof.
(e) If the estimated cost of the Restoration is $50,000.00 or
less, and so long as no Event of Default then exists under any of the Loan
Documents, Mortgagor shall be entitled to adjust and settle the insurance claim
without the consent or participation of Mortgagee and Mortgagor shall be
entitled to receive the payment for such loss. Mortgagor and Mortgagee shall
jointly adjust and settle all insurance claims over $50,000.00, PROVIDED,
HOWEVER, if an Event of Default shall have occurred and be continuing, Mortgagee
shall have the right to adjust and settle such claims without the prior consent
of Mortgagor. In the event of any insured loss, the payment for such loss shall
be made directly to Mortgagee. Any insurance proceeds payable under any of the
Policies in excess of $50,000.00 (and, if an Event of Default then exists
hereunder, any insurance proceeds of $50,000.00 or less) may, at the option of
Mortgagee, be used in one or more of the following ways: (w) applied to the
Indebtedness, whether such Indebtedness then be matured or unmatured (such
application to be without prepayment fee or premium, except that if an Event of
Default, or an event which with notice and/or the passage of time, or both,
would constitute an Event of Default, has occurred and remains uncured, then
such application shall be subject to the applicable premium computed in
accordance with the Note), (x) used to fulfill any of the covenants contained
herein as the Mortgagee may determine, (y) used to replace or restore the
property to a condition satisfactory to the Mortgagee, or (z) released to the
Mortgagor. Notwithstanding the foregoing, provided: (i) not more than forty
percent (40%) of the gross area of the Improvements is directly affected by such
damage, destruction or loss and the amount of the loss does not exceed
twenty-five percent (25%) of the fair market value of the Mortgaged Property,
(ii) no Event of Default or event that with the passage of time or giving of
notice or both would constitute a default has occurred hereunder, under the Note
or under any of the other Loan Documents and remains uncured at the time of such
application, (iii) the insurer does not deny liability to any named insured,
(iv) each major and/or anchor tenant (as determined by Mortgagee) whose Lease
permits termination thereof as a result of such insured loss, agrees in writing
to continue its Lease, (v) rental loss insurance is available and in force and
effect to offset in full any abatement of rent to which any tenant may be
entitled as a result of such damage, destruction or loss, (vi) the remaining
Improvements continue at all times to comply with all applicable building,
zoning and other land use laws and regulations, (vii) in Mortgagee's judgment,
the Restoration is practicable and can be completed within one (1) year after
the damage, destruction or loss and at least one (1) year prior to the Maturity
Date (as such term is defined in the Note), and (viii) rebuilding of the
Improvements to substantially identical size, condition and use as existed prior
to the casualty is permitted by all applicable laws and ordinances, then all of
such proceeds shall be used for Restoration.
- 9 -
{Page}
Loan No. 6518291
Notwithstanding the foregoing, such proceeds shall be used for Restoration to
the extent required under the terms of any existing leases of any portion of the
Mortgaged Property. Any application of insurance proceeds to the Indebtedness
shall be to the unpaid installments of principal due under the Note in the
inverse order of their maturity, such that the regular payments under the Note
shall not be reduced or altered in any manner. In the event the above criteria
are satisfied (including that no Event of Default or event that, with the
passage of time or giving of notice or both, would constitute a default has
occurred hereunder, under the Note or other Loan Documents) or Mortgagee
otherwise elects to allow the use of such proceeds for the Restoration, such
proceeds shall be disbursed in accordance with the following provisions:
(i) Each request for an advance of insurance proceeds shall be
made on seven (7) days' prior notice to Mortgagee and shall be accompanied
by a certificate of the Architect, if one be required under PARAGRAPH
3(d)(iii) above, otherwise by an executive officer or managing general
partner or managing member of Mortgagor, stating (A) that all work
completed to date has been performed in compliance with the approved plans
and specifications and in accordance with all provisions of law, (B) the
sum requested is properly required to reimburse Mortgagor for payments by
Mortgagor to, or is properly due to, the contractor, subcontractors,
materialmen, laborers, engineers, architects or other persons rendering
services or materials for the Restoration (giving a brief description of
such services and materials), and that when added to all sums, if any,
previously disbursed by Mortgagee, does not exceed the value of the work
done to the date of such certificate and (C) that the amount of such
proceeds remaining in the hands of Mortgagee will be sufficient on
completion of the work to pay the same in full (giving, in such reasonable
detail as Mortgagee may require, an estimate of the cost of such
completion).
(ii) Each request for an advance of insurance proceeds shall, to
the extent permitted under applicable law, be accompanied by waivers of
liens satisfactory to Mortgagee covering that part of the Restoration
previously paid for, if any, and by a search prepared by a title company or
by other evidence reasonably satisfactory to Mortgagee including without
limitation a title endorsement satisfactory to Mortgagee if available in
the state where the Real Property is located, that there has not been filed
with respect to the Real Property any mechanic's lien or other lien or
instrument and that there exist no encumbrances on or affecting the Real
Property other than the Permitted Encumbrances or otherwise approved by
Mortgagee. In addition to the foregoing, the request for the final advance
shall be accompanied by (A) any final occupancy permit which may be
required for the Improvements, (B) all other governmental permits,
certificates and approvals and all other permits necessary for the
occupancy and operation of the Real Property, (C) Tenant estoppels from
tenants whose space was affected and (D) final lien waivers from all
contractors, subcontractors and materialmen.
(iii) No advance of insurance proceeds shall be made if there
exists an Event of Default or event which with the passage of time or the
giving of notice or both would constitute a default on the part of
Mortgagor under this Mortgage, the Note or any other Loan Document.
- 10 -
{Page}
Loan No. 6518291
(iv) If the cost of the Restoration (as reasonably estimated by
Mortgagee) at any time shall exceed the amount of the insurance proceeds
available therefor, insurance proceeds shall not be advanced until
Mortgagor, before commencing the Restoration or continuing the Restoration,
as the case may be, shall deposit the full amount of the deficiency (or
other assurances reasonably satisfactory to Mortgagee) with Mortgagee and
the amount so deposited shall first be applied toward the cost of the
Restoration before any portion of the insurance proceeds is disbursed for
such purpose.
Upon completion of the Restoration and payment in full therefor, or
upon failure on the part of Mortgagor promptly to commence or diligently to
continue the Restoration, or at any time upon request by Mortgagor, Mortgagee
may apply the amount of any such proceeds then or thereafter in the hands of
Mortgagee to the payment of the Indebtedness; PROVIDED, HOWEVER, that nothing
herein contained shall prevent Mortgagee from applying at any time the whole or
any part of such proceeds to the curing of any default that has not been cured
within the applicable cure period under this Mortgage, the Note or any other
Loan Document.
(f) Insurance proceeds and any additional funds deposited by
Mortgagor with Mortgagee shall constitute additional security for the
Indebtedness. Mortgagor shall execute, deliver, file and/or record, at its
expense, such documents and instruments as Mortgagee deems necessary or
advisable to grant to Mortgagee a perfected, first priority security interest in
the insurance proceeds and such additional funds. If Mortgagee elects to have
the insurance proceeds applied to Restoration, (i) the insurance proceeds shall
be, at Mortgagee's election, disbursed in installments by Mortgagee or by a
disbursing agent ("DEPOSITORY") selected by Mortgagee and whose fees and
expenses shall be paid by Mortgagor in the manner provided in PARAGRAPH 3(e)
above and (ii) all costs and expenses incurred by Mortgagee in connection with
the Restoration, including, without limitation, reasonable counsel fees and
costs, shall be paid by Mortgagor.
4. PAYMENT OF TAXES, ETC.
(a) Mortgagor shall pay or cause to be paid all taxes,
assessments, water rates and sewer rents, now or hereafter levied or assessed or
imposed against the Mortgaged Property or any part thereof (the "TAXES") and all
ground rents, maintenance charges, other governmental impositions, and other
charges levied, assessed or imposed against the Mortgaged Property, including,
without limitation, vault charges and license fees (collectively, "Other
Charges") for the use of vaults, chutes and similar areas adjoining the Real
Property, as same become due and payable. Mortgagor will deliver to Mortgagee,
promptly upon Mortgagee's request, evidence satisfactory to Mortgagee that the
Taxes and Other Charges have been so paid and are not then delinquent. Mortgagor
shall not suffer or permit any lien or charge (including, without limitation,
any mechanic's lien) against all or any part of the Mortgaged Property and
Mortgagor shall promptly cause to be paid and discharged any lien or charge
whatsoever which may be or become a lien or charge against the Mortgaged
Property. Mortgagor shall promptly pay for all utility services provided to the
Mortgaged Property. In addition, Mortgagee may, at its option, retain the
services of a firm to monitor the payment of Taxes, the cost of which shall be
borne by Mortgagor.
- 11 -
{Page}
Loan No. 6518291
(b) Notwithstanding the provisions of subsection (a) of this
PARAGRAPH 4, Mortgagor shall have the right to contest in good faith the amount
or validity of any such Taxes, liens or Other Charges (including, without
limitation, tax liens and mechanics' liens) referred to in subsection (a) above
by appropriate legal proceedings and in accordance with all applicable law,
after notice to, but without cost or expense to, Mortgagee, provided that (i) no
Event of Default or event that, with the passage of time or giving of notice or
both, would constitute a default hereunder, under the Note or other Loan
Documents has occurred and is continuing, (ii) Mortgagor pays such Taxes, liens
or Other Charges as same become due and payable, unless Mortgagor delivers
evidence satisfactory to Mortgagee that, as a result of Mortgagor's contest,
Mortgagor's obligation to pay such Taxes, liens or Other Charges has been
deferred by the appropriate governmental authority, in which event, Mortgagor
may defer such payment of such Taxes, liens or Other Charges until the date
specified by such governmental authority, (iii) such contest shall be promptly
and diligently prosecuted by and at the expense of Mortgagor, (iv) Mortgagee
shall not thereby suffer any civil penalty, or be subjected to any criminal
penalties or sanctions, (v) such contest shall be discontinued and such Taxes,
liens or Other Charges promptly paid if at any time all or any part of the
Mortgaged Property shall be in imminent danger of being foreclosed, sold,
forfeited or otherwise lost or if the title, lien and security interest created
by this Mortgage or the priority thereof shall be in imminent danger of being
impaired, (vi) Mortgagor shall have set aside adequate reserves (in Mortgagee's
judgment) for the payment of such Taxes, liens or Other Charges, together with
all interest and penalties thereon and (vii) Mortgagor shall have furnished such
security as may be reasonably required in the proceeding or as may be requested
by Mortgagee, to insure the payment of any such Taxes, liens or Other Charges,
together with all interest and penalties thereon.
5. RESERVE FUND.
(a) TAX AND INSURANCE FUND. Mortgagor shall pay to Mortgagee on
the first day of each calendar month such amounts as Mortgagee from time to time
estimates to be sufficient to create and maintain a reserve fund from which (i)
to pay the Taxes and Other Charges, at least thirty (30) days prior to the date
they are due without the payment of any penalties or interest, and (ii) to pay,
at least thirty (30) days prior to their due date for the renewal of the
coverage afforded by the Policies upon the expiration thereof, the insurance
premiums for the Policies estimated by Mortgagee to be payable on such due date,
(said amounts in (i) and (ii) above hereafter called the "Tax and Insurance
Fund").
(1) Notwithstanding the foregoing clause (i) of this
subsection (a), provided (X) Inland Western Spartanburg, L.L.C. or a Permitted
Affiliated Transferee, as defined in Paragraph 9(h) below, or a Transferee
approved by Mortgagee pursuant to Paragraph 9(f) below is and remains the owner
of the Mortgaged Property, (Y) no Event of Default has occurred and is
continuing under this Mortgage or any of the Loan Documents beyond any
applicable notice or cure period, (Z) Mortgagor pays such Taxes and Other
Charges prior to the date they are due and prior to the assessment of any
penalties or interest and provides, upon request, evidence of such timely
payment to Mortgagee, then Mortgagee will not require Mortgagor to make the
deposits referred to in clause (i) of this subsection (a). In the event
Mortgagor is hereafter required to make the deposits referred to in clause (i)
of this subsection (a) on account of Mortgagor's failure to satisfy all of the
requirements of the preceding sentence,
- 12 -
{Page}
Loan No. 6518291
Mortgagor agrees at Mortgagor's sole cost and expense, upon request thereafter
of Mortgagee, to promptly execute and deliver to Mortgagee a written agreement
for the making of such deposits in the future.
(2) Notwithstanding the foregoing clause (ii) of this
subsection (a), provided (X) no Event of Default has occurred and is continuing
under this Mortgage or any of the Loan Documents beyond any applicable notice or
cure period, (Y) Inland Western Spartanburg, L.L.C. or a Permitted Affiliated
Transferee, as defined in Paragraph 9(h) below, or a Transferee approved by
Mortgagee pursuant to Paragraph 9(f) below is and remains the owner of the
Mortgaged Property, and (Z) Mortgagor complies in full with all obligations in
the Loan Documents regarding insurance, including without limitation providing
Mortgagee with timely evidence (i) that the required insurance is in place for
the Mortgaged Property and is never delinquent or suspended, and (ii) that all
insurance premiums are paid when due, then Mortgagee will not require Mortgagor
to make the deposits referred to in clause (ii) of this subsection (a). In the
event Mortgagor is hereafter required to make the deposits referred to in clause
(ii) of this subsection (a) on account of Mortgagor's failure to satisfy all of
the requirements of the preceding sentence, Mortgagor agrees at Mortgagor's sole
cost and expense, upon request thereafter of Mortgagee, to promptly execute and
deliver to Mortgagee a written agreement for the making of such deposits in the
future.
(b) REPLACEMENT RESERVE FUND. If required by Mortgagee,
Mortgagor shall enter into a Replacement Reserve Agreement which shall require
Mortgagor to pay to Mortgagee on the first day of each calendar month one
twelfth (1/12) of the amount reasonably estimated by Mortgagee to be due for the
replacements and capital repairs required to be made to the Mortgaged Property
during each calendar year (the "REPLACEMENT RESERVE FUND"). Mortgagee shall make
disbursements from the Replacement Reserve Fund for items specified in the
Replacement Reserve Agreement as set forth in such Agreement. Mortgagee may
require an inspection of the Mortgaged Property prior to making a disbursement
in order to verify completion of replacements and repairs. Mortgagee reserves
the right to make any disbursement from the Replacement Reserve Fund directly to
the party furnishing materials and/or services.
Notwithstanding the foregoing, provided: (W) no Event of Default
has occurred and is continuing under this Mortgage or any of the Loan Documents
beyond any applicable notice or cure period, (X) Inland Western Spartanburg,
L.L.C. or a Permitted Affiliated Transferee, as defined in Paragraph 9(h) below,
or a Transferee approved by Mortgagee pursuant to Paragraph 9(f) below is and
remains the owner of the Mortgaged Property, (Y) Mortgagor has complied in full
with all obligations set forth in this Mortgage and in the other Loan Documents
regarding maintaining the Mortgaged Property, including without limitation
maintaining the Mortgaged Property in good order and repair, and (Z) inspections
of the Mortgaged Property do not uncover the necessity of creating or
reinstating the Replacement Reserve Fund, in Mortgagee's sole discretion, then
Mortgagee will not require Mortgagor to make the deposits referred to in this
subsection (b). In the event Mortgagor is hereafter required to make the
deposits referred to in this subsection (b) on account of Mortgagor's failure to
satisfy all of the requirements of the preceding sentence, Mortgagor agrees at
Mortgagor's sole cost and expense, upon request thereafter of Mortgagee, to
promptly execute and deliver to Mortgagee a written agreement for the making of
such deposits in the future.
- 13 -
{Page}
Loan No. 6518291
(c) TENANT IMPROVEMENT AND LEASING COMMISSION RESERVE. If
required by Mortgagee, Mortgagor shall enter into a Tenant Improvement and
Leasing Commission Agreement which shall require Mortgagor to pay to Mortgagee
on the first day of each calendar month deposits for tenant improvements and
leasing commissions in amounts determined by Mortgagee in its sole discretion,
for payment of costs and expenses incurred by Mortgagor in connection with the
performance of work to refit and release space in the Improvements that is
currently vacant or anticipated to be vacated during the term of the Loan, and
for payment of leasing commissions incurred by Mortgagor in connection with the
releasing of space in the Improvements that is currently vacant or anticipated
to be vacated during the term of the Loan (the "TENANT IMPROVEMENT AND LEASING
COMMISSION RESERVE FUND"), all according to the Tenant Improvement and Leasing
Commission Agreement.
Notwithstanding the foregoing, provided no Event of Default has
occurred and is continuing under this Mortgage or any of the Loan Documents
beyond any applicable notice or cure period and no condition or event exists
which with notice, the passage or time, or both, would constitute an Event of
Default under this Mortgage or any of the Loan Documents, then Mortgagee will
not require Mortagor to make the deposits referred to in this subsection (c). In
the event Mortgagor is hereafter required to make the deposits referred to in
this subsection (c) on account of Mortgagor's failure to satisfy all of the
requirements of the preceding sentence, Mortgagor agrees at Mortgagor's sole
cost and expense, upon request thereafter of Mortgagee, to promptly execute and
deliver to Mortgagee a written agreement for the making of such deposits in the
future.
(d) REPAIR AND REMEDIATION RESERVE FUND. If required by
Mortgagee, Mortgagor shall enter into a Reserve Agreement for Repairs and shall
pay to Mortgagee the estimated cost to complete any required repairs (the
"REPAIR AND REMEDIATION RESERVE FUND") as more fully set forth in said
Agreement. Notwithstanding anything herein to the contrary, Mortgagee agrees
that the Repair and Remediation Reserve Fund shall not be required if the
aggregate cost to repair all items set forth in any applicable Property
Condition Assessment, Environmental Assessment or other report is less than
$200,000.00.
The amounts in (a), (b), (c) and (d) above shall hereinafter be
collectively called the "RESERVE FUND". Mortgagor hereby pledges to Mortgagee
any and all monies now or hereafter deposited as the Reserve Fund as additional
security for the payment of the Indebtedness. Mortgagee may apply the Reserve
Fund to payments of Taxes, Other Charges, insurance premiums and, as applicable,
payments for replacements and capital repairs, tenant improvements and leasing
commissions and repairs and remediations required to be made by Mortgagor
pursuant to the terms hereof or pursuant to the terms of any other Loan
Documents (even though subsequent owners of the Mortgaged Property may benefit
thereby); PROVIDED, HOWEVER, if there is an Event of Default which is
continuing, then Mortgagee may credit such Reserve Fund against the Indebtedness
in such priority and proportions as Mortgagee in its discretion shall deem
proper. If the Reserve Fund is not sufficient to fully pay for the Taxes, Other
Charges and/or the insurance premiums or, as applicable, amounts for
replacements and capital repairs, tenant improvements and leasing commissions
and repairs and remediation when due, Mortgagor shall promptly pay to Mortgagee,
upon demand, an amount which Mortgagee shall estimate as sufficient to make up
the deficiency. The Reserve Fund shall not constitute a
- 14 -
{Page}
Loan No. 6518291
trust fund and may be commingled with other monies held by Mortgagee. No
earnings or interest on the Reserve Fund shall be payable to Mortgagor.
6. CONDEMNATION. Mortgagor shall promptly give Mortgagee written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Mortgagee copies of any and all papers
served in connection with such proceedings. Following the occurrence of a
condemnation, Mortgagor, regardless of whether an award is available, shall
promptly proceed to restore, repair, replace or rebuild the Improvements to the
extent practicable to be of at least equal value and of substantially the same
character as prior to such condemnation, all to be effected in accordance with
applicable law. Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of such taking),
Mortgagor shall continue to pay the Indebtedness at the time and in the manner
provided for its payment in the Note, in this Mortgage and the other Loan
Documents and the Indebtedness shall not be reduced until any award or payment
therefor shall have been actually received after expenses of collection and
applied by Mortgagee to the discharge of the Indebtedness. Mortgagor shall cause
the award or payment made in any condemnation or eminent domain proceeding,
which is payable to Mortgagor, to be paid directly to Mortgagee. Mortgagee may,
at Mortgagee's election, use the award in any one or more of the following ways:
(a) apply any such award or payment (for purposes of this PARAGRAPH 6, the award
or payment that may be made in any condemnation or eminent domain proceeding
shall mean the entire award allocated to Mortgagor in any capacity) to the
discharge of the Indebtedness whether or not then due and payable (such
application to be without prepayment fee or premium, except that if an Event of
Default, or an event which with notice and/or the passage of time, or both,
would constitute an Event of Default, has occurred, then such application shall
be subject to the applicable premium computed in accordance with the Note), (b)
use the same or any part thereof to fulfill any of the covenants contained
herein as the Mortgagee may determine, (c) use the same or any part thereof to
replace or restore the Mortgaged Property to a condition satisfactory to the
Mortgagee, or (d) release the same to the Mortgagor. If the Mortgaged Property
is sold, through foreclosure or otherwise, prior to the receipt by Mortgagee of
such award or payment, Mortgagee shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive said award or payment or a portion thereof sufficient to pay the
Indebtedness.
7. LEASES AND RENTS.
(a) Mortgagor does hereby absolutely and unconditionally assign
to Mortgagee its right, title and interest in all current and future Leases and
Rents and all proceeds from the sale, cancellation, surrender or other
disposition of the Leases, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Mortgagee shall not be construed to bind
Mortgagee to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise to impose any obligation upon
Mortgagee. Mortgagor agrees to execute and deliver to Mortgagee such additional
instruments in form and substance satisfactory to Mortgagee, as may hereafter be
requested by Mortgagee to further evidence and confirm such assignment.
Nevertheless, subject to the terms of this PARAGRAPH 7, Mortgagee grants to
- 15 -
{Page}
Loan No. 6518291
Mortgagor a revocable license to operate and manage the Mortgaged Property and
to collect the Rents. Mortgagor shall hold the Rents, or a portion thereof
sufficient to discharge all current sums due on the Indebtedness, in trust for
the benefit of Mortgagee for use in the payment of such sums. The grant of the
foregoing license is subject to the provisions of PARAGRAPH 1 of the separate
Assignment of Leases and Rents of even date herewith granted by the Mortgagor as
"Assignor" to the Mortgagee as "Assignee" with respect to the Mortgaged Property
("ASSIGNMENT OF LEASES AND RENTS"). Upon the occurrence of an Event of Default,
the license granted to Mortgagor herein shall be automatically revoked and
Mortgagee shall immediately be entitled to possession of all Rents, whether or
not Mortgagee enters upon or takes control of the Mortgaged Property. Mortgagee
is hereby granted and assigned by Mortgagor the right, at its option, upon the
revocation of the license granted herein to enter upon the Mortgaged Property in
person, by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license herein granted may be applied
toward payment of the Indebtedness in such priority and proportion as Mortgagee
in its discretion shall deem proper. It is further the intent of Mortgagor and
Mortgagee that the Rents hereby absolutely assigned are no longer, during the
term of this Mortgage, property of Mortgagor or property of any estate of
Mortgagor as defined in Section 541 of the Bankruptcy Code and shall not
constitute collateral, cash or otherwise, of Mortgagor. The term "Rents" as used
herein shall mean the gross rents without deduction or offsets of any kind.
(b) All Leases executed after the date of this Mortgage shall
provide that they are subordinate to this Mortgage and that the lessee agrees to
attorn to Mortgagee; PROVIDED, HOWEVER, that nothing herein shall affect
Mortgagee's right to designate from time to time any one or more Leases as being
superior to this Mortgage and Mortgagor shall execute and deliver to Mortgagee
and shall cause to be executed and delivered to Mortgagee from each tenant under
such Lease any instrument or agreement as Mortgagee may deem necessary to make
such Lease superior to this Mortgage. Upon request, Mortgagor shall promptly
furnish Mortgagee with executed copies of all Leases.
(c) Mortgagor shall not, without the prior consent of Mortgagee,
(i) lease all or any part of the Mortgaged Property, (ii) alter or change the
terms of any Lease or cancel or terminate, abridge or otherwise modify the terms
of any Lease, (iii) consent to any assignment of or subletting under any Lease
not in accordance with its terms, (iv) cancel, terminate, abridge or otherwise
modify any guaranty of any Lease or the terms thereof, (v) collect or accept
prepayments of installments of Rents for a period of more than one (1) month in
advance or (vi) further assign the whole or any part of the Leases or the Rents;
PROVIDED, HOWEVER, that such action as described in subsections (i)-(iv) above
may be taken without Mortgagee's consent for any Lease which is for 10,000
square feet of space or less, and has a term (including the renewal or extension
term) of five (5) years or less, and so long as such Lease provides for an
annual rent at least equal to the then competitive and comparable market rent (a
lease satisfying those criteria shall be referred to as a "SMALL LEASE") so long
as the taking of such action is in the ordinary course of Mortgagor's business
and that such action is still subject to PARAGRAPH 1 of the separate Assignment
of Leases and Rents pertaining to Termination Amounts (as defined therein).
- 16 -
{Page}
Loan No. 6518291
(d) With respect to each Lease, Mortgagor shall (i) observe and
perform each and every provision thereof on the lessor's part to be fulfilled or
performed under each Lease and not do or permit to be done anything to impair
the value of the Lease as security for the Loan, including surrender or
voluntary termination of any Lease, (ii) promptly send to Mortgagee copies of
all notices of default which Mortgagor shall send or receive thereunder, (iii)
enforce all of the terms, covenants and conditions contained in such Lease upon
the lessee's part to be performed, short of termination thereof, (iv) execute
and deliver, at the request of Mortgagee, all such further assurances,
confirmations and assignments in connection with the Mortgaged Property as
Mortgagee shall, from time to time, require and (v) upon request, furnish
Mortgagee with executed copies of all Leases; PROVIDED, HOWEVER, the notice to
Mortgagee referenced in subsection (ii) above and the restriction on termination
of a Lease in connection with the enforcement of its terms, covenants and
conditions set forth in (iii) above shall not be required or apply, as the case
may be, for any Small Lease. Upon the occurrence of any Event of Default under
this Mortgage, Mortgagor shall pay monthly in advance to Mortgagee, or any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of the Mortgaged Property or part of the Mortgaged
Property as may be occupied by Mortgagor or any one Mortgagor and upon default
in any such payment Mortgagor shall vacate and surrender possession of the
Mortgaged Property to Mortgagee or to such receiver and, in default thereof,
Mortgagor may be evicted by summary proceedings or otherwise.
(e) All security deposits of tenants, whether held in cash or
any other form, shall not be commingled with any other funds of Mortgagor and,
if cash, shall be deposited by Mortgagor at such commercial or savings bank or
banks as may be reasonably satisfactory to Mortgagee. Any bond or other
instrument which Mortgagor is permitted to hold in lieu of cash security
deposits under any applicable legal requirements shall be maintained in full
force and effect in the full amount of such deposits unless replaced by cash
deposits as hereinabove described, shall be issued by an institution reasonably
satisfactory to Mortgagee, shall, if permitted pursuant to any legal
requirements, name Mortgagee as payee or mortgagee thereunder (or at Mortgagee's
option, be fully assignable to Mortgagee) and shall, in all respects, comply
with any applicable legal requirements and otherwise be reasonably satisfactory
to Mortgagee. Mortgagor shall, upon request, provide Mortgagee with evidence
reasonably satisfactory to Mortgagee of Mortgagor's compliance with the
foregoing. Following the occurrence and during the continuance of any Event of
Default, Mortgagor shall, upon Mortgagee's request, if permitted by any
applicable legal requirements, turn over to Mortgagee the security deposits (and
any interest theretofore earned thereon) with respect to all or any portion of
the Mortgaged Property, to be held by Mortgagee subject to the terms of the
Leases.
8. MAINTENANCE AND USE OF MORTGAGED PROPERTY. Mortgagor shall or
shall cause tenants to, at its sole cost and expense, keep and maintain the
Mortgaged Property, including, without limitation, parking lots and recreational
and landscaped portions thereof, if any, in good order and condition. The
Improvements and the Equipment shall not be diminished, removed, demolished or
materially altered (except for normal replacement of Equipment) and Mortgagor
shall not erect any new buildings, structures or building additions on the
Mortgaged Property without the prior consent of Mortgagee, So long as no Event
of Default shall have occurred and be continuing, Mortgagor shall have the right
at any time and from time to time after providing Mortgagee with written notice
to make or cause to be made reasonable alterations
- 17 -
{Page}
Loan No. 6518291
of and additions to the Mortgaged Property or any part thereof, PROVIDED that
any alteration or addition (i) shall not change the general character of the
Mortgaged Property or reduce the fair market value thereof below its value
immediately before such alteration or addition, or impair the usefulness of the
Mortgaged Property, (ii) is effected with due diligence, in a good and
workmanlike manner and in compliance with all applicable laws and with all
provisions of any insurance policy covering or applicable to the Mortgaged
Property and all requirements of the issuers thereof, (iii) is promptly and
fully paid for, or caused to be paid for, by Mortgagor, (iv) the estimated cost
of such alteration or addition does not exceed five percent (5%) of the original
principal amount of the Loan, (v) is made under the supervision of a qualified
architect or engineer, (vi) shall not violate the terms of any Leases, and (vii)
upon completion, Mortgagor shall provide Mortgagee with (aa) a satisfactory
final improvement survey if the footprint of the building has been altered,
(bb), any final occupancy permit which may be required for the Improvements,
(cc) all other governmental permits, certificates and approvals and all other
permits, certificates and approvals of fire underwriters which are required with
respect to the alterations and additions and the use and occupancy thereof, and
shall furnish true copies thereof to Mortgagee, and (dd) final lien waivers from
all contractors, subcontractors and materialmen. Mortgagor shall promptly comply
with all laws, orders and ordinances affecting the Mortgaged Property, or the
use thereof, PROVIDED, HOWEVER, that nothing in the foregoing clause shall
require Mortgagor to comply with any such law, order or ordinance so long as
Mortgagor shall in good faith, after notice to, but without cost or expense to,
Mortgagee, contest the validity of such law, order or ordinance by appropriate
legal proceedings and in accordance with all applicable law, which proceedings
must operate to prevent (i) the enforcement thereof, (ii) the payment of any
fine, charge or penalty, (iii) the sale or forfeiture of the Mortgaged Property
or any part thereof, (iv) the lien of this Mortgage and the priority thereof
from being impaired, (v) the imposition of criminal liability on Mortgagee and
(vi) the imposition, unless stayed, of civil liability on Mortgagee; PROVIDED
that during such contest Mortgagor shall, at the option of Mortgagee, provide
cash, bonds or other security satisfactory to Mortgagee, indemnifying and
protecting Mortgagee against any liability, loss or injury by reason of such
non-compliance or contest, and PROVIDED FURTHER, that such contest shall be
promptly and diligently prosecuted by and at the expense of Mortgagor. Mortgagor
shall promptly, at its sole cost and expense, repair, replace or rebuild any
part of the Mortgaged Property which may be destroyed by any casualty, or become
damaged, worn or dilapidated. Mortgagor shall not commit any waste at the
Mortgaged Property. Mortgagor shall not initiate, join in, acquiesce in or
consent to any material adverse change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Mortgaged Property or any part thereof. If under
applicable zoning provisions the use of all or any portion of the Mortgaged
Property is or shall become a nonconforming use, Mortgagor will not cause or
permit such nonconforming use to be discontinued or abandoned without the
express consent of Mortgagee. Mortgagor covenants and agrees that it shall
operate the Mortgaged Property at all times as a first-class commercial retail
facility.
9. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY OR INTERESTS IN
THE MORTGAGOR; OTHER INDEBTEDNESS.
(a) Mortgagor acknowledges that Mortgagee has examined and
relied on the creditworthiness and experience of Mortgagor in owning and
operating properties such as
- 18 -
{Page}
Loan No. 6518291
the Mortgaged Property in agreeing to make the Loan, and that Mortgagee will
continue to rely on Mortgagor's ownership of the Mortgaged Property as a means
of maintaining the value of the Mortgaged Property as security for repayment of
the Indebtedness. Mortgagor acknowledges that Mortgagee has a valid interest in
maintaining the value of the Mortgaged Property so as to ensure that, should
Mortgagor default in the repayment of the Indebtedness, Mortgagee can recover
the Indebtedness by a sale of the Mortgaged Property. Mortgagor shall not,
without the prior written consent of Mortgagee, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or any
part thereof or interest therein, or permit the Mortgaged Property or any part
thereof to be sold, conveyed, alienated, mortgaged, encumbered, pledged or
otherwise transferred.
(b) A sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer within the meaning of this PARAGRAPH 9 shall be deemed to
include (i) an installment sales agreement wherein Mortgagor agrees to sell the
Mortgaged Property or any part thereof for a price to be paid in installments,
(ii) an agreement by Mortgagor leasing all or a substantial part of the
Mortgaged Property for other than actual occupancy by a space tenant thereunder
or a sale, assignment or other transfer of, or the grant of a security interest
in, Mortgagor's right, title and interest in and to any Leases or any Rents,
(iii) if Mortgagor, any guarantor of Non-Recourse Carveout Obligations (as
hereinafter defined), any other guarantor, any indemnitor of environmental
liabilities or any general partner or managing member of Mortgagor or of any
such guarantor or indemnitor is a corporation, the voluntary or involuntary
sale, assignment, conveyance or transfer of such corporation's stock (or the
stock of any corporation directly or indirectly controlling such corporation by
operation of law or otherwise) or the creation or issuance of new stock in one
or a series of transactions by which an aggregate of more than ten percent (10%)
of such corporation's stock shall be vested in a party or parties who are not
now stockholders or any change in the control of such corporation, (iv) if
Mortgagor, any guarantor, of Non-Recourse Carveout Obligations, any other
guarantor or any indemnitor of environmental liabilities or any general partner
or managing member of Mortgagor or any such guarantor or indemnitor is a limited
or general partnership, joint venture or limited liability company, the change,
removal, resignation or addition of a general partner, managing partner, limited
partner, joint venturer or member or the transfer of the partnership interest of
any general partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member, and (v) if Mortgagor, any guarantor of
Non-Recourse Carveout Obligations or any other guarantor or any indemnitor of
environmental liabilities, is an entity, whether one of the above-mentioned
entities or not, any change in the ownership or control of such entity, any
merger, consolidation or dissolution or syndication affecting such entity, or
the transfer, sale, assignment or pledge of any interest in such entity or in
any person, directly or indirectly, controlling such entity or in any general
partner or managing member thereof, whether at one time or in a series of
related transactions.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Indebtedness immediately due and payable upon Mortgagor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Mortgagee's consent. This provision shall apply to
every sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of
the Mortgaged Property regardless of whether voluntary or
- 19 -
{Page}
Loan No. 6518291
not, or whether or not Mortgagee has consented to any previous sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Mortgaged Property.
(d) Mortgagee's consent to a sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property or any other
action described in this PARAGRAPH 9 shall not be deemed to be a waiver of
Mortgagee's right to require such consent to any future occurrence of same. Any
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property or other action made in contravention of this PARAGRAPH 9
shall be null and void and of no force and effect.
(e) Mortgagor agrees to bear and shall pay or reimburse
Mortgagee on demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by Mortgagee in connection with the
review, approval and documentation of any such sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer.
(f) Notwithstanding the foregoing, from and after the
ninetieth (90th) day following satisfaction by Mortgagor of the Transfer
Conditions described in Paragraph 72 below, Mortgagee shall permit two (2) sales
or transfers of the Mortgaged Property, PROVIDED that:
(i) no Event of Default or event which with the giving of
notice or passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(ii) the proposed transferee ("TRANSFEREE"), the guarantors of
Non-Recourse Carveout Obligations, any other guarantor, and the indemnitors
of environmental liabilities shall be reputable entities or persons of good
character, creditworthy, with sufficient financial worth considering the
obligations assumed and undertaken, as evidenced by financial statements
and other information reasonably requested by Mortgagee;
(iii) the Transferee and its property manager shall have
sufficient experience in the ownership and management of properties similar
to the Mortgaged Property, and Mortgagee shall be provided with reasonable
evidence thereof (and Mortgagee reserves the right to approve the
Transferee without approving the substitution of the property manager);
(iv) that Mortgagee has received a written request for approval
from the Mortgagor at least thirty (30) days prior to the proposed transfer
(including a description of the proposed terms of the transfer), together
with a diagram showing the legal structure of the Transferee, the proposed
guarantors of Non-Recourse Carveout Obligations, any other proposed
guarantors, and the proposed indemnitors of environmental liabilities and
all of the constituent entities of each, after the contemplated transfer,
and a list of the names, types of interests and ownership percentages of
all persons to have ownership interests in any of the foregoing or any
constituent entity thereof, financial statements for all such entities and
an administrative fee of $5,000,
- 20 -
{Page}
Loan No. 6518291
which shall be deemed fully earned on the date of receipt and shall be
retained by Mortgagee regardless of whether or not the transfer occurs and
whether or not approval is given;
(v) Mortgagee and its counsel have received (aa) certification
from Mortgagor and the Transferee that the proposed terms of the transfer
described in subparagraph 9(f)(iv) are the actual terms of the transfer,
(bb) evidence of casualty insurance and other applicable insurance, (cc)
all corporate, partnership or other entity documents and (dd) all other
certificates, legal opinions, title materials and other documents which
Mortgagee may require, all in form and substance satisfactory to Mortgagee,
at least thirty (30) days prior to the proposed transfer;
(vi) Mortgagee be provided satisfactory evidence concerning the
effect of any change in the real estate taxes to result from the sale and
the effect of such change on the ability of the Mortgaged Property to
generate a cash flow sufficient to pay the debt service on the Loan and to
maintain a debt service coverage ratio satisfactory to Mortgagee;
(vii) If the Loan is part of a Secondary Market Transaction and
the documents governing such Secondary Market Transaction so require,
Mortgagee shall have received in writing evidence from the Rating Agencies
to the effect that such transfer will not result in a re-qualification,
reduction or withdrawal of any rating initially assigned or to be assigned
in a Secondary Market Transaction together with such legal opinions as may
be requested by the Rating Agencies. The term "RATING AGENCIES" as used
herein shall mean each of Standard & Poor's Ratings Group, Moody's
Investors Service, Inc., Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc. or any other nationally-recognized statistical rating agency
who shall then be rating the certificates or securities issued in
connection with the Secondary Market Transaction;
(viii) the Transferee and its constituent entities shall comply
with all of the Single Purpose Entity/Separateness requirements set forth
in Paragraph 19 hereof;
(ix) the Transferee shall have executed and delivered to
Mortgagee an assumption agreement in form and substance acceptable to
Mortgagee, evidencing such Transferee's agreement to abide and be bound by
the terms of the Note, this Mortgage and the other Loan Documents, together
with an executed guaranty of Non-Recourse Carveout Obligations and any
other guaranty from an approved guarantor and an executed separate
environmental indemnity agreement from an approved indemnitor, both in form
and substance acceptable to Mortgagee, other documentation as Mortgagee may
reasonably require, and such legal opinions and title insurance
endorsements as may be reasonably requested by Mortgagee;
(x) Mortgagee shall have received an assumption fee equal to
one percent (1%) of the then unpaid principal balance of the Note (against
which the administrative fee shall be credited) in addition to the payment
of all reasonable costs and expenses incurred by Mortgagee in connection
with such assumption (including reasonable attorney's fees and costs); and
- 21 -
{Page}
Loan No. 6518291
(xi) the Transferee shall be able to make the representations
and warranties set forth in Paragraph 18(h) of this Mortgage.
In the event all of the foregoing conditions are satisfied and
Mortgagee consents to the sale or transfer, Mortgagee agrees to release
Mortgagor, any indemnitors under any environmental indemnity and any guarantors
of the Non-Recourse Carveout Obligations of all liability under the Loan
Documents upon such transfer of the Morgaged Property pursuant to this
Paragraph 9(f), (1) except for any event or circumstance with respect to which
Mortgagor and such indemnitors remain obligated to continue to indemnify
Mortgagee under any environmental indemnity agreement; (2) except for any fraud
or willful misrepresentation by or on behalf of Mortgagor, or such indemnitor or
guarantor with respect to the Mortgaged Property or the making or delivery of
any of the Loan Documents or with respect to any materials or information
provided by or on behalf of Mortgagor, indemnitor or guarantor in connection
with the Loan, and (3) provided that Mortgagor's obligations arising prior to
completion of such transfer are no longer subject to disgorgement under any
applicable state or federal creditor rights or bankruptcy laws and Mortgagee
receives an assumption of the obligations of such indemnitor and guarantor by an
individual(s) or entity(ies) acceptable to Mortgagee in its sole discretion.
Mortgagor and Mortgagee further agree that (1) any environmental
indemnification obligations of Mortgagor or any indemnitor under an
environmental indemnity agreement shall not apply to any future environmental
activity or conditions resulting solely from any act or omission for which
Mortgagor bears no responsibility and which occurs after Mortgagor or any person
or entity in any way related to Mortgagor no longer holds possession or has any
interest in the Mortgaged Property; provided, however, the transferor Mortgagor,
the prior guarantors and the prior indemnitors, respectively, shall have the
burden of establishing that all the conditions in this PARAGRAPH 9 (including,
without limitation, the time as to which matters described herein arose) were
satisfied by clear and convincing evidence and shall indemnify and hold
Mortgagee harmless for all matters set forth in PARAGRAPH 39 and in the
Non-Recourse Carveout Obligations until such transferor Mortgagor, prior
guarantors or prior indemnitors, respectively, have met such burden; Mortgagee
agrees that Mortgagor shall have met such burden with respect to the Mortgaged
Property if Mortgagor at such time delivers to Mortgagee an environmental
insurance policy satisfactory in all respects to Mortgagee in its reasonable
discretion; and (2) in the event the individual or entity(ies) assuming the
obligations of such indemnitor and guarantor are acceptable to Mortgagee in its
sole discretion, are willing to accept such indemnitor's obligation under the
environmental indemnity for the time period in which the original indemnitor
guaranteed the obligations of Mortgagor (i.e. the time period prior to said
transfer of the Mortgaged Property) and are willing to execute an indemnity in
form and content acceptable to Mortgagee, then, notwithstanding the foregoing,
such original indemnitor will be completely relieved of liability under such
environmental indemnity (except for any fraud or willful misrepresentation by or
on behalf of Mortgagor or such indemnitor or guarantor with respect to the
Mortgaged Property, the making or delivery of any of the Loan Documents or in
any materials or information provided by or on behalf of such indemnitor in
connection with the Loan).
- 22 -
{Page}
Loan No. 6518291
(g) The provisions of Paragraphs 9(a), 9(b) and 9(f) shall
not operate to prohibit the transfer, sale or conveyance of shares in Inland
Western Retail Real Estate Trust, Inc. (the "Trust") as long as all of the
following conditions are satisfied:
(i) the Trust continues to be the sole member and owner of
Mortgagor and continues to control the day-to-day operations of Mortgagor
and the Mortgaged Property;
(ii) the Trust maintains its status as a real estate
investment trust; and
(iii) no such transfer results in any party owning more than
twenty percent (20%) (or such lesser amount as constitutes a controlling
interest) in the shares or ownership units or interests of the Trust.
The term CONTROL or CONTROLLING shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or activities of a person or entity, whether through
ownership of voting securities or other interests, by contract or
otherwise.
(h) Notwithstanding anything in this Paragraph 9 to the
contrary, from and after the ninetieth (90th) day following satisfaction by
Mortgagor of the Transfer Conditions described in Paragraph 72 below, Mortgagor
shall have a one time right, provided no Event of Default or event which with
the giving of notice or passage of time would constitute an Event of Default
under the Loan Documents shall have occurred and remain uncured, to assign, sell
or transfer (the "Permitted Affiliated Transfer") all of the Mortgaged Property
to an affiliate of Inland Western Retail Real Estate Trust, Inc. ("Permitted
Affiliated Transferee"), PROVIDED that:
(i) Mortgagor shall pay to Mortgagee a $5,000.00 transfer fee;
(ii) Mortgagee shall have received from Mortgagor reimbursement
of all of Mortgagee's expenses, including legal fees, incurred in
connection with the Permitted Affiliated Transfer;
(iii) the Permitted Affiliated Transferee shall assume, in form
and substance satisfactory to Mortgagee, all obligations of Mortgagor under
the Loan Documents, including, without limitation, the environmental
Indemnity Agreement and Guaranty of non-recourse carveout obligations, with
the same degree of recourse liability as Mortgagor and subject to the same
exculpatory provisions;
(iv) Mortgagee shall have received a title policy satisfactory to
Mortgagee updated to the date of the Permitted Affiliated Transfer,
evidencing that such Permitted Affiliated Transfer will not adversely
affect Mortgagee's first and prior lien on the Mortgaged Property or any
other rights or interests granted to Mortgagee under the Loan Documents;
- 23 -
{Page}
Loan No. 6518291
(v) Mortgagee shall have received legal opinions of
Mortgagor's independent or in-house counsel, as the case may be, in form
and substance satisfactory to Mortgagee, that all previous opinions
pertaining to Mortgagor are true with respect to the Permitted Affiliated
Transferee and the Permitted Affiliated Transferee has duly assumed the
Loan Documents, and the same are valid and enforceable against the
Permitted Affiliated Transferee and the Mortgaged Property and that
Mortgagor has the requisite power and authority to properly transfer the
Mortgaged Property;
(vi) no Event of Default shall have occurred and remain uncured
under the Loan Documents;
(vii) no such transfer of interest shall result in a change of
control of Mortgagor or the day-to-day operations of the Mortgaged
Property;
(viii) without limiting the foregoing, no such transfer, either
singly or in the aggregate with other transfers, will result in a violation
of the special purpose entity provisions of the Loan Documents or
Mortgagor's organizational documents and Mortgagor will provide new or
updated non-consolidation opinions and other opinions to the extent
required at the initial funding of the Loan with respect to the Permitted
Affiliated Transfer; and
(ix) Mortgagee has received at least thirty (30) days' prior
written notice of such transfer, together with a diagram showing the
structure of the Mortgagor and all constituent entities after the
contemplated transfer and a list of the names, types of interests and
percentages of ownership of all owners of interests in Mortgagor and any
constituent entities (except the shareholders of Inland Western Retail Real
Estate Trust, Inc.) after the contemplated transfer.
(i) Mortgagor has not incurred and will not incur any
indebtedness, secured or unsecured, other than the Loan and debt (i) incurred in
the ordinary course of business to vendors and suppliers of services to the
Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion
thereof, or by interests in the Mortgagor or any constituent entity thereof, and
(iii) not accompanied by any rights to control or to obtain control of the
Mortgagor or any constituent entity thereof. No indebtedness other than the Loan
may be secured (subordinate or PARI PASSU) by the Mortgaged Property, or any
portion thereof, or by interests in the Mortgagor or any constituent entity
thereof.
10. ESTOPPEL CERTIFICATES.
(a) Mortgagor, within ten (10) business days after request by
Mortgagee, shall furnish Mortgagee from time to time 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 rate of interest in the Note, (iv) the date through which all
installments of interest, commitment fees and/or principal have been paid, (v)
any offsets or defenses to the payment of the Indebtedness, if any, (vi) that
the Note and this Mortgage have not been modified or if modified, giving
particulars of such modification and (vii) such other information as shall be
requested by Mortgagee.
- 24 -
{Page}
Loan No. 65