MORTGAGE AND SECURITY AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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in violation of law,

 

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

 

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

 

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

 

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

 

BORROWER COVENANTS AND AGREES AS FOLLOWS:

 

1.         Borrower shall

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)        remain a Single-Purpose Entity; and

 

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

 

2.         Borrower shall not:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“ Permitted Transfer ” shall mean:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.         Borrower remains a Single Purpose Entity.

 

“ Property Transfer Requirements ” are all of the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“ Ownership Transfer Requirements ” are all of the Property Transfer Requirements which Lender deems appropriate in its discretion, as well as