Download INLAND WESTERN RETAIL REAL ESTATE TRUST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2009
or
□
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 000-51199
Inland Western Retail Real Estate Trust, Inc.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
42-1579325
(I.R.S. Employer Identification No.)
2901 Butterfield Road, Oak Brook, Illinois
(Address of principal executive offices)
60523
(Zip Code)
630-218-8000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
X Yes
□ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).
□ Yes
□ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer
□
Non-accelerated filer
X
□
Accelerated filer
(Do not check if a smaller reporting
company)
Smaller reporting company □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes X No
□
As of May 11, 2009, there were 479,973,814 shares of common stock outstanding.
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
Item 1.
Consolidated Financial Statements
1
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
33
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
50
Item 4.
Controls and Procedures
51
PART II – OTHER INFORMATION
Item 1.
Legal Proceedings
51
Item 1A.
Risk Factors
52
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
52
Item 6.
Exhibits
52
SIGNATURES
53
Part I – Financial Information
Item 1. Consolidated Financial Statements
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Balance Sheets
March 31, 2009 and December 31, 2008
(in thousands, except per share amounts)
See accompanying notes to consolidated financial statements
1
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Operations and Other Comprehensive (Loss) Income
For the Three Months Ended March 31, 2009 and 2008
Unaudited
(in thousands, except per share amounts)
See accompanying notes to consolidated financial statements
2
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Equity
For the Three Months Ended March 31, 2009
Unaudited
(in thousands, except per share amounts)
See accompanying notes to consolidated financial statements
3
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2009 and 2008
Unaudited
(in thousands, except per share amounts)
See accompanying notes to consolidated financial statements
4
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Consolidated Statements of Cash Flows
(Continued)
For the Three Months Ended March 31, 2009 and 2008
Unaudited
(in thousands, except per share amounts)
See accompanying notes to consolidated financial statements
5
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by GAAP for complete financial statements. Readers of this Quarterly Report should refer to the audited
financial statements of Inland Western Retail Real Estate Trust, Inc. for the fiscal year ended December 31, 2008, which
are included in the Company’s 2008 Annual Report on Form 10-K, as certain footnote disclosures contained in such
audited financial statements have been omitted from this Quarterly Report. In the opinion of management, all
adjustments necessary for a fair presentation have been included in this Quarterly Report.
(1)
Organization and Basis of Presentation
Inland Western Retail Real Estate Trust, Inc. (the “Company”) was formed on March 5, 2003 to acquire and manage a
diversified portfolio of real estate, primarily multi-tenant shopping centers and single-user net lease properties.
All amounts in this Form 10-Q are stated in thousands with the exception of per share amounts, square foot amounts,
number of properties, number of states, number of leases and number of employees.
The Company issued a total of 459,483 shares of its common stock at $10.00 per share, resulting in gross proceeds of
$4,595,192. In addition, as of March 31, 2009, the Company had issued 63,104 shares through its DRP at $8.50 to $10.00
per share for gross proceeds of $617,456 and had repurchased a total of 43,822 shares through its SRP at prices ranging
from $9.25 to $10.00 per share for an aggregate cost of $432,487. As a result, the Company had total shares outstanding
of 478,765 and had realized total net offering proceeds, before offering costs, of $4,780,161 as of March 31, 2009.
The Company is qualified and has elected to be taxed as a real estate investment trust (REIT) under the Internal Revenue
Code of 1986, as amended, or the Code, commencing with the tax year ending December 31, 2003. Since the Company
qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on taxable income that is
distributed to shareholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to
federal income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a
REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal
income and excise taxes on its undistributed income. The Company has one wholly-owned subsidiary that has elected to
be treated as a taxable REIT subsidiary (TRS) for federal income tax purposes. A TRS is taxed on its net income at
regular corporate tax rates. The income tax expense incurred as a result of the TRS did not have a material impact on the
Company’s accompanying consolidated financial statements. On November 15, 2007, the Company acquired four
qualified REIT subsidiaries. Their income is consolidated with REIT income for federal and state income tax purposes.
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
Certain reclassifications have been made to the 2008 consolidated financial statements to conform to the 2009
presentation.
The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly-owned
subsidiaries and consolidated joint venture investments. Wholly-owned subsidiaries generally consist of limited liability
companies (LLCs) and limited partnerships (LPs). The Company has ownership interests ranging from 5% to 98% in
twenty LLCs or LPs which own twenty operating properties and seven LLCs or LPs which own twenty-two development
properties, of which thirteen and six, respectively, are consolidated in the accompanying consolidated financial statements
as of March 31, 2009. The effects of all significant intercompany transactions have been eliminated.
The Company consolidates certain property holding entities and other subsidiaries in which it owns less than a 100%
equity interest if it is deemed to be the primary beneficiary in a variable interest entity (VIE), (as defined in Financial
6
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Accounting Standards Board (FASB) Interpretation No. (FIN) 46(R): Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51, as revised ). The Company also consolidates entities that are not VIEs and in which it has
financial and operating control in accordance with Emerging Issues Task Force (EITF) Issue No. 04-5: Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when
the Limited Partners have Certain Rights and American Institute of Certified Public Accountants Statement of Position
(SOP) 78-9: Accounting for Investments in Real Estate Ventures . All significant intercompany balances and transactions
have been eliminated in consolidation. Investments in real estate joint ventures in which the Company has the ability to
exercise significant influence, but does not have financial or operating control, are accounted for using the equity method
of accounting. Accordingly, the Company’s share of the income (or loss) of these unconsolidated joint ventures is
included in consolidated net (loss) income.
The Company is the controlling member in various consolidated entities. The organizational documents of these entities
contain provisions that require the entities to be liquidated through the sale of their assets upon reaching a future date as
specified in each respective organizational document or through put/call arrangements. As controlling member, the
Company has an obligation to cause these property owning entities to distribute proceeds of liquidation to the
noncontrolling interest partners in these partially-owned entities only if the net proceeds received by each of the entities
from the sale of assets warrant a distribution based on the agreements. Some of the LLC or LP agreements for these
entities contain put/call provisions which grant the right to the outside owners and the Company to require each LLC or
LP to redeem the ownership interest of the outside owners during future periods. In instances where outside ownership
interests are subject to put/call arrangements requiring settlement for fixed amounts, the LLC or LP is treated as a 100%
owned subsidiary by the Company with the amount due to the outside owner reflected as a financing and included in
“Other financings” in the accompanying consolidated balance sheets in accordance with EITF Issue No. 00-4: Majority
Owner’s Accounting for a Transaction in the Shares of a Consolidated Subsidiary and a Derivative Indexed to the
Minority Interest in that Subsidiary. Interest expense is recorded on such liabilities in amounts equal to the preferred
returns due to the outside owners as provided in the LLC or LP agreements.
In December 2007, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 160: Noncontrolling
Interests in Consolidated Financial Statements , effective for fiscal years beginning on or after December 15, 2008. The
Company has adopted SFAS No. 160 effective January 1, 2009. SFAS No. 160 defines noncontrolling interest as the
portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. Under SFAS No. 160, ownership
interests in the subsidiary that are held by owners other than the parent are reported on the consolidated balance sheets as
noncontrolling interests within equity, separately from the Company’s equity. On the consolidated statements of
operations, revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the
consolidated amounts, including both the amounts attributable to the Company and noncontrolling
interests. Consolidated statements of equity are included for both quarterly and annual financial statements, including
beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total
equity.
In conjunction with the adoption of SFAS No. 160 on January 1, 2009, the Company also evaluated its noncontrolling
interests under EITF Topic No. D-98: Classification and Measurement of Redeemable Securities , as amended. Per EITF
Topic No. D-98, noncontrolling interests that are redeemable for cash or other assets at the option of the holder, not solely
within the control of the issuer, must be classified outside of permanent equity. This has resulted in the Company
classifying certain outside ownership interests as redeemable noncontrolling interests outside of permanent equity in the
consolidated balance sheets. The Company made this determination based on an evaluation of the terms in applicable
agreements, specifically the redemption provisions.
In connection with the adoption of SFAS No. 160, the Company reclassified into permanent equity the historical balances
related to the noncontrolling interests associated with the insurance association captive and two consolidated joint venture
investments. Noncontrolling interests associated with the Company’s other consolidated joint venture investments
continue to be classified outside of permanent equity in accordance with the provisions of EITF Topic No. D-98 as those
interests are redeemable by the Company at the discretion of the noncontrolling interest holder. The amount at which
these interests would be redeemed is based on a formula contained in each respective agreement and, as of March 31,
7
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
2009 and December 31, 2008, was determined to approximate the carrying value of these interests. Accordingly, no
adjustment was made during the three months ended March 31, 2009.
Effective January 1, 2009, the Company transferred real estate and $3,438 to a joint venture partner in redemption of its
noncontrolling interest in the venture. The transaction was accounted for at fair value, with the carrying value of the
non-monetary assets exceeding the estimated fair value, and resulted in a loss of $3,447. Such loss is included in “Other
(expense) income” in the accompanying consolidated statement of operations and was fully allocated to the
noncontrolling interest partner pursuant to the joint venture agreement. On April 15, 2009, a final cash payment of
$1,048 was made.
On January 16, 2009, the Company paid a noncontrolling interest partner, whose interest was previously classified in
“Other financings” in the accompanying consolidated balance sheets, $3,410 for the full redemption of its interest in a
consolidated joint venture.
On April 8, 2009, certain noncontrolling interest partners requested $40,549 for the partial redemption of their interest in
various consolidated joint ventures. This amount is classified as “Other financings” in the accompanying consolidated
balance sheets and is unpaid as of May 11, 2009.
On April 28, 2009, the Company paid a noncontrolling interest partner $5,812 for the full redemption if its interest in a
consolidated joint venture and accrued preferred return. Of this amount, $5,698 is classified as “Other financings” in the
accompanying consolidated balance sheets.
The Company is a party to an agreement with an LLC formed as an insurance association captive (the “Captive”), which
is wholly-owned by the Company, two related parties, Inland Real Estate Corporation and Inland American Real Estate
Trust, Inc. The Captive is serviced by a related party, Inland Risk and Insurance Management Services Inc. for a fee of
$25 per quarter. The Company entered into the agreement with the Captive to stabilize its insurance costs, manage its
exposures and recoup expenses through the functions of the Captive program. The Captive was initially capitalized with
$750 in cash in 2006, of which the Company’s initial contribution was $188. Additional contributions were made in the
form of premium payments to the Captive determined for each member based upon its respective loss experiences. The
Captive insures a portion of the members’ property and general liability losses. These losses will be paid by the Captive
up to and including a certain dollar limit, after which the losses are covered by a third-party insurer. It has been
determined that under FIN 46(R), the Captive is a variable interest entity and the Company is the primary
beneficiary. Therefore, the Captive has been consolidated by the Company. The other members’ interests are reflected
as “Noncontrolling interests” in the accompanying consolidated financial statements.
Noncontrolling interests are adjusted for additional contributions by noncontrolling interest holders’ and distributions to
noncontrolling interest holders’, as well as the noncontrolling interest holders’ share of the net income or losses of each
respective entity.
(2) Summary of Significant Accounting Policies
Revenue Recognition: The Company commences revenue recognition on its leases based on a number of factors. In
most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of
the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for
accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition
under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased
asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically
when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting
purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any
tenant improvement allowances funded under the lease are treated as lease incentives which reduce revenue recognized
over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes
possession of the unimproved space for the lessee to construct their own improvements. The Company considers a
8
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting
purposes. These factors include:

whether the lease stipulates how and on what a tenant improvement allowance may be spent;

whether the tenant or the Company retains legal title to the improvements;

the uniqueness of the improvements;

the expected economic life of the tenant improvements relative to the length of the lease;

who constructs or directs the construction of the improvements, and

whether the tenant or the Company is obligated to fund cost overruns.
The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment. In
making that determination, the Company considers all of the above factors. No one factor, however, necessarily
establishes its determination.
Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income
earned on a straight-line basis and the cash rent due under the provisions of the lease is recorded as deferred rent
receivable and is included as a component of “Accounts and notes receivable” in the accompanying consolidated balance
sheets.
Reimbursements from tenants for recoverable real estate taxes and operating expenses are accrued as revenue in the
period the applicable expenditures are incurred. The Company makes certain assumptions and judgments in estimating
the reimbursements at the end of each reporting period.
The Company records lease termination income if there is a signed termination letter agreement, all of the conditions of
the agreement have been met, the tenant is no longer occupying the property and collectability is reasonably
assured. Upon early lease termination, the Company provides for losses related to recognized intangibles and other assets
or adjusts the attribution period of the assets if determined to be appropriate, in accordance with its policy related to loss
on lease terminations.
Staff Accounting Bulletin (SAB) No. 104: Revenue Recognition , provides that a lessor should defer recognition of
contingent rental income (i.e. purchase/excess rent) until the specified target (i.e. breakpoint) that triggers the contingent
rental income is achieved. The Company records percentage rental income in accordance with SAB No. 104.
In conjunction with certain acquisitions, the Company receives payments under master lease agreements pertaining to
certain non-revenue producing spaces either at the time of, or subsequent to, the purchase of these properties. Upon
receipt of the payments, the receipts are recorded as a reduction in the purchase price of the related properties rather than
as rental income. These master leases were established at the time of purchase in order to mitigate the potential negative
effects of loss of rent and expense reimbursements. Master lease payments are received through a draw of funds
escrowed at the time of purchase and generally cover a period from three months to three years. These funds may be
released to either the Company or the seller when certain leasing conditions are met. The Company received $839 and
$970 of these payments during the three months ended March 31, 2009 and 2008, respectively.
The Company accounts for profit recognition on sales of real estate in accordance with SFAS No. 66: Accounting for
Sales of Real Estate . In summary, profits from sales are not recognized under the full accrual method by the Company
unless a sale is consummated; the buyer’s initial and continuing investments are adequate to demonstrate a commitment to
pay for the property; the Company’s receivable, if applicable, is not subject to future subordination; the Company has
transferred to the buyer the usual risks and rewards of ownership; and the Company does not have substantial continuing
involvement with the property. During the three months ended March 31, 2009, the Company sold one investment
property. Refer to Note 3 for further information. No investment properties were sold during the three months ended
March 31, 2008.
9
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Cash and Cash Equivalents : The Company considers all demand deposits, money market accounts and investments in
certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of
purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The
combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation
(FDIC) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess
of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate
the financial institutions' non-performance.
Marketable Securities: Investments in marketable securities are classified as “available for sale” and accordingly are
carried at fair value, with unrealized gains and losses reported as a separate component of shareholders’ equity. Declines
in the value of these investments in marketable securities that the Company determines are other-than-temporary are
recorded as recognized loss on marketable securities.
To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent
to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment
is recoverable outweighs evidence to the contrary, amongst other things. Evidence considered in this assessment includes
the nature of the investment, the reasons for the impairment (i.e. credit or market related), the severity and duration of the
impairment, changes in value subsequent to the end of the reporting period and forecasted performance of the
investee. All available information is considered in making this determination with no one factor being determinative.
Investment Properties: Investment properties are recorded at cost less accumulated depreciation. Ordinary repairs and
maintenance are expensed as incurred.
In December 2007, the FASB issued SFAS No. 141(R): Business Combinations . SFAS No. 141(R) establishes
principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase, if any; and determines what information to
disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
SFAS No. 141(R) was effective for business combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2008. The Company adopted SFAS No. 141(R) on
January 1, 2009 and all subsequent real estate acquisitions are accounted for under this standard, as the Company believes
most operating real estate assets meet the revised definition of a business under SFAS No. 141(R).
The Company allocates the purchase price of each acquired investment property between land, building and
improvements, acquired above market and below market lease intangibles, in-place lease value, any assumed financing
that is determined to be above or below market, the value of customer relationships, if any, and goodwill if determined, to
meet the definition of a business under SFAS No. 141(R). The allocation of the purchase price is an area that requires
judgment and significant estimates. Beginning in 2009, transaction costs associated with any acquisitions are expensed as
incurred. In some circumstances, the Company engages independent real estate appraisal firms to provide market
information and evaluations that are relevant to the Company’s purchase price allocations; however, the Company is
ultimately responsible for the purchase price allocations. The Company determines whether any financing assumed is
above or below market based upon comparison to similar financing terms at the time of acquisition for similar investment
properties. The Company allocates a portion of the purchase price to the estimated acquired in-place lease value based on
estimated lease execution costs for similar leases as well as lost rent payments during an assumed lease-up period when
calculating as-if-vacant fair values. The Company considers various factors including geographic location and size of the
leased space. The Company also evaluates each significant acquired lease based upon current market rates at the
acquisition date and considers various factors including geographical location, size and location of the leased space within
the investment property, tenant profile, and the credit risk of the tenant in determining whether the acquired lease is above
or below market. If an acquired lease is determined to be above or below market, the Company allocates a portion of the
purchase price to such above or below market leases based upon the present value of the difference between the
contractual lease rate and the estimated market rate. For below market leases with fixed rate renewals, renewal periods
10
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
are included in the calculation of below market lease values. The determination of the discount rate used in the present
value calculation is based upon a risk adjusted rate. This discount rate is a significant factor in determining the market
valuation which requires the Company’s evaluation of subjective factors such as market knowledge, economics,
demographics, location, visibility, age and physical condition of the property.
The portion of the purchase price allocated to acquired in-place lease intangibles is amortized on a straight-line basis over
the life of the related lease as a component of depreciation and amortization expense. The Company incurred
amortization expense pertaining to acquired in-place lease intangibles of $12,210 and $13,080 for the three months ended
March 31, 2009 and 2008, respectively.
The portion of the purchase price allocated to acquired above market lease value and acquired below market lease value is
amortized on a straight-line basis over the life of the related lease as an adjustment to rental income and over the
respective renewal period for below market lease value with fixed rate renewals. Amortization pertaining to the above
market lease value of $1,647 and $1,794 for the three months ended March 31, 2009 and 2008, respectively, was applied
as a reduction to rental income. Amortization pertaining to the below market lease value of $2,257 and $2,443 was
applied as an increase to rental income for the three months ended March 31, 2009 and 2008, respectively.
Depreciation expense is computed using the straight-line method. Buildings and improvements are depreciated based
upon estimated useful lives of 30 years for buildings and associated improvements and 15 years for site improvements and
most other capital improvements. Tenant improvements and leasing fees are amortized on a straight-line basis over the
life of the related lease as a component of depreciation and amortization expense.
Assets Held For Sale : In determining whether to classify an asset as held for sale, the Company considers whether: (i)
management has committed to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition;
(iii) the Company has initiated a program to locate a buyer; (iv) the Company believes that the sale of the asset is
probable; (v) the Company has received a significant non-refundable deposit for the purchase of the property; (vi) the
Company is actively marketing the asset for sale at a price that is reasonable in relation to its current value, and (vii)
actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be
made.
If all of the above criteria are met, the Company classifies the asset as held for sale. When these criteria are met, the
Company suspends depreciation (including depreciation for tenant improvements and building improvements) and
amortization of acquired in-place lease value and customer relationship values. The assets and liabilities associated with
those assets that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting
period. Additionally, the operations for the periods presented are classified on the consolidated statements of operations
and other comprehensive (loss) income as discontinued operations for all periods presented. There were no assets held
for sale at March 31, 2009 and one multi-tenant property held for sale at December 31, 2008. Refer to Note 3 for more
information.
Impairment: In accordance with SFAS No. 144: Accounting for the Impairment or Disposal of Long-Lived Assets , the
Company’s investment properties, including developments in progress, are reviewed for potential impairment whenever
events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment indicators are
assessed separately for each property and include, but are not limited to, significant decreases in property net operating
income and occupancy percentages. Impairment indicators for developments in progress are assessed by project and
include, but are not limited to, significant changes in project completion dates, development costs and market factors.
In accordance with EITF Issue No 08-6: Equity Method Investment Accounting Considerations and Accounting Principles
Board (APB) Opinion No. 18: The Equity Method of Accounting for Investments in Common Stock and SAB No. 59:
Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities , as amended by SAB No. 111,
the Company’s investments in unconsolidated joint ventures are reviewed for potential impairment, including impairment
evaluations of the individual assets underlying these investments, whenever events or changes in circumstances warrant
such an evaluation.
11
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
If an indicator of potential impairment exists, the asset would be tested for recoverability by comparing its carrying value
to the estimated future undiscounted operating cash flows, which is based upon many factors which require difficult,
complex or subjective judgments to be made. Such assumptions include, but are not limited to, projecting vacancy rates,
rental rates, operating expenses, lease terms, tenant financial strength, economy, demographics, property location, capital
expenditures and sales value. An investment property is considered to be impaired when the estimated future
undiscounted operating cash flows are less than its carrying value. To the extent an impairment has occurred, the excess
of the carrying value of the asset over its estimated fair value is recorded as a provision for asset impairment. Based upon
the Company’s judgment, an impairment loss of $20,400 was warranted for the three months ended March 31, 2009
related to one of the Company’s operating properties. No impairment was warranted for the three months ended March
31, 2008. No impairment was warranted for the three months ended March 31, 2009 and 2008, related to the Company’s
investment in unconsolidated joint ventures.
Loss on Lease Terminations : In situations in which a lease or leases associated with a significant tenant have been or
are expected to be terminated early, the Company evaluates the remaining useful lives of depreciable or amortizable assets
in the asset group related to the lease that will be terminated (i.e., tenant improvements, above and below market lease
intangibles, in-place lease intangibles, and customer relationship intangibles). Based upon consideration of the facts and
circumstances of the termination, the Company may write-off or accelerate the depreciation and amortization associated
with the applicable asset group over the shortened remaining lease period. If the Company concludes that a write-off of
the asset group is appropriate, such charges are reported in the consolidated statements of operations as “Loss on lease
terminations.” The Company recorded loss on lease terminations of $5,735 and $3,124 for the three months ended March
31, 2009 and 2008, respectively.
Conditional Asset Retirement Obligations : In accordance with FIN 47: Accounting for Conditional Asset Retirement
Obligations , the Company evaluates the potential impact of conditional asset retirement obligations on its consolidated
financial statements. FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS No. 143:
Accounting for Asset Retirement Obligations refers to a legal obligation to perform an asset retirement activity in which
the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the
entity. Thus, the timing and/or method of settlement may be conditional on a future event. FIN 47 also clarifies when an
entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. Based
upon the Company’s evaluation, the accrual of a liability for asset retirement obligations was not warranted as of March
31, 2009 and December 31, 2008.
Development Projects : The Company capitalizes costs incurred during the development period such as construction,
insurance, architectural, legal, interest and other financing costs, and real estate taxes. At such time as the development is
considered substantially complete, those costs included in construction in progress are reclassified to land and building
and other improvements. Development payables of $2,798 and $4,339 at March 31, 2009 and December 31, 2008,
respectively, consist of costs incurred and not yet paid pertaining to these development projects and are included in
“Accounts payable and accrued expenses” on the accompanying consolidated balance sheets.
Partially-Owned Entities : If the Company determines that it is an owner in a variable interest entity within the meaning
of FIN 46(R) and that its variable interest will absorb a majority of the entity’s expected losses, receive a majority of the
entity’s expected residual returns, or both, then it will consolidate the entity. Following consideration under FIN 46(R),
in accordance with EITF No. 04-5, the Company evaluates applicable partially-owned entities for consolidation. At issue
in EITF No. 04-5 is what rights held by the limited partner(s) preclude consolidation in circumstances in which the
general partner would consolidate the limited partnership in accordance with GAAP. The Company generally
consolidates entities (in the absence of other factors when determining control) when it has over a 50% ownership interest
in the entity. However, the Company also evaluates who controls the entity even in circumstances in which it has greater
than a 50% ownership interest in accordance with SOP No. 78-9. If the Company does not control the entity due to the
lack of decision-making abilities, it will not consolidate the entity.
12
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Notes Receivable: Notes receivable relate to real estate financing arrangements and are recorded at fair value based on
the borrower's credit quality and are recorded at face value. Interest income is recognized over the life of the note using
the effective interest method and the Company generally requires collateral. The Company has not and does not intend to
sell these receivables. Amounts collected on notes receivable are included in net cash provided by (used in) investing
activities in the consolidated statements of cash flows.
Notes receivable are evaluated for impairment in accordance with SFAS No. 114: Accounting by Creditors for
Impairment of a Loan . The allowance for uncollectable notes receivable is the Company’s best estimate of the amount of
credit losses in the Company’s existing notes. The allowance is determined upon a review of the applicable facts and
circumstances. A note is impaired if it is probable that the Company will not collect all principal and interest
contractually due. The impairment is measured based on the present value of expected future cash flows discounted at the
note’s effective interest rate. The Company does not accrue interest when a note is considered impaired. When ultimate
collectability of the principal balance of the impaired note is in doubt, all cash receipts on the impaired note are applied to
reduce the principal amount of the note until the principal has been recovered and is recognized as interest income
thereafter. Based upon the Company’s judgment, one note receivable with a balance of $300 was impaired and fully
reserved for as of March 31, 2009 and December 31, 2008 and is included in the allowance for doubtful accounts in the
consolidated balance sheets.
Allowance for Doubtful Accounts : The Company periodically evaluates the collectability of amounts due from tenants
and maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make
required payments under their lease agreements. The Company also maintains an allowance for receivables arising from
the straight-lining of rents. This receivable arises from revenue recognized in excess of amounts currently due under the
lease agreements. Management exercises judgment in establishing these allowances and considers payment history and
current credit status in developing these estimates.
Rental Expense : Rental expense associated with land and office space that the Company leases under non-cancellable
operating leases is recorded on a straight-line basis over the term of each lease. The difference between rental expenses
incurred on a straight-line basis and rent payments due under the provisions of the lease agreement is recorded as a
deferred liability and is included as a component of “Other liabilities” in the accompanying consolidated balance
sheets. See Note 7 for additional information pertaining to these leases.
Restricted Cash and Escrows : Restricted cash and escrows include funds received by third party escrow agents from
sellers pertaining to master lease agreements. The Company records the third party escrow funds as both an asset and a
corresponding liability, until certain leasing conditions are met. Restricted cash and escrows also consist of lenders'
escrows and funds restricted through joint venture arrangements and is included as a component of “Other assets” in the
accompanying consolidated balance sheets.
Loan Fees: Loan fees are amortized using the effective interest method over the life of the related loans as a component
of interest expense.
Derivative Instruments and Hedging Activities: The Company adopted SFAS No. 161: Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133 as of January 1, 2009. SFAS No. 161
amends and expands the disclosure requirements of SFAS No. 133: Accounting for Derivative Instruments and Hedging
Activities with the intent to provide users of financial statements with an enhanced understanding of (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS
No. 133 and its related interpretations, and (c) how derivative instruments and the related hedged items affect an entity’s
financial position, financial performance and cash flows. SFAS No. 161 requires qualitative disclosures about objectives
and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative
instruments, and disclosures about credit-risk-related contingent features in derivative instruments.
In accordance with SFAS No. 133, all derivatives are recorded on the consolidated balance sheets at their fair values
within “Other assets” or “Other liabilities.” On the date that the Company enters into a derivative, it designates the
13
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
derivative as a hedge against the variability of cash flows that are to be paid in connection with a recognized liability.
Subsequent changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly
effective are recorded in other comprehensive (loss) income, until earnings are affected by the variability of cash flows of
the hedged transactions. Any hedge ineffectiveness is reported in net (loss) income. The Company does not use
derivatives for trading or speculative purposes.
New Accounting Pronouncements
In April 2009, the FASB issued three related Staff Positions (FSP) to clarify the application of SFAS No. 157 to fair
value measurements in the current economic environment, modify the recognition of other-than-temporary impairments
of debt securities, and require companies to disclose the fair values of financial instruments in interim periods. These
Staff Positions, as more fully discussed below, are effective for interim and annual periods ending after June 15, 2009,
with early adoption permitted for periods ending after March 15, 2009. The Company elected to early adopt the three
Staff Positions as of January 1, 2009.

FSP No. 157-4: Determining Fair Value When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not Orderly provides guidance
related to calculating fair value in a disorderly market or a market with little activity. The adoption of FSP
No l57-4 did not have a material impact on the Company's consolidated financial statements as (a) its fair
value measurements of investments in marketable securities are Level 1 fair value measurements, (b) its
fair value measurements of derivative instruments are based on the current and forward term structures of
interest rates for which there has not been a significant decline in the volume and level of activity, and (c)
although its fair value measurements for SFAS No. 107 disclosure purposes, as amended by FSP FAS
107-1, are determined in accordance with SFAS No. 157, the carrying values of the majority of these
items approximate their fair values and are based on inputs for which the volume and level of activity
have not significantly decreased;

FSP No. FAS 115-2 and FAS 124-2: Recognition and Presentation of Other-Than-Temporary
Impairments defines other-than-temporary impairment as it relates to debt securities. The Company's
investments in marketable securities primarily consist of perpetual preferred stock of other publicly
traded real estate companies However, given the credit characteristics associated with these securities,
the Company treats these securities as equity securities and accordingly the adoption of FSP No. 157-2
and FAS 124-2 did not have a material impact on the Company's consolidated financial statements;

FSP No. FAS 107-1 and APB 28-1: Interim Disclosures about Fair Value of Financial Instruments
requires enhanced interim fair value disclosures similar to the required annual disclosures. The adoption
of FSP No. FAS 107-1 and APB 28--1 resulted in certain incremental disclosures as presented within
Note 16.
(3) Discontinued Operations and Assets Held for Sale
The Company employs a business model which utilizes asset management as a key component of monitoring its
investment properties to ensure that each property continues to meet expected investment returns and standards. This
strategy calls for the Company to sell properties that do not measure up to its standards and re-deploy the sales proceeds
into new, higher quality acquisitions and developments that are expected to generate sustainable revenue growth and more
attractive returns.
On January 15, 2009, the Company closed on the sale of an approximately 172,000 square foot multi-tenant lifestyle
center located in Larkspur, California, with a sales price of $65,000, which resulted in net sales proceeds of $31,111 and a
gain on sale of $12,212 as the criteria under the full accrual method were met as of this date. The sale resulted in the
repayment of $33,630 of debt. This property qualified for held for sale accounting treatment during the fourth quarter of
2008, at which time depreciation and amortization ceased since it met all of the Company’s held for sale criteria. As
such, the assets and liabilities are separately classified on the consolidated balance sheets as of December 31, 2008 and the
14
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
operations for all periods presented are classified as discontinued operations on the consolidated statements of operations
and other comprehensive (loss) income.
The Company does not allocate general corporate interest expense to discontinued operations. Income from discontinued
operations had an impact on (loss) income per common share (basic and diluted) of $0.03 and none for the three months
ended March 31, 2009 and 2008, respectively.
The results of operations for the investment property sold during the three months ended March 31, 2009 are presented in
the table below:
The following assets and liabilities relate to the above investment property which was classified as held for sale as of
December 31, 2008.
(4) Transactions with Related Parties
An Inland affiliate, who is a registered investment advisor, provides investment advisory services to the Company related
to the Company’s securities investment account for a fee (paid monthly) of up to one percent per annum based upon the
aggregate fair value of the Company’s assets invested. The Inland affiliate has full discretionary authority with respect to
the investment and reinvestment and sale (including by tender) of all securities held in that account, subject to investment
15
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
guidelines the Company provides to them. The Inland affiliate has also been granted power to vote all investments held
in the account. The Company incurred fees totaling none and $488 for the three months ended March 31, 2009 and 2008
respectively. As of March 31, 2009 and December 31, 2008, fees of $160 remained unpaid. The agreement is
non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice and
specification of the effective date of said termination. Effective for the period from November 1, 2008 through
September 30, 2009, the investment advisor has agreed to waive all fees due at the request of the Company.
An Inland affiliate provides loan servicing for the Company for a monthly fee based upon the number of loans being
serviced. Such fees totaled $97 and $107 for the three months ended March 31, 2009 and 2008, respectively. As of
March 31, 2009 and December 31, 2008, none remained unpaid. The agreement is non-exclusive as to both parties and is
cancellable by providing not less than 180 days prior written notice and specification of the effective date of said
termination.
An Inland affiliate facilitates the mortgage financing the Company obtains on some of its properties. The Company pays
the Inland affiliate 0.2% of the principal amount of each loan obtained on the Company’s behalf. Such costs are
capitalized as loan fees and amortized over the respective loan term as a component of interest expense. For the three
months ended March 31, 2009 and 2008, respectively, the Company had incurred no loan fees to this Inland affiliate. The
agreement is non-exclusive as to both parties and is cancellable by providing not less than 180 days prior written notice
and specification of the effective date of said termination.
The Company has a property acquisition agreement and a transition property due diligence services agreement with an
Inland affiliate. In connection with the Company’s acquisition of new properties, the Inland affiliate will give the
Company a first right as to all retail, mixed use and single-user properties and, if requested, provide various services
including services to negotiate property acquisition transactions on the Company’s behalf and prepare suitability, due
diligence, and preliminary and final pro forma analyses of properties proposed to be acquired. The Company will pay all
reasonable third party out-of-pocket costs incurred by this entity in providing such services; pay an overhead cost
reimbursement of $12 per transaction, and, to the extent these services are requested, pay a cost of $7 for due diligence
expenses and a cost of $25 for negotiation expenses per transaction. The Company incurred none and $19 of such costs
for the three months ended March 31, 2009 and 2008, respectively. None of these costs remained unpaid as of March 31,
2009 and December 31, 2008. The agreement is non-exclusive as to both parties and is cancellable by providing not less
than 180 days prior written notice and specification of the effective date of said termination.
The Company has an institutional investor relationships services agreement with an Inland affiliate. Under the terms of
the agreement, the Inland affiliate will attempt to secure institutional investor commitments in exchange for advisory and
client fees and reimbursement of project expenses. No such costs have been incurred by the Company during the three
months ended March 31, 2009 and 2008, respectively. The agreement is non-exclusive as to both parties and is
cancellable by providing not less than 180 days prior written notice and specification of the effective date of said
termination.
An Inland affiliate has a legal services agreement with the Company, where that Inland affiliate will provide the Company
with certain legal services in connection with the Company’s real estate business. The Company will pay the Inland
affiliate for legal services rendered under the agreement on the basis of actual time billed by attorneys and paralegals at
the Inland affiliate's hourly billing rate then in effect. The billing rate is subject to change on an annual basis, provided,
however, that the billing rates charged by the Inland affiliate will not be greater than the billing rates charged to any other
client and will not be greater than 90% of the billing rate of attorneys of similar experience and position employed by
nationally recognized law firms located in Chicago, Illinois performing similar services. For the three months ended
March 31, 2009 and 2008, the Company incurred $183 and $37, respectively of these costs. $240 and $189 of these costs
remained unpaid as of March 31, 2009 and December 31, 2008, respectively. The agreement is non-exclusive as to both
parties and is cancellable by providing not less than 180 days prior written notice and specification of the effective date of
said termination.
16
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
The Company has consulting agreements with Daniel L. Goodwin, Robert D. Parks, the Company’s chairman, and G.
Joseph Cosenza, who each provide it with strategic assistance for the term of their respective agreement including making
recommendations and providing guidance to the Company as to prospective investment, financing, acquisition,
disposition, development, joint venture and other real estate opportunities contemplated from time to time by it and its
board of directors. The consultants also provide additional services as may be reasonably requested from time to time by
the Company’s board of directors. The term of each agreement runs until November 15, 2010 unless terminated
earlier. The Company may terminate these consulting agreements at any time. The consultants do not receive any
compensation for their services, but the Company is obligated to reimburse their ordinary and necessary out-of-pocket
business expenses in fulfilling their duties under the consulting agreements. There were no reimbursements required
under the consulting agreements for the three months ended March 31, 2009 and 2008.
The Company has service agreements with certain Inland affiliates, including its office and facilities management
services, insurance and risk management services, computer services, personnel services, property tax services and
communications services. Generally, these agreements provide that the Company obtain certain services from the Inland
affiliates through the reimbursement of a portion of their general and administrative costs. For the three months ended
March 31, 2009 and 2008, the Company incurred $974 and $412, respectively, of these reimbursements. Of these costs,
$447 and $209 remained unpaid as of March 31, 2009 and December 31, 2008, respectively. The services are to be
provided on a non-exclusive basis in that the Company shall be permitted to employ other parties to perform any one or
more of the services and that the applicable counterparty shall be permitted to perform any one or more of the services to
other parties. The agreements have various expiration dates but are cancellable by providing not less than 180 days prior
written notice and specification of the effective date of said termination.
The Company subleases its office space from an Inland affiliate. The lease calls for annual base rent of $496 and
additional rent in any calendar year of its proportionate share of taxes and common area maintenance costs. Additionally,
the Inland affiliate paid certain tenant improvements under the lease in the amount of $395 and such improvements are
being repaid by the Company over a period of five years. The sublease calls for an initial term of five years which
expires in November 2012, with one option to extend for an additional five years. None of these costs remained unpaid
as of March 31, 2009 and December 31, 2008.
(5) Marketable Securities
Investment in marketable securities of $88,106 and $118,421 (original cost basis of $285,127 and $296,457 respectively)
as of March 31, 2009 and December 31, 2008 respectively, consists of preferred and common stock investments which are
classified as available-for-sale and recorded at fair value. Unrealized holding gains and losses on available-for-sale
securities are excluded from earnings and reported as a separate component of other comprehensive (loss) income until
realized. Recognized gains and losses from the sale of available-for-sale securities are determined on a specific
identification basis. Dividend income is recognized when earned.
Net unrealized (losses) gains were equal to $(22,937) and $1,324 for the three months ended March 31, 2009 and 2008,
respectively. During the three months ended March 31, 2009 and 2008, the Company recognized losses of $24,709 and
$8,036, respectively, related to declines in the value of securities which were determined to be other-than-temporary. In
addition, during the three months ended March 31, 2009 and 2008, the Company recognized net (losses) gains of $(2,239)
and $226, respectively, on sales of securities.
During the three months ended March 31, 2009 and 2008, dividend income of $3,484 and $5,336, respectively, was
earned on marketable securities and is included in “Dividend income” in the accompanying consolidated statements of
operations. For the three months ended March 31, 2009 and the year ended December 31, 2008, $1,360 and $2,062,
respectively, of dividend income remained unpaid, respectively, and is included in “Other assets” in the accompanying
consolidated balance sheets.
Of the investments held as of March 31, 2009, the Company had gross unrealized gains of $2,134 and gross unrealized
losses of $555 recorded in accumulated other comprehensive loss. The Company does not consider the investments with
17
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
gross unrealized losses to be other than temporarily impaired as of March 31, 2009. However, without recovery in the
near term such that liquidity returns to the markets and spreads return to levels that reflect underlying credit quality,
additional other-than-temporary impairment losses may occur in future periods. The Company evaluates investments for
impairment quarterly. If the Company concludes that an investment is other than temporarily impaired, an impairment
charge will be recognized at that time. As a result of an overall improvement in the market, net unrealized gains totaled
$21,595 as of April 30, 2009.
Gross unrealized losses on marketable securities and the fair value of the related securities, aggregated by investment
category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2009
were as follows:
This table includes 13 security positions which were in an unrealized loss position at March 31, 2009.
The Company purchases a portion of its securities through a margin account. As of March 31, 2009 and December 31,
2008, the Company had recorded a payable of $41,736 and $56,340, respectively, for securities purchased on margin
which is included in “Mortgages and notes payable” in the accompanying consolidated balance sheets. This debt bears a
variable interest rate of London InterBank Offered Rate (LIBOR) plus 35 basis points. At March 31, 2009, this rate was
equal to 0.86%. Interest expense on this debt in the amount of $107 and $1,141 was recognized within “Interest expense”
on the accompanying consolidated statements of operations for the three months ended March 31, 2009 and 2008,
respectively. This debt is due on demand. The value of the Company’s marketable securities serves as collateral for this
debt.
(6) Stock Option Plan
The Company’s Independent Director Stock Option Plan (Plan), as amended, provides, subject to certain conditions, for
the grant to each independent director of options to acquire shares following their becoming a director and for the grant of
additional options to acquire shares on the date of each annual shareholders’ meeting.
As of March 31, 2009 and December 31, 2008, there had been a total of 70 options granted, none of which had been
exercised or expired.
The Company calculates the per share weighted average fair value of options granted on the date of the grant using the
Black Scholes option pricing model utilizing certain assumptions regarding the expected dividend yield, risk free interest
rate, expected life and expected volatility rate. Expense of $4 and $3 related to these stock options was recorded during
the three months ended March 31, 2009 and 2008, respectively.
(7) Leases
Master Lease Agreements
In conjunction with certain acquisitions, the Company receives payments under master lease agreements pertaining to
certain non-revenue producing spaces at the time of purchase for periods generally ranging from three months to three
years after the date of purchase or until the spaces are leased. As these payments are received, they are recorded as a
reduction in the purchase price of the respective property rather than as rental income. The cumulative amount of such
payments was $26,185 and $25,346, as of March 31, 2009 and December 31, 2008, respectively.
18
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Operating Leases
The majority of revenues from the Company’s properties consist of rents received under long-term operating
leases. Some leases provide for the payment of fixed base rent paid monthly in advance, and for the reimbursement by
tenants to the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special
assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the
landlord and recoverable under the terms of the lease. Under these leases, the landlord pays all expenses and is
reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid. Certain other tenants are subject to
net leases which provide that the tenant is responsible for fixed based rent as well as all costs and expenses associated
with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such
expenses are not included on the accompanying consolidated statements of operations. Under net leases where all
expenses are paid by the landlord, subject to reimbursement by the tenant, the expenses are included in “Property
operating expenses” and reimbursements are included in “Tenant recovery income” on the accompanying consolidated
statements of operations.
In certain municipalities, the Company is required to remit sales taxes to governmental authorities based upon the rental
income received from properties in those regions. These taxes may be reimbursed by the tenant to the Company
depending upon the terms of the applicable tenant lease. As with other recoverable expenses, the presentation of the
remittance and reimbursement of these taxes is on a gross basis whereby sales tax expenses are included in “Property
operating expenses” and sales tax reimbursements are included in “Other property income” on the accompanying
consolidated statements of operations. Such taxes remitted to governmental authorities and reimbursed by tenants were
$535 and $614, for the three months ended March 31, 2009 and 2008, respectively.
In certain properties where there are large tenants, other tenants may have co-tenancy provisions within their lease that
requires that if certain large tenants or "shadow" tenants discontinue operations, a right of termination or reduced rent may
exist.
The Company leases land under non-cancellable operating leases at certain of its properties expiring in various years from
2018 to 2105. For the three months ended March 31, 2009 and 2008, ground lease rent expense was $2,511 and $2,341,
respectively, and is included in “Property operating expenses” on the accompanying consolidated statements of
operations. In addition, the Company leases office space for certain management offices from third parties and the
Company subleases its corporate office space from an Inland affiliate. For the three months ended March 31, 2009 and
2008, office rent expense was $192 and $225, respectively and is included in “Property operating expenses” in the
accompanying consolidated statements of operations.
19
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(8) Notes Receivable
The Company has provided mortgage and development financing to third-parties.
The following table summarizes the Company’s notes receivable at March 31, 2009 and December 31, 2008:
(9) Mortgages and Notes Payable
The following table summarizes the Company’s mortgages and notes payable at March 31, 2009 and December 31, 2008.
Mortgages Payable
Mortgage loans outstanding as of March 31, 2009 were $4,290,001 and had a weighted average interest rate of 4.89%. Of
this amount, $4,074,325 had fixed rates ranging from 3.99% to 8.00% and a weighted average fixed rate of
5.01%. Excluding the mortgage debt assumed from sellers at acquisition and debt of consolidated joint venture
investment, the highest fixed rate on the Company’s mortgage debt was 8.0%. The remaining $215,676 of outstanding
indebtedness represented variable rate loans with a weighted average interest rate of 2.64%. Properties with a net
carrying value of
20
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
$6,136,190 at March 31, 2009 and related tenant leases are pledged as collateral. As of March 31, 2009, scheduled
maturities for the Company’s outstanding mortgage indebtedness had various due dates through March 1, 2037.
Mortgage loans outstanding as of December 31, 2008 were $4,295,834 and had a weighted average interest rate of 4.88%.
Of this amount, $4,060,067 had fixed rates ranging from 3.99% to 7.48% and a weighted average fixed rate of
4.94%. Excluding the mortgage debt assumed from sellers at acquisition and debt of consolidated joint venture
investments, the highest fixed rate on the Company’s mortgage debt was 5.94%. The remaining $235,767 of outstanding
indebtedness represented variable rate loans with a weighted average interest rate of 3.81%. Properties with a net
carrying value of $6,158,082 at December 31, 2008 and related tenant leases are pledged as collateral. As of December
31, 2008, scheduled maturities for the Company’s outstanding mortgage indebtedness had various due dates through
March 1, 2037.
The majority of the Company’s mortgage loans require monthly payments of interest only, although some loans require
principal and interest payments, as well as reserves for taxes, insurance, and certain other costs. Although the loans
placed by the Company are generally non-recourse, occasionally, when it is deemed to be advantageous, the Company
may guarantee all or a portion of the debt on a full-recourse basis. The Company guarantees a percentage of the
construction loans on four of its consolidated development joint ventures. These guarantees earn a fee of approximately
1% of the loan amount and are released upon certain pre-leasing requirements. At times, the Company has borrowed
funds financed as part of a cross-collateralized package, with cross-default provisions, in order to enhance the financial
benefits. In those circumstances, one or more of the properties may secure the debt of another of the Company’s
properties.
Notes Payable
Notes payable outstanding as of March 31, 2009 and December 31, 2008, were $50,404 and $50,428, respectively. Of
these amounts, $50,000 represented a note payable to an unconsolidated joint venture. The note bears interest at 4.80%
and is to be repaid on the earlier to occur of (i) an event of default, as defined, or (ii) upon termination of the
unconsolidated joint venture’s operating agreement. The Company has the right to prepay the note without penalty. The
remaining $404 and $428, respectively, is a ten year $600 note, net of amortization, with a third party that bears interest at
a rate of 2%.
Derivative Instruments and Hedging Activities
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The
Company principally manages its exposures to a wide variety of business and operational risks through management of its
core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily
by managing the amount, sources, and duration of its debt funding and, to a limited extent, the use of derivative
instruments.
Specifically, the Company has entered into derivative instruments to manage exposures that arise from business activities
that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest
rates. The Company’s derivative instruments, described below, are used to manage differences in the amount, timing, and
duration of the Company’s known or expected cash payments principally related to certain of the Company’s borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its
exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its
interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of
variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the
agreements without exchange of the underlying notional amount.
21
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is
recorded in “Accumulated other comprehensive loss” and is subsequently reclassified into earnings in the period that the
hedged forecasted transaction affects earnings. As of March 31, 2009 and December 31, 2008, the Company’s intent is to
remain a party to the derivative contracts described more fully below. Accordingly, no amounts classified in accumulated
other comprehensive loss are expected to be reclassified in the next 12 months. During 2008, the Company executed two
interest rate swaps, as noted above and described more fully below, to hedge the variable cash flows associated with
existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in
earnings.
As of March 31, 2009 and December 31, 2008, the Company had two interest rate derivatives outstanding with the
following terms. In May 2008, the Company entered into an interest rate swap with a notional amount of $8,250 for a
five-year term. This swap was executed to hedge the interest rate risk associated with a variable-rate borrowing that
effectively converts one-month LIBOR into a fixed-rate of approximately 3.81% for $8,250 of term loan debt. In June
2008, the Company entered into an interest rate swap with a notional amount of $75,000 for a three-year term. This swap
was executed to hedge the interest rate risk associated with a variable-rate borrowing that effectively converts one-month
LIBOR into a fixed-rate of approximately 4.06% for $75,000 of term loan debt. The Company does not use derivatives
for trading or speculative purposes and currently does not have any derivatives other than as described above.
The table below presents the fair value of the Company’s interest rate swaps as well as their classification on the
consolidated balance sheets as of March 31, 2009 and December 31, 2008.
As of March 31, 2009 and December 31, 2008 these interest rate swaps were determined to be highly effective and
accordingly no ineffectiveness was recorded relative to these interest rate swaps. As of March 31, 2009 and December
31, 2008 there have been no termination events or events of default related to these interest rate swaps. In addition, the
Company has concluded that it is probable that the counterparty to these interest rate swaps will not default and it is
probable that the forecasted transactions will occur. The Company has no credit-risk contingent features in its agreements
with the counterparty.
Margin Payable
The Company purchases a portion of its securities through a margin account. As of March 31, 2009 and December 31,
2008, the Company had recorded a payable of $41,736 and $56,340, respectively, for securities purchased on
margin. This debt bears a variable interest rate of LIBOR plus 35 basis points. At March 31, 2009, this rate was equal to
0.86%. This debt is due upon demand. The value of the Company’s marketable securities serves as collateral for this
debt.
22
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
Debt Maturities
The following table shows the mortgages payable, notes payable, margin payable and line of credit maturities during the
next five years:
The maturity table excludes other financing obligations as described in Note 1.
(10) Line of Credit
On October 15, 2007, the Company entered into an unsecured credit agreement with KeyBank National Association and
other financial institutions for up to $225,000 with an optional unsecured borrowing capacity of $75,000, for a total
unsecured borrowing capacity of $300,000. The agreement has an initial term of three years with a one-year extension
option. The line of credit required interest-only payments monthly on the outstanding balance at the rate equal to LIBOR
plus 80 to 125 basis points depending on the ratio of the Company’s net worth to total recourse indebtedness. The
outstanding balances on the line of credit at March 31, 2009 and December 31, 2008 was $225,000. The Company was
also required to pay, on a quarterly basis, fees ranging from 0.125% to 0.20%, per annum, on the average daily undrawn
funds under this agreement. The credit agreement requires compliance with certain covenants, such as a leverage ratio,
fixed charge coverage, minimum net worth requirements, distribution limitations and investment restrictions, as well as
our ability to incur recourse indebtedness. The credit agreement also contains customary default provisions including the
failure to timely pay debt service payable thereunder, the failure to comply with the Company’s financial and operating
covenants, and the failure to pay when the Company’s consolidated indebtedness becomes due. In the event the
Company’s lenders declare a default, as defined in the credit agreement, this could result in an acceleration of any
outstanding borrowings.
On April 17, 2009, the Company entered into an amendment to the credit agreement. The terms of the amendment to the
credit agreement call for:

a reduction of the aggregate commitment from $225,000 to $200,000 at closing;

an initial collateral pool secured by first priority liens (assignment of partnership interests to be converted to
mortgage liens within 90 days of closing) in eight retail assets valued at approximately $200,000;

the requirement that the maximum advance rate on the appraised value of the initial collateral pool be 80%
beginning September 30, 2009;

pay down of the line from net proceeds of asset sales;

an assignment of corporate cash flow in the event of default;

an increase in interest rate to LIBOR (3% floor) plus 3.50%;
23
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)

an increase in the unused fees to 0.35% or to 0.50% depending on the undrawn amount;

the requirement for a comprehensive collateral pool subject to certain financial covenants related to loan-to-value
and debt service coverage (secured by mortgage interests in each asset) beginning March 31, 2010;

an agreement to prohibit redemptions of the Company’s common shares and limit the common dividend to no
more than the minimum level necessary to remain in compliance with the REIT regulations until March 31, 2010;
and

customary fees associated with the modification.
In exchange for these changes, certain of the financial covenants under the credit agreement have been modified, namely
the leverage ratio, minimum net worth and fixed charge coverage covenants, retroactive to January 1, 2009. As of March
31, 2009, the Company was in compliance with all financial covenants, as amended.
Certain of the Company’s subsidiaries are in maturity default on six non-recourse mortgage payables totaling
$54,945. Such maturities are subject to limits set forth in the credit agreement and if they grow to higher levels, could
cause a future default under the cross default provisions of the credit agreement. Debt service remains current on these
mortgages.
(11) Investment in Unconsolidated Joint Ventures
The following table summarizes the Company’s investments in unconsolidated joint ventures:
These investments are accounted for using the equity method of accounting. Under the equity method of accounting, the
net equity investment of the Company is reflected on the accompanying consolidated balance sheets and the
accompanying consolidated statements of operations includes the Company’s share of net income or loss from the
unconsolidated joint venture. Distributions from these investments that are related to income from operations are
included as operating activities and distributions that are related to capital transactions are included in investing activities
in the Company’s consolidated statements of cash flows.
Effective April 27, 2007, the Company formed a strategic joint venture (MS Inland) with a large state pension fund (the
“institutional investor”). Under the terms of the agreement the profits and losses of MS Inland are split 80% and 20%
between the institutional investor and the Company, respectively, except for the interest earned on the initial invested
funds, of which the Company is allocated 95%. The Company’s share of profits in MS Inland were $468 and $659 for
the three months ended March 31, 2009 and 2008, respectively. The Company received net operating cash distributions
from MS Inland totaling $1,118 and $1,587 for the three months ended March 31, 2009 and 2008, respectively.
The difference between the Company’s investment in MS Inland and the amount of the underlying equity in net assets of
MS Inland is due to basis differences resulting from the Company’s contribution of property assets at its historical net
book value versus the fair value of the contributed properties. Such differences are amortized over the depreciable lives
of MS Inland’s property assets. The Company recorded $80 and $80 of amortization related to this difference for the
three months ended March 31, 2009 and 2008, respectively.
MS Inland may acquire additional assets using leverage, consistent with its existing business plan, of approximately 50%
of the original purchase price, or current market value if higher. The Company is the managing member of MS Inland
and earns fees for providing property management, acquisition and leasing services to MS Inland. The Company earned
fees of $318 and $332 during the three months ended March 31, 2009 and 2008, respectively.
24
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
The ownership percentages associated with Hampton Retail Colorado (Hampton), at March 31, 2009 and December 31,
2008, are based upon the maximum capital contribution obligations under the terms of the partnership. The Company’s
share of net loss in Hampton was $1,004 for the three months ended March 31, 2009. During the year ended December
31, 2008, the partnership determined that the carrying values of certain of its assets were not recoverable and accordingly
recorded its portion of an impairment loss in the amount of $3,504.
The Company reviewed the carrying value of its investment in unconsolidated joint ventures and determined that no
impairment indicators existed as of March 31, 2009 and December 31, 2008.
(12) Segment Reporting
The Company owns multi-tenant shopping centers and single-user net lease properties across the United States. The
Company’s shopping centers are typically anchored by credit tenants, discount retailers, home improvement retailers,
grocery and drug stores complemented with additional stores providing a wide range of other goods and services to
shoppers.
The Company assesses and measures operating results of its properties based on net property operations. The Company
internally evaluates the operating performance of the properties as a whole and does not differentiate properties by
geography, size or type. In accordance with the provisions of SFAS No. 131: Disclosure about Segments of an Enterprise
and Related Information , each of the Company’s investment properties are considered a separate operating
segment. However, under the aggregation criteria of SFAS No. 131 and as clarified in EITF Issue No. 04-10:
Determining Whether to Aggregate Operating Segments that Do Not Meet the Quantitative Thresholds , the Company’s
properties are considered one reportable segment.
(13) Earnings per Share
Basic net (loss) income per share (EPS) is computed by dividing net (loss) income by the weighted average number of
common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net (loss)
income by the common shares plus shares issuable upon exercising options. As of March 31, 2009 and December 31,
2008, options to purchase 70 shares of common stock at the weighted average exercise price of $9.70 per share, were
outstanding. These options to purchase shares had an immaterial effect on diluted EPS.
The basic and diluted weighted average number of common shares outstanding was 478,662 and 484,612 for the three
months ended March 31, 2009 and 2008, respectively.
(14) Income Taxes
The Company has elected to be taxed as a REIT under the Internal Revenue Code. To qualify as a REIT, the Company
must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of
its adjusted taxable income to the Company’s shareholders. The Company intends to continue to adhere to these
requirements and to maintain its REIT status. As a REIT, the Company is entitled to a deduction for some or all of the
distributions it pays to shareholders. Accordingly, the Company generally will not be subject to federal income taxes as
long as it distributes an amount equal to or in excess of 90% of its taxable income currently to shareholders. The
Company is also generally subject to federal income taxes on any taxable income that is not currently distributed to its
shareholders. If the Company fails to qualify as a REIT in any table year, it will be subject to federal income taxes and
may not be able to qualify as a REIT for four subsequent taxable years.
REIT qualification reduces, but does not eliminate, the amount of state and local taxes the Company pays. In addition,
the Company’s consolidated financial statements include the operations of one wholly-owned subsidiary that has elected
to be treated as a TRS that is not entitled to a dividends paid deduction and is subject to corporate federal, state and local
income taxes. The Company recorded no income tax expense related to the TRS for the three months ended March 31,
2009 and 2008, as a result of a loss during these periods.
25
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
As a REIT, the Company may also be subject to certain federal excise taxes if it engages in certain types of
transactions. Deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and
liabilities are recognized for the estimated future consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which these temporary differences are expected to
reverse. Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized
based on consideration of available evidence, including future reversal of existing taxable temporary difference, future
projected taxable income and tax planning strategies. In assessing the realizability of deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. The Company has considered various factors, including future
reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies in making
this assessment. The Company believes any deferred tax asset will not be realized in future periods and therefore, has
recorded a valuation allowance for the entire balance, resulting in no effect on the consolidated financial statements.
Differences between net (loss) income per the consolidated statements of operations and the Company’s taxable income
primarily relate to impairment charges recorded on investment properties, other-than-temporary impairment on the
investments in marketable securities, the timing of revenue recognition, and investment property depreciation and
amortization.
The Company adopted the provisions of FIN 48: Accounting for Uncertainty in Income Taxes – an interpretation of SFAS
No. 109 on January 1, 2007. FIN 48 defines a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of
this provision, liabilities of none and $130 are recorded as of March 31, 2009 and December 31, 2008, respectively. The
Company believes that it has no uncertain tax positions that do not meet the “more likely than not” recognition threshold
as of March 31, 2009. The Company expects no significant increases or decreases in unrecognized tax benefits due to
changes in tax positions within one year of March 31, 2009. Returns for the calendar years 2005 through 2008 remain
subject to examination by federal and various state tax jurisdictions.
(15) Provision for Asset Impairment
During the three months ended March 31, 2009, the Company recorded an asset impairment charge of $20,400 related to a
multi-tenant retail operating property located in Mesa, Arizona. No asset impairments were recorded during the three
months ended March 31, 2008.
The Company identified certain indicators of impairment during the first quarter for this property, such as the property’s
low occupancy rate, difficulty in leasing space and financially troubled tenants. The Company performed a cash flow
valuation analysis and determined that the carrying value of the property exceeded its undiscounted cash flows based upon
the estimated holding period for the asset. Therefore, the Company has recorded an impairment loss related to this
property consisting of the excess carrying value of the asset over its estimated fair value, which is calculated utilizing
numerous assumptions including market rental rates, capitalization rates and discounted rates, within the accompanying
consolidated statements of operations.
(16) Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157: Fair Value Measurements . It defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value
measurements. SFAS No. 157 applies to accounting pronouncements that require or permit fair value measurements,
except for share-based payments transactions under SFAS No. 123(R). SFAS No. 157 was effective for financial
statements issued for fiscal years beginning after November 15, 2007. In February 2007, the FASB issued FSP No. FAS
157-2, which delayed the effective date of SFAS No. 157 for non-financial assets and non-financial liabilities not
measured on a recurring basis to fiscal years beginning after November 15, 2008. The Company adopted SFAS No. 157
26
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
and FSP No. FAS 157-2 on January 1, 2008 and, as neither SFAS No. 157 nor FSP No. FAS 157-2 requires any new fair
value measurements or remeasurements of previously computed fair values, their adoption did not have a material effect
on the Company’s consolidated financial statements.
Fair Value of Financial Instruments
The following table presents the carrying value and estimated fair value of the Company’s financial instruments at March
31, 2009 and December 31, 2008. The fair value of a financial instrument is the amount that would be received to sell an
asset or paid to transfer a liability in a transaction between market participants at the measurement date.
The carrying values shown in the table are included in the consolidated balance sheets under the indicated captions except
for derivative liability, which is included in other liabilities.
The fair value of the financial instruments shown in the above table as of March 31, 2009 and December 31, 2008
represent the Company’s best estimates of the amounts that would be received to sell those assets or that would be paid to
transfer those liabilities in a transaction between market participants at that date. Those fair value measurements
maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or
liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the
assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the
Company based on the best information available in those circumstances.
The following methods and assumptions were used to estimate the fair value of each financial instrument:

Investment in marketable securities : Marketable securities classified as available for sale are measured
using quoted market prices at the reporting date multiplied by the quantity held.

Notes receivable : The Company estimates the fair value of its notes receivable by discounting the future cash
flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable
maturities by the Company's lenders.

Debt: The Company estimates the fair value of its mortgages payable by discounting the future cash flows of
each instrument at rates currently offered to the Company for similar debt instruments of comparable
maturities by the Company's lenders. The carrying value of the Company's other indebtedness approximate
fair value because of the relatively short maturity of these instruments.

Other financings: Other financings on the consolidated balance sheets represent the equity interest of the
noncontrolling member in certain consolidated entities where the LLC or LP agreement contains put/call
arrangements which grant the right to the outside owners and the Company to require each LLC or LP to
redeem the ownership interest in future periods for fixed amounts. The Company believes the fair value of
other financings is that amount which is the fixed amount at which it would settle, which approximates its
carrying value.
27
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)

Derivative liability : The fair value of the derivative liability is determined using pricing models developed
based on the LIBOR swap rate and other observable market data. The Company also incorporates credit
valuation adjustments to appropriately reflect both its own nonperformance risk and the respective
counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair market value of its
derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit
enhancements.
Fair Value Hierarchy
SFAS No. 157 specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques
reflect assumptions other market participants would use based upon market data obtained from independent sources
(observable inputs). In accordance with SFAS No. 157, the following summarizes the fair value hierarchy:

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the
Company has the ability to access.

Level 2 Inputs – Inputs, other than the quoted prices in active markets that are observable either directly or
indirectly.

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the
overall fair value measurements.
SFAS No. 157 requires the use of observable market data, when available, in making fair value measurements. When
inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value
measurement is categorized is based on the lowest level input that is significant to the fair value measurement.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of
the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as
estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of
March 31, 2009, the Company has assessed the significance of the impact of the credit valuation adjustments on the
overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to
the overall valuation. As a result, the Company has determined that its derivative valuations in their entirety are classified
in Level 2 of the fair value hierarchy.
The following table presents the Company’s assets and liabilities and related valuation inputs within the fair value
hierarchy utilized to measure fair value as of March 31, 2009 and December 31, 2008:
During the three months ended March 31, 2009, the Company recorded an asset impairment charge of $20,400 related to
one of its consolidated operating properties. The Company’s estimated fair value relating to this impairment assessment
was based upon a discounted cash flow model that included all estimated cash inflows and outflows over a specific
holding period. These cash flows are comprised of unobservable inputs which include contractual rental revenues and
forecasted rental revenues and expenses based upon market conditions and expectation for growth. Capitalization rates
and discount rates utilized in this model were based upon observable rates that the Company believed to be within a
28
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
reasonable range of current market rates for the property. Based on these inputs, the Company had determined that its
valuation of its consolidated operating property was classified within Level 3 of the fair value hierarchy.
(17) Recent Developments
On January 9, 2009, the Company repaid $27,233 of construction loan debt and accrued interest on the property known as
Shoppes at Stroud, located in Stroudsburg, Pennsylvania. The construction loan had a variable interest rate of 1.97% as
of December 31, 2008.
On January 13, 2009, the Company’s board of directors amended the DRP effective March 1, 2009, solely to modify the
purchase price to $8.50 per share.
On March 10, 2009, the Company acquired another phase of the property known as Southlake Town Square, located in
Southlake, Texas, for a purchase price of $16,000 with 35,436 square feet secured by a mortgage payable of $9,200 with a
fixed interest rate of 6.75% and a term of two years.
On March 19, 2009, the Company’s board of directors declared the first quarter 2009 distribution to be $0.048783 per
share, payable to recordholders as of that date.
During the quarter ended March 31, 2009, the Company closed on one mortgage payable in the amount of $13,970 with a
fixed interest rate of 7.00% and a term of three years on an existing property.
During the quarter ended March 31, 2009, the Company refinanced two mortgages payable totaling $45,760 with fixed
interest rates of 4.18% and 4.56% with new borrowed amounts totaling $37,400 with fixed interest rates of 7.70% and
7.25% and terms of ten years.
During the quarter ended March 31, 2009, the Company funded earnouts totaling $2,240 to purchase an additional 7,365
square feet at two existing properties.
(18) Commitments and Contingencies
The Company has acquired several properties which have earnout components, meaning the Company did not pay for
portions of these properties that were not rent producing at the time of acquisition. The Company is obligated, under
these agreements, to pay for those portions when a tenant moves into its space and begins to pay rent. The earnout
payments are based on a predetermined formula. Each earnout agreement has a time limit regarding the obligation to pay
any additional monies. The time limits generally range from one to three years. If, at the end of the time period allowed,
certain space has not been leased and occupied, the Company will generally own that space without any further payment
obligation to the seller. As of March 31, 2009, based on pro-forma leasing rates, the Company may pay as much as
$27,911 in the future as retail space covered by earnout agreements is occupied and becomes rent producing.
The Company has entered into one construction loan agreement and three other installment note agreements in which the
Company has committed to fund up to a total of $29,135. Each loan, except one, requires monthly interest payments with
the entire principal balance due at maturity. The combined receivable balance at March 31, 2009 and December 31, 2008,
was $25,696 and $25,715, net of allowances of $300 and $300, respectively. The Company may be required to fund up to
an additional $1,214 on these loans as all four of the agreements are non-revolving and some principal payments have
already been received.
The Company guarantees a portion of the construction debt associated with certain of its consolidated development joint
ventures. The guarantees are released as certain leasing parameters are met. As of March 31, 2009, the amount
guaranteed by the Company was $17,944; however, as these guarantees are with consolidated entities the potential full
liability associated with these guarantees has not been recorded.
29
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
On November 30, 2006, the Company entered into a consolidated joint venture, Stroud Commons, LLC for the purpose of
acquiring land and developing a shopping center in Stroudsburg, Pennsylvania. As part of the project, the joint venture
obtained construction debt. On January 9, 2009, the Company paid off the entire outstanding balance of $ 27,160 ,
releasing the guarantee.
On August 31, 2006, the Company entered into a consolidated joint venture, Inland Western/Weber JV Frisco Parkway
Limited Partnership for the purpose of acquiring land and developing a shopping center in Frisco, Texas. As part of the
project, the joint venture obtained construction debt, which as of March 31, 2009, had an outstanding balance of $ 19,417 ,
of which the Company has guaranteed 25%, or $ 4,854 . Upon achieving a debt service coverage ratio of 1.25, the
guaranteed amount is reduced to 15% of the outstanding loan balance.
On September 15, 2006, the Company entered into a consolidated joint venture, Inland Western/Weber JV Dallas
Wheatland Limited Partnership for the purpose of acquiring land and developing a shopping center in Dallas, Texas. As
part of the project, the joint venture obtained construction debt, which as of March 31, 2009, had an outstanding balance
of $ 5,891 , of which the Company has guaranteed 15%, or $ 884 .
On August 9, 2006, the Company entered into a consolidated joint venture, Lake Mead Crossing, LLC for the purpose of
acquiring land and developing a shopping center in Henderson, Nevada. As part of the project, the joint venture obtained
construction debt which as of March 31, 2009, had an outstanding balance of $ 55,447 , of which the Company has
guaranteed 15%, or $ 8,317 .
On June 4, 2008, the Company entered into a consolidated joint venture, Green Valley Crossing, LLC (Green Valley) for
the purpose of acquiring land and developing a shopping center located in Henderson, Nevada. In connection with the
acquisition by Green Valley, an adjacent land parcel was acquired by Target Corporation (Target). Under the terms of the
agreement, Target had the option to put the adjacent parcel back to Green Valley if certain normal development activities,
such as obtaining permits and establishing utilities at the site, were not completed by January 20, 2009. Green Valley
would be obligated to reimburse Target for the purchase price of the land in addition to certain costs incurred. The
Company had guaranteed the put option with Green Valley. On December 1, 2008, the put agreement was released. In
addition, as part of the project, the joint venture obtained construction debt which as of March 31, 2009, had an
outstanding balance of $9,722 , of which the Company has guaranteed 40%, or $ 3,889 . Upon achieving a debt service
coverage ratio of 1.10 for a period of 90 consecutive days, the guaranteed amount is reduced to 25% of the outstanding
loan balance. Upon achieving a debt service coverage ratio of 1.25 for a period of 90 consecutive days, the guaranteed
amount is further reduced to 15% of the outstanding debt balance.
As of March 31, 2009, the Company had eight irrevocable letters of credit outstanding for security in mortgage loan
arrangements, mostly relating to loan fundings against earnout spaces at certain properties. Once the Company pays the
remaining portion of the purchase price for these properties and meets certain occupancy requirements, the letters of credit
will be released. There were also two letters of credit outstanding for the benefit of the Captive. These letters of credit
serve as collateral for payment of potential claims within the limits of self-insurance. There is one letter of credit for each
policy year, and they will remain outstanding until all claims from the relative policy year are closed. There were also
five letters of credit relating to four development projects as security for utilities and completion. The balance of
outstanding letters of credit at March 31, 2009 was $29,929, and none have been drawn upon.
The Company has entered into an interest rate lock agreement with a lender to secure interest rates on mortgage debt on
properties it currently owns or plans to purchase in the future. The Company has outstanding interest rate lock deposits
under the agreement that locks only the Treasury portion of mortgage debt interest, which had a maturity date of June 30,
2008, and was extended to May 29, 2009. This Treasury rate lock agreement locks the Treasury portion at a rate of
5.582% on $85,000 in notional amounts, and can be converted into full rate locks upon allocation of properties. During
2009, the Company was not required to make additional rate lock deposits, and determined that the carrying value of the
rate lock deposits were fully recoverable as of March 31, 2009. The balance of the rate lock deposits as of March 31,
2009 and December 31, 2008 was $1,220.
30
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(19) Litigation
The Company previously disclosed in its Form 10-K for the fiscal years ended December 31, 2008 and December 31,
2007, respectively, the lawsuit filed against the Company and nineteen other defendants by City of St. Clair Shores
General Employees Retirement System and Madison Investment Trust in the United States District Court for the Northern
District of Illinois. In an amended complaint filed on June 12, 2008, plaintiffs alleged that all the defendants violated the
federal securities laws, and certain defendants breached fiduciary duties owed to the Company and its shareholders, in
connection with the Company’s merger with its business manager/advisor and property managers as reflected in its Proxy
Statement dated September 12, 2007 (the "Proxy Statement"). All the defendants, including the Company, filed motions
to dismiss the lawsuit, arguing that the amended complaint failed to comply with various rules and standards for pleading
the kinds of claims in issue.
In a Memorandum Opinion and Order dated April 1, 2009 (“Order”), the court granted in part the defendants' motions to
dismiss the amended complaint. The court dismissed five of the seven counts of the amended complaint in their entirety,
including all claims that the Company’s board of directors breached their fiduciary duties to the Company and its
shareholders in connection with the merger. As to the remaining two counts, which alleged that the Proxy Statement
contained false and misleading statements, or omitted to state material facts necessary to make the statements therein not
false and misleading, in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), the motions to dismiss were granted in part and denied in part. The court also held that the amended complaint
adequately alleged a claim under Section 14(a) of the Exchange Act against KPMG LLP, in connection with its
independent audit report for the advisor and property managers’ financial statements, and William Blair & Company,
LLC, in connection with its Fairness Opinion that the consideration to be paid by the Company under the merger
agreement was fair to the Company from a financial point of view. The court ordered the plaintiffs to file a second
amended complaint conforming to the court’s Order. Plaintiffs filed a second amended complaint on May 1, 2009.
In connection with this litigation, the Company continues to advance legal fees for certain directors and officers and
William Blair & Company, LLC as part of its obligations under existing indemnity provisions. The Company believes
the plaintiffs’ allegations are without merit and intends to vigorously defend the lawsuit.
(20) Subsequent Events
During the period from April 1, 2009 through May 12, 2009, the Company:

issued 1,209 additional shares of common stock through the DRP, resulting in a total of 479,974 of common stock
outstanding at May 11, 2009;

paid distributions of $23,356, representing $0.048783 per share, to shareholders in April 2009 for the quarter
ended March 31, 2009;

paid $1,048 and $5,812 to the Company’s partners in two consolidated joint ventures to fulfill their respective
redemption interests;

funded additional capital of $328 on one existing unconsolidated development joint venture;

funded additional capital of $301 on two existing development joint ventures;

closed on the sale of a single tenant office building consisting of approximately 389,000 square feet, located in
Greensboro, North Carolina with a sales price of $53,000, which resulted in net proceeds of $18,938 and a gain on
sale of $4,807. The buyer, an Inland affiliate, assumed the mortgage payable of $33,040;

closed on the sale of a single tenant office building consisting of approximately 396,000 square feet, located in
Salt Lake City, Utah with a sales price of $46,000, which resulted in net proceeds of $14,869 and a gain on sale
of $3,175. The buyer, an Inland affiliate, assumed the mortgage payable of $30,149;

sold a vacant land parcel adjacent to an existing development joint venture for a price of $650;

borrowed an additional $4,750 of margin debt related to the Company’s investment in marketable securities;
31
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
Notes to Consolidated Financial Statements
(Unaudited)

paid an extension fee of $18 to extend the maturity date of one mortgage payable with a principal balance of
$7,179 and a fixed interest rate of 4.96% from April 1, 2009 to June 1, 2009;

paid an extension fee of $19 to extend the maturity date of one mortgage payable with a principal balance of
$7,562 and a fixed interest rate of 4.96% from April 1, 2009 to June 1, 2009;

paid an extension fee of $10 to extend the maturity date of one mortgage payable with a principal balance of
$5,342 and a fixed interest rate of 4.39% from May 1, 2009 to June 1, 2009;

paid an extension fee of $10 to extend the maturity date of one mortgage payable with a principal balance of
$23,766 and a fixed interest rate of 8.00% from May 1, 2009 to June 1, 2009;

paid an extension fee of $20 to extend the maturity date of one mortgage payable with a principal balance of
$12,700 and a fixed interest rate of 4.29% from May 1, 2009 to July 1, 2009;

paid an extension fee of $49 to extend the maturity date of one mortgage payable with a principal balance of
$19,525 and a fixed interest rate of 3.99% from May 1, 2009 to July 1, 2009;

paid an extension fee of $37 to extend the maturity dates of two mortgages payable on one investment property
with a combined principal balance of $14,865 and fixed interest rates of 4.91% and 4.95% from May 1, 2009 to
July 1, 2009;

paid an extension fee of $27 to extend the maturity dates of two mortgages payable on one investment property
with a combined principal balance of $10,810 and fixed interest rates of 4.96% and 5.13% from May 1, 2009 to
July 1, 2009;

paid an extension fee of $110 to extend the maturity date of one mortgage payable with a principal balance of
$44,000 and a variable interest rate of 2.54% from June 1, 2009 to July 1, 2009;

funded a principal paydown of $4,000 to extend the maturity date of one mortgage payable with a principal
balance of $14,200 and a variable interest rate of 2.02% from May 12, 2009 to October 12, 2009;

refinanced a mortgage payable of $23,650 with a fixed interest rate of 4.53% with a new borrowed amount of
$17,350 with a variable interest rate of 6.50% and a term of 5 years;

closed on one mortgage payable in the amount of $8,300, with a fixed interest rate of 7.48% and a term of 10
years on an existing property;

funded a partial principal paydown of $2,350 for one mortgage payable with an original principal balance of
$8,550 and a fixed interest rate of 5.48%;

maturity defaults on mortgages payable – refer to Note 10;

entered into an amendment to the credit agreement – refer to Note 10, and

repaid $33,000 on the unsecured line of credit.
32
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
elsewhere in this Quarterly Report on Form 10-Q may constitute “forward-looking statements.” Forward-looking
statements are statements that are not historical, including statements regarding management’s intentions, beliefs,
expectations, representations, plans or predictions of the future and are typically identified by such words as “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” We intend that such forward-looking
statements be subject to the safe harbor provisions created by Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 and the Federal Private Securities Litigation Reform Act of 1995 and we include
this statement for the purpose of complying with such safe harbor provisions. Future events and actual results,
performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance,
transactions or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and other
factors that might cause such differences, some of which could be material, include, but are not limited to:

Our financial condition may be affected by required debt service payments, the risk of default and restrictions on
our ability to incur additional debt or enter into certain transactions under our credit agreement. In addition, we
may encounter difficulties in obtaining permanent financing or refinancing existing debt;

National or local economic, business, real estate and other market conditions, including the ability of the general
economy to recover timely from the current volatile economic downturn;

The level and volatility of interest rates as well as significant challenges in the debt markets that may adversely
affect our ability to obtain permanent financing or refinance our existing indebtedness;

General financial risks affecting the real estate industry, including the current economic downturn that may
adversely affect the ability of our tenants, or new tenants, to enter into new leases or the ability of our existing
tenants to renew their leases at rates at least as favorable as their current rates or at all;

Financial stability of tenants, including the ability of tenants to pay rent, the decision of tenants to close stores and
the effect of bankruptcy laws and our ability to re-lease any resulting vacant space;

Risks of real estate development, including the failure of pending developments and redevelopments to be
completed on time and within budget and the failure of newly acquired or developed properties to perform as
expected;

The ability to dispose of properties on favorable terms or at all as real estate investments can be illiquid,
particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing;

Risks of joint venture activities, including development joint ventures;

The effect of inflation and other factors on fixed rental rates, operating expenses and real estate taxes;

The competitive environment in which we operate and the supply of and demand for retail goods and services in
our markets;

The increase in property and liability insurance costs and the ability to obtain appropriate insurance coverage;

The ability to maintain our status as a REIT for federal income tax purposes;

The effects of hurricanes and other natural disasters;

Environmental/safety requirements and costs, and

Other risks identified in this Quarterly Report on Form 10-Q and, from time to time, in other reports we file with
the SEC.
We disclaim any intention or obligation to update or revise any forward-looking statement whether as a result of new
information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of March 31, 2009. This Quarterly Report on Form 10-Q should also be read in
conjunction with our Annual Report on Form 10-K, for the year ended December 31, 2008, filed with the SEC on March
31, 2009.
33
Executive Summary
Inland Western Retail Real Estate Trust, Inc. is a self-managed real estate investment trust, or REIT, that acquires,
manages, and develops a diversified portfolio of real estate, primarily multi-tenant shopping centers. As of March 31,
2009, our portfolio consisted of 291 operating properties wholly-owned by us and thirteen operating properties in which
we own between 5% and 98% (the consolidated operating joint venture properties), for a total of 304 operating
properties. We have also invested in seven other operating properties that we do not consolidate and twenty-two
properties in seven development joint ventures, six of which we consolidate.
In this report all references to “we,” “our,” and “us” refer collectively to Inland Western Retail Real Estate Trust, Inc. and
its subsidiaries including joint ventures.
Our goal is to maximize the possible return to our shareholders through the acquisition, development, redevelopment,
creation of strategic joint ventures and management of the related properties consisting of neighborhood and community
multi-tenant shopping centers and single-user net lease properties. We attempt to manage our assets by leasing and
re-leasing space at favorable rates, controlling costs, maintaining strong tenant relationships and creating additional value
through redeveloping and repositioning our centers. We distribute funds generated from operations to our shareholders
and intend to continue distributions in order to maintain our REIT status.
The properties in our portfolio are located in 38 states. As of March 31, 2009, our consolidated and wholly-owned
portfolio consisted of 182 multi-tenant shopping centers and 122 free-standing, single-user properties of which 106 are net
lease properties. The consolidated and wholly-owned portfolio contains an aggregate of approximately 45.8 million
square feet of gross leasable area (GLA), of which approximately 88% of the GLA was physically leased and 89% was
economically leased. The weighted average occupied GLA was 88% and 89% as of March 31, 2009 and December 31,
2008, respectively. Our anchor tenants include nationally and regionally recognized grocers, discount retailers and other
tenants who provide basic household goods and services. Of our total annualized revenue as of March 31, 2009,
approximately 66% is generated by anchor, single or credit tenants, including PetSmart, Bed, Bath & Beyond, Ross Dress
for Less, Wal-Mart, Hewitt Associates, Home Depot, Kohl’s, Best Buy and several others. The term “credit tenant” is
subjective and we apply the term to tenants who we believe have a substantial net worth.
Of the 304 wholly-owned and consolidated joint venture properties as of March 31, 2009, 136 properties were located
west of the Mississippi River. These 136 properties equate to approximately 46% of our GLA and approximately 46% of
our annualized base rental income as of March 31, 2009. The remaining 168 properties are located east of the Mississippi
River.
During the three months ended March 31, 2009, we invested approximately $18,240 for the acquisition of an additional
phase at one of our existing operating properties and funding of two earnouts at two existing properties, containing a total
GLA of approximately 42,800 square feet. We also invested approximately $1,072 and $1,284 for real estate
development on our consolidated and unconsolidated joint ventures, respectively. We received approximately $11,986 in
investor proceeds through our DRP, $64,741 in proceeds from the sale of one operating property and obtained
approximately $60,570 in mortgage proceeds from new and refinanced mortgages.
We continue to monitor potential credit issues of our tenants, and analyze the possible effects on our consolidated
financial statements and liquidity. In addition to the collectability assessment of outstanding accounts receivable, we also
evaluate the related real estate for recoverability pursuant to the provisions of SFAS No. 144, as well as any tenant related
deferred charges for recoverability, which may include straight-line rents, deferred lease costs, tenant improvements,
tenant inducements and intangible assets.
Economic Conditions
Historically, real estate has been subject to a wide range of cyclical economic conditions that affect various real estate
markets and geographic regions with differing intensities and at different times. Different regions of the United States
have and may continue to experience varying degrees of economic growth or distress. Adverse changes in general or
local economic conditions could result in the inability of some tenants of ours to meet their lease obligations and could
otherwise adversely affect our ability to attract or retain tenants. Our shopping centers are typically anchored by two or
34
more national tenants (Wal-Mart or Target), home improvement stores (Home Depot or Lowe’s Home Improvement) and
two or more junior anchor tenants (Bed Bath & Beyond, Kohl’s, T.J. Maxx or PetSmart), which generally offer
day-to-day necessities, rather than higher-priced luxury items. In addition, we seek to reduce our operating and leasing
risks through ownership of a portfolio of properties with a diverse geographic presence and tenant base .
The retail sector has been affected by the competitive nature of the retail business and the competition for market share as
well as general economic conditions where stronger retailers have out-positioned some of the weaker retailers. These
shifts have forced some market share away from weaker retailers and required them, in some cases, to declare bankruptcy
and/or close stores even though they have not filed for bankruptcy protection.
Although certain individual tenants within our portfolio have filed for bankruptcy protection as discussed above, we
believe that several of our major tenants, including Wal-Mart, Home Depot, Kohl’s, Target, Lowe’s Home Improvement,
T.J. Maxx and Bed Bath & Beyond, are financially secure retailers based upon their current credit quality. This stability is
further evidenced by these tenants’ relatively constant same store sales growth in the current economic
environment. However, recent headlines continue to describe the plight of subprime borrowers, the general troubles in
the housing market and the potential for such problems to impact consumer spending. Consumers’ concerns regarding
the health of the U.S. economy and its impact on disposable income have caused broad changes in shopping patterns.
Consumers appear to be more price sensitive and patronize those retailers that offer the best value for non-discretionary
goods. As a result, many of our core retailers are believed to be doing well and are still pursuing new store locations.
Weaker retailers, some of which have locations in our portfolio, are feeling pressure and are expected to continue to
experience difficulty in this environment.
Historical occupancy rates in our shopping center portfolio have ranged from 98% to 88% since our inception in
2003. Also, average base rental rates have increased from $12.83 to $13.26 since 2003. Anticipating that more store
closings are likely to occur this coming year, we continue to be proactive in our leasing strategy to reflect a more
conservative stance. We focus on maintaining occupancy by pursuing new lease commitments. Moreover, to date we
have been able to achieve these results without significant capital investment in tenant improvements or leasing
commissions. While tenants may come and go over time, shopping centers that are well-located and actively managed
are expected to perform well. We are very conscious of, and sensitive to, the risks posed by the economy, but we are
currently of the belief that the position of our portfolio and the general diversity and credit quality of our tenant base will
enable us to successfully navigate through these challenging economic times.
Institutional and Development Joint Ventures
During 2007, we began our two-pronged joint venture strategy – institutional and development. Our initial institutional
joint venture program was launched in April 2007 by the creation of a new entity with equity contributions made by our
joint venture partner and a combination of asset and equity contributions by us. Our joint venture partner is a large state
pension fund, advised by Morgan Stanley Real Estate Advisors. We initially contributed approximately $336,000 of
assets to the joint venture with the intention of contributing an additional $164,000 in assets, followed by an additional
$500,000 of new assets to be acquired. We are the managing member of the joint venture and earn fees for asset
management, property management, leasing, acquisitions and dispositions. We earned fees of $318 and $332 during the
three months ended March 31, 2009 and 2008, respectively.
Also during 2007, we launched our development joint venture program which involves partnering with regional
developers. We believe that a national platform of retail development requires strength and expertise in strategic local
markets. Currently we have seven development joint ventures totaling $109,425 of equity contributed by us, all
anticipated to earn a preferred return of not less than 9%. Total costs of these developments are expected to be
$421,312. Furthering our strategy for development joint ventures, we signed an agreement with a regional developer in
the Las Vegas area whereby we can commit, at our discretion, up to $112,500 in equity on to be named developments,
$9,096 of which was committed as of March 31, 2009. We seek to maintain a right of first offer with respect to
completed developments; however, we will seek to get the best execution if that involves a sale of the developed property
at which time we will share in the proceeds realized upon the consummation of a sale.
35
Our consolidated joint ventures have the following shopping center projects under construction. At March 31, 2009,
$180,990 of costs had been incurred in relation to these development projects.
The consolidated joint venture development estimated funding schedule, as of March 31, 2009, is as follows:
Of the four construction loans related to our consolidated joint venture developments, two of the loans mature in the third
quarter of 2009, and one matures in the fourth quarter of 2009. The amount of recourse to us relative to these loans
ranges from 15% to 25% of the outstanding balance and amounts to $14,055 as of March 31, 2009.
One of our unconsolidated joint ventures has the following shopping center project under construction. At March 31,
2009, $49,380 of costs had been incurred in relation to this development project.
The unconsolidated joint venture development estimated funding schedule, as of March 31, 2009, is as follows:
The construction loan related to our unconsolidated joint venture development matures on September 5, 2010.
36
The amount of available financing at terms acceptable to us upon maturity of our construction loans may be limited as a
result of certain factors, including the tightening of underwriting standards by lenders and credit rating agencies and the
widening of credit spreads. As such, we are in active discussions with each of our lenders concerning extensions of the
construction loans related to our consolidated and unconsolidated joint venture developments described above.
Critical Accounting Policies and Estimates
Our 2008 Annual Report on Form 10-K contains a description of our critical accounting policies, including acquisition of
investment property, impairment of long-lived assets, cost capitalization, depreciation and amortization, assets held for
sale, revenue recognition, marketable securities, partially-owned entities and allowance for doubtful accounts. For the
three months ended March 31, 2009, there were no significant changes to these policies, except as follows.
Acquisition of Investment Property
In December 2007, the FASB issued SFAS No. 141(R): Business Combinations . SFAS No. 141(R) establishes
principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase, if any; and determines what information to
disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.
SFAS No. 141(R) was effective for business combinations for which the acquisition date is on or after the beginning of
the first annual reporting period beginning on or after December 15, 2008. We adopted SFAS No. 141(R) on January 1,
2009 and all subsequent real estate acquisitions are accounted for under this standard, as we believe most operating real
estate assets meet the revised definition of a business under SFAS No. 141(R).
We allocate the purchase price of each acquired investment property between land, building and improvements, acquired
above market and below market lease intangibles, in-place lease value, any assumed financing that is determined to be
above or below market and the value of customer relationships, if any, and goodwill if determined, to meet the definition
of a business under SFAS No. 141(R). The allocation of the purchase price is an area that requires judgment and
significant estimates. Beginning in 2009, transaction costs associated with any acquisitions are expensed as incurred. In
some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations that
are relevant to our purchase price allocations; however, we are ultimately responsible for the purchase price
allocations. We determine whether any financing assumed is above or below market based upon comparison to similar
financing terms at the time of acquisition for similar investment properties. We allocate a portion of the purchase price to
the estimated acquired in-place lease value based on estimated lease execution costs for similar leases as well as lost rent
payments during an assumed lease-up period when calculating as-if-vacant fair values. We consider various factors
including geographic location and size of the leased space. We also evaluate each significant acquired lease based upon
current market rates at the acquisition date and consider various factors including geographical location, size and location
of the leased space within the investment property, tenant profile, and the credit risk of the tenant in determining whether
the acquired lease is above or below market. If an acquired lease is determined to be above or below market, we allocate
a portion of the purchase price to such above or below market leases based upon the present value of the difference
between the contractual lease rate and the estimated market rate. For below market leases with fixed rate renewals,
renewal periods are included in the calculation of below market lease values. The determination of the discount rate used
in the present value calculation is based upon a risk adjusted rate. This discount rate is a significant factor in determining
the market valuation which requires our evaluation of subjective factors such as market knowledge, economics,
demographics, location, visibility, age and physical condition of the property.
Impairment of Long-Lived Assets
In accordance with SFAS No. 144, our investment properties, including developments in progress, are reviewed for
potential impairment whenever events or changes in circumstances indicate that the carrying value may not be
recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to,
significant decreases in property net operating income and occupancy percentages. Impairment indicators for
developments in progress are assessed by project and include, but are not limited to, significant changes in project
completion dates, development costs and market factors.
37
In accordance with EITF Issue No. 08-6: Equity Method Investment Accounting Considerations and APB Opinion No. 18:
The Equity Method of Accounting for Investments in Common Stock and SAB No. 59: Other Than Temporary Impairment
of Certain Investments in Debt and Equity Securities , as amended by SAB No. 111, our investments in unconsolidated
joint ventures are reviewed for potential impairment, including impairment evaluations of the individual assets underlying
these investments, whenever events or changes in circumstances warrant such an evaluation.
If an indicator of potential impairment exists, the asset would be tested for recoverability by comparing its carrying value
to the estimated future undiscounted operating cash flows, which is based upon many factors which require difficult,
complex or subjective judgments to be made. Such assumptions include, but are not limited to, projecting vacancy rates,
rental rates, operating expenses, lease terms, tenant financial strength, economy, demographics, property location, capital
expenditures and sales value. An investment property is considered to be impaired when the estimated future
undiscounted operating cash flows are less than its carrying value. To the extent an impairment has occurred, the excess
of the carrying value of the asset over its estimated fair value is recorded as a provision for asset impairment.
Derivative and Hedging Activities
We adopted SFAS No. 161: Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB
Statement No. 133 as of January 1, 2009. SFAS No. 161 amends and expands the disclosure requirements of SFAS No.
133: Accounting for Derivative Instruments and Hedging Activities with the intent to provide users of financial statements
with an enhanced understanding of (a) how and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative
instruments and the related hedged items affect an entity’s financial position, financial performance and cash
flows. SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative
disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related
contingent features in derivative instruments.
In accordance with SFAS No. 133, all derivatives are recorded on the consolidated balance sheets at their fair values
within “Other assets” or “Other liabilities.” On the date that we enter into a derivative, we designate the derivative as a
hedge against the variability of cash flows that are to be paid in connection with a recognized liability. Subsequent
changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly effective are
recorded in other comprehensive (loss) income, until earnings are affected by the variability of cash flows of the hedged
transactions. Any hedge ineffectiveness is reported in net (loss) income. We do not use derivatives for trading or
speculative purposes.
38
Results of Operations
Comparison of the three months ended March 31, 2009 to March 31, 2008
The table below presents operating information for our same store portfolio consisting of 301 operating properties
acquired or placed in service prior to January 1, 2008, along with a reconciliation to net operating income. The properties
in the same store portfolios as described were owned for the three months ended March 31, 2009 and 2008.
39
39
Net operating income decreased by $18,977, or 14.0%. Total rental income, tenant recovery and other property income
decreased by $13,892, or 7.4%, and total property operating expenses increased by $5,105, or 9.9%, for the three months
ended March 31, 2009, as compared to March 31, 2008.
Rental income. Rental income decreased $7,703, or 5.5%, on a same store basis from $141,180 to $133,477. The same
store decrease is primarily due to:

a decrease of $7,634 due to the early termination of certain tenant leases, co-tenancy rent reductions and tenant
bankruptcies;

a decrease of $922 in percentage rent due to decreased tenant sales resulting from current general economic
conditions; partially offset by

an increase of $603 in rental income due to base rent increases related to existing tenants;

an increase of $240 due to the buildout and leasing of additional square footage, and

an increase of $700 due to earnouts completed subsequent to the three months ended March 31, 2008.
Overall, rental income decreased $5,171, or 3.6%, from $142,175 to $137,004. The other investment properties
experienced:

an increase of $1,167 due to investment properties acquired subsequent to March 31, 2008, and

an increase of $1,375 related to development properties placed into service subsequent to March 31, 2008.
Tenant recovery income. Tenant recovery income decreased $4,141, or 11.3%, on a same store basis from $36,513 to
$32,372, primarily due to:

reduced occupancy as a result of increased tenant vacancies resulting from bankruptcies and early lease
terminations resulting from the current economic challenges facing tenants, and

a reduction in the 2008 tenant recovery income estimates as a result of the common area maintenance and real
estate tax expense reconciliation processes completed during the three months ended March 31, 2009.
Overall, tenant recovery income decreased $3,479, or 9.5%, from $36,781 to $33,302, primarily due to the decrease in the
same store portfolio described above, partially offset by recovery income from other investment properties purchased after
December 31, 2007.
Other property income. Other property income decreased overall by $5,242, or 60.0%. The decrease is primarily
attributable to a $5,000 lease termination fee earned during the three months ended March 31, 2008.
Property operating expenses. Property operating expenses increased $267, or 0.9%, on a same store basis from $30,454 to
$30,721. The same store increase is primarily due to bad debt expense of $722 as increased tenant bankruptcies and the
current economic challenges facing tenants.
The net increase was partially offset by the following items:

a decrease in insurance expense of $274, primarily related to a reduction in insurance premiums;

a decrease in certain non-recoverable and recoverable expenses of $140, and

a decrease in actual operating expenses attributable to the property management companies of $41.
Overall, property operating expenses increased $1,342, or 4.4%, from $30,757 to $32,099, due to the increase in the same
store portfolio described above, as well as an increase of $1,075 in other investment properties, as follows:

an increase in bad debt expense of $279, and

an increase in certain non-recoverable and recoverable expenses of $796 related to the acquisition of properties
and completions of earnouts subsequent to January 1, 2008.
40
Real estate taxes. Real estate taxes increased $3,093, or 14.9%, on a same store basis from $20,783 to $23,876. This
increase is primarily due to:

an increase of $952 related to properties where vacated tenants with triple net leases had previously paid real
estate taxes directly to the taxing authorities and accordingly the expense was not reflected in our consolidated
financial statements during the three months ended March 31, 2008;

an increase of $1,040 in prior year estimates adjusted during the three months ended March 31, 2009, based on
actual real estate taxes paid;

a decrease of $354 in real estate tax refunds received for prior year tax assessment adjustments, and

an increase of $812 in 2008 real estate tax expenses due to normal increases in assessed values averaging
approximately 4%.
Overall, real estate taxes increased $3,763, or 18.0%, from $20,933 to $24,696. The other investment properties
representing properties acquired subsequent to December 31, 2007, and phases of developments placed into service
subsequent to March 31, 2008, resulted in an increase in real estate taxes of $670.
Other income . Other income decreased $4,512, or 37.5%. This decrease was due primarily to:

a decrease in dividend income of $1,852 due to dividend reductions and suspensions associated with our
investments in marketable securities;

a decrease in interest income primarily due to decreases of $314 as a result of full or partial payoffs of notes
receivable subsequent to March 31, 2008 and $484 as a result of decreases in operating cash and short-term
investments receiving lower interest rates in interest bearing accounts; and

a decrease of $846 in straight-line rental income primarily due to reduced occupancy as a result of increased
tenant vacancies resulting from tenant bankruptcies and tenants with co-tenancy rent reductions.
Other expenses . Other expenses increased $48,411, or 35.0%. This increase was primarily due to:

a $20,400 increase in the provision for asset impairment during the three months ended March 13, 2009, related to
a multi-tenant property located in Mesa, Arizona;

an increase in recognized loss on marketable securities of $19,138 primarily as a result of a $24,709 decline in the
first quarter of 2009 in the fair value of certain marketable securities determined to be other-than-temporary as
compared to other-than-temporary impairment of $8,036 in the first quarter of 2008;

an increase in other expense of $2,783 primarily related to the joint venture partner redemption discussed in Note
1 to the consolidated financial statements;

an increase in loss on lease terminations of $2,611 as a result of an increase in tenants that vacated prior to lease
expiration due to an increase in tenant bankruptcies and current economic challenges facing tenants;

an increase of $1,202 in interest expense primarily due to increases in the outstanding mortgage payable balances,
the fixed to variable spread on our interest rate swaps, which were not in place during the first quarter of 2008,
decreases in capitalized interest due to phases of our development joint ventures being placed into service,
partially offset by decreases in margin interest; and

an increase of $964 in bad debt expense related to straight-line rent receivables as a result of increased tenant
bankruptcies and the overall increase in tenant receivables.
Discontinued operations. Discontinued operations consist primarily of amounts related to four properties that we sold in
2007 and one property that we sold during the first quarter of 2009. On January 15, 2009, we closed on the sale of one
multi-tenant lifestyle center with a sales price of $65,000, which resulted in net sales proceeds of $31,111 after repayment
of the $33,630 mortgage payable and a gain on sale of $12,212.
41
Funds From Operations
One of our objectives is to provide cash distributions to our shareholders from cash generated by our operations. Cash
generated from operations is not equivalent to our (loss) income from continuing operations as determined under
GAAP. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate
Investment Trusts, or NAREIT, an industry trade group, has promulgated a standard known as "Funds from Operations"
or FFO. We believe that FFO, which is a non-GAAP performance measure, provides an additional and useful means to
assess the operating performance of REITs. As defined by NAREIT, FFO means net (loss) income computed in
accordance with GAAP, excluding gains (or losses) from sales of investment properties, plus depreciation on investment
properties and amortization after adjustments for unconsolidated joint ventures in which the REIT holds an interest. We
have adopted the NAREIT definition for computing FFO because management believes that, subject to the following
limitations, FFO provides a basis for comparing our performance and operations to those of other REITs. FFO is not
intended to be an alternative to "Net Income" as an indicator of our performance nor to "Cash Flows from Operating
Activities" as determined by GAAP as a measure of our capacity to pay distributions.
FFO is calculated as follows:
Depreciation and amortization related to investment properties for purposes of calculating FFO includes loss on lease
terminations which encompasses the write-off of tenant related assets including tenant improvements and in-place lease
values, as a result of early lease terminations. Total loss on lease terminations for the three months ended March 31, 2009
and 2008 were $5,735 and $3,124, respectively.
The decline in funds from operations in 2009 resulted primarily from non-cash impairments recognized on marketable
securities and one investment property. Other-than-temporary impairment on marketable securities of $24,709 and asset
impairment of $20,400 were recognized during the three months ended March 31, 2009. Despite impairment losses
recognized, such losses are not realized and accordingly, we believe that our marketable securities will continue to
generate dividend income and, if the equity market recovers, we may be able to sell marketable securities at prices in
excess of our current carrying values although there can be no assurance that we will be able to do so.
The net (loss) income and distributions declared per common share are based upon the weighted average number of
common shares outstanding. The $0.05 per share distribution declared for the three months ended March 31, 2009
represented 172.2% of our FFO for the period. The $0.16 per share distribution declared for the three months ended
March 31, 2008, represented 97.4% of our FFO for the period. Our distribution of current and accumulated earnings and
profits for federal income tax purposes are taxable to shareholders as ordinary income. Distributions in excess of these
earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent
thereof (a return of capital) and thereafter as taxable gain. The distributions in excess of earnings and profits will have the
effect of deferring taxation on the amount of the distribution until the sale of the shareholders’ shares. The balance of the
distribution constitutes ordinary income. In order to maintain our qualification as a REIT, we must make annual
distributions to shareholders of at least 90% of our REIT taxable income. REIT taxable income does not include capital
gains. Under certain circumstances, we may be required to make distributions in excess of cash available for distribution
in order to meet the REIT distribution requirements. Distributions are determined by our board of directors and are
dependent on a number of factors, including the amount of funds available for distribution, our financial condition,
42
decisions by the board of directors to reinvest funds rather than to distribute the funds, our need for capital expenditures,
the annual distribution required to maintain REIT status under the Code, and other factors the board of directors may
deem relevant.
Liquidity and Capital Resources
Current Environment
We rely on capital to buy, develop and improve our properties. Events in 2008 and early 2009, including recent failures
and near failures of a number of large financial service companies, have made the capital markets increasingly volatile.
We periodically evaluate opportunities to issue additional debt or raise additional equity.
The debt capital markets have been volatile and challenging and numerous financial institutions have experienced
unprecedented write-offs and liquidity issues. As a result, lender prospects are unknown. Commercial mortgage-backed
securities (CMBS) lending is stalled at this time and it is uncertain when it will return. Rates available from commercial
and investment banks are widely divergent when and if they are willing to quote a rate. We also have noted that life
insurance companies appear to be becoming more selective in relation to new lending opportunities. Life insurance
companies also appear to be more interested in smaller individual property loans versus large portfolios. The overall
trend from lenders appears to be that the quality of sponsorship and relationship strength are critical factors in their
decision making process but deposits from borrowers are required for credit to be extended.
During the past year, increased perceived risk has caused borrowing spreads over treasury rates to reach higher levels than
previously experienced. This uncertainty re-emphasizes the need to access diverse sources of capital, maintain liquidity
and stage debt maturities carefully. Most significantly, it underscores the importance of a conservative balance sheet that
provides flexibility in accessing capital and enhances our ability to manage assets with limited restrictions. A
conservative balance sheet allows us to be opportunistic in our investment strategy and in accessing the most efficient and
lowest cost financing available.
We maintain a credit agreement with a syndicate of financial institutions. While not a significant component of our
capital structure, the credit agreement provides for borrowings of $225,000, amended as described below, if certain
financial covenants are maintained and a maturity date of October 2010, with a one-year extension option. The credit
agreement requires compliance with certain covenants, such as, among other things, a leverage ratio, fixed charge
coverage, minimum net worth requirements, distribution limitations and investment restrictions, as well as limitations on
our ability to incur recourse indebtedness. The credit agreement also contains customary default provisions including the
failure to timely pay debt service payable thereunder, the failure to comply with our financial and operating covenants,
and the failure to pay when our consolidated indebtedness becomes due. In the event our lenders declare a default, as
defined in the credit agreement, this could result in an acceleration of any outstanding borrowings.
On October 15, 2007, we entered into an unsecured credit agreement, as described above, with KeyBank National
Association and other financial institutions for up to $225,000 with an optional unsecured borrowing capacity of $75,000,
for a total unsecured borrowing capacity of $300,000. The agreement has an initial term of three years with a one-year
extension option. The line of credit required interest-only payments monthly on the outstanding balance at the rate equal
to LIBOR plus 80 to 125 basis points depending on the ratio of our net worth to total recourse indebtedness. The
outstanding balance on the line of credit at March 31, 2009 and December 31, 2008 was $225,000. We were also
required to pay, on a quarterly basis, fees ranging from 0.125% to 0.20%, per annum, on the average daily undrawn funds
under this agreement. The credit agreement requires compliance with certain covenants, such leverage ratios and fixed
charge coverage, minimum net worth requirements, distribution limitations and investment restrictions.
On April 17, 2009, we entered into an amendment to the credit agreement. The terms of the amendment to the credit
agreement call for:

a reduction of the aggregate commitment from $225,000 to $200,000 at closing;

an initial collateral pool secured by first priority liens (assignment of partnership interests to be converted to
mortgage liens within 90 days of closing) in eight retail assets valued at approximately $200,000;
43

the requirement that the maximum advance rate on the appraised value of the initial collateral pool be 80%
beginning September 30, 2009;

pay down of the line from net proceeds of asset sales;

an assignment of corporate cash flow in the event of default;

an increase in interest rate to LIBOR (3% floor) plus 3.50%;

an increase in the unused fees to 0.35% or to 0.50% depending on the undrawn amount;

the requirement for a comprehensive collateral pool subject to certain financial covenants related to loan-to-value
and debt service coverage (secured by mortgage interests in each asset) beginning March 31, 2010;

an agreement to prohibit redemptions of our common shares and limit the common dividend to no more than the
minimum level necessary to remain in compliance with the REIT regulations until March 31, 2010; and

customary fees associated with the modification.
In exchange for these changes, certain of the financial covenants under the credit agreement have been modified, namely
the leverage ratio, minimum net worth and fixed charge coverage covenants, retroactive to January 1, 2009. As of March
31, 2009, we were in compliance with all financial covenants, as amended.
Certain of our subsidiaries are in maturity default on six non-recourse mortgage payables totaling $54,945. Such
maturities are subject to limits set forth in the credit agreement governing our outstanding line of credit, and if they grow
to higher levels, could cause a future default under the cross default provisions of that credit agreement. Debt service
remains current on these mortgages.
Based on our current business plans, we believe we will be able to operate in compliance with our covenants under the
credit agreement for 2009 and beyond.
Our current business plans indicate that we will be able to operate in compliance with these covenants, as modified, in
2009 and beyond; however, the current dislocation in the global credit markets has significantly impacted our projected
cash flows and our financial position and effective leverage. If there is a continued decline in the retail and real estate
industries and a decline in consumer confidence leading to a decline in consumer spending and/or we are unable to
successfully execute plans as further described below, we could violate these covenants, and as a result may be subject to
higher finance costs and fees and/or an acceleration of the maturity date of advances under the credit agreement. These
facts and an inability to predict future economic conditions have encouraged us to adopt a strict focus on lowering
leverage and increasing financial flexibility.
At the current operating levels we anticipate that cash flow from operating activities will continue to provide adequate
capital for all scheduled interest and monthly principal payments on outstanding indebtedness and dividend payments in
accordance with REIT requirements. We are committed to prudently managing and minimizing discretionary operating
and capital expenditures and raising the necessary equity and debt capital to maximize liquidity, repay outstanding
borrowings as they mature and comply with financial covenants in 2009 and beyond.
General
We remain focused on our balance sheet, identifying future financings at reasonable pricing and evaluating opportunities
created by the distress in the financial markets. Our strategy has been and continues to be to procure financing on an
individual asset, non-recourse basis to preserve our corporate credit. This strategy reflects our primary interest in
maintaining a strong balance sheet, while attempting to capitalize on attractive investment opportunities that have been
created by current market conditions, although there currently appear to be few such opportunities. We continue to
review prospective investments based upon risk and return attributes.
Our principal demands for funds have been and will continue to be for payment of operating expenses, payment of interest
on outstanding indebtedness, shareholder distributions, and beginning in the second quarter of 2009 refinancings of
property level indebtedness. Generally, cash needs for items other than property acquisitions have been met from
operations. Cash needs for 2009 debt maturities will primarily need to come from refinancing proceeds, the amount and
44
terms which are unknown due to the inactivity in the debt market. Cash needs for 2009 will also be met by the retention
of cash expected from the suspension of the SRP and reduction of distributions.
As of March 31, 2009, we had cash and cash equivalents of $140,780. At the current operating levels we anticipate that
cash flow from operating activities will continue to provide adequate capital for all interest and monthly principal
payments on outstanding indebtedness and recurring tenant improvements. In 2009, we plan to be a net seller of assets by
divesting certain recently developed assets and non-core assets. These asset sales are primarily designed to assist in the
pay down of debt maturing in 2009. However, there can be no assurance that such sales will occur, or, if they occur, that
they will materially assist in reducing our indebtedness.
During the three months ended March 31, 2009, we obtained aggregate secured financings of $67,639 with interest rates
ranging from 1.90% to 7.70% and maturities up to ten years. This amount includes $45,760 of mortgage debt refinanced
to new borrowed amounts of $37,400 at a weighted average rate of 7.5% with ten year maturities. We repaid $33,630 in
mortgage debt and $27,160 in construction loan debt from our net cash flow after distributions to shareholders.
We continue to evaluate our maturing mortgage debt, and based on management’s current assessment, to the extent we
obtain viable financing and refinancing alternatives, such alternatives may have a material adverse impact on our expected
financial results as lenders increase the cost of debt financing and tighten their underwriting standards. Our remaining
2009 mortgage debt maturities of $1,014,450 mature as follows: $189,701 in the second quarter; $498,229 in the third
quarter and $326,520 in the fourth quarter of 2009. As we continue our efforts to refinance our maturing mortgage debt,
maturity defaults have occurred on certain of our mortgage debt and we anticipate additional maturity defaults will occur
due to lack of replacement financings, timing issues related to loan closings and protracted extension negotiations. Such
maturity defaults are subject to limits set forth in the credit agreement governing our outstanding line of credit, and if they
grow to higher levels, could cause a future default under the cross default provisions of the credit agreement. No
assurance can be provided that the aforementioned obligations will be refinanced or repaid as currently anticipated and as
a result, we may consider conveying properties to lenders in satisfaction of the underlying mortgage debt obligations.
Our leases typically provide that the tenant bears responsibility for a majority of all property costs and expenses associated
with ongoing maintenance and operation, including, but not limited to, utilities, property taxes and insurance. In addition,
in some instances our leases provide that the tenant is responsible for roof and structural repairs. Certain of our properties
are subject to leases under which we retain responsibility for certain costs and expenses associated with the property. We
anticipate that capital demands to meet obligations related to capital improvements with respect to properties will be
minimal for the foreseeable future (as many of our properties have recently been constructed or rehabbed) and can be met
with funds from operations and working capital.
We believe that our current capital resources (including cash on hand) and anticipated refinancings are sufficient to meet
our liquidity needs for 2009. We further believe that our individually procured, non-recourse indebtedness positions us
well for the refinancing efforts facing us in 2009 and 2010. We intend to seek refinancing on all of our indebtedness
coming due in 2009 and 2010; but, when we deem appropriate we will seek extensions of the existing indebtedness. We
can not be assured that the lenders will honor such extension requests; however, given the non-recourse nature of our
indebtedness we believe our ability to obtain reasonable extensions is likely. We also believe that the prospect of being a
net seller of real estate assets in 2009 will further benefit our refinancing efforts and our cash position.
Liquidity
We anticipate that cash flow from operating activities will continue to provide adequate capital for all scheduled interest
and monthly principal payments on outstanding indebtedness, recurring tenant improvements and distribution payments in
accordance with REIT requirements. To assist in the refinancing needs, we intend to utilize a combination of equity
raised from expected asset sales, retained capital as a result of suspension of the share repurchase program, and the change
in the dividend policy announced with the intention of paying at least 90% of taxable income to maintain our REIT
status. In addition, we are pursuing prospective refinancings and extensions in order to fund our debt repayments and, to
the extent deemed appropriate, minimizing further capital expenditures. While we review numerous investment
opportunities, we do not expect to invest significant capital in these investment opportunities until debt maturities are
appropriately addressed.
45
Our primary uses and sources of our consolidated cash are as follows:
Uses
Sources
Short-Term:


Tenant improvement allowances

Operating cash flow

Improvements made to individual properties
that are not recoverable through common
area maintenance charges to tenants
Available borrowings under revolving credit
facilities

Distribution payments

Distribution reinvestment plan

Secured loans collateralized by individual
properties

Debt repayment requirements, including
both principal and interest

Asset sales

Corporate and administrative expenses
Long-Term:


Acquisitions
Secured loans collateralized by individual
properties

New development

Major redevelopment, renovation or
expansion programs at individual properties


Construction loans

Long-term project financing

Debt repayment requirements, including
both principal and interest
Joint venture financing with institutional
partners

Marketable securities

Asset sales
Mortgages Payable . Mortgage loans outstanding as of March 31, 2009 were $4,290,001 and had a weighted average
interest rate of 4.89%. Of this amount, $4,074,325 had fixed rates ranging from 3.99% to 8.00% and a weighted average
fixed rate of 5.01%. The remaining $215,676 of outstanding indebtedness represented variable rate loans with a weighted
average interest rate of 2.64%. Properties with a net carrying value of $6,136,190 at March 31, 2009 and related tenant
leases are pledged as collateral. As of March 31, 2009, scheduled maturities for our outstanding mortgage indebtedness
had various due dates through March 1, 2037.
Shareholder Liquidity . We provide the following programs to facilitate investment in our shares and to provide limited,
interim liquidity for our shareholders until such time as a market for the shares develops:
The DRP, subject to certain share ownership restrictions, allows our shareholders who have purchased shares in our
offerings to automatically reinvest distributions by purchasing additional shares from us. Such purchases under the DRP
are not subject to selling commissions or the marketing contribution and due diligence expense allowance. In conjunction
with our estimate of the value of a share of our stock for purposes of ERISA, the board of directors amended our DRP,
effective March 1, 2009, solely to modify the purchase price. Thus, on or after March 1, 2009, additional shares of our
stock purchased under the DRP has been purchased at a price of $8.50 per share. In the event (if ever) of a listing on a
national stock exchange, shares purchased by us for the DRP will be purchased on such exchange or market at the then
prevailing market price, and will be sold to participants at that price. Prior to this change on March 1, 2009, participants
were able to acquire shares under the DRP at a price equal to $10.00 per share. The price per share had been $9.50 up to
the payment of the distribution made in October 2006, at which point it was increased to $10.00 per share. As of March
31, 2009, we had issued 63,104 shares pursuant to the DRP for an aggregate amount of $617,456.
Capital Resources
At March 31, 2009, our capitalization consisted of $4,607,141 of debt and $2,522,334 of total equity. At March 31, 2009,
our total debt consisted of $4,124,729 of fixed-rate debt and $482,412 of variable-rate debt, including $83,250 of
variable-rate debt that was effectively swapped to a fixed rate. At December 31, 2008, our total debt consisted of
$4,110,495 of fixed-rate debt and $517,107 of variable-rate debt.
It is management’s current strategy to have access to the capital resources necessary to manage our balance sheet, to repay
upcoming maturities and, to a lesser extent, to consider making prudent investments should such opportunities
arise. Accordingly, we may seek to obtain funds through additional debt or equity financings and/or joint venture capital
in a
46
manner consistent with our intention to operate with a conservative debt capitalization policy. In light of the current
economic conditions, we may not be able to obtain financing on favorable terms, or at all, which may negatively impact
future cash flows available for distribution. Foreclosure on mortgaged properties as a result of an inability to refinance
existing indebtedness would have a negative impact on our financial condition and results of operations.
Our credit agreement contains certain financial and operating covenants, including, among other things, leverage and
fixed charge coverage ratios, as well as limitations on our ability to incur recourse indebtedness. Although we intend to
operate in compliance with these covenants as modified by the amendment, if we were to violate these covenants, we may
be subject to higher finance costs and fees or accelerated maturities.
We have entered into an interest rate lock agreement with a lender to secure interest rates on mortgage debt on properties
we currently own or plan to purchase in the future. We have outstanding interest rate lock deposits under the agreement
that locks only the Treasury portion of mortgage debt interest, which had a maturity date of June 30, 2008, and was
extended to May 29, 2009. This Treasury rate lock agreement locks the Treasury portion at a rate of 5.582% on $85,000
in notional amounts, and can be converted into full rate locks upon allocation of properties. During 2009, we were not
required to make additional rate lock deposits, and determined that the carrying value of the rate lock deposits were fully
recoverable as of March 31, 2009. The balance of the rate lock deposits as of March 31, 2009 and December 31, 2008
was $1,220.
Although the loans we closed are generally non-recourse, occasionally, when it is deemed to be advantageous, we may
guarantee all or a portion of the debt on a full-recourse basis or cross-collateralize loans. The majority of our loans
require monthly payments of interest only, although some loans require principal and interest payments as well as reserves
for real estate taxes, insurance and certain other costs. Individual decisions regarding interest rates, loan-to-value, fixed
versus variable-rate financing, maturity dates and related matters are often based on the condition of the financial markets
at the time the debt is issued, which may vary from time to time.
Distributions declared and paid are determined by our board of directors and are dependent on a number of factors,
including the amount of funds available for distribution, flow of funds, our financial condition, any decision by our board
of directors to reinvest funds rather than to distribute the funds, our capital expenditures, the annual distribution required
to maintain REIT status under the Code and other factors the board of directors may deem relevant.
Statement of Cash Flows Comparison for the Three Months Ended March 31, 2009 and 2008
Cash Flows from Operating Activities
Cash flows provided by operating activities were $51,576 and $88,476 for the three months ended March 31, 2009 and
2008, respectively, which consists primarily of net income from property operations.
Cash Flows from Investing Activities
Cash flows provided by (used in) investing activities were $40,170 and $(58,078), respectively, for the three months
ended March 31, 2009 and 2008. Of these amounts, $16,488 and $65,625 were used for acquisition of new properties and
earnouts at existing properties during the three months ended March 31, 2009 and 2008, respectively. During the three
months ended March 31, 2009, we sold one property which resulted in sales proceeds of $64,741. In addition, during the
three months ended March 31, 2009 and 2008, we purchased marketable securities of $15 and $17,947, respectively, and
sold marketable securities of $7,393 and $717, respectively.
We will attempt to dispose of select non-core assets in 2009. It is uncertain given current market conditions when and
whether we will be successful in disposing of these assets and whether such sales could recover our original
cost. Additionally, tenant improvement costs associated with re-leasing space recently vacated or currently leased by our
bankrupt tenants could be significant.
47
Cash Flows from Financing Activities
Cash flows used in financing activities were $72,133 and $23,741, respectively, for the three months ended March 31,
2009 and 2008. We paid none and $56,381 for shares repurchased through the SRP for the three months ended March 31,
2009 and 2008, respectively. We also (used)/generated $(40,535) and $58,412 for the three months ended March 31,
2009 and 2008, respectively, related to proceeds from new mortgages secured by our properties, an unsecured line of
credit and other financings, net of principal payments, payoffs and the payment of fees and deposits. During the three
months ended March 31, 2009 and 2008, we also (used)/generated $(14,604) and $12,381, respectively, through the net
purchase of securities on margin. We paid $13,584 and $38,153 in distributions, net of distributions reinvested through
DRP, to our shareholders for the three months ended March 31, 2009 and 2008, respectively.
Effects of Transactions with Related and Certain Other Parties
See Note 4 – Transactions with Related Parties in our consolidated financial statements.
Off-Balance Sheet Arrangements, Contractual Obligations, Liabilities and Contracts and Commitments
Contracts and Commitments
We have acquired several properties which have earnout components, meaning that we did not pay for portions of these
properties that were not rent producing at the time of acquisition. We are obligated, under these agreements, to pay for
those portions when a tenant moves into its space and begins to pay rent. The earnout payments are based on a
predetermined formula. Each earnout agreement has a time limit regarding the obligation to pay any additional
monies. The time limits generally range from one to three years. If, at the end of the time period allowed, certain space
has not been leased and occupied, generally, we will own that space without any further payment obligation. Based on
pro-forma leasing rates, we may pay as much as $27,911 in the future as retail space covered by earnout agreements is
occupied and becomes rent producing.
We have entered into one construction loan agreement and three other installment note agreements in which we have
committed to fund up to a total of $29,135. Each loan, except one, requires monthly interest payments with the entire
principal balance due at maturity. The combined receivable balance at March 31, 2009 and December 31, 2008 was
$25,696 and $25,715, net of allowances of $300 and $300, respectively. We may be required to fund up to an additional
$1,214 on these loans as all four of the agreements are non-revolving and some principal payments have already been
received.
We guarantee a portion of the construction debt associated with certain of the consolidated development joint
ventures. The guarantees are released as certain leasing parameters are met.
As of March 31, 2009, the amount
guaranteed by us was $17,944; however, as these guarantees are with consolidated entities, the potential liability
associated with these guarantees has not been recorded.
As of March 31, 2009, we had eight irrevocable letters of credit outstanding for security in mortgage loan arrangements,
mostly relating to loan fundings against earnout spaces at certain properties. Once we pay the remaining portion of the
purchase price for these properties and meet certain occupancy requirements, the letters of credit will be released. There
were also two letters of credit outstanding for the benefit of the Captive. These letters of credit serve as collateral for
payment of potential claims. There were also five letters of credit relating to four development projects as security for
utilities and completion. The balance of outstanding letters of credit at March 31, 2009 was $29,929, and none have been
drawn upon.
We have entered into an interest rate lock agreement with a lender to secure interest rates on mortgage debt on properties
we currently own or plan to purchase in the future. We have outstanding interest rate lock deposits under the agreement
that locks only the Treasury portion of mortgage debt interest, which had a maturity date of June 30, 2008, and was
extended to May 29, 2009. This Treasury rate lock agreement locks the Treasury portion at a rate of 5.582% on $85,000
in notional amounts, and can be converted into full rate locks upon allocation of properties. During 2009, we were not
required to make additional rate lock deposits, and determined that the carrying value of rate lock deposits were fully
recoverable as of March 31, 2009. The balance of the rate lock deposits as of March 31, 2009 and December 31, 2008
was $1,220.
48
Subsequent Events
During the period from April 1, 2009 through May 12, 2009, we:

issued 1,209 additional shares of common stock through the DRP, resulting in a total of 479,974 of common stock
outstanding at May 11, 2009;

paid distributions of $23,356, representing $0.048783 per share, to shareholders in April 2009 for the quarter
ended March 31, 2009;

paid $1,048 and $5,812 to our partners in two consolidated joint ventures to fulfill their respective redemption
interests;

funded additional capital of $328 on one existing unconsolidated development joint venture;

funded additional capital of $301 on two existing development joint ventures;

closed on the sale of a single tenant office building consisting of approximately 389,000 square feet, located in
Greensboro, North Carolina with a sales price of $53,000, which resulted in net proceeds of $18,938 and a gain on
sale of $4,807. The buyer, an Inland affiliate, assumed the mortgage payable of $33,040;

closed on the sale of a single tenant office building consisting of approximately 396,000 square feet, located in
Salt Lake City, Utah with a sales price of $46,000, which resulted in net proceeds of $14,869 and a gain on sale
of $3,175. The buyer, an Inland affiliate, assumed the mortgage payable of $30,149;

sold a vacant land parcel adjacent to an existing development joint venture for a price of $650;

borrowed an additional $4,750 of margin debt related to our investment in marketable securities;

paid an extension fee of $18 to extend the maturity date of one mortgage payable with a principal balance of
$7,179 and a fixed interest rate of 4.96% from April 1, 2009 to June 1, 2009;

paid an extension fee of $19 to extend the maturity date of one mortgage payable with a principal balance of
$7,562 and a fixed interest rate of 4.96% from April 1, 2009 to June 1, 2009;

paid an extension fee of $10 to extend the maturity date of one mortgage payable with a principal balance of
$5,342 and a fixed interest rate of 4.39% from May 1, 2009 to June 1, 2009;

paid an extension fee of $10 to extend the maturity date of one mortgage payable with a principal balance of
$23,766 and a fixed interest rate of 8.00% from May 1, 2009 to June 1, 2009;

paid an extension fee of $20 to extend the maturity date of one mortgage payable with a principal balance of
$12,700 and a fixed interest rate of 4.29% from May 1, 2009 to July 1, 2009;

paid an extension fee of $49 to extend the maturity date of one mortgage payable with a principal balance of
$19,525 and a fixed interest rate of 3.99% from May 1, 2009 to July 1, 2009;

paid an extension fee of $37 to extend the maturity dates of two mortgages payable on one investment property
with a combined principal balance of $14,865 and fixed interest rates of 4.91% and 4.95% from May 1, 2009 to
July 1, 2009;

paid an extension fee of $27 to extend the maturity dates of two mortgages payable on one investment property
with a combined principal balance of $10,810 and fixed interest rates of 4.96% and 5.13% from May 1, 2009 to
July 1, 2009;

paid an extension fee of $110 to extend the maturity date of one mortgage payable with a principal balance of
$44,000 and a variable interest rate of 2.54% from June 1, 2009 to July 1, 2009;

funded a principal paydown of $4,000 to extend the maturity date of one mortgage payable with a principal
balance of $14,200 and a variable interest rate of 2.02% from May 12, 2009 to October 12, 2009;

refinanced a mortgage payable of $23,650 with a fixed interest rate of 2.54% with a new borrowed amount of
$17,350 with a variable interest rate of 6.50% and a term of 5 years;

closed on one mortgage payable in the amount of $8,300, with a fixed interest rate of 7.48% and a term of 10
years on an existing property;

funded a partial principal paydown of $2,350 for one mortgage payable with an original principal balance of
$8,550 and a fixed interest rate of 5.48%;
49

maturity defaults on mortgage payable – refer to Note 10;

entered into an amendment to the credit agreement – refer to Note 10, and

repaid $33,000 on the unsecured line of credit.
New Accounting Pronouncements
See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements regarding certain new
accounting pronouncements that we have recently adopted and that we expect to adopt in 2009.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity and fund
capital expenditures and expansion of our real estate investment portfolio and operations. Our interest rate risk
management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall
borrowing costs. To achieve our objectives we borrow primarily at fixed rates through interest rate lock agreements or
variable rates with the lowest margins available and in some cases, with the ability to convert variable rates to fixed rates.
We have entered into an interest rate lock agreement with a lender to secure interest rates on mortgage debt on properties
we currently own or plan to purchase in the future. We have outstanding interest rate lock deposits under the agreement
that locks only the Treasury portion of mortgage debt interest, which had a maturity date of June 30, 2008, and was
extended to May 29, 2009. This Treasury rate lock agreement locks the Treasury portion at a rate of 5.582% on $85,000
in notional amounts, and can be converted into full rate locks upon allocation of properties. During 2009, we were not
required to make additional rate lock deposits, and determined that the carrying value of the rate lock deposits were fully
recoverable as of March 31, 2009. The balance of the rate lock deposits as of March 31, 2009 and December 31, 2008
was $1,220.
With regard to variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring
changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging
opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both
of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management
control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected
impact of changes in interest rates on our future cash flows.
We may use additional derivative financial instruments to hedge exposures to changes in interest rates on loans secured by
our properties. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the
counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is
positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is
negative, we owe the counterparty and, therefore, it does not possess a credit risk. It is our policy to enter into these
transactions with the same party providing the financing, with the right of offset. Alternatively, we will minimize the
credit risk in derivative instruments by entering into transactions with high-quality counterparties. Market risk is the
adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk
associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and
degree of market risk that may be undertaken.
The carrying amount of our mortgages payable, notes payable and line of credit is approximately $249,945 higher than its
fair value as of March 31, 2009.
We had $482,412 of variable rate debt with an average interest rate of 1.94% as of March 31, 2009. An increase in the
variable interest rate on this debt constitutes a market risk. If interest rates increase by 1%, based on debt outstanding as
of March 31, 2009, interest expense would increase by approximately $4,824 on an annualized basis.
Equity Price Risk
We are exposed to equity price risk as a result of our investments in marketable securities. Equity price risk changes as
the volatility of equity prices changes or the values of corresponding equity indices change.
50
Other-than-temporary impairments were $24,709 and $8,036 for the three months ended March 31, 2009 and 2008,
respectively. The overall stock market and REIT stocks have declined since late 2007, including our REIT stock
investments, which have resulted in our recognizing other-than-temporary impairments. At this point in time our
investments continue to generate dividend income. If the equity market recovers, we may be able to sell marketable
securities at prices in excess of our current book values. However, without recovery in the near term such that liquidity
returns to the markets and spreads return to levels that reflect underlying credit quality, it is difficult to project where the
REIT market and the value of our investments in marketable securities will be beyond the first quarter 2009. If our stock
positions do not recover in 2009, we could take additional other-than-temporary impairments, which could be material to
our operations.
The information presented herein is merely an estimate and has limited predictive value. As a result, the ultimate realized
gain or loss with respect to interest rate fluctuations will depend on the interest rate exposures that arise during the period,
our hedging strategies at that time and future changes in the level of interest rates.
Item 4. Controls and Procedures
We have established disclosure controls and procedures to ensure that material information relating us, including our
consolidated subsidiaries, is made known to the officers who certify our financial reports and to the members of senior
management and the board of directors.
Based on management’s evaluation as of March 31, 2009, our chief executive officer, chief operating officer and chief
financial officer and chief accounting officer have concluded that our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information
required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules
and forms.
There were no changes to our internal controls over financial reporting during the fiscal quarter ended March 31, 2009
that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Part II – Other Information
Item 1. Legal Proceedings
We previously disclosed in our Form 10-K for the fiscal years ended December 31, 2008 and December 31, 2007,
respectively, the lawsuit filed against us and nineteen other defendants by City of St. Clair Shores General Employees
Retirement System and Madison Investment Trust in the United States District Court for the Northern District of
Illinois. In an amended complaint filed on June 12, 2008, plaintiffs alleged that all the defendants violated the federal
securities laws, and certain defendants breached fiduciary duties owed to us and our shareholders, in connection with our
merger with our business manager/advisor and property managers as reflected in our Proxy Statement dated September
12, 2007 (the "Proxy Statement"). All the defendants, including us, filed motions to dismiss the lawsuit, arguing that the
amended complaint failed to comply with various rules and standards for pleading the kinds of claims in issue.
In a Memorandum Opinion and Order dated April 1, 2009 (“Order”), the court granted in part the defendants' motions to
dismiss the amended complaint. The court dismissed five of the seven counts of the amended complaint in their entirety,
including all claims that our board of directors breached their fiduciary duties to us and our shareholders in connection
with the merger. As to the remaining two counts, which alleged that the Proxy Statement contained false and misleading
statements, or omitted to state material facts necessary to make the statements therein not false and misleading, in
violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), the motions to dismiss
were granted in part and denied in part. The court also held that the amended complaint adequately alleged a claim under
Section 14(a) of the Exchange Act against KPMG LLP, in connection with its independent audit report for the advisor and
property managers’ financial statements, and William Blair & Company, LLC, in connection with its Fairness Opinion
that the consideration to be paid by us under the merger agreement was fair to us from a financial point of view. The
court ordered the plaintiffs to file a second amended complaint conforming to the court’s Order. Plaintiffs filed a second
amended complaint on May 1, 2009.
51
In connection with this litigation, we continue to advance legal fees for certain directors and officers and William Blair &
Company, LLC as part of our obligations under existing indemnity provisions. We believe the plaintiffs’ allegations are
without merit and intend to vigorously defend the lawsuit.
Item 1A. Risk Factors
There have been no material changes to our risk factors during the three months ended March 31, 2009 compared to those
risk factors presented in our Annual Report on Form 10-K for the year ended December 31, 2008.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 6. Exhibits
Exhibit No. Description
10.583
Second Amendment to Escrow Agreement dated November 14, 2008 by and among Inland Real Estate
Investment Corporation, Inland Western Retail Real Estate Trust, Inc., IWEST Merger Agent, LLC and
Bank of America, N.A. as Successor to LaSalle Bank, N.A. (filed herewith).
10.584
Amendment to Credit Agreement dated as of October 15, 2007 among Inland Western Real Estate Trust,
Inc. as Borrower and KeyBanc National Association as Administrative Agent, KeyBanc Capital Markets
as Lead Arranger and Book Manager, and Certain of the Lenders from Time to Time Parties hereto, as
Lenders (filed herewith).
31.1
Certification of Chief Executive Officer and President pursuant to rule 13a-14(a) of the Securities
Exchange Act of 1934 (filed herewith).
31.2
Certification of Chief Operating Officer and Chief Financial Officer pursuant to rule 13a-14(a) of the
Securities Exchange Act of 1934 (filed herewith).
31.3
Certification of Chief Accounting Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of
1934 (filed herewith).
32.1
Certification of Chief Executive Officer and President, Chief Operating Officer and Chief Financial
Officer and Chief Accounting Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934
(filed herewith).
52
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
By:
/s/ Michael J. O’Hanlon
Michael J. O’Hanlon
Chief Executive Officer and President
Date:
May 13, 2009
By:
/s/ Steven P. Grimes
Steven P. Grimes
Chief Operating Officer and
Chief Financial Officer
Date:
May 13, 2009
By:
/s/ James W. Kleifges
James W. Kleifges
Chief Accounting Officer
Date:
May 13, 2009
53
Exhibit 31.1
CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael J. O’Hanlon, certify that:
1.
I have reviewed this quarterly report on Form 10-Q for the three months ended March 31, 2009 of Inland Western Retail Real
Estate Trust, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by
this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
/s/ Michael J. O’Hanlon
By:
Michael J. O’Hanlon
Chief Executive Officer and President
Date:
May 13, 2009
Exhibit 31.2
CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Steven P. Grimes, certify that:
1.
I have reviewed this quarterly report on Form 10-Q for the three months ended March 31, 2009 of Inland Western Retail Real
Estate Trust, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by
this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
/s/ Steven P. Grimes
By:
Steven P. Grimes
Chief Operating Officer and Chief Financial Officer
Date
May 13, 2009
Exhibit 31.3
CERTIFICATION
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, James W. Kleifges, certify that:
1.
I have reviewed this quarterly report on Form 10-Q for the three months ended March 31, 2009 of Inland Western Retail Real
Estate Trust, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by
this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.
/s/ James W. Kleifges
By:
James W. Kleifges
Chief Accounting Officer
Date
May 13, 2009
Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Inland Western Retail Real Estate Trust, Inc. (the "Company")
for the three months ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Michael J. O’Hanlon, as Chief Executive Officer and President of the Company, Steven P. Grimes, as Chief
Operating Officer and Chief Financial Officer of the Company and James W. Kleifges as Chief Accounting Officer of the
Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to his knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
/s/ Michael J. O’Hanlon
Name:
Michael J. O’Hanlon
Chief Executive Officer and President
Date:
May 13, 2009
/s/ Steven P. Grimes
Name:
Steven P. Grimes
Chief Operating Officer and Chief Financial Officer
Date:
May 13, 2009
/s/ James W. Kleifges
Name:
James W. Kleifges
Chief Accounting Officer
Date:
May 13, 2009
SECOND AMENDMENT TO ESCROW AGREEMENT
IS SECOND AMENDMENT TO ESCROW AGREEMENT (this " Amendment ") is made and entered into as of the
h day of April, 2009, by and among INLAND REAL ESTATE INVESTMENT CORPORATION, a Delaware
poration (" IREIC "); INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation ("
EST "); IWEST MERGER AGENT, LLC, in its capacity as agent (the " Agent "); and BANK OF AMERICA, N.A.
SUCCESSOR TO LASALLE BANK, N.A., as escrow agent (" Escrow Agent ").
RECITALS :
A.
IREIC, IWEST, the Agent and the Escrow Agent are parties to that certain Escrow Agreement, dated as of
vember 15, 2007 (the " Escrow Agreement "). Capitalized terms used but not defined in this Amendment, but defined in
Escrow Agreement, shall have the meanings given to them in the Escrow Agreement.
B.
The Escrow Agreement was entered into pursuant to that certain Agreement and Plan of Merger, dated as
August 14, 2007 (the " Merger Agreement "), by and among IWEST, certain acquisition subsidiaries of IWEST, IREIC,
Agent, Inland Western Retail Real Estate Advisory Services, Inc., Inland Southwest Management Corp., Inland
thwest Management Corp. and Inland Western Management Corp.
C.
IREIC, IWEST, Agent and Escrow Agent entered into the First Amendment to Escrow Agreement dated as
November 14, 2008 to eliminate the disbursement of Escrowed Shares on the Initial Disbursement Date.
D.
IREIC, IWEST, the Agent and the Escrow Agent desire to enter into this Amendment to amend the date for
l disbursement of Escrowed Shares.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained, and for
er good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
ee as follows:
Amendment to Escrow Agreement .
Section 4(b) of the Escrow Agreement shall be amended by deleting the first sentence of that Section in its entirety
and substituting in lieu thereof the following:
On the second (2nd) anniversary of the Effective Date (the “ Final Disbursement Date ”),
Escrow Agent shall disburse to IREIC and the Agent (or as directed by IREIC and the
Agent in writing no less than two (2) Business Days prior to the Final Disbursement
Date), an amount of Escrowed Shares (the “ Final Disbursement Amount ”) equal to
100% of (A) the Value of the Escrow as of the Final Disbursement Date less (B) an
amount (the “ Final Withheld Amount ”) equal to the aggregate Damages, if any, then
claimed by IWEST pursuant to a proper IWEST Disbursement Request or Final
Adjudication received by Escrow Agent, IREIC and the Agent in accordance with
Section 4(c) below prior to the Final Disbursement Date (each, an “ IWEST Claim ”),
which claimed Damages have not been disbursed from the Escrow Fund or otherwise
paid or satisfied prior to the Final Disbursement Date.
General Provisions .
(a)
Except as amended by this Amendment, the terms and provisions of the Escrow Agreement shall remain in
full force and effect.
(b)
This Amendment may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
(c)
This Amendment may be executed and delivered by exchange of facsimile copies showing the signatures of
IWEST, the Agent, IREIC and the Escrow Agent, and those signatures need not be affixed to the same copy. The
facsimile copies showing the signatures of IWEST, the Agent, IREIC and Escrow Agent will constitute originally
signed copies of the same agreement requiring no further execution.
(d)
This Amendment shall be governed by and construed in accordance with the internal laws of the State of
Illinois applicable to contracts made and performed entirely within the State of Illinois, without giving effect to its
conflicts of law provisions.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IWEST COUNTERPART SIGNATURE PAGE TO
SECOND AMENDMENT TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written
ve.
EST:
LAND WESTERN RETAIL REAL ESTATE TRUST, INC.
/s/ Steven P. Grimes
me:
Steven P. Grimes
Chief Operating Officer, Chief
Financial Officer and Treasurer
AGENT COUNTERPART SIGNATURE PAGE TO
SECOND AMENDMENT TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written
ve.
E AGENT :
EST MERGER AGENT, LLC
/s/ Daniel L. Goodwin
me:
Daniel L. Goodwin
President
REIC COUNTERPART SIGNATURE PAGE TO SECOND AMENDMENT TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written
ve.
EIC:
LAND REAL ESTATE INVESTMENT CORPORATION
/s/ Brenda Gail Gujral
me:
Brenda Gail Gujral
President
ESCROW AGENT COUNTERPART SIGNATURE PAGE TO
SECOND AMENDMENT TO ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first written
ve.
CROW AGENT :
NK OF AMERICA, N.A.
SUCCESSOR TO LASALLE BANK, N.A.
/s/ Mark T. Lolacono
me:
Mark T. Lolacono
Vice President
COMPREHENSIVE AMENDMENT TO CREDIT AGREEMENT
DATED AS OF APRIL 17, 2009
AMONG
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC.
AS BORROWER
AND
KEYBANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
KEYBANC CAPITAL MARKETS
AS LEAD ARRANGER AND BOOK MANAGER
AND
CERTAIN OF THE LENDERS
FROM TIME TO TIME PARTIES HERETO,
AS LENDERS
TABLE OF CONTENTS
Page
ARTICLE I.
1
ARTICLE IA.
2
DEFINITIONS
2
ARTICLE II. THE CREDIT
2
1
2.1.
Generally
21
2.2.
Ratable and Non Ratable Advances
22
2.3.
Collateral
22
2.4.
Final Principal Payment
26
2.5.
Unused Fee
26
2.6.
Other Fees
26
2.7.
Minimum Amount of Each Advance
26
2.8.
Principal Payments
26
2.9.
Method of Selecting Types and Interest Periods for New Advances
27
2.10.
Conversion and Continuation of Outstanding Advances
27
2.11.
Changes in Interest Rate, Etc
28
2.12.
Rates Applicable After Default
28
2.13.
Method of Payment
28
2.14.
Notes; Telephonic Notices
29
2.15.
Interest Payment Dates; Interest and Fee Basis
29
2.16.
Swingline Advances
30
2.17.
Notification of Advances, Interest Rates and Prepayments
30
2.18.
Lending Installations
31
2.19.
Non-Receipt of Funds by the Administrative Agent
31
2.20.
Replacement of Lenders under Certain Circumstances
31
2.21.
Usury
32
ARTICLE IIA LETTER OF CREDIT SUBFACILITY
3
2
2A.1
Obligation to Issue.
32
2A.2
Types and Amounts.
32
2A.3
Conditions.
32
2A.4
Procedure for Issuance of Facility Letters of Credit.
33
2A.5
Reimbursement Obligations; Duties of Issuing Bank.
34
2A.6
Participation.
34
2A.7
Payment of Reimbursement Obligations.
35
2A.8
Compensation for Facility Letters of Credit.
36
2A.9
Letter of Credit Collateral Account.
37
ARTICLE III. CHANGE IN CIRCUMSTANCES
3
7
3.1.
Yield Protection
37
3.2.
Changes in Capital Adequacy Regulations
38
3.3.
Availability of Types of Advances
38
3.4.
Funding Indemnification
38
3.5.
Taxes
38
3.6.
Lender Statements; Survival of Indemnity
40
ARTICLE IV. CONDITIONS PRECEDENT
4
1
4.1.
Initial Advance
41
4.2.
Each Advance and Issuance
42
ARTICLE V. REPRESENTATIONS AND WARRANTIES
4
2
-i-
5.1.
Existence
42
5.2.
Authorization and Validity
43
5.3.
No Conflict; Government Consent
43
5.4.
Financial Statements; Material Adverse Effect
43
5.5.
Taxes
43
5.6.
Litigation and Guarantee Obligations
44
5.7.
Subsidiaries
44
5.8.
ERISA
44
5.9.
Accuracy of Information
44
5.10.
Regulation U
44
5.11.
Material Agreements
44
5.12.
Compliance With Laws
44
5.13.
Ownership of Properties
44
5.14.
Investment Company Act
45
5.15.
Public Utility Holding Company Act
45
5.16.
Solvency
45
5.17.
Insurance
45
5.18.
Borrower Status
46
5.19.
Environmental Matters
46
5.20.
OFAC Representation
47
5.21.
Intellectual Property.
47
5.22.
Broker’s Fees
47
5.23.
Initial Collateral Properties
47
5.24.
No Bankruptcy Filing
49
5.25.
No Fraudulent Intent
49
5.26.
Transaction in Best Interests of Borrower and Subsidiary Guarantors; Consideration
49
5.27.
Subordination
49
5.28.
Tax Shelter Representation
49
5.29.
Anti-Terrorism Laws
50
5.30.
Survival
51
ARTICLE VI. COVENANTS
5
1
6.1.
Financial Reporting
51
6.2.
Use of Proceeds
52
6.3.
Notice of Default
53
6.4.
Conduct of Business
53
6.5.
Taxes
54
6.6.
Insurance
54
6.7.
Compliance with Laws
54
6.8.
Maintenance of Properties
54
6.9.
Inspection
54
6.10.
Maintenance of Status
54
6.11.
Dividends
54
6.12.
Merger; Sale of Assets
55
6.13.
Current Borrower Transactions
55
6.14.
Sale and Leaseback
55
6.15.
Acquisitions and Investments
55
6.16.
Liens
56
6.17.
Affiliates
56
6.18.
Financial Undertakings
56
6.19.
Variable Interest Indebtedness
56
- ii -
6.20.
Consolidated Net Worth
57
6.21.
Indebtedness and Cash Flow Covenants
57
6.22.
Environmental Matters
57
6.23.
Permitted Investments
58
6.24.
Minimum Average Occupancy
59
6.25.
Prohibited Encumbrances
59
6.26.
Subsidiary Guaranty
59
6.28.
Amendments to Organizational Documents
60
ARTICLE VII. DEFAULTS
6
0
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
6
3
8.1.
Acceleration
63
8.2.
Amendments
63
8.3.
Preservation of Rights
64
8.4.
Insolvency of Borrower
64
ARTICLE IX. GENERAL PROVISIONS
6
4
9.1.
Survival of Representations
64
9.2.
Governmental Regulation
65
9.3.
Taxes
65
9.4.
Headings
65
9.5.
Entire Agreement
65
9.6.
Several Obligations; Benefits of the Agreement
65
9.7.
Expenses; Indemnification
65
9.8.
Numbers of Documents
66
9.9.
Accounting
66
9.10.
Severability of Provisions
66
9.11.
Nonliability of Lenders
66
9.12.
CHOICE OF LAW
66
9.13.
CONSENT TO JURISDICTION
66
9.14.
WAIVER OF JURY TRIAL
67
9.15.
USA Patriot Act Notice
67
ARTICLE X. THE ADMINISTRATIVE AGENT
6
7
10.1.
Appointment
67
10.2.
Powers
67
10.3.
General Immunity
67
10.4.
No Responsibility for Loans, Recitals, etc.
68
10.5.
Action on Instructions of Lenders
68
10.6.
Employment of Agents and Counsel
68
10.7.
Reliance on Documents; Counsel
68
10.8.
Administrative Agent’s Reimbursement and Indemnification
68
10.9.
Rights as a Lender
69
10.10.
Lender Credit Decision
69
10.11.
Successor Administrative Agent
69
10.12.
Notice of Defaults
70
10.13.
Requests for Approval
70
10.14.
Defaulting Lenders
70
10.15.
Additional Agents
71
ARTICLE XI. SETOFF; RATABLE PAYMENTS
7
1
11.1.
Setoff
71
11.2.
Ratable Payments
71
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
7
1
- iii -
12.1.
Successors and Assigns
71
12.2.
Participations
72
12.3.
Assignments
73
12.4.
Dissemination of Information
73
12.5.
Tax Treatment
74
ARTICLE XIII. NOTICES
7
4
13.1.
Giving Notice
74
13.2.
Change of Address
74
ARTICLE XIV. COUNTERPARTS
7
4
- iv -
COMPREHENSIVE AMENDMENT TO CREDIT AGREEMENT
This Comprehensive Amendment to Credit Agreement (the “Amendment”) dated as of
April 17, 2009, is among Inland Western Retail Real Estate Trust, Inc., a corporation organized under
the laws of the State of Maryland (the “ Borrower ”), KeyBank National Association, a national
banking association, and the several banks, financial institutions and other entities from time to time
parties to the Agreement (collectively, the “ Lenders ”), and KeyBank National Association, not
individually, but as “Administrative Agent”.
RECITALS
A.
The Borrower is primarily engaged in the business of purchasing, owning, operating, leasing and
managing retail properties.
B.
The Borrower is qualified as a real estate investment trust under Section 856 of the Code.
C.
The Borrower and the Lenders are parties to a Credit Agreement dated as of October 15, 2007
(the “ Original Credit Agreement ”). Pursuant to Section 8.2 of the Original Credit Agreement,
Borrower and the Required Lenders (as defined in the Credit Agreement) may enter into
agreements for the purposes of modifying certain of the terms and provisions of the Original
Credit Agreement.
D.
The Borrower has requested that the Administrative Agent and the Required Lenders, enter into
this Amendment to comprehensively amend the Original Credit Agreement to (i) decrease the
Aggregate Commitment thereunder and (ii) modify certain of the terms thereof which can be
amended with the approval of the Required Lenders. The Administrative Agent and those
Lenders executing this Amendment and constituting Required Lenders, acting on behalf of all of
the Lenders as provided in the Original Credit Agreement, have agreed to do so on the terms set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
ARTICLE I.
AMENDMENT
1.1.
Continuation of Credit Agreement . As expressly modified as provided herein, the
Original Credit Agreement shall continue in full force and effect.
1.2
Amendment .
Articles I through XIV of the Original Credit Agreement are hereby
deleted in their entirety and replaced by Articles IA through XIV of this Agreement, as set forth
below, provided however that, notwithstanding anything else herein to the contrary, Sections 2.13,
8.1, 8.2 and 11.2 of the Original Credit Agreement shall continue unamended and in full force and
effect.
1
ARTICLE IA.
DEFINITIONS
As used in this Agreement:
“ABR Applicable Margin” means 2.0%.
“Account Pledge Agreement” means an Account Security, Pledge and Assignment
Agreement, substantially in the form of Exhibit H hereto, to be executed and delivered by the
Borrower and the Administrative Agent for the benefit of the Lenders with respect to the Deposit
Account into which the Excess Funds are deposited by each of the Subsidiary Guarantors and the
other Subsidiaries of the Borrower, as the same may be modified, amended or restated from time to
time.
“Acquisition” means any transaction, or any series of related transactions, consummated on
or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any
going business or all or substantially all of the assets of any partnership, limited liability company,
firm, corporation or division thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a corporation which have
ordinary voting power for the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership or membership interests of a partnership or limited liability company.
“Adjusted Annualized EBITDA” means, as of any date, an annualized amount determined by
multiplying four (4) times the Consolidated Net Income for the most recent fiscal quarter of the
Borrower for which financial results have been reported, as adjusted by (i) deducting therefrom any
income attributable to Excluded Tenants; (ii) adding or deducting for, as appropriate, any adjustment
made under GAAP for straight lining of rents, gains or losses from sales of assets, extraordinary
items, depreciation, amortization, interest expenses, taxes and the Consolidated Group Pro Rata
Share of interest, taxes, depreciation and amortization in Investment Affiliates; (iii) deducting
therefrom an annual amount for capital expenditures equal to (a) $0.15 per gross leaseable square
foot times the weighted quarterly average gross leaseable area of retail Projects (which includes
mixed-use Projects that are primarily retail) owned by the Consolidated Group during such fiscal
quarter and (b) $0.25 per net rentable area of all other Projects owned by the Consolidated Group
during such fiscal quarter; (iv) adding back all master lease income (not to exceed 5% of
Consolidated Net Income); and (v) adding back the actual advisory fee paid to the Advisor that was
deducted in determining Consolidated Net Income and deducting an assumed asset management fee
and Borrower level expenses equal to 4.5% of aggregate Net Operating Income from all Projects,
provided that if the Advisor is acquired by or merged into the Borrower, beginning with the second
full fiscal quarter after such acquisition and for each fiscal quarter thereafter no further adjustments
under this clause (v) will be made and Adjusted Annualized EBITDA will be calculated using the
Borrower’s actual general and administrative expenses.
“Adjusted Collateral Pool NOI” means, as of any date, Collateral Pool NOI for the most
recent fiscal quarter of the Borrower for which financial results have been reported less an amount
for capital expenditures equal to (a) $0.0375 per gross leaseable square foot ($0.15 per annum
divided by four quarters) times the weighted quarterly average gross leaseable area of Qualifying
Collateral Pool Properties that are retail Projects (which includes mixed use Projects that are
primarily retail) and (b) $0.0625 per gross leaseable square foot ($0.25 per annum divided by four
-2-
quarters) times the weighted quarterly average gross leaseable area of all other Qualifying Collateral
Pool Properties.
“Administrative Agent” means KeyBank National Association in its capacity as agent for the
Lenders pursuant to Article X , and not in its individual capacity as a Lender, and any successor
Administrative Agent appointed pursuant to Article X .
“Advance” means a borrowing hereunder consisting of the aggregate amount of the several
Loans made by one or more of the Lenders to the Borrower of the same Type and, in the case of
LIBOR Rate Advances, for the same Interest Period, including without limitation Swingline
Advances.
“Advisor” means Inland Western Retail Real Estate Advisory Services, Inc.
“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled
by or under common control with such Person. A Person shall be deemed to control another Person
if the controlling Person owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
“Aggregate Commitment” means, as of any date, the aggregate of the then-current
Commitments of all the Lenders, which is, as of the Amendment Effective Date, $200,000,000.
“Agreement” means the Original Credit Agreement as modified by this Comprehensive
Amendment to Credit Agreement, as it may be further amended or modified and in effect from time
to time.
“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the higher of
(i) the Prime Rate for such day, (ii) the sum of Federal Funds Effective Rate for such day plus 1.5%
per annum, and (iii) the sum of the LIBOR Base Rate for a LIBOR Interest Period of one day, as
determined by the Agent, plus 1.5% per annum.
“Amendment Effective Date” means the date this Amendment has been fully executed and
delivered by the Borrower and the Required Lenders.
“Annualized Consolidated NOI” means, as of any date, for any entity or group of entities
without duplication, (A) the aggregate Net Operating Income for the most recent fiscal quarter for
which financial results have been reported from all Projects owned by such entity or group of entities
as of the end of such fiscal quarter multiplied by (B) four.
“Applicable Margin” means, as applicable, the ABR Applicable Margin or the LIBOR
Applicable Margin which are used in calculating the interest rate applicable to the various Types of
Advances.
“Appraisal” means an MAI certified appraisal of an Initial Collateral Property or a Qualifying
Collateral Pool Property performed in accordance with FIRREA and Administrative Agent’s
appraisal requirements by an appraiser selected and retained by Administrative Agent, on behalf of
the Lenders, at Borrower’s expense.
-3-
“Appraised Value” means, (i) as of any date prior to March 31, 2010, the aggregate, as-is
values of the Initial Collateral Properties as established by the most recent Appraisals, provided that
if the Consolidated Group holds less than one hundred percent (100%) of the ownership interests in
an Initial Collateral Property, then the Consolidated Group Pro Rata Share of such appraised value of
such Initial Collateral Property will be used in determining Appraised Value and (ii) as of March 31,
2010, and any date thereafter, the aggregate, as-is values of the Qualifying Collateral Pool Properties
as established by the most recent Appraisals thereof.
“Article” means an article of this Agreement unless another document is specifically
referenced.
“Authorized Officer” means any of the President, Chief Financial Officer and Chief
Operating Officer, or the Chairman and Chief Executive Officer, or the Chief Accounting Officer of
the Borrower, or any other executive officer or authorized agent approved by the Administrative
Agent on behalf of the Lenders acting singly.
“Borrower” is defined in the recitals hereto.
“Borrowing Date” means a date on which an Advance is made hereunder.
“Borrowing Notice” is defined in Section 2.9 .
“Business Day” means (i) with respect to any borrowing, payment or rate selection of LIBOR
Rate Advances, a day (other than a Saturday or Sunday) on which banks generally are open in
Cleveland, Ohio, Charlotte, N.C. and New York, New York for the conduct of substantially all of
their commercial lending activities and on which dealings in United States dollars are carried on in
the London interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday)
on which banks generally are open in Cleveland, Ohio, Charlotte, N.C. and New York, New York for
the conduct of substantially all of their commercial lending activities.
“Capital Stock” means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests in a
Person which is not a corporation and any and all warrants or options to purchase any of the
foregoing.
“Capitalization Rate” means seven and one-half percent (7.5%).
“Capitalized Lease” of a Person means any lease of Property imposing obligations on such
Person, as lessee thereunder, which are required in accordance with GAAP to be capitalized on a
balance sheet of such Person.
“Capitalized Lease Obligations” of a Person means the amount of the obligations of such
Person under Capitalized Leases which would be shown as a liability on a balance sheet of such
Person prepared in accordance with GAAP.
“Cash Equivalents” means, as of any date:
(i)
securities issued or directly and fully guaranteed or insured by the United
States Government or any agency or instrumentality thereof having maturities
of not more than one year from such date;
-4-
(ii)
mutual funds organized under the United States Investment Company Act
rated AAm or AAm-G by S&P and P-1 by Moody’s;
(iii)
certificates of deposit or other interest-bearing obligations of a bank or trust
company which is a member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less than A-1 by S&P and
not less than P-1 by Moody’s (or in each case, if no bank or trust company is
so rated, the highest comparable rating then given to any bank or trust
company, but in such case only for funds invested overnight or over a
weekend) provided that such investments shall mature or be redeemable upon
the option of the holders thereof on or prior to a date one month from the date
of their purchase;
(iv)
certificates of deposit or other interest-bearing obligations of a bank or trust
company which is a member in good standing of the Federal Reserve System
having a short term unsecured debt rating of not less than A-1+ by S&P, and
not less than P-1 by Moody’s and which has a long term unsecured debt
rating of not less than A1 by Moody’s (or in each case, if no bank or trust
company is so rated, the highest comparable rating then given to any bank or
trust company, but in such case only for funds invested overnight or over a
weekend) provided that such investments shall mature or be redeemable upon
the option of the holders thereof on or prior to a date three months from the
date of their purchase;
(v)
bonds or other obligations having a short term unsecured debt rating of not
less than A-1+ by S&P and P-1+ by Moody’s and having a long term debt
rating of not less than A1 by Moody’s issued by or by authority of any state
of the United States, any territory or possession of the United States,
including the Commonwealth of Puerto Rico and agencies thereof, or any
political subdivision of any of the foregoing;
(vi)
repurchase agreements issued by an entity rated not less than A-1+ by S&P,
and not less than P-1 by Moody’s which are secured by U.S. Government
securities of the type described in clause (i) of this definition maturing on or
prior to a date one month from the date the repurchase agreement is entered
into;
(vii)
short term promissory notes rated not less than A-1+ by S&P, and not less
than P-1 by Moody’s maturing or to be redeemable upon the option of the
holders thereof on or prior to a date one month from the date of their
purchase; and
(viii)
commercial paper (having original maturities of not more than 365 days)
rated at least A-1+ by S&P and P-1 by Moody’s and issued by a foreign or
domestic issuer who, at the time of the investment, has outstanding long-term
unsecured debt obligations rated at least A1 by Moody’s.
“Change in Control” means any change in the membership of the Borrower’s Board of
Directors which results at any time in the number of members having served on the Board of
Directors for a term of at least twelve (12) months being less than 50% of the total number of board
members.
-5-
“Change in Management” means the failure of at least one of Robert D. Parks, Steven P.
Grimes and Michael O’Hanlon to continue to be active on a daily basis in the management of the
Borrower provided that if all of such individuals shall die or become disabled or otherwise cease
being active on a daily basis in the management of the Borrower, the Borrower shall have one
hundred (120) days to retain a replacement executive of comparable experience which is reasonably
satisfactory to the Administrative Agent.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise
modified from time to time.
“Collateral” means all of the property, rights and interests of Borrower and its Subsidiaries
that are subject to the security interests and Liens created by the Security Documents.
“Collateral Assignment” means, collectively, (i) the Collateral Assignment of Interests dated
of even date herewith from Borrower to the Administrative Agent, for the benefit of the Lenders, as
the same may be modified, amended or restated, pursuant to which there shall be granted to the
Administrative Agent on behalf of the Lenders a first priority lien and security interest in the
applicable Equity Interests and the other interests of Borrower in the Collateral described therein, (ii)
the Collateral Assignment of Interests dated of even date herewith from IWR Protective Corporation,
a Delaware corporation (“IWR”), to the Administrative Agent, for the benefit of the Lenders, as the
same may be modified, amended or restated, pursuant to which there shall be granted to the
Administrative Agent on behalf of the Lenders a first priority lien and security interest in the
applicable Equity Interests and the other interests of IWR in the Collateral described therein, and (iii)
each additional Collateral Assignment of Interests in favor of Administrative Agent, for the benefit of
the Lenders, delivered pursuant to the terms of Section 2.3 , as the same may be modified, amended
or restated, and any further assignments, certificates, powers, consents, acknowledgments, estoppels
or UCC-1 financing statements that may be delivered in connection therewith.
“Collateral Pool Debt Service” means, as of any date, an imputed annual amount of principal
and interest that would be due on the Outstanding Facility Amount as of the last day of the most
recent fiscal quarter of Borrower for which financial results have been reported if the Outstanding
Facility Amount were a fully amortizing loan with equal monthly payments of principal and interest
over a period of thirty years at a per annum interest rate equal to the greater of (a) 7.00% and (b) the
sum of (i) the then current yield on obligations of the United States Treasury having the closest
maturity date to the tenth (10 th ) anniversary of such date of calculation, and (ii) 2.50%.
“Collateral Pool Debt Service Coverage” means the Adjusted Collateral Pool NOI divided by
Collateral Pool Debt Service.
“Collateral Pool Leverage Ratio” means the Outstanding Facility Amount divided by
Collateral Pool Value, expressed as a percentage.
“Collateral Pool NOI” means, as of any date, the sum of (a) the aggregate Net
Operating Income (excluding Net Operating Income attributable to a tenant subject to a voluntary or
involuntary petition for relief under any federal or state bankruptcy law pursuant to which it has
rejected its Lease) for the most recent fiscal quarter for which financial results have been reported
attributable to all Qualifying Collateral Pool Properties owned for the entirety of such fiscal quarter
plus , (b) in the case of any Qualifying Collateral Pool Property that was owned as of the last day of
such fiscal quarter, but not so owned for the full fiscal quarter, the amount of Net Operating Income
(excluding Net Operating Income attributable to a tenant subject to a voluntary or involuntary
petition for relief under any federal or state bankruptcy law pursuant to which it has rejected its
-6-
Lease) that would have been earned if such Qualifying Collateral Pool Property had been so owned
for the full fiscal quarter, as established by Borrower and reasonably approved by the Administrative
Agent on behalf of the Lenders.
“Collateral Pool Value” means, (i) as of any date prior to March 31, 2010, the aggregate
Appraised Values of the Initial Collateral Pool Properties then owned by the Borrower or a
Subsidiary Guarantor, (ii) for the period from March 31, 2010 through May 31, 2010, the sum of (A)
with respect to those Qualifying Collateral Pool Properties then owned by the Borrower or a
Subsidiary Guarantor that have been valued by an Appraisal, the aggregate Appraised Values of such
Qualifying Collateral Pool Properties and (B) with respect to those Qualifying Collateral Pool
Properties then owned by the Borrower or a Subsidiary Guarantor that have not yet been valued by
an Appraisal, the sum of (x) the Collateral Pool NOI attributable to any such Qualifying Collateral
Pool Properties which have been owned by Borrower or a Subsidiary Guarantor for the most recent
full fiscal quarter for which financial results of Borrower have been reported and for the three (3)
immediately preceding entire fiscal quarters multiplied by four and divided by the Capitalization
Rate plus (y) the aggregate acquisition cost of such Qualifying Collateral Pool Properties not so
owned for such period of four (4) consecutive entire fiscal quarters, and (iii) as of May 31, 2010 and
at all times thereafter, the aggregate Appraised Values of the Qualifying Collateral Pool Properties
then owned by the Borrower or a Subsidiary Guarantor. For purposes of this definition, to the extent
Collateral Pool Value attributable to Qualifying Collateral Pool Properties which are occupied
pursuant to Financeable Ground Leases would exceed 15% of Collateral Pool Value, such excess
shall be excluded .
“Commitment” means, for each Lender, the obligation of such Lender to make Loans on the
terms and conditions set forth herein not exceeding the amount set forth opposite its signature below
or as set forth in any Notice of Assignment relating to any assignment that has become effective
pursuant to Section 12.3.2 , as such amount may be modified from time to time pursuant to the terms
hereof.
“Consolidated Debt Service” means, for any period, without duplication, (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of scheduled principal payments
attributable to Consolidated Outstanding Indebtedness (excluding balloon or optional principal
payments made at maturity or made at an earlier date to avoid an accelerated amortization schedule
in respect of any such Indebtedness) together with any amount deposited with or reserved by the
holders of such Consolidated Outstanding Indebtedness for collateral purposes during such period by
any member of the Consolidated Group, to the extent such deposit or reserve is not available for the
payment of Project operating expenses, plus (c) a percentage of all such principal payments and
deposits or reserves made during such period by any Investment Affiliate on Indebtedness taken into
account in calculating Consolidated Interest Expense, equal to the greater of (x) the percentage of the
principal amount of such Indebtedness for which any member of the Consolidated Group is liable
and (y) the Consolidated Group Pro Rata Share of such Investment Affiliate.
“Consolidated Group” means the Borrower and all Subsidiaries which are consolidated with
it for financial reporting purposes under GAAP.
“Consolidated Group Pro Rata Share” means, with respect to any Investment Affiliate, the
percentage of the total equity ownership interests held by the Consolidated Group in the aggregate, in
such Investment Affiliate determined by calculating the greater of (i) the percentage of the issued and
outstanding stock, partnership interests or membership interests in such Investment Affiliate held by
the Consolidated Group in the aggregate and (ii) the percentage of the total book value of such
-7-
Investment Affiliate that would be received by the Consolidated Group in the aggregate, upon
liquidation of such Investment Affiliate, after repayment in full of all Indebtedness of such
Investment Affiliate.
“Consolidated Interest Expense” means, for any period without duplication, the sum of
(a) the amount of interest expense, determined in accordance with GAAP, of the Consolidated Group
for such period attributable to Consolidated Outstanding Indebtedness during such period plus (b) the
applicable Consolidated Group Pro Rata Share of any interest expense, determined in accordance
with GAAP, of each Investment Affiliate, for such period, whether recourse or non-recourse.
“Consolidated Net Income” means, for any period, consolidated net income (or loss) of the
Consolidated Group for such period determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Worth” means, as of any date of determination, an amount equal to
(a) Total Asset Value minus (b) Consolidated Outstanding Indebtedness as of such date.
“Consolidated Outstanding Indebtedness” means, as of any date of determination, without
duplication, the sum of (a) all Indebtedness of the Consolidated Group outstanding at such date,
determined on a consolidated basis in accordance with GAAP (whether recourse or non-recourse),
plus , without duplication, (b) the applicable Consolidated Group Pro Rata Share of any Indebtedness
of each Investment Affiliate other than Indebtedness of such Investment Affiliate to a member of the
Consolidated Group.
“Construction in Progress” means, as of any date, the book value of any Projects then under
development provided that a Project shall no longer be included in Construction in Progress and shall
be deemed to be a Stabilized Retail Project and shall be valued based on its Net Operating Income
upon the earlier of (i) the expiration of the second full fiscal quarter after substantial completion
(which shall mean the receipt of a temporary certificate of occupancy or a final certificate of
occupancy) of such Project and (ii) the last day of the first full fiscal quarter in which the Annualized
Consolidated NOI attributable to such Project divided by the Capitalization Rate exceeds the book
value of such Project.
“Controlled Group” means all members of a controlled group of corporations and all trades
or businesses (whether or not incorporated) under common control which, together with the
Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
“Conversion/Continuation Notice” is defined in Section 2.10 .
“Core Project” means either a Stabilized Retail Project or a Project that is fully leased to a
single tenant whose long-term unsecured debt obligations are then rated BBB- or above by S&P and
Baa3 or above by Moody’s under a triple net lease with an unexpired lease term of at least five (5)
years.
“Default” means an event described in Article VII .
“Defaulting Lender” means any Lender which fails or refuses to perform its obligations under
the Agreement within the time period specified for performance of such obligation, or, if no time
frame is specified, if such failure or refusal continues for a period of five (5) Business Days after
written notice from the Administrative Agent; provided that (i) such Lender shall not be deemed to
be a Defaulting Lender during the period of time following such Lender’s delivery of a written notice
to the Administrative Agent detailing such Lender’s contention that a good faith dispute exists
-8-
as to the occurrence of such a failure or refusal until a subsequent determination is made by the
Administrative Agent and communicated to such Lender that such a good faith contest does not exist
and (ii) if such Lender cures such failure or refusal, such Lender shall cease to be a Defaulting
Lender.
“Default Rate” means the interest rate which may apply during the continuance of a Default
pursuant to Section 2.12 .
“Deposit Account” means a certain account to be maintained by the Borrower with the
Depository Bank which is being pledged to the Administrative Agent for the benefit of the Lenders
pursuant to the Account Pledge Agreements, and any replacement or substitution accounts thereafter
established with the prior written consent of Administrative Agent on behalf of the Lenders.
“Depository Bank” means Bank of America, N.A. or such other banks acceptable to the
Administrative Agent on behalf of the Lenders as the Borrower may hereafter select to hold the
Deposit Account.
“Dividend Payout Ratio” means, for any given period of time for any Person, the ratio of (a)
an amount equal to (i) 100% of all dividends or other distributions, direct or indirect, on account of
any equity interest of such Person (except dividends or distributions payable solely in additional
equity interests of the same class) during such period, less (ii) any amount of such dividends or
distributions constituting Dividend Reinvestment Proceeds, to (b) Funds From Operations of such
Person for such period.
“Dividend Reinvestment Proceeds” means all dividends or other distributions, direct or
indirect, on account of any equity interest of any Person which any holder(s) of such equity interest
directs to be used, concurrently with the making of such dividend or distribution, for the purpose of
purchasing for the account of such holder(s) additional equity interests in such Person or its
subsidiaries.
“Environmental Laws” means any and all foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the environment, as now or
may at any time hereafter be in effect, in each case to the extent the foregoing are applicable to the
Borrower or any Subsidiaries or any of its respective assets or Projects.
“Equity Interests” means the legal, equitable and beneficial ownership interest of Borrower
(or any Subsidiaries of Borrower) in any Subsidiary of Borrower which is either (i) the direct owner
of an Initial Collateral Property or Qualifying Collateral Pool Property or (ii) in the case of certain of
the Initial Collateral Properties, the holder of an ownership interest in such a direct owner.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any rule or regulation issued thereunder.
“Excess Funds” means that portion of the revenues of Borrower and Borrower’s Subsidiaries
from the operation of their Properties, which is distributable to the Borrower as represented by the
amounts received in the Holdco Account from those three certain lockbox accounts maintained by
the Borrower’s three management subsidiaries with Depository Bank for receipt of all revenues from
such Properties, after payment of all debt service and operating expenses related to such Properties
from the Holdco Account, and which Borrower has agreed to cause to be distributed from such
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lockbox accounts to the Holdco Account and then from the Holdco Account to the Deposit Account
as described in Section 6.29 below.
“Excluded Subsidiary” means, a Subsidiary which is (A) a single-purpose entity which owns
only Projects subject to Secured Indebtedness and which has restrictions on the creation of any
Guarantee Obligations or additional Indebtedness and other safeguards typically imposed on such
single-purpose entities in secured financings or (B) an entity which is primarily engaged in the
provision of services and does not own any Projects.
“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation and
the Administrative Agent, taxes imposed on its overall net income, and franchise taxes imposed on it,
by any jurisdiction with taxing authority over the Lender.
“Excluded Tenants” means, as of any date, (i) any anchor tenant or (ii) any non-anchor tenant
leasing more than 15,000 square feet of gross leaseable area at one of the Projects that, in either case,
either (a) is subject to a voluntary or involuntary petition for relief under any federal or state
bankruptcy codes or insolvency law or (b) is not operating its business in its demised premises at
such Project unless such non-operating tenant’s lease obligations are guaranteed by an entity whose
then current long-term, unsecured debt obligations are rated BBB-- or above by S&P and Baa3 or
above by Moody’s.
“Extension Notice” is defined in Section 2.1 .
“Facility Letter of Credit” means a Letter of Credit issued pursuant to Article IIA of this
Agreement.
“Facility Letter of Credit Fee” is defined in Section 2A.8 .
“Facility Letter of Credit Obligations” means, as at the time of determination thereof, all
liabilities, whether actual or contingent, of the Borrower with respect to Facility Letters of Credit,
including the sum of (a) the Reimbursement Obligations and (b) the aggregate undrawn face amount
of the then outstanding Facility Letters of Credit.
“Facility Letter of Credit Sublimit” means $50,000,000.
“Facility Termination Date” means October 14, 2010, as such date may be extended pursuant
to Section 2.1 .
“Federal Funds Effective Rate” shall mean, for any day, the rate per annum (rounded upward
to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve
Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as computed and
announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the “Federal Funds Effective
Rate.”
“Fee Letter” is defined in Section 2.6 .
“Financeable Ground Lease” means, a ground lease reasonably satisfactory to the
Administrative Agent on behalf of the Lenders, which must provide customary protections for a
potential leasehold mortgagee (“Mortgagee”) which include, among other things (i) a remaining
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term, including any optional extension terms exercisable unilaterally by the tenant, of no less than 25
years, (ii) a provision that the ground lease will not be terminated until the Mortgagee has received
notice of a default, has had a reasonable opportunity to cure or complete foreclosure, and has failed
to do so, (iii) provision for a new lease to the Mortgagee as tenant on the same terms if the ground
lease is terminated for any reason, (iv) transferability of the tenant’s interest under the ground lease
without any requirement for consent of the ground lessor unless based on delivery of customary
assignment and assumption agreements from the transferor and transferee, (v) the ability of the tenant
to mortgage tenant’s interest under the ground lease without any requirement for consent of the
ground lessor, and (vi) that the tenant under the ground lease is entitled to all insurance proceeds and
condemnation awards (other than the amount attributable to landlord’s fee interest in the land if an
adjustment in rent is provided for in connection therewith).
“Financial Contract” of a Person means (i) any exchange - traded or over-the-counter futures,
forward, swap or option contract or other financial instrument with similar characteristics, or (ii) any
Rate Management Transaction.
“Financial Undertaking” of a Person means (i) any transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person, or (ii) any agreements, devices or arrangements designed
to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange transactions, including, but not
limited to, interest rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate options.
“First Mortgage Receivable” means any Indebtedness owing to a member of the
Consolidated Group which is secured by a first-priority mortgage, deed to secure debt or deed of trust
on commercial real estate having a value in excess of the amount of such Indebtedness and which has
been designated by the Borrower as a “First Mortgage Receivable” in its most recent compliance
certificate.
“Fixed Charge Coverage Ratio” means (i) Adjusted Annualized EBITDA divided by (ii) the
sum of (A) Consolidated Debt Service for the most recent four (4) fiscal quarters for which financial
results have been reported, plus (B) all Preferred Dividends, if any, payable with respect to such four
(4) fiscal quarters.
“Floating Rate” means, for any day, a rate per annum equal to (i) the Alternate Base Rate for
such day plus (ii) ABR Applicable Margin for such day, in each case changing when and as the
Alternate Base Rate changes.
“Floating Rate Advance” means an Advance which bears interest at the Floating Rate.
“Floating Rate Loan” means a Loan which bears interest at the Floating Rate.
“Free Cash Flow” means all profits, proceeds or other income relating to or arising from the
Borrower’s or any Subsidiary’s operations after the payment of interest and required principal
amortization on any Indebtedness, operating expenses then due and payable for any Project, general
and administrative expenses related to the operation of the Borrower, costs for tenant improvements
at any Project, capital expenditures, dividends, contractually obligated payments for redemptions of
membership interests under limited liability company operating agreements, and margin payments
with respect to Marketable Securities.
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“Funds From Operations” means, with respect to a Person and for a given period, an amount
equal to the net income (or loss) of such Person for such period, computed in accordance with
GAAP, excluding gains (or losses) from extraordinary items, plus real estate depreciation and
amortization, and after adjustments for unconsolidated affiliates.
“GAAP” means generally accepted accounting principles in the United States of America as
in effect from time to time, applied in a manner consistent with that used in preparing the financial
statements referred to in Section 6.1 .
“Governmental Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
“Guarantee Obligation” means, as to any Person (the “ guaranteeing person ”), any obligation
(determined without duplication) of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any Letter of Credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter-indemnity or similar obligation, in either
case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the “ primary obligations ”) of any other third Person (the “ primary obligor ”) in any manner,
whether directly or indirectly, including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefore, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in
respect thereof; provided , however , that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business or guarantees
by the Borrower of liabilities under any interest rate lock agreement utilized to facilitate Secured
Indebtedness of another member of the Consolidated Group or an Investment Affiliate. The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if less, the maximum
stated liability set forth in the instrument embodying such Guarantee Obligation), provided , that in
the absence of any such stated amount or stated liability, the amount of such Guarantee Obligation
shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
“Holdco Account” means that certain account maintained at the Depository Bank by Inland
Holdco Management, LLC, a Delaware limited liability company, which is the sole owner of
Borrower’s three management subsidiaries.
“Indebtedness” of any Person at any date means without duplication, (a) all indebtedness of
such Person for borrowed money including without limitation any repurchase obligation or liability
of such Person with respect to securities, accounts or notes receivable sold by such Person, (b) all
obligations of such Person for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in accordance with customary
practices), to the extent such obligations constitute indebtedness for the purposes of GAAP
(excluding premiums or discounts on debt required to be recognized under GAAP), (c) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument,
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(d) all Capitalized Lease Obligations, (e) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (f) all Guarantee Obligations of such Person
(excluding in any calculation of consolidated Indebtedness of the Consolidated Group, Guarantee
Obligations of one member of the Consolidated Group in respect of primary obligations of any other
member of the Consolidated Group), (g) all reimbursement obligations of such Person for letters of
credit and other contingent liabilities, (h) any Net Mark-to-Market Exposure and (i) all liabilities
secured by any Lien (other than Liens for taxes not yet due and payable) on any property owned by
such Person even though such Person has not assumed or otherwise become liable for the payment
thereof.
“Initial Collateral Properties” means those certain Projects listed in Schedule 1 attached
hereto.
“Interest Period” means a LIBOR Interest Period.
“Investment” of a Person means any Property owned by such Person, including without
limitation, any loan, advance (other than commission, travel and similar advances to officers and
employees made in the ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any investment in, or
purchase or other acquisition of, the stock, partnership interests, notes, debentures or other securities
of any other Person made by such Person.
“Investment Affiliate” means any Person in which the Consolidated Group, directly or
indirectly, has a ten percent (10%) or greater ownership interest, whose financial results are not
consolidated under GAAP with the financial results of the Consolidated Group.
“Issuance Date” is defined in Section 2A.4(a)(2) .
“Issuance Notice” is defined in Section 2A.4(c) .
“Issuing Bank” means, with respect to each Facility Letter of Credit, the Lender which issues
such Facility Letter of Credit. KeyBank shall be the sole Issuing Bank.
“Leases” shall mean, collectively, all leases, subleases and occupancy agreements affecting
the Initial Collateral Properties or Qualifying Collateral Pool Properties, or any part thereof now
existing or hereafter executed and all material amendments, material modifications or supplements
thereto.
“Lenders” means the lending institutions listed on the signature pages of the Credit
Agreement, their respective successors and assigns, and any other lending institutions that
subsequently become parties to the Credit Agreement.
“Lending Installation” means, with respect to a Lender, any office, branch, subsidiary or
affiliate of such Lender.
“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued
upon the application of such Person or upon which such Person is an account party or for which such
Person is in any way liable.
“Letter of Credit Collateral Account” is defined in Section 2A.9 .
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“Letter of Credit Request” is defined in Section 2A.4(a) .
“Leverage Ratio” means Consolidated Outstanding Indebtedness divided by Total Asset
Value, expressed as a percentage.
“LIBOR Applicable Margin” means, as of any date with respect to any LIBOR Interest Period,
3.5%.
“LIBOR Base Rate” means, with respect to a LIBOR Rate Advance for the relevant LIBOR
Interest Period, the applicable British Bankers’ Association LIBOR rate (rounded upwards to the
nearest 1/16 th ) for deposits in U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such
LIBOR Interest Period, and having a maturity equal to such LIBOR Interest Period, provided that, if
no such British Bankers’ Association LIBOR rate is available to the Administrative Agent, the
applicable LIBOR Base Rate for the relevant LIBOR Interest Period shall instead be the rate
determined by the Administrative Agent to be the rate at which KeyBank or one of its Affiliate banks
offers to place deposits in U.S. dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day of such LIBOR
Interest Period, in the approximate amount of the relevant LIBOR Rate Advance and having a
maturity equal to such LIBOR Interest Period, provided further that, in the event that the LIBOR
Base Rate with respect to a LIBOR Rate Advance is less than 3.00%, the LIBOR Base Rate shall be
deemed to be 3.00%.
“LIBOR Interest Period” means, with respect to each amount bearing interest at a LIBOR
based rate, a period of one, two, three, six or twelve months, to the extent deposits in the London
interbank market with such maturities are available to the Lenders, commencing on a Business Day,
as selected by Borrower; provided, however, that (i) any LIBOR Interest Period which would otherwise
end on a day which is not a Business Day shall continue to and end on the next succeeding Business Day,
unless the result would be that such LIBOR Interest Period would be extended to the next succeeding
calendar month, in which case such LIBOR Interest Period shall end on the next preceding Business Day
and (ii) any LIBOR Interest Period which begins on a day for which there is no numerically
corresponding date in the calendar month in which such LIBOR Interest Period would otherwise end
shall instead end on the last Business Day of such calendar month. Notwithstanding the foregoing,
at any one time there will be no more than seven (7) LIBOR Interest Periods outstanding.
“LIBOR Loan” means a Loan which bears interest at a LIBOR Rate.
“LIBOR Rate” means, for any LIBOR Interest Period, the sum of (A) the LIBOR Base Rate
applicable thereto divided by one minus the then-current Reserve Requirement and (B) the LIBOR
Applicable Margin.
“LIBOR Rate Advance” means an Advance which bears interest at a LIBOR Rate.
“LIBOR Rate Loan” means a Loan which bears interest at a LIBOR Rate.
“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
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“Loan” means, with respect to a Lender, such Lender’s portion of any borrowing hereunder
by the Borrower.
“Loan Documents” means this Agreement, the Subsidiary Guaranty, the Notes, the Security
Documents and any other document from time to time evidencing or securing indebtedness incurred
by the Borrower under this Agreement, as any of the foregoing may be amended or modified from
time to time.
“Majority Lenders” means Lenders holding a majority of the Percentages.
“Marketable Securities” means Investments in Capital Stock or debt securities issued by any
Person (other than an Investment Affiliate) which are publicly traded on a national exchange,
excluding Cash Equivalents.
“Material Adverse Effect” means, in the Administrative Agent’s reasonable discretion, a
material adverse effect on (i) the business, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of any of the Loan
Documents.
“Materials of Environmental Concern” means any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or
wastes, defined or regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
“Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by the Note and as provided for herein or in the Note or other Loan
Documents, under the laws of such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions hereof.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Mortgages” shall mean first priority, recorded mortgages or deeds of trust encumbering first
those Initial Collateral Properties which are wholly owned by Subsidiary Guarantors which are
Wholly-Owned Subsidiaries of Borrower, and then all of the Qualifying Collateral Pool Properties,
executed in each case by a Subsidiary Guarantor and securing the Obligations in substantially the
same form as is attached hereto as Exhibit I and made a part hereof, with such modifications are
reasonably satisfactory to the Administrative Agent on behalf of the Lenders, to be executed,
delivered and recorded within the time periods set forth herein.
“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any member of the Controlled Group
is a party to which more than one employer is obligated to make contributions.
“Negative Pledge” means, with respect to a given asset, any provision of a document,
instrument or agreement (other than any Loan Document) which prohibits or purports to prohibit the
creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning
such asset or any other Person.
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“Net Asset Value” means, for any period the value of all Projects calculated at cost less
related secured debt and less the Outstanding Facility Amount, in each case on a weighted average
basis, during such period.
“Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the
excess (if any) of all unrealized losses over all unrealized profits of such Person arising from Rate
Management Transactions or any other Financial Contract. “Unrealized losses” means the fair
market value of the cost to such Person of replacing such Rate Management Transaction or other
Financial Contract as of the date of determination (assuming the Rate Management Transaction or
other Financial Contract were to be terminated as of that date), and “unrealized profits” means the
fair market value of the gain to such Person of replacing such Rate Management Transaction or other
Financial Contract as of the date of determination (assuming such Rate Management Transaction or
other Financial Contract were to be terminated as of that date).
“Net Operating Income” means, with respect to any Project for any period, “property rental
and other income” (as determined by GAAP) attributable to such Project accruing for such period,
adding all master lease income (not to exceed to 5% of Net Operating Income), minus the amount of
all expenses (as determined in accordance with GAAP) incurred in connection with and directly
attributable to the ownership and operation of such Project for such period, including, without
limitation, Management Fees and amounts accrued for the payment of real estate taxes and insurance
premiums, but excluding any general and administrative expenses related to the operation of the
Borrower, any interest expense, or other debt service charges, any amortization related to
above-market or below-market leases and any non-cash charges such as depreciation or amortization
of financing costs. As used herein “ Management Fees ”, means, with respect to each Project for any
period, an amount equal to the greater of (i) actual management fees payable with respect thereto and
(ii) three percent (3%) per annum on the aggregate base rent and percentage rent due and payable
under leases at such Project.
“Non-Core Project” means, as of any date, a Project that does not then qualify as a Core
Project and, notwithstanding the definition of Project, may be located in either Canada or the United
States.
“Non-U.S. Lender” is defined in Section 3.5(iv) .
“Note” means any one of those promissory notes dated October 15, 2007 from Borrower in
favor of the Lenders, including any amendment, modification, renewal or replacement of any such
promissory note.
“Notice of Assignment” is defined in Section 12.3.2 .
“Obligations” means the Advances, the Facility Letters of Credit, the Reimbursement
Obligations, and all accrued and unpaid fees and all other obligations of Borrower to the
Administrative Agent or the Lenders arising under this Agreement or any of the other Loan
Documents, including all payments and other obligations that may accrue after the commencement of
any action or proceeding described in Sections 7.7 and 7.8 .
“One Day LIBOR Rate” means, with respect to Swingline Advances only, for any day, the
sum of (A) an interpolated rate, as determined by the Swingline Lender in its sole discretion, for
such day, equal to the LIBOR Base Rate that would apply to an Interest Period of one day plus (B)
the LIBOR Applicable Margin.
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“Other Taxes” is defined in Section 3.5(ii) .
“Outstanding Facility Amount” means, at any time, the sum of all then outstanding Advances
and Facility Letter of Credit Obligations.
“Participants” is defined in Section 12.2.1 .
“Payment Date” means, with respect to the payment of interest accrued on any Advance, the
fifteenth day of each calendar month.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Percentage” means for each Lender the ratio that such Lender’s Commitment bears to the
Aggregate Commitment, expressed as a percentage.
“Permitted Acquisitions” are defined in Section 6.15 .
“Permitted Investments” are defined in Section 6.23 .
“Permitted Liens” are defined in Section 6.16 .
“Person” means any natural person, corporation, limited liability company, joint venture,
partnership, association, enterprise, trust or other entity or organization, or any government or
political subdivision or any agency, department or instrumentality thereof.
“Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group may have any liability.
“Preferred Dividends” means, with respect to any entity, dividends or other distributions
which are payable to holders of any ownership interests in such entity which entitle the holders of
such ownership interests to be paid on a preferred basis prior to dividends or other distributions to the
holders of other types of ownership interests in such entity.
“Prime Rate” means a rate per annum equal to the prime rate of interest publicly announced
from time to time by KeyBank or its parent as its prime rate (which is not necessarily the lowest rate
charged to any customer), changing when and as said prime rate changes. In the event that there is a
successor to the Administrative Agent by merger, or the Administrative Agent assigns its duties and
obligations to an Affiliate, then the term “Prime Rate” as used in this Agreement shall mean the
prime rate, base rate or other analogous rate of the new Administrative Agent.
“Project” means any real estate asset located in the United States owned by the Borrower or
any of its Subsidiaries or any Investment Affiliate, and operated or intended to be operated as a retail
property or other commercial property of a type allowed under Section 6.23 hereof.
“Property” of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Purchasers” is defined in Section 12.3.1 .
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“Qualifying Collateral Pool Property” means any Stabilized Retail Project which, as of any
date of determination, (a) is located in the United States; (b) is wholly owned by a Subsidiary
Guarantor, in fee simple or under the terms of a Financeable Ground Lease; (c) has 100% of the
direct or indirect ownership interests in such Subsidiary Guarantor pledged to the Administrative
Agent on behalf of the Lenders pursuant to the Collateral Assignments or, from and after May 1,
2010, is encumbered by a Mortgage in favor of the Administrative Agent on behalf of the Lenders;
(d) is free of all structural defects or major architectural deficiencies, title defects, environmental
conditions or other adverse matters except for defects, deficiencies, conditions or other matters
individually or collectively which are not material to the profitable operation of such Property as
evidenced by a certification of the Borrower, subject to the approval of the Majority Lenders as to the
materiality of any such exception; (e) is not, nor is any direct or indirect interest of the Borrower or
any Subsidiary therein, subject to any Lien other than Permitted Liens set forth in clauses (i) through
(iv) of Section 6.16 or to any Negative Pledge (other than the Liens and Negative Pledges created
pursuant to this Agreement to secure the obligations of the Borrower and the Subsidiary Guarantors);
and (f) when aggregated with all other Qualifying Collateral Pool Properties, results in the Qualifying
Collateral Pool Properties as a whole having at least eighty percent (80%) of their aggregate gross
leaseable area physically occupied. The Properties identified by Borrower as Qualifying Collateral
Pool Properties as of March 31, 2010 shall be reasonably acceptable to and approved by the Majority
Lenders in accordance with Section 2.3 of this Agreement.
“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by the Borrower which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof, whether linked to one or
more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.
“Recourse Indebtedness” means any Indebtedness of the Borrower or any other member of
the Consolidated Group with respect to which the liability of the obligor is not limited to the
obligor’s interest in specified assets securing such Indebtedness, subject to customary limited
exceptions for certain acts or types of liability such as environmental liability, fraud and other
customary nonrecourse carveouts.
“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or official interpretation
of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing
or carrying margin stocks applicable to member banks of the Federal Reserve System.
“Reimbursement Obligations” means at any time, the aggregate of the obligations of the
Borrower to the Lenders, the Issuing Bank and the Administrative Agent in respect of all
unreimbursed payments or disbursements made by the Lenders, the Issuing Bank and the
Administrative Agent under or in respect of the Facility Letters of Credit.
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“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such section, with respect to a Plan, excluding, however, such events as to
which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
“Required Lenders” means Lenders in the aggregate having at least 66 2/3% of the Aggregate
Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate
holding at least 66 2/3% of the aggregate unpaid principal amount of the outstanding Advances,
provided that, (i) the Commitment and Advances held by any then-current Defaulting Lender shall be
subtracted from the Aggregate Commitment and the outstanding Advances solely for the purpose of
calculating the Required Lenders at such time and (ii) at such times as there are less than four (4)
Lenders the two references to “at least 66 2/3%” in this definition shall be changed to “more than
50%”.
“Reserve Requirement” means, with respect to a LIBOR Rate Loan and LIBOR Interest
Period, that percentage (expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having jurisdiction with respect
thereto for determining the maximum reserves (including, without limitation, basic, supplemental,
marginal and emergency reserves) for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D) maintained by a member bank of the Federal Reserve System.
“Secured Indebtedness” means any Indebtedness of the Borrower or any other member of the
Consolidated Group which is secured by a Lien on a Project, any ownership interests in any Person
or any other assets which had, in the aggregate, a value in excess of the amount of such Indebtedness
at the time such Indebtedness was incurred.
“Security Documents” means the Collateral Assignments (and each Collateral Assignment
subsequently delivered pursuant to this Agreement), the Mortgages, the Account Pledge Agreement
and any further collateral assignments to the Administrative Agent for the benefit of the Lenders,
including, without limitation, any UCC-1 financing statements delivered or authorized to be filed by
the Administrative Agent in connection therewith.
“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.
“Single Employer Plan” means a Plan maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled Group.
“S&P” means Standard & Poor’s Ratings Group and its successors.
“Stabilized Retail Projects” mean any neighborhood shopping centers, community shopping
centers, stand-alone, triple net retail properties and any other stabilized retail Projects (including
mixed-use Projects where retail is the primary use) approved by the Administrative Agent on behalf
of the Lenders, but not including any Projects included in Construction in Progress.
“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of
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its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar
business organization more than 50% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled. Unless otherwise expressly provided, all
references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.
“Subsidiary Guarantor” means, as of any date, each Subsidiary of the Borrower which is then
a party to the Subsidiary Guaranty pursuant to Section 6.26 .
“Subsidiary Guaranty” means the guaranty to be executed and delivered by those
Subsidiaries of the Borrower listed on Schedule 4, substantially in the form of Exhibit F , as the same
may be amended, supplemented or otherwise modified from time to time pursuant to Section 6.26 ,
including any joinders executed by additional Subsidiary Guarantors.
“Substantial Portion” means, with respect to the Property of the Borrower and its
Subsidiaries, Property which represents more than 10% of then-current Total Asset Value.
“Swingline Advances” means, as of any date, collectively, all Swingline Loans then
outstanding under this Facility.
“Swingline Commitment” means the obligation of the Swingline Lender to make Swingline
Loans not exceeding $30,000,000, which is included in, and is not in addition to, the Swingline
Lender’s total Commitment hereunder.
“Swingline Lender” shall mean KeyBank National Association, in its capacity as a Lender,
and at the option of a new Administrative Agent, any successor Administrative Agent.
“Swingline Loan” means a loan made by the Swingline Lender pursuant to Section 2.16
hereof.
“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding
Excluded Taxes and Other Taxes.
“Total Asset Value” means, as of any date, (i) the Annualized Consolidated NOI attributable
to Projects owned by the Borrower or a member of the Consolidated Group (excluding 100% of the
Annualized Consolidated NOI attributable to Projects not owned for at least four (4) full fiscal
quarters as of the end of the fiscal quarter for which Annualized Consolidated NOI is calculated)
divided by the Capitalization Rate, plus (ii) 100% of the price paid for any such Projects first
acquired by the Borrower or a member of the Consolidated Group during such four (4) fiscal quarter
period, plus (iii) cash, Cash Equivalents and Marketable Securities owned by the Consolidated Group
as of the end of such fiscal quarter, provided that the amount added to Total Asset Value on account
of Marketable Securities shall not exceed 5% of Total Asset Value, plus (iv) the Consolidated
Group’s Pro Rata Share of (A) Annualized Consolidated NOI attributable to Projects owned by
Investment Affiliates (excluding Annualized Consolidated NOI attributable to Projects not owned for
the entire four (4) fiscal quarters on which Annualized Consolidated NOI is calculated) divided by
(B) the Capitalization Rate, plus (v) the Consolidated Group Pro Rata Share of the price paid for such
Projects first acquired by an Investment Affiliate during such four (4) fiscal quarters, plus
(vi) Construction in Progress at book value, plus (vii) First Mortgage Receivables owned by the
Consolidated Group (at the lower of book value or market value), plus (viii) Unimproved Land at
book value, plus (ix) investments in Non-Core Projects.
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“Transferee” is defined in Section 12.4 .
“Type” means, with respect to any Advance, its nature as a Floating Rate Advance or LIBOR
Rate Advance.
“Unfunded Liabilities” means the amount (if any) by which the present value of all vested
nonforfeitable benefits under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent valuation date for such
Plans.
“Unimproved Land” means, as of any date, any land which (i) is not appropriately zoned for
retail development, (ii) does not have access to all necessary utilities or (iii) does not have access to
publicly dedicated streets, unless such land has been designated in writing by the Borrower in a
certificate delivered to the Administrative Agent as land that is reasonably expected to satisfy all
such criteria within twelve (12) months after such date. For purposes of clarification, if any, such
land shall be deemed to be included in Construction in Progress as of such date of designation and
from and after such date shall not be considered Unimproved Land.
“Unmatured Default” means an event which but for the lapse of time or the giving of notice,
or both, would constitute a Default.
“Unsecured Indebtedness” means, with respect to any Person, all Indebtedness of such
Person for borrowed money that does not constitute Secured Indebtedness or Guarantee Obligations.
“Unused Fee” is defined is Section 2.5 .
“Unused Fee Percentage” means, with respect to any day during a calendar quarter, (i) 0.35%
per annum, if the sum of the Advances and Facility Letter of Credit Obligations outstanding on such
day is 50% or more of the Aggregate Commitment or (ii) 0.50% per annum if the sum of the
Advances and Facility Letter of Credit Obligations outstanding on such day is less than 50% of the
Aggregate Commitment.
“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or indirectly, by such
Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or
more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular and plural forms of
the defined terms.
ARTICLE II.
THE CREDIT
2.1.
Generally
. Subject to the terms and conditions of this Agreement, Lenders severally agree to make Advances
through the Administrative Agent to the Borrower from time to time prior to the Facility Termination
Date, and to support the issuance of Facility Letters of Credit under Article IIA of this Agreement,
provided that the making of any such Advance or the issuance of such Facility Letter of Credit will
not:
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(i)
cause the then-current Outstanding Facility Amount to exceed the then-current
Aggregate Commitment; or
(ii)
cause the then-current outstanding Swingline Advances to exceed the Swingline
Commitment; or
(iii)
cause the then outstanding Facility Letters of Credit Obligations to exceed the
Facility Letter of Credit Sublimit; or
(iv)
from and after September 30, 2009, cause the then current Outstanding
Facility Amount to exceed eighty percent (80%) of the Collateral Pool Value; or
(v)
from and after March 31, 2010, cause either (A) the then current Outstanding
Facility Amount to exceed sixty percent (60%) of the Collateral Pool Value, or (B) the Collateral
Pool Debt Service Coverage to be equal to or less than 1.50 to 1.00.
Notwithstanding anything else to the contrary contained herein, the percentages in clauses (iv) and
(v) of the preceding sentence shall not be increased, nor shall the ratio in such clause (v) be
decreased, by any waiver or amendment of such conditions unless all of the Lenders have approved
such waiver or amendment. The Advances may be Swingline Advances, ratable Floating Rate
Advances or ratable LIBOR Rate Advances. Each Lender shall fund its Percentage of each such
Advance (other than a Swingline Advance) and no Lender will be required to fund any amounts
which, when aggregated with such Lender’s Percentage of all other Advances then outstanding and
of all Facility Letter of Credit Obligations, would exceed such Lender’s then-current
Commitment. This facility (“ Facility ”) is a revolving credit facility and, subject to the provisions
of this Agreement, Borrower may request Advances hereunder, repay such Advances and reborrow
Advances at any time prior to the Facility Termination Date. The Facility Termination Date can be
extended at the Borrower’s request for one (1) extension period of one year upon written notice to the
Administrative Agent received by the Administrative Agent not later than 90 days prior to the
then-current Facility Termination Date (an “ Extension Notice ”), provided that (i) no Default or
Unmatured Default has occurred and is continuing when the Extension Notice is given and on the
day immediately preceding the first day of such extension period, (ii) all of the covenants of the
Borrower hereunder are being complied with when an Extension Notice is given and on the day
immediately preceding the first day of such extension period, and (iii) the Borrower pays, along with
the Extension Notice, an extension fee to the Administrative Agent for the account of each Lender
equal to 0.15% of the then-current Commitment of such Lender. In no event shall the Facility
Termination Date be extended to a date later than October 14, 2011 without the consent of all of the
Lenders.
2.2.
Ratable and Non Ratable Advances
. Each Advance hereunder shall consist of Loans made from the several Lenders ratably based on
each Lender’s Percentage, except for Swingline Loans which shall be made by the Swingline Lender
in accordance with Section 2.16 . The ratable Advances may be Floating Rate Advances, LIBOR
Rate Advances or a combination thereof, selected by the Borrower in accordance with Sections 2.8
and 2.9 .
2.3.
Collateral
(A)
. The obligations of Borrower under the Loan
Documents shall be secured by a perfected first priority
security interest to be held by the Administrative Agent for
the benefit of the Lenders in the Collateral, including the
initial Collateral with respect to the Initial Collateral
Properties and such additional Collateral with respect to
additional Qualifying Collateral Pool Properties, as described
below, as shall be evidenced from time to time by the Security
Documents. The Mortgages on the Initial Collateral Properties
shall be executed, delivered and recorded not later than the
ninetieth (90 th ) day after the Amendment Effective Date.
Borrower shall also provide to the
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Administrative Agent not later than such ninetieth (90 th ) day
after the Amendment Effective Date (i) such insurance
certificates, title insurance policies, surveys (which if no
material changes to the improvements thereon have occurred,
may be older surveys accompanied by an affidavit of no
change from the Borrower), environmental assessments, and
such other due diligence materials as the Administrative
Agent shall reasonably require for each Initial Collateral
Property, in addition to a written opinion of the Borrower’s
counsel addressed to the Lenders in a form reasonably
satisfactory to the Administrative Agent on behalf of the
Lenders regarding any required Mortgage (the “Required
Diligence”) and (ii) a written confirmation that as of such date
all of the representations and warranties contained in Section
5.23 hereof continue to be true and correct in all material
respects with respect to the Initial Collateral Properties.
Appraisals of the Initial Collateral Properties shall be ordered
by the Administrative Agent not later than the fifteenth (15 th )
day after the Amendment Effective Date and shall be
distributed to the Lenders upon receipt, but shall be subject to
approval by the Administrative Agent on behalf of the
Lenders only. Borrower shall have the option to order updates
to the Appraisals of the Initial Collateral Properties to be
delivered to the Administrative Agent for distribution to the
Lenders not later than September 30, 2009. Borrower shall
pay for all Appraisals of the Initial Collateral Properties and
the Qualifying Collateral Properties required hereunder.
(a)
Initial Collateral Properties . At any time prior to March 31, 2010, none of the
Initial Collateral Properties nor any portion thereof (nor all nor a portion of any equity
interest in a Subsidiary owning any such Initial Collateral Property) shall be sold, transferred
or otherwise conveyed, nor shall any Indebtedness securing any such Initial Collateral
Property or any such equity interest be incurred. Notwithstanding the foregoing, Borrower
may replace an Initial Collateral Property, provided that a replacement Initial Collateral
Property (“Substitute Collateral”), which must be wholly owned by a Subsidiary Guarantor in
fee simple, is identified and approved by the Majority Lenders, and if such replacement
occurs after September 30, 2009, such replacement is covered by an Appraisal that indicates
that the Collateral Pool Leverage Ratio, after giving effect to such replacement, will not
exceed the limit set forth in Section 6.21(iv) of this Agreement. Borrower shall notify the
Administrative Agent in writing of its intent to replace an Initial Collateral Property, and
provide the Administrative Agent with copies of a rent roll, ARGUS runs, leasing activity
reports, tenant sales reports (if applicable), Leases, operating statements, most recent title
insurance policies and/or searches, most recent survey and most recent engineering and
environmental assessments (“Approval Diligence”) with respect to the Substitute Collateral
for distribution to the Lenders. Each of the Lenders shall have fifteen (15) Business Days
after it receives notice and delivery of the Approval Diligence to notify the Administrative
Agent in writing whether it approves or objects to the Substitute Collateral becoming an
Initial Collateral Property. If any such Lender does not so approve or object in writing to the
Substitute Collateral within such period, that Lender shall be deemed to have approved the
Substitute Collateral. The Administrative Agent shall notify Borrower in writing within
twenty (20) Business Days of receiving notice of Borrower’s intent to replace an Initial
Collateral Property and the Approval Diligence related thereto if the Majority Lenders have
approved the Substitute Collateral. If the Administrative Agent timely notifies Borrower that
the Substitute Collateral shall become a Initial Collateral Property, then, within ninety (90)
days after the date of Borrower’s receipt of notice of the Majority Lenders’ acceptance of the
Substitute Collateral, Borrower shall (i) cause the applicable Subsidiary owning such Project
to execute and deliver a Joinder Agreement with respect to the Subsidiary Guaranty, if such
Subsidiary has not already executed a Subsidiary Guaranty, (ii) execute and deliver, and shall
cause the applicable Subsidiary (and all intervening Subsidiaries owning, directly or
indirectly, Equity Interests in such applicable Subsidiary) to execute and deliver, as
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applicable, to the Administrative Agent all instruments, documents, or agreements, including
a Collateral Assignment in substantially the same form as the Collateral Assignment attached
as Exhibit G-1 or Exhibit G-2 , as identified by the Administrative Agent, attached hereto,
UCC-1 financing statements, acknowledgments and membership, partnership and stock
certificates and blank transfer powers, as the Administrative Agent on behalf of the Lenders
shall deem reasonably necessary or desirable to obtain and perfect a first priority security
interest in, or Lien on, the Equity Interests in the applicable Subsidiary, and the other
Collateral with respect thereto as described in the Collateral (such other Collateral to consist
of similar Collateral as was included in the Collateral Assignment of delivered concurrently
herewith), if such documents have not previously been executed and delivered, (iii) cause the
Required Diligence, Appraisal and Mortgage with respect to such Substitute Collateral to be
delivered, executed and recorded, all as provided in the first grammatical paragraph of this
Section 2.3 with respect to the Initial Collateral Properties and (iv) execute and deliver to the
Administrative Agent on behalf of the Lenders a written confirmation that, as of the date such
Substitute Collateral is included in Collateral, all of the representations and warranties
contained in Section 5.23 hereof are true and correct in all material respects with respect to
such Substitute Collateral as if it were an Initial Collateral Property (collectively, the
“Collateral Inclusion Conditions”). Upon satisfaction of all of the Collateral Inclusion
Conditions, the Initial Collateral Property being replaced by the Substitute Collateral will be
released from the applicable Collateral Assignment or Mortgage, as the case may be. Except
in accordance with this Section 2.3(a) and Section 6.27 , the Administrative Agent on behalf
of the Lenders may not release any Collateral with respect to the Initial Collateral Properties
without the consent of all of the Lenders.
(b)
Qualifying Collateral Pool Properties . Not less than thirty (30) Business
Days prior to Ma rch 31, 2010 Borrower shall notify the Administrative Agent in writing of
the Projects that, if acceptable to the Majority Lenders, shall become the initial Qualifying
Collateral Pool Properties and provide the Administrative Agent with the Approval Diligence
with respect to such proposed Qualifying Collateral Pool Properties for distribution to the
Lenders. Each of the Lenders shall have fifteen (15) Business Days after it receives notice
and delivery of the Approval Diligence to notify the Administrative Agent in writing whether
it approves or objects to any of the proposed Qualifying Collateral Pool Properties. If any
such Lender does not so approve or object in writing to any proposed Qualifying Collateral
Pool Property within such period, that Lender shall be deemed to have approved such
Qualifying Collateral Pool Property. The Administrative Agent shall notify Borrower in
writing within twenty (20) Business Days after it receives notice thereof and delivery of the
Approval Diligence related thereto if the Majority Lenders have approved such Projects
becoming Qualifying Collateral Pool Properties. If the Administrative Agent on behalf of the
Lenders notifies Borrower that such Projects have been so approved to become Qualifying
Collateral Pool Properties, then, as a condition precedent to each such Project actually
becoming a Qualifying Collateral Pool Property and being included in the Collateral, the
Borrower shall satisfy, and shall cause each applicable Subsidiary owning one of such
Projects to satisfy, with respect to such Project, clauses (i), (ii) and (iv) of the Collateral
Inclusion Conditions on or before March 31, 2010 and clause (iii) of the Collateral Inclusion
Conditions on or before May 31, 2010.
(c)
Addition of Qualifying Collateral Pool Properties . Not less than twenty (20)
Business Days prior to the date on which (a) Borrower expects to acquire a Project that will
become a Qualifying Collateral Pool Property, whether directly or indirectly through a
Subsidiary, or (b) a Project owned by Borrower or any of its Subsidiaries is to be designated
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to become a Qualifying Collateral Pool Property, Borrower shall notify the Administrative
Agent thereof in writing and thereafter provide the Administrative Agent with the Approval
Diligence with respect to such Project for distribution to the Lenders. Each of the Lenders
shall have fifteen (15) Business Days after it receives notice and delivery thereof to notify the
Administrative Agent in writing whether it approves or objects to the proposed Qualifying
Collateral Pool Property. If any such Lender does not so approve or object to the proposed
Qualifying Collateral Pool Property, that Lender shall be deemed to have approved the
proposed Qualifying Collateral Pool Property. The Administrative Agent shall notify
Borrower in writing within twenty (20) Business Days after it receives notice thereof and
delivery of the Approval Diligence related thereto if the Majority Lenders have approved the
proposed Qualifying Collateral Pool Property. If the Administrative Agent on behalf of the
Lenders notifies Borrower that such Project has been so approved to become a Qualifying
Collateral Pool Property, then, as a condition precedent to such Project actually becoming a
Qualifying Collateral Pool Property and being included in the Collateral, the Borrower shall
satisfy, or shall cause the applicable Subsidiary Guarantor owning such Project to satisfy, the
Collateral Inclusion Conditions with respect to such Project not later than the ninetieth (90 th )
day after the date of Borrower’s receipt of such notice of approval.
(d)
Sale or Financing of a Qualifying Collateral Pool Property . Provided no
Default or Unmatured Default shall have occurred hereunder or under the other Loan
Documents and be continuing (or would exist immediately after giving effect to the
transactions contemplated by this Section 2.3(d) ), including the covenants set forth in
Section 6.21 (v)-(vii) , the Borrower or another applicable Subsidiary may sell a Qualifying
Collateral Pool Property or create a Lien securing Indebtedness on a Qualifying Collateral
Pool Property (for purposes of this Section, such a sale or the creation of such a Lien shall be
referred to as a “Qualifying Collateral Pool Sale or Financing”) upon the following terms and
conditions:
i)
Borrower shall deliver to the Administrative
Agent written notice of the desire to consummate such
Qualifying Collateral Pool Sale or Financing on or
before the date that is ten (10) Business Days prior to
the date on which the Qualifying Collateral Pool Sale
or Financing is to be effected;
ii)
On or before the date that is five (5) Business
Days prior to the date of the Qualifying Collateral
Pool Sale or Financing is to be effected, Borrower
shall submit to the Administrative Agent a certificate,
which shall be subject to the Administrative Agent’s
review and reasonable approval, on behalf of the
Lenders, setting forth the Collateral Pool Leverage
Ratio and Collateral Pool Debt Service Coverage on a
pro forma basis as of the date of the Qualifying
Collateral Pool Sale or Financing giving effect to: (A)
the Qualifying Collateral Pool Sale or Financing and
(B) any other Projects that became or are becoming a
Qualifying Collateral Pool Property prior to the date
of the Qualifying Collateral Pool Sale or Financing
(the “Pro Forma Calculations”);
iii)
If the Pro Forma Calculations show that
Borrower will be out of compliance with the
covenants contained in Sections 6.21(v)- (vii) ,
Borrower shall, before the closing of the Qualifying
Collateral Pool Sale, either identify an additional
Qualifying Collateral Pool Property that causes
Borrower to be in compliance with the covenants
contained in Sections 6.21(v)- (vii) , or pay down the
Outstanding Facility Amount sufficiently to permit the
Borrower to be in compliance with those covenants;
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iv)
To the extent that any such sale or financing of all or a portion of a
Qualifying Collateral Pool Property (or of any equity interest in a Subsidiary owning any such
Qualifying Collateral Pool Property) occurs as permitted by this Section, the Borrower shall make a
principal payment on the Notes as required by Section 2.8(b) of this Agreement.
Upon the occurrence of the Qualifying Collateral Pool Sale or Financing, the underlying Project shall
no longer be a Qualifying Collateral Pool Property, and the Administrative Agent on behalf of the
Lenders shall execute such documents or instruments and take all other actions necessary or
advisable on behalf of the Lenders to release the related security interests (including without
limitation releases of any pledged Equity Interests) evidenced by any Security Documents.
2.4.
Final Principal Payment
. Any outstanding Advances and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.
2.5.
Unused Fee
. The Borrower agrees to pay to the Administrative Agent for the account of each Lender an unused
facility fee (the “ Unused Fee ”) equal to an aggregate amount computed on a daily basis by
multiplying (i) the Unused Fee Percentage applicable to such day, expressed as a per diem rate, times
(ii) the excess of the Aggregate Commitment over the Outstanding Facility Amount on such
day. The Unused Fee shall be payable quarterly in arrears on the first Business Day of each calendar
quarter (for the prior calendar quarter) and upon any termination of the Aggregate Commitment in its
entirety.
2.6.
Other Fees
. The Borrower agrees to pay all fees payable to the Administrative Agent pursuant to the
Borrower’s letter agreement with the Administrative Agent dated as of March 10, 2009 (the “ Fee
Letter ”).
2.7.
Minimum Amount of Each Advance
. Each Advance shall be in the minimum amount of $1,000,000; provided, however, that any
Floating Rate Advance may be in the amount of the unused Aggregate Commitment.
2.8.
Principal Payments
.
(a) Optional . The Borrower may from time to time pay, without penalty or premium,
all or any part of outstanding Floating Rate Advances without prior notice to the Administrative
Agent. A LIBOR Rate Advance may be paid on the last day of the applicable Interest Period or, if
and only if the Borrower pays any amounts due to the Lenders under Sections 3.4 and 3.5 as a result
of such prepayment, on a day prior to such last day.
(b) Mandatory . The Borrower shall at all applicable times make principal payments
equal to:
(i) if upon the delivery of any Appraisal of an Initial Collateral Property or a
Qualifying Collateral Pool Property, the Collateral Pool Value as adjusted to reflect the Appraised
Value established thereby for such Property is not sufficient for Borrower to remain in compliance
with the financial covenants set forth in Section 6.21(iv) through (vii) , an amount sufficient to
achieve such compliance, such principal payment to be due on the tenth (10th) Business Day after
Borrower’s receipt of such updated Appraisal,
(ii) all Free Cash Flow, on a quarterly basis, not later than thirty (30) days
after the end of each fiscal quarter of the Borrower,
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(iii) all net proceeds due to Borrower, or distributions due to Borrower from
its Subsidiaries on account of net proceeds, as a result of the sale, financing or refinancing of any
assets of the Borrower, or of any Subsidiary of the Borrower (excluding that portion of any such net
proceeds or distributions used at or about such time to repay Indebtedness of the Consolidated
Group, provided such Indebtedness is scheduled to mature within two years of the date of such sale,
financing or refinancing), and
(iv) the net proceeds received on account of any equity contributions (other
than Dividend Reinvestment Proceeds) or sales of any Capital Stock, including treasury stock,
received by the Borrower.
2.9.
Method of Selecting Types and Interest Periods for New Advances
. The Borrower shall select the Type of Advance and, in the case of each LIBOR Rate Advance, the
LIBOR Interest Period applicable to each Advance from time to time. The Borrower shall give the
Administrative Agent irrevocable notice (a “ Borrowing Notice ”) in the form attached as Exhibit E
and made a part hereof (i) not later than 1:00 p.m. Cleveland, Ohio time on the Business Day
immediately preceding the Borrowing Date of each Floating Rate Advance, (ii) not later than 10:00
a.m. Cleveland, Ohio time, at least three (3) Business Days before the Borrowing Date for each
LIBOR Rate Advance and (iii) not later than 10:00 a.m. Cleveland, Ohio time on the same day as the
Borrowing Date for each Swingline Advance, which shall specify:
(i)
the Borrowing Date, which shall be a Business Day, of such Advance,
(ii)
the aggregate amount of such Advance,
(iii)
the Type of Advance selected,
(iv)
if such Advance is a Swingline Advance, and Borrower desires to have the One Day
LIBOR Rate apply for the duration of such Swingline Advance, a request to that effect; and
(v)
in the case of each LIBOR Rate Advance, the LIBOR Interest Period applicable
thereto.
The Administrative Agent shall provide a copy to the Lenders by facsimile of each
Borrowing Notice and each Conversion/Continuation Notice not later than the close of business on
the Business Day it is received. Each Lender shall make available its Loan or Loans, in funds
immediately available in Cleveland, Ohio to the Administrative Agent at its address specified
pursuant to Article XIII on each Borrowing Date not later than (i) 10:00 a.m. (Cleveland, Ohio time),
in the case of Floating Rate Advances (other than Swingline Advances), or (ii) noon (Cleveland,
Ohio time) in the case of all other Advances. The Administrative Agent will make the funds so
received from the Lenders available to the Borrower at the Administrative Agent’s aforesaid address.
No LIBOR Interest Period may end after the Facility Termination Date and, unless the
Required Lenders otherwise agree in writing, in no event may there be more than seven (7) different
LIBOR Interest Periods for LIBOR Rate Advances outstanding at any one time.
2.10.
Conversion and Continuation of Outstanding Advances
. Floating Rate Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into LIBOR Rate Advances. Each LIBOR Rate Advance shall
continue as a LIBOR Rate Advance until the end of the then applicable Interest Period therefore, at
which time such LIBOR Rate
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Advance shall be automatically converted into a Floating Rate Advance unless the Borrower shall
have given the Administrative Agent a “ Conversion/Continuation Notice” requesting that, at the end
of such Interest Period, such LIBOR Rate Advance either continue as a LIBOR Rate Advance for the
same or another Interest Period or be converted to an Advance of another Type. Subject to the terms
of Section 2.7 , the Borrower may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided that any conversion of any LIBOR
Rate Advance shall be made on, and only on, the last day of the Interest Period applicable
thereto. The Borrower shall give the Administrative Agent irrevocable notice (a
“Conversion/Continuation Notice”) of each conversion of an Advance to a LIBOR Rate Advance or
continuation of a LIBOR Rate Advance not later than 10:00 a.m. (Cleveland, Ohio time), at least
three Business Days, in the case of a conversion into or continuation of a LIBOR Advance, prior to
the date of the requested conversion or continuation, specifying:
(i)
the requested date which shall be a Business Day, of such conversion or continuation;
(ii)
the aggregate amount and Type of the Advance which is to be converted or
continued; and
(iii)
the amount and Type(s) of Advance(s) into which such Advance is to be converted or
continued and, in the case of a conversion into or continuation of a LIBOR Rate Advance, the
duration of the Interest Period applicable thereto.
2.11.
Changes in Interest Rate, Etc
. Each Floating Rate Advance shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance is made or is converted from a LIBOR Rate
Advance into a Floating Rate Advance pursuant to Section 2.10 to but excluding the date it becomes
due or is converted into a LIBOR Rate Advance pursuant to Section 2.10 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that portion of any
Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each LIBOR Rate Advance shall bear interest from and including the first
day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined as applicable to such LIBOR Rate Advance.
2.12.
Rates Applicable After Default
. Notwithstanding anything to the contrary contained in Section 2.9 or 2.10 , during the continuance
of a Default or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Advance may be made as, converted into or continued as a LIBOR Rate
Advance. During the continuance of a Default the Required Lenders may, at their option, by notice
to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding
any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each LIBOR Rate Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum and (ii)
each Floating Rate Advance shall bear interest at a rate per annum equal to the Floating Rate
otherwise applicable to the Floating Rate Advance plus 2% per annum; provided, however, that the
Default Rate shall become applicable automatically if a Default occurs under Section 7.1 or 7.2 ,
unless waived by the Required Lenders.
2.13.
Method of Payment
.
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(i)
All payments of the Obligations hereunder shall be made, without setoff, deduction,
or counterclaim, in immediately available United States funds to the Administrative Agent on
behalf of the Lenders at the Administrative Agent’s address specified pursuant to Article XIII
, or at any other Lending Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (Cleveland time) on the date when due and
shall be applied ratably by the Administrative Agent among the Lenders.
(ii)
As provided elsewhere herein, all Lenders’ interests in the Advances and the Loan
Documents shall be ratable undivided interests and none of such Lenders’ interests shall have
priority over the others. Each payment delivered to the Administrative Agent for the account
of any Lender or amount to be applied or paid by the Administrative Agent to any Lender
shall be paid promptly (on the same day as received by the Administrative Agent if received
prior to noon (Cleveland time) on such day and otherwise on the next Business Day) by the
Administrative Agent to such Lender in the same type of funds that the Administrative Agent
received at such Lender’s address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Administrative Agent from such
Lender. Payments received by the Administrative Agent on behalf of the Lenders but not
timely funded to the Lenders shall bear interest payable by the Administrative Agent at the
Federal Funds Effective Rate from the date due until the date paid. The Administrative
Agent is hereby authorized to charge the account of the Borrower maintained with KeyBank
for each payment of principal, interest and fees as it becomes due hereunder.
2.14.
Notes; Telephonic Notices
. Each Lender is hereby authorized to record the principal amount of each of its Loans and each
repayment on the schedule attached to its Note, provided, however, that the failure to so record shall
not affect the Borrower’s obligations under such Note. The Borrower hereby authorizes the Lenders
and the Administrative Agent on behalf of the Lenders to extend, convert or continue Advances,
effect selections of Types of Advances and to transfer funds based on telephonic notices made by any
Authorized Officer. The Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error. The Administrative Agent
will at the request of the Borrower, from time to time, but not more often than monthly, provide
notice of the amount of the outstanding Aggregate Commitment, the Type of Advance, and the
applicable interest rate, if for a LIBOR Rate Advance. Upon a Lender’s furnishing to Borrower an
affidavit to such effect, if a Note is mutilated, destroyed, lost or stolen, Borrower shall deliver to such
Lender, in substitution therefore, a new note containing the same terms and conditions as such Note
being replaced.
2.15.
Interest Payment Dates; Interest and Fee Basis
. Interest accrued on each Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, at maturity, whether by acceleration or otherwise, and
upon any termination of the Aggregate Commitment in its entirety under Section 2.1
hereof. Interest, Unused Fees, Facility Letter of Credit Fees and all other fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable for the day an Advance
is made but not for the day of any payment on the amount paid if payment is received prior to noon
(Cleveland time) at the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal
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payment, such extension of time shall be included in computing interest in connection with such
payment.
2.16.
Swingline Advances
. In addition to the other options available to the Borrower hereunder, the Swingline Commitment
shall be available for Swingline Advances subject to the following terms and conditions. Swingline
Advances shall be made available for same day borrowings provided that notice is given in
accordance with Section 2.9 hereof. All Swingline Advances shall bear interest at either the Floating
Rate or, if Borrower has given written notice to the Administrative Agent as described in Section 2.9
when requesting such Swingline Advance, at the One Day LIBOR Rate, as it may be adjusted over
the duration of such Swingline Advance. In no event shall the Swingline Lender be required to fund
a Swingline Advance if it would increase the total aggregate outstanding Loans by Swingline Lender
hereunder plus its Percentage of Facility Letter of Credit Obligations to an amount in excess of the
Swingline Lender’s Commitment. No Swingline Advance may be made to repay a Swingline
Advance, but Borrower may repay Swingline Advances from subsequent pro rata Advances
hereunder. On the fifth (5 th ) Business Day after such a Swingline Advance was made, if such
Swingline Advance has not been repaid by the Borrower, each Lender irrevocably agrees to purchase
its Percentage of any Swingline Advance made by the Swingline Lender regardless of whether the
conditions for disbursement are satisfied at the time of such purchase, including the existence of an
Unmatured Default or Default hereunder provided that Swingline Lender did not have actual
knowledge of such Unmatured Default or Default at the time the Swingline Advance was made and
provided further that no Lender shall be required to have total outstanding Loans plus its Percentage
of Facility Letters of Credit exceed its Commitment. Such purchase shall take place on the date of
the request by Swingline Lender so long as such request is made by noon (Cleveland time), and
otherwise on the Business Day following such request. All requests for purchase shall be in
writing. From and after the date it is so purchased, each such Swingline Advance shall, to the extent
purchased, (i) be treated as a Loan made by the purchasing Lenders and not by the selling Lender for
all purposes under this Agreement and the payment of the purchase price by a Lender shall be
deemed to be the making of a Loan by such Lender and shall constitute outstanding principal under
such Lender’s Note, and (ii) shall no longer be considered a Swingline Advance except that all
interest accruing on or attributable to such Swingline Advance for the period prior to the date of such
purchase shall be paid when due by the Borrower to the Administrative Agent for the benefit of the
Swingline Lender and all such amounts accruing on or attributable to such Loans for the period from
and after the date of such purchase shall be paid when due by the Borrower to the Administrative
Agent for the benefit of the purchasing Lenders. If prior to purchasing its Percentage of a Swingline
Advance one of the events described in Section 7.7 shall have occurred and such event prevents the
consummation of the purchase contemplated by preceding provisions, each Lender will purchase an
undivided participating interest in the outstanding Swingline Advance in an amount equal to its
Percentage of such Swingline Advance. From and after the date of each Lender’s purchase of its
participating interest in a Swingline Advance, if the Swingline Lender receives any payment on
account thereof, the Swingline Lender will distribute to such Lender its participating interest in such
amount (appropriately adjusted, in the case of interest payments, to reflect the period of time
during which such Lender’s participating interest was outstanding and funded); provided, however,
that in the event that such payment was received by the Swingline Lender and is required to be
returned to the Borrower, each Lender will return to the Swingline Lender any portion thereof
previously distributed by the Swingline Lender to it. If any Lender fails to so purchase its
Percentage of any Swingline Advance, such Lender shall be deemed to be a Defaulting Lender
hereunder.
2.17.
Notification of Advances, Interest Rates and Prepayments
. The Administrative Agent will notify each Lender of the contents of each Borrowing Notice,
Conversion/Continuation
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Notice, and repayment notice received by it hereunder not later than the close of business on the
Business Day such notice is received by the Administrative Agent. The Administrative Agent will
notify each Lender of the interest rate applicable to each LIBOR Rate Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.18.
Lending Installations
. Each Lender may book its Loans at any Lending Installation selected by such Lender and may
change its Lending Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for the benefit of such
Lending Installation. Each Lender may, by written or telex notice to the Administrative Agent and
the Borrower, designate a Lending Installation through which Loans will be made by it and for
whose account Loan payments are to be made.
2.19.
Non-Receipt of Funds by the Administrative Agent
. Unless the Borrower or a Lender, as the case may be, notifies the Administrative Agent prior to the
time at which it is scheduled to make payment to the Administrative Agent on behalf of the Lenders
of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Administrative Agent for the account of the Lenders, that it does not
intend to make such payment, the Administrative Agent may assume that such payment has been
made. The Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If such Lender or the
Borrower, as the case may be, has not in fact made such payment to the Administrative Agent, the
recipient of such payment shall, on demand by the Administrative Agent, repay to the Administrative
Agent the amount so made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Administrative Agent
until the date the Administrative Agent recovers such amount at a rate per annum equal to (i) in the
case of payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in the case of
payment by the Borrower, the interest rate applicable to the relevant Loan. If such Lender so repays
such amount and interest thereon to the Administrative Agent within one Business Day after such
demand, all interest accruing on the Loan not funded by such Lender during such period shall be
payable to such Lender when received from the Borrower.
2.20.
Replacement of Lenders under Certain Circumstances
. The Borrower shall be permitted to replace any Lender which (a) is not capable of receiving
payments without any deduction or withholding of United States federal income tax pursuant to
Section 3.5 , or (b) cannot maintain its LIBOR Rate Loans at a suitable Lending Installation pursuant
to Section 3.3 , with a replacement bank or other financial institution; provided that (i) such
replacement does not conflict with any applicable legal or regulatory requirements affecting the
Lenders, (ii) no Default or (after notice thereof to Borrower) no Unmatured Default shall have
occurred and be continuing at the time of such replacement, (iii) the Borrower shall repay (or the
replacement bank or institution shall purchase, at par) all Loans and other amounts owing to such
replaced Lender prior to the date of replacement, (iv) the Borrower shall be liable to such replaced
Lender under Sections 3.4 and 3.6 if any LIBOR Rate Loan owing to such replaced Lender shall be
prepaid (or purchased) other than on the last day of the Interest Period relating thereto, (v) the
replacement bank or institution, if not already a Lender, and the terms and conditions of such
replacement, shall be reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of Section 12.3
(provided that the Borrower shall be obligated to pay the processing fee referred to therein),
(vii) until such time as such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 3.5
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and (viii) any such replacement shall not be deemed to be a waiver of any rights which the
Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.
2.21.
Usury
. This Agreement and each Note are subject to the express condition that at no time shall Borrower
be obligated or required to pay interest on the principal balance of the Loan at a rate which could
subject any Lender to either civil or criminal liability as a result of being in excess of the Maximum
Legal Rate. If by the terms of this Agreement or the Loan Documents, Borrower is at any time
required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the interest rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in excess of the
Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until
payment in full so that the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
ARTICLE IIA
LETTER OF CREDIT SUBFACILITY
2A.1
Obligation to Issue .
Subject to the terms and conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower herein set forth, the Issuing Bank hereby agrees to issue for the account of
the Borrower, one or more Facility Letters of Credit in accordance with this Article IIA , from time to
time during the period commencing on the Amendment Effective Date and ending on a date sixty
(60) days prior to the Facility Termination Date.
2A.2
Types and Amounts .
The Issuing Bank shall not have any obligation to:
(i)
issue any Facility Letter of Credit if the aggregate maximum amount
then available for drawing under Letters of Credit issued by such Issuing Bank, after
giving effect to the Facility Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank;
(ii)
issue any Facility Letter of Credit if, after giving effect thereto, (1) the
then applicable Outstanding Facility Amount would exceed the then current
Aggregate Commitment or (2) the Facility Letter of Credit Obligations would exceed
the Facility Letter of Credit Sublimit; or
(iii)
issue any Facility Letter of Credit having an expiration date, or
containing automatic extension provisions to extend such date, to a date beyond the
sixtieth (60 th ) day prior to the Facility Termination Date.
2A.3
Conditions .
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In addition to being subject to the satisfaction of the conditions contained in Article IV hereof and in
the balance of this Article IIA, the obligation of the Issuing Bank to issue any Facility Letter of
Credit is subject to the satisfaction in full of the following conditions:
(i)
the Borrower shall have delivered to the Issuing Bank at such times
and in such manner as the Issuing Bank may reasonably prescribe such documents
and materials as may be reasonably required pursuant to the terms of the proposed
Facility Letter of Credit (it being understood that if any inconsistency exists between
such documents and the Loan Documents, the terms of the Loan Documents shall
control) and the proposed Facility Letter of Credit shall be reasonably satisfactory to
the Issuing Bank as to form and content;
(ii)
as of the date of issuance, no order, judgment or decree of any court,
arbitrator or governmental authority shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing the requested Facility Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction over the
Issuing Bank shall prohibit or request that the Issuing Bank refrain from the issuance
of Letters of Credit generally or the issuance of the requested Facility Letter or Credit
in particular; and
(iii)
there shall not exist any Default or Unmatured Default.
2A.4
Procedure for Issuance of Facility Letters of Credit .
(a)
Borrower shall give the Issuing Bank and the Administrative Agent at least
three (3) Business Days’ prior written notice of any requested issuance of a Facility Letter of Credit
under this Agreement (a “ Letter of Credit Request ”), such notice shall be irrevocable, except as
provided in Section 2A.4(b)(i) below, and shall specify:
(1)
the stated amount of the Facility Letter of Credit requested (which stated amount
shall not be less than $50,000);
(2)
the effective date (which day shall be a Business Day) of issuance of such requested
Facility Letter of Credit (the “ Issuance Date ”);
(3)
the date on which such requested Facility Letter of Credit is to expire (which day
shall be a Business Day which is not less than sixty (60) days prior to the Facility
Termination Date);
(4)
the purpose for which such Facility Letter of Credit is to be issued;
(5)
the Person for whose benefit the requested Facility Letter of Credit is to be issued;
and
(6)
any special language required to be included in the Facility Letter of Credit.
At the time such request is made, the Borrower shall also provide the Administrative Agent and the
Issuing Bank with a copy of the form of the Facility Letter of Credit that the Borrower is requesting
be issued and shall execute and deliver the Issuing Bank’s customary letter of credit application and
reimbursement agreement with respect thereto. Such notice, to be effective, must be received by
such Issuing Bank and the Administrative Agent not later than noon (Cleveland time) on the last
Business Day on which notice can be given under this Section 2A.4(a) . Administrative Agent shall,
promptly upon request by a Lender, provide a copy of such Letter of Credit Request to such Lender.
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(b)
Subject to the terms and conditions of this Article IIA and provided that the
applicable conditions set forth in Article IV hereof have been satisfied, the Issuing Bank shall, on the
Issuance Date, issue a Facility Letter of Credit on behalf of the Borrower in accordance with the
Letter of Credit Request and the Issuing Bank’s usual and customary business practices unless the
Issuing Bank has actually received (i) written notice from the Borrower specifically revoking the
Letter of Credit Request with respect to such Facility Letter of Credit given not later than the
Business Day immediately preceding the Issuance Date, or (ii) written or telephonic notice from the
Administrative Agent stating that the issuance of such Facility Letter of Credit would violate Section
2A.2 .
(c)
The Issuing Bank shall give the Administrative Agent (who shall promptly
notify Lenders) and the Borrower written or telex notice, or telephonic notice confirmed promptly
thereafter in writing, of the issuance of a Facility Letter of Credit (the “ Issuance Notice ”).
(d)
The Issuing Bank shall not extend or amend any Facility Letter of Credit
unless the requirements of this Section 2A.4 are met as though a new Facility Letter of Credit was
being requested and issued.
2A.5
Reimbursement Obligations; Duties of Issuing Bank .
(a)
The Issuing Bank shall promptly notify the Borrower and the Administrative
Agent (who shall promptly notify Lenders) of any draw under a Facility Letter of Credit. Any such
draw shall not be deemed to be a default hereunder but shall constitute an Advance of the Facility in
the amount of the Reimbursement Obligation with respect to such Facility Letter of Credit and shall
bear interest from the date of the relevant drawing(s) under the pertinent Facility Letter of Credit at
the Floating Rate Advance; provided that if a Default or an Unmatured Default exists at the time of
any such drawing(s), then the Borrower shall reimburse the Issuing Bank for drawings under a
Facility Letter of Credit issued by the Issuing Bank no later than the next succeeding Business Day
after the payment by the Issuing Bank and until repaid such Reimbursement Obligation shall bear
interest at the Default Rate.
(b)
Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Facility Letter of Credit, if taken or omitted in the absence of willful misconduct
or gross negligence, shall not put the Issuing Bank under any resulting liability to any Lender or,
provided that such Issuing Bank has complied with the procedures specified in Section 2A.4 , relieve
any Lender of its obligations hereunder to the Issuing Bank. In determining whether to pay under any
Facility Letter of Credit, the Issuing Bank shall have no obligation relative to the Lenders other than
to confirm that any documents required to be delivered under such Letter of Credit appear to have
been delivered in compliance, and that they appear to comply on their face, with the requirements of
such Letter of Credit.
2A.6
Participation .
(a)
Immediately upon issuance by the Issuing Bank of any Facility Letter of
Credit in accordance with the procedures set forth in this Article IIA , each Lender shall be deemed
to have irrevocably and unconditionally purchased and received from the Issuing Bank, without
recourse, representation or warranty, an undivided interest and participation equal to such Lender’s
Percentage in such Facility Letter of Credit (including, without limitation, all obligations of the
Borrower with respect thereto) and all related rights hereunder . Each Lender’s obligation to make
further Loans to Borrower (other than any payments such Lender is required to make under
subparagraph (b) below) or to purchase an interest from the Issuing Bank in any subsequent Facility
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Letters of Credit issued by the Issuing Bank on behalf of Borrower shall be reduced by such Lender’s
Percentage of the undrawn portion of each Facility Letter of Credit outstanding.
(b)
In the event that the Issuing Bank makes any payment under any Facility
Letter of Credit and the Borrower shall not have repaid such amount to the Issuing Bank pursuant to
Section 2A.7 hereof, the Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay
to the Administrative Agent for the account of the Issuing Bank the amount of such Lender’s
Percentage of the unreimbursed amount of such payment, and the Administrative Agent shall
promptly pay such amount to the Issuing Bank. Lender’s payments of its Percentage of such
Reimbursement Obligation as aforesaid shall be deemed to be a Loan by such Lender and shall
constitute outstanding principal under such Lender’s Note. The failure of any Lender to make
available to the Administrative Agent for the account of the Issuing Bank its Percentage of the
unreimbursed amount of any such payment shall not relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent for the account of such Issuing Bank its
Percentage of the unreimbursed amount of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make available to the
Administrative Agent its Percentage of the unreimbursed amount of any payment on the date such
payment is to be made. Any Lender which fails to make any payment required pursuant to this
Section 2A.6(b) shall be deemed to be a Defaulting Lender hereunder.
(c)
Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank shall promptly pay to
the Administrative Agent on behalf of the Lenders and the Administrative Agent shall promptly (on
the same day as received by the Administrative Agent if received prior to noon (Cleveland time) on
such day and otherwise on the next Business Day) pay to each Lender which has funded its
participating interest therein, in immediately available funds, an amount equal to such Lender’s
Percentage thereof.
(d)
Upon the request of the Administrative Agent or any Lender, the Issuing
Bank shall furnish to such Administrative Agent or Lender copies of any Facility Letter of Credit to
which the Issuing Bank is party and such other documentation as may reasonably be requested by the
Administrative Agent or Lender.
(e)
The obligations of a Lender to make payments to the Administrative Agent
for the account of the Issuing Bank with respect to a Facility Letter of Credit shall be absolute,
unconditional and irrevocable, not subject to any counterclaim, set-off, qualification or exception
whatsoever other than a failure of any such Issuing Bank to comply with the terms of this Agreement
relating to the issuance of such Facility Letter of Credit, and such payments shall be made in
accordance with the terms and conditions of this Agreement under all circumstances.
2A.7
Payment of Reimbursement Obligations .
(a)
The Borrower agrees to pay to the Administrative Agent for the account of
the Issuing Bank the amount of all Advances for Reimbursement Obligations, interest and other
amounts payable to the Issuing Bank under or in connection with any Facility Letter of Credit when
due, irrespective of any claim, set-off, defense or other right which the Borrower may have at any
time against any Issuing Bank or any other Person, under all circumstances, including without
limitation any of the following circumstances:
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(i)
any lack of validity or enforceability of this Agreement or any of the
other Loan Documents;
(ii)
the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary named in a Facility Letter of
Credit or any transferee of any Facility Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, the Issuing Bank, any
Lender, or any other Person, whether in connection with this Agreement, any Facility
Letter of Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower and the beneficiary
named in any Facility Letter of Credit);
(iii)
any draft, certificate or any other document presented under the
Facility Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect of any statement therein being untrue or inaccurate in any respect;
(iv)
the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or
(v)
the occurrence of any Default or Unmatured Default.
(b)
In the event any payment by the Borrower received by the Issuing Bank or
the Administrative Agent with respect to a Facility Letter of Credit and distributed by the
Administrative Agent to the Lenders on account of their participations is thereafter set aside, avoided
or recovered from the Administrative Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received such distribution
shall, upon demand by the Administrative Agent, contribute such Lender’s Percentage of the amount
set aside, avoided or recovered together with interest at the rate required to be paid by the Issuing
Bank or the Administrative Agent upon the amount required to be repaid by the Issuing Bank or the
Administrative Agent.
2A.8
Compensation for Facility Letters of Credit .
(a)
The Borrower shall pay to the Administrative Agent, for the ratable account
of the Lenders (including the Issuing Bank), based upon the Lenders’ respective Percentages, a per
annum fee (the “ Facility Letter of Credit Fee ”) as a percentage of the face amount of each Facility
Letter of Credit outstanding equal to the LIBOR Applicable Margin in effect from time to time
hereunder while such Facility Letter of Credit is outstanding. The Facility Letter of Credit Fee
relating to any Facility Letter of Credit shall accrue on a daily basis and shall be due and payable in
arrears on the first Business Day of each calendar quarter following the issuance of such Facility
Letter of Credit and, to the extent any such fees are then due and unpaid, on the Facility Termination
Date or any other earlier date that the Obligations are due and payable in full. The Administrative
Agent shall promptly (on the same day as received by the Administrative Agent if received prior to
noon (Cleveland time) on such day and otherwise on the next Business Day) remit such Facility
Letter of Credit Fees, when paid, to the other Lenders in accordance with their Percentages
thereof. The Borrower shall not have any liability to any Lender for the failure of the Administrative
Agent to promptly deliver funds to any such Lender and shall be deemed to have made all such
payments on the date the respective payment is made by the Borrower to the Administrative Agent,
provided such payment is received by the time specified in Section 2.13 hereof.
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(b)
The Issuing Bank also shall have the right to receive solely for its own
account an issuance fee equal to the greater of (A) $1,500 or (B) one-eighth of one percent (0.125%)
per annum to be calculated on the face amount of each Facility Letter of Credit for the stated duration
thereof, based on the actual number of days and using a 360-day year basis. The issuance fee shall
be payable by the Borrower on the Issuance Date for each such Facility Letter of Credit and on the
date of any increase therein or extension thereof. The Issuing Bank shall also be entitled to receive
its reasonable out-of-pocket costs and the Issuing Bank’s standard charges of issuing, amending and
servicing Facility Letters of Credit and processing draws thereunder.
2A.9
Letter of Credit Collateral Account .
The Borrower hereby agrees that it will immediately upon the request of the Administrative Agent,
establish a special collateral account (the “ Letter of Credit Collateral Account ”) at the
Administrative Agent’s office at the address specified pursuant to Article XIII , in the name of the
Borrower but under the sole dominion and control of the Administrative Agent, for the benefit of the
Lenders, and in which the Borrower shall have no interest other than as set forth in Section 8.1 . The
Letter of Credit Collateral Account shall hold the deposits the Borrower is required to make after a
Default on account of any outstanding Facility Letters of Credit as described in Section 8.1 . In
addition to the foregoing, the Borrower hereby grants to the Administrative Agent, for the benefit of
the Lenders, a security interest in and to the Letter of Credit Collateral Account and any funds that
may hereafter be on deposit in such account, including income earned thereon. The Lenders
acknowledge and agree that the Borrower has no obligation to fund the Letter of Credit Collateral
Account unless and until so required under Section 8.1 hereof.
ARTICLE III.
CHANGE IN CIRCUMSTANCES
3.1.
Yield Protection
.
If, on or after the date of this Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of
law), or any change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender or applicable Lending Installation with any
request or directive (whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i)
subjects any Lender or any applicable Lending Installation to any Taxes, or changes
the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender
in respect of its LIBOR Rate Loans, or
(ii)
imposes or increases or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate applicable to LIBOR Rate
Advances), or
(iii)
imposes any other condition the result of which is to increase the cost to any Lender
or any applicable Lending Installation of making, funding or maintaining its LIBOR Rate
Loans, or reduces any amount receivable by any Lender or any applicable Lending
Installation in connection with its LIBOR Rate Loans, or requires any Lender or any
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applicable Lending Installation to make any payment calculated by reference to the amount
of LIBOR Rate Loans, by an amount deemed material by such Lender as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending
Installation, as the case may be, of making or maintaining its LIBOR Rate Loans or Commitment or
to reduce the return received by such Lender or applicable Lending Installation in connection with
such LIBOR Rate Loans or Commitment, then, within 15 days of a demand by such Lender
accompanied by reasonable evidence of the occurrence of the applicable event under clauses (i), (ii)
or (iii) above, the Borrower shall pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in amount received.
3.2.
Changes in Capital Adequacy Regulations
. If a Lender in good faith determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation controlling such
Lender is increased as a result of a Change (as hereinafter defined), then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which such Lender in good faith
determines is attributable to this Agreement, its outstanding credit exposure hereunder or its
obligation to make Loans hereunder (after taking into account such Lender’s policies as to capital
adequacy). “ Change ” means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines (as hereinafter defined) or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this Agreement which affects the amount of
capital required or expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. “ Risk-Based Capital Guidelines ” means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled “International Convergence of Capital Measurements and Capital
Standards,” including transition rules, and any amendments to such regulations adopted prior to the
date of this Agreement.
3.3.
Availability of Types of Advances
. If any Lender in good faith determines that maintenance of any of its LIBOR Rate Loans at a
suitable Lending Installation would violate any applicable law, rule, regulation or directive, whether
or not having the force of law, the Administrative Agent shall, with written notice to Borrower,
suspend the availability of LIBOR Rate Advances and require any LIBOR Rate Advances to be
repaid; or if the Required Lenders in good faith determine that (i) deposits of a type or maturity
appropriate to match fund LIBOR Rate Advances are not available, the Administrative Agent shall,
with written notice to Borrower, suspend the availability of LIBOR Rate Advances with respect to
any LIBOR Rate Advances made after the date of any such determination, or (ii) an interest rate
applicable to a LIBOR Rate Advance does not accurately reflect the cost of making such a LIBOR
Rate Advance, then, if for any reason whatsoever the provisions of Section 3.1 are inapplicable, the
Administrative Agent shall, with written notice to Borrower, suspend the availability of any LIBOR
Rate Advances made after the date of any such determination. If the Borrower is required to so
repay a LIBOR Rate Advance, the Borrower may concurrently with such repayment borrow from the
Lenders, in the amount of such repayment, a Loan bearing interest at the Floating Rate.
3.4.
Funding Indemnification
. If any payment of a LIBOR Rate Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a LIBOR
Rate Advance is not made on the date specified by the
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Borrower for any reason other than default by the Lenders or as a result of unavailability pursuant to
Section 3.3 , the Borrower will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost (incurred or expected to be incurred) in
liquidating or employing deposits acquired to fund or maintain the LIBOR Rate Advance and shall
pay all such losses or costs within fifteen (15) days after written demand therefor.
3.5.
Taxes
.
(i)
All payments by the Borrower to or for the account of any Lender or the
Administrative Agent on behalf of the Lenders hereunder or under any Note shall be made
free and clear of and without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent on behalf of the Lenders, (a) the sum payable shall be
increased as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.5 ) such Lender or the
Administrative Agent on behalf of the Lenders (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (b) the Borrower shall
make such deductions, (c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall furnish to the
Administrative Agent the original copy of a receipt evidencing payment thereof within 30
days after such payment is made.
(ii)
In addition, the Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under any Note or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Note (“Other Taxes”).
(iii)
The Borrower hereby agrees to indemnify the Administrative Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3 .5) paid by the Administrative
Agent on behalf of the Lenders or such Lender and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Administrative Agent or such
Lender makes demand therefore pursuant to Section 3.6 .
(iv)
Each Lender that is not incorporated under the laws of the United States of America
or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten Business
Days after the date it becomes a party to this Agreement, (i) deliver to the Borrower and the
Administrative Agent two duly completed copies of United States Internal Revenue Service
Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United States
federal income taxes, and (ii) deliver to the Borrower and the Administrative Agent a United
States Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to the Borrower and the Administrative Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in
the most recent forms so delivered by it, such additional forms or amendments thereto as may
be reasonably requested by the Borrower or the Administrative Agent. All forms or
amendments described in the preceding sentence shall certify that such Lender is entitled to
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receive payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with respect to it
and such Lender advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal income
tax.
(v)
For any period during which a Non-U.S. Lender has failed to provide the Borrower
with an appropriate form pursuant to clause (iv), above (unless such failure is due to a change
in treaty, law or regulation, or any change in the interpretation or administration thereof by
any governmental authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States.
(vi)
Any Lender that is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate following receipt of such documentation.
(vii)
If the U.S. Internal Revenue Service or any other governmental authority of the
United States or any other country or any political subdivision thereof asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for the account
of any Lender (because the appropriate form was not delivered or properly completed,
because such Lender failed to notify the Administrative Agent of a change in circumstances
which rendered its exemption from withholding ineffective, or for any other reason), such
Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to
the Administrative Agent under this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for the Administrative Agent,
which attorneys may be employees of the Administrative Agent). The obligations of the
Lenders under this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement and any such Lender obligated to indemnify the
Administrative Agent shall not be entitled to indemnification from the Borrower with respect
to such amounts, whether pursuant to this Article or otherwise, except to the extent the
Borrower participated in the actions giving rise to such liability.
3.6.
Lender Statements; Survival of Indemnity
. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation
with respect to its LIBOR Rate Loans to reduce any liability of the Borrower to such Lender under
Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of LIBOR Rate Advances under Section 3.3 ,
so long as such designation is not, in the reasonable judgment of such Lender, disadvantageous to
such Lender. Each Lender shall deliver a written statement of such Lender to the Borrower (with a
copy to the Administrative Agent) as to the amount due, if any, under Sections 3.1, 3.2, 3.4 or 3.5
. Such written statement shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be
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final, conclusive and binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a LIBOR Rate Loan shall be calculated as
though each Lender funded its LIBOR Rate Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the LIBOR Rate applicable
to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement of any Lender shall be payable on demand after receipt by the
Borrower of such written statement. The obligations of the Borrower under Sections 3.1, 3.2, 3.4
and 3.5 shall survive payment of the Obligations and termination of this Agreement.
ARTICLE IV.
CONDITIONS PRECEDENT
4.1.
Initial Advance
. The obligations of the Lenders under the Agreement as modified by this Amendment shall not
become effective, and the Lenders shall not be required to make the initial Advance hereunder or
issue the initial Facility Letter of Credit hereunder after the Amendment Effective Date, unless and
until (a) the Borrower shall, prior to or concurrently therewith, have paid all fees due and payable to
the Lenders and the Administrative Agent hereunder, and (b) the Borrower shall have furnished to
the Administrative Agent the following:
(i)
The duly executed originals of this Amendment and any additional Loan Documents,
with sufficient copies for each of the Lenders;
(ii)
(A) Certificate of good standing for the Borrower from the State of Maryland,
certified by the appropriate governmental officer and dated not more than thirty (30) days
prior to the Amendment Effective Date, and (B) foreign qualification certificates for the
Borrower and certified by the appropriate governmental officer and dated not more than
thirty (30) days prior to the Amendment Effective Date for each other jurisdiction where the
failure of the Borrower to so qualify or be licensed (if required) would have a Material
Adverse Effect;
(iii)
Copies of the formation documents (including code of regulations, if appropriate) of
the Borrower, certified by an officer of the Borrower, together with all amendments thereto;
(iv)
Incumbency certificates, executed by officers of the Borrower, which shall identify
by name and title and bear the signature of the Persons authorized to sign this Amendment
and the additional Loan Documents and to make borrowings hereunder on behalf of the
Borrower, upon which certificate the Administrative Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the Borrower;
(v)
Copies, certified by a Secretary or an Assistant Secretary of the Borrower of the
Board of Directors’ resolutions (and resolutions of other bodies, if any are reasonably
deemed necessary by counsel for the Administrative Agent) authorizing the Advances
provided for herein, with respect to the Borrower, and the execution, delivery and
performance of this Amendment and the additional Loan Documents to be executed and
delivered by the Borrower hereunder;
(vi)
A written opinion of the Borrower’s counsel, addressed to the Lenders in
substantially the form of Exhibit D hereto or such other form as the Administrative Agent
may reasonably approve;
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(vii)
A certificate, signed by an officer of the Borrower, stating that on the Amendment
Effective Date no Default or Unmatured Default has occurred and is continuing, and no
Material Adverse Effect has occurred and that all representations and warranties of the
Borrower are true and correct as of the Amendment Effective Date provided that such
certificate is in fact true and correct;
(viii)
The most recent financial statements of the Borrower in the form required under
Section 6.1 ;
(ix)
UCC financing statement, judgment, and tax lien searches with respect to the
Borrower from the State of Maryland and the State of Illinois, and, with respect to IWR and
each of the “Companies” (as defined in the Collateral Assignments), from the State of
Delaware;
(x)
Evidence that all upfront fees due to each of the Lenders under the terms of their
respective commitment letters have been paid, or will be paid out of the proceeds of such
initial Advance hereunder;
(xi)
Evidence, the form and substance of which is reasonably acceptable to the
Administrative Agent, that each of the Initial Collateral Properties is wholly owned by the
entities listed on Schedule 1 and is not subject to any Secured Indebtedness; and
(xii)
Such other documents as any Lender or its counsel may have reasonably requested,
the form and substance of which documents shall be reasonably acceptable to the parties and
their respective counsel.
In the event that the Administrative Agent has not received, within thirty (30) days from the
Amendment Effective Date, a letter from the Depository Bank confirming its agreement with the
irrevocable directions given by Borrower pursuant to Section 6.29 of this Agreement in a form
reasonably satisfactory to the Administrative Agent, the Lenders shall not be required to make any
further Advances or to issue any further Facility Letters of Credit until such letter is received.
4.2.
Each Advance and Issuance
. The Lenders shall not be required to make any Advance or issue any Facility Letter of Credit
unless on the applicable Borrowing Date:
(i)
There exists no Default or Unmatured Default;
(ii)
The representations and warranties contained in Article V are true and correct as of
such Borrowing Date with respect to Borrower, except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in which case such representation or
warranty shall be true and correct on and as of such earlier date; and
(iii)
All documents incident to the making of such Advance or issuance of such Facility
Letter of Credit shall be satisfactory to the Administrative Agent and its counsel.
Each Borrowing Notice and each Letter of Credit Request with respect to each such Advance
shall constitute a representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied. Any Lender may require a duly completed Compliance
Certificate in substantially the same form of the Certificate attached as Exhibit A .
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1.
Existence
. The Borrower is a corporation duly organized and validly existing under the laws of the State of
Maryland. The Borrower has its principal place of business in Oak Brook, Illinois and is duly
qualified as a foreign entity, properly licensed (if required), in good standing and has all requisite
authority to conduct its business in each jurisdiction in which its business is conducted, except where
the failure to be so qualified, licensed and in good standing and to have the requisite authority would
not have a Material Adverse Effect. Each of Borrower’s Subsidiaries is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite
authority to conduct its business in each jurisdiction in which its business is conducted.
5.2.
Authorization and Validity
. The Borrower has the corporate power and authority and legal right to execute and deliver the
Loan Documents and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings, and the Loan Documents constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally.
5.3.
No Conflict; Government Consent
. Neither the execution and delivery by the Borrower of the Loan Documents, nor the consummation
of the transactions therein contemplated, nor compliance with the provisions thereof will violate any
law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or
any of its Subsidiaries or the Borrower’s or any Subsidiary’s articles of incorporation, by-laws, or
operating agreement, or the provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or
conflict with or constitute a default thereunder, except where such violation, conflict or default would
not have a Material Adverse Effect, or result in the creation or imposition of any Lien in, of or on the
Property of the Borrower or a Subsidiary pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or validation of, or filing, recording
or registration with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan
Documents other than the filing of a copy of this Agreement.
5.4.
Financial Statements; Material Adverse Effect
. All consolidated financial statements of the Borrower and its Subsidiaries heretofore or hereafter
delivered to the Lenders were prepared in accordance with GAAP in effect on the preparation date of
such statements and fairly present in all material respects the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended, subject, in the case of interim financial statements, to normal
and customary year-end adjustments. From the preparation date of the most recent financial
statements delivered to the Lenders through the Amendment Effective Date, there was no change in
the business, properties, or condition (financial or otherwise) of the Borrower and its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect.
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5.5.
Taxes
. The Borrower and its Subsidiaries have filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant
to any assessment received by the Borrower or any of its Subsidiaries except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been provided. No tax liens
have been filed and no claims are being asserted with respect to such taxes. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.6.
Litigation and Guarantee Obligations
. Except as set forth on Schedule 2 hereto or as set forth in written notice to the Administrative
Agent from time to time, there is no litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect. The Borrower has no material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 6.1 or as set forth in written notices to the Administrative
Agent given from time to time after the Amendment Effective Date on or about the date such
material contingent obligations are incurred.
5.7.
Subsidiaries
. All of the issued and outstanding shares of capital stock of any Subsidiaries that are corporations
have been duly authorized and issued and are fully paid and non-assessable.
5.8.
ERISA
. The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed
$1,000,000. Neither Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur, any withdrawal liability to Multiemployer Plans in excess of $250,000
in the aggregate. Each Plan complies in all material respects with all applicable requirements of law
and regulations, no Reportable Event has occurred with respect to any Plan, neither Borrower nor any
other members of the Controlled Group has withdrawn from any Plan or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan.
5.9.
Accuracy of Information
. No information, exhibit or report furnished by the Borrower or any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or compliance with, the
Loan Documents contained any material misstatement of fact or omitted to state a material fact or
any fact necessary to make the statements contained therein not misleading.
5.10.
Regulation U
. The Borrower has not used the proceeds of any Advance to buy or carry any margin stock (as
defined in Regulation U) in violation of the terms of this Agreement.
5.11.
Material Agreements
. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to
any charter or other corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which
it is a party, which default could have a Material Adverse Effect, or (ii) any agreement or instrument
evidencing or governing Indebtedness, which default would constitute a Default hereunder.
5.12.
Compliance With Laws
. The Borrower and its Subsidiaries have complied with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of their respective businesses or the ownership of their
respective Property, except for any non-compliance which would not have a Material Adverse
Effect. Neither Borrower nor any Subsidiary has received any
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written notice to the effect that their operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and safety statutes and
regulations or the subject of any federal or state investigation evaluating whether any remedial action
is needed to respond to a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could have a Material Adverse Effect.
5.13.
Ownership of Properties
. On the date of this Agreement, the Borrower and its Subsidiaries will have good and marketable
title, free of all Liens other than those permitted by Section 6.16 , to all of the Property and assets
reflected in the financial statements as owned by it, other than those assets represented by mortgage
receivables that are required to be consolidated despite the fact that title to the mortgaged assets is
not in the Borrower of any of its Subsidiaries.
5.14.
Investment Company Act
. Neither the Borrower nor any Subsidiary is an “investment company” or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940, as
amended.
5.15.
Public Utility Holding Company Act
. Neither the Borrower nor any Subsidiary is a “holding company” or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a
“holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
5.16.
Solvency
.
(i)
Immediately after the Amendment Effective Date and immediately following the
making of each Loan and after giving effect to the application of the proceeds of such Loans,
(a) the fair value of the assets of the Borrower and its Subsidiaries on a consolidated basis, at
a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of
the Borrower and its Subsidiaries on a consolidated basis; (b) the present fair saleable value
of the Property of the Borrower and its Subsidiaries on a consolidated basis will be greater
than the amount that will be required to pay the probable liability of the Borrower and its
Subsidiaries on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured;
(c) the Borrower and its Subsidiaries on a consolidated basis will be able to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the Borrower and its Subsidiaries on a consolidated basis will
not have unreasonably small capital with which to conduct the businesses in which they are
engaged as such businesses are now conducted and are proposed to be conducted after the
date hereof.
(ii)
The Borrower does not intend to, or to permit any of its Subsidiaries to, and does not
believe that it or any of its Subsidiaries will, incur debts beyond their ability to pay such
debts as they mature, taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.17.
Insurance
The Borrower and its Subsidiaries carry insurance on their Projects, including the Initial Collateral
Properties, with financially sound and reputable insurance companies, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar Projects in localities where the Borrower and its Subsidiaries operate,
including, without limitation:
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(i)
Property and casualty insurance (including coverage for flood and other water
damage for any Project located within a 100-year flood plain) in the amount of the
replacement cost of the improvements at the Projects (to the extent replacement cost
insurance is maintained by companies engaged in similar business and owning similar
properties);
(ii)
Builder’s risk insurance for any Project under construction in the amount of the
construction cost of such Project;
(iii)
Loss of rental income insurance in the amount not less than one year’s gross revenues
from the Projects; and
(iv)
Comprehensive general liability or umbrella insurance in the amount of $20,000,000
per occurrence.
5.18.
Borrower Status
. The Borrower is qualified as a real estate investment trust under Section 856 of the Code and
currently is in compliance in all material respects with all provisions of the Code applicable to the
qualification of the Borrower as a real estate investment trust.
5.19.
Environmental Matters
. Each of the following representations and warranties is true and correct on and as of the
Amendment Effective Date except as disclosed on Schedule 3 attached hereto and to the extent that
the facts and circumstances giving rise to any such failure to be so true and correct, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a)
To the knowledge of the Borrower, the Projects of the Borrower and
its Subsidiaries do not contain any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could reasonably give rise to
liability of the Borrower or any Subsidiary under, Environmental Laws.
(b)
To the knowledge of the Borrower, (i) the Projects of the Borrower
and its Subsidiaries and all operations at the Projects are in compliance with all
applicable Environmental Laws, and (ii) with respect to all Projects owned by the
Borrower and/or its Subsidiaries (x) for at least two (2) years, have in the last two
years, or (y) for less than two (2) years, have for such period of ownership, been in
compliance in all material respects with all applicable Environmental Laws.
(c)
Neither the Borrower nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Projects, nor does the Borrower have knowledge or reason
to believe that any such notice will be received or is being threatened.
(d)
To the knowledge of the Borrower, Materials of Environmental
Concern have not been transported or disposed of from the Projects of the Borrower
and its Subsidiaries in violation of, or in a manner or to a location which could
reasonably give rise to liability of the Borrower or any Subsidiary under,
Environmental Laws, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Projects of the
Borrower and its Subsidiaries in violation of, or in a manner that could give rise to
liability of the Borrower or any Subsidiary under, any applicable Environmental
Laws.
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(e)
No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of the Borrower, threatened, under any Environmental
Law to which the Borrower or any of its Subsidiaries is or, to the Borrower’s
knowledge, will be named as a party with respect to the Projects of the Borrower and
its Subsidiaries, nor are there any consent decrees or other decrees, consent orders,
administrative order or other orders, or other administrative of judicial requirements
outstanding under any Environmental Law with respect to the Projects of the
Borrower and its Subsidiaries.
(f)
To the knowledge of the Borrower, there has been no release or threat
of release of Materials of Environmental Concern at or from the Projects of the
Borrower and its Subsidiaries, or arising from or related to the operations of the
Borrower and its Subsidiaries in connection with the Projects in violation of or in
amounts or in a manner that could give rise to liability under Environmental Laws.
5.20.
OFAC Representation
. The Borrower is not, and shall not be at any time, a person with whom the Lenders are restricted
from doing business under the regulations of the Office of Foreign Asset Control (“ OFAC ”) of the
Department of Treasury of the United States of America (including, those Persons named on OFAC’s
Specially Designated and Blocked Persons list) or under any statute, executive order (including, the
September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not
and shall not engage in any dealings or transactions or otherwise be associated with such persons. In
addition, the Borrower hereby agrees to provide to the Administrative Agent any information that the
Administrative Agent deems necessary from time to time in order to ensure compliance with all
applicable Laws concerning money laundering and similar activities.
5.21.
Intellectual Property .
(i) Borrower and each of its Subsidiaries owns or has the right to use, under valid
license agreements or otherwise, all material patents, licenses, franchises, trademarks, trademark
rights, trade names, trade name rights, trade secrets and copyrights (collectively, “Intellectual
Property”) used in the conduct of their respective businesses as now conducted and as contemplated
by the Loan Documents, without known conflict with any patent, license, franchise, trademark, trade
secret, trade name, copyright, or other proprietary right of any other Person.
(ii) Borrower and each of its Subsidiaries have taken all such steps as they deem
reasonably necessary to protect their respective rights under and with respect to such Intellectual
Property.
(iii) No claim has been asserted by any Person with respect to the use of any
Intellectual Property by Borrower or any of its Subsidiaries, or challenging or questioning the
validity or effectiveness of any Intellectual Property.
(iv) The use of such Intellectual Property by Borrower and each of its Subsidiaries
does not infringe on the rights of any Person, subject to such claims and infringements as do not, in
the aggregate, give rise to any liabilities on the part of the Borrower or any of its Subsidiaries that
could be reasonably expected to have a Material Adverse Effect.
5.22.
Broker’s Fees
. No broker’s or finder’s fee, commission or similar compensation will be payable with respect to
the transactions contemplated hereby. Except as provided in the Fee
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Letter, no other similar fees or commissions will be payable by any Lender for any other services
rendered to the Borrower, any of the Subsidiaries of the Borrower or any other Person ancillary to the
transactions contemplated hereby.
5.23.
Initial Collateral Properties
. As of the Amendment Effective Date, Schedule 1 is a correct and complete list of all Initial
Collateral Properties.
(a)
Each of the Initial Collateral Properties is not located in an area that has been
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 or the Flood Disaster Protection Act of 1973, as amended, or any
successor law, or, if located within any such area, the applicable Subsidiary Guarantor has
obtained and will maintain through the Facility Termination Date the insurance prescribed in
Section 5.17 hereof.
(b)
To the Borrower’s knowledge, each of the Initial Collateral Properties and the
present use and occupancy thereof are in material compliance with all material zoning
ordinances (without reliance upon adjoining or other properties), building codes, land use and
Environmental Laws, and other similar laws (“Applicable Laws”).
(c)
Each of the Initial Collateral Properties is served by all utilities required for
the current or contemplated use thereof. Each of the Initial Collateral Properties has
accepted or is equipped to accept such utility service.
(d)
All public roads and streets necessary for service of and access to each of the
Initial Collateral Properties for the current or contemplated use thereof have been completed,
and are open for use by the public, or appropriate insured private easements are in place.
(e)
Borrower is not aware of any material latent or patent structural or other
significant deficiency of the Initial Collateral Properties. Each of the Initial Collateral
Properties is free of damage and waste that would materially and adversely affect the value of
the Initial Collateral Properties, is in good repair and to Borrower’s knowledge there is no
deferred maintenance other than ordinary wear and tear. Each of the Initial Collateral
Properties is free from damage caused by fire or other casualty.
(f)
To Borrower’s knowledge, all liquid and solid waste disposal, septic and
sewer systems located on the Initial Collateral Properties are in a good and safe condition and
repair and to Borrower’s knowledge, in material compliance with all Applicable Laws with
respect to such systems.
(g)
All improvements on the Initial Collateral Properties lie within the boundaries
and building restrictions of the legal description of record of Initial Collateral Properties, no
improvements encroach upon easements benefiting the Initial Collateral Properties other than
encroachments that do not materially adversely affect the use or occupancy of the Initial
Collateral Properties and no improvements on adjoining properties encroach upon the Initial
Collateral Properties or easements benefiting the Initial Collateral Properties other than
encroachments that do not materially adversely affect the use or occupancy of the Initial
Collateral Properties.
(h)
All Leases are in full force and effect. Borrower is not in default under any
Lease and Borrower has disclosed to Lenders in writing any material default, of which
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Borrower has knowledge, under any Lease which demises more than five percent (5%) of the
total gross leaseable area of the related Project.
(i)
There are no material delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, or other outstanding charges affecting
the Initial Collateral Properties except to the extent such items are being contested in good
faith and as to which adequate reserves have been provided, except that certain income tax
returns of Borrower, Parent or any Subsidiary thereof may be on extension. Each of the
Initial Collateral Properties is taxed separately without regard to any other property not
included in the Initial Collateral Properties and for all purposes each of the various
contiguous components of the Initial Collateral Properties.
(j)
No condemnation proceeding or eminent domain action is pending or
threatened against any of the Initial Collateral Properties which would impair the use, sale or
occupancy of such Initial Collateral Property (or any portion thereof) in any material manner.
(k)
Each of the Initial Collateral Properties is not, nor is any direct or indirect
interest of the Borrower or any Subsidiary therein, subject to any Lien other than Permitted
Liens set forth in clauses (i) through (iv) of Section 6.16 or to any Negative Pledge (other
than the Liens and Negative Pledges created pursuant to this Agreement to secure the
obligations of the Borrower and the Subsidiary Guarantors).
5.24.
No Bankruptcy Filing
. Neither Borrower nor any of its Subsidiaries is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property,
and Borrower has no knowledge of any Person contemplating the filing of any such petition against
any of such Persons.
5.25.
No Fraudulent Intent
. Neither the execution and delivery of this Agreement or any of the other Loan Documents nor the
performance of any actions required hereunder or thereunder is being undertaken by Borrower or the
Subsidiary Guarantors with or as a result of any actual intent by any of such Persons to hinder, delay
or defraud any entity to which any of such Persons is now or will hereafter become indebted.
5.26.
Transaction in Best Interests of Borrower and Subsidiary Guarantors; Consideration
. The transaction evidenced by this Agreement and the other Loan Documents is in the best interests
of Borrower and the Subsidiary Guarantors and their respective creditors. The direct and indirect
benefits to inure to Borrower and the Subsidiary Guarantors pursuant to this Agreement and the other
Loan Documents constitute substantially more than “reasonably equivalent value” (as such term is
used in §548 of the Bankruptcy Code) and “valuable consideration,” “fair value,” and “fair
consideration” (as such terms are used in any applicable state fraudulent conveyance law), in
exchange for the benefits to be provided by Borrower and the Subsidiary Guarantors pursuant to this
Agreement and the other Loan Documents, and but for the willingness of each Subsidiary Guarantor
to guaranty the Obligations, Borrower would be unable to obtain the financing contemplated
hereunder which financing will enable Borrower and its subsidiaries to have available financing to
conduct and expand their business. Borrower and its Subsidiaries constitute a single integrated
financial enterprise and receives a benefit from the availability of credit under this Agreement.
5.27.
Subordination
. Borrower is not a party to or bound by any agreement, instrument or indenture that may require the
subordination in right or time of payment of any of the Obligations to any other indebtedness or
obligation of any such Persons.
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5.28.
Tax Shelter Representation
. Borrower does not intend to treat the Loans, and/or related transactions as being a “reportable
transaction” (within the meaning of United States Treasury Regulation Section 1.6011-4). In the
event Borrower determines to take any action inconsistent with such intention, it will promptly notify
the Administrative Agent thereof. If Borrower so notifies the Administrative Agent, Borrower
acknowledges that one or more of the Lenders may treat its Loans as part of a transaction that is
subject to Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.
5.29.
Anti-Terrorism Laws
.
(i)
None of the Borrower or any of its Affiliates is in violation of any laws or
regulations relating to terrorism or money laundering (“Anti-Terrorism Laws”), including
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the
“Executive Order”) and the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.
(ii)
None of the Borrower or any of its Affiliates, or any of its brokers or other
agents acting or benefiting from the Loan is a Prohibited Person. A “Prohibited Person” is
any of the following:
(1)
a person or entity that is listed in the Annex to, or is otherwise
subject to the provisions of, the Executive Order;
(2)
a person or entity owned or controlled by, or acting for or on
behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the
provisions of, the Executive Order;
(3)
a person or entity with whom any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(4)
a person or entity who commits, threatens or conspires to commit
or supports “terrorism” as defined in the Executive Order; or
(5)
a person or entity that is named as a “specially designated national
and blocked person” on the most current list published by the U.S. Treasury Department Office
of Foreign Asset Control at its official website or any replacement website or other replacement
official publication of such list.
(iii)
None of the Borrower or any of its Affiliates or any of its brokers or other
agents acting in any capacity in connection with the Loan (1) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the
benefit of any Prohibited Person, (2) deals in, or otherwise engages in any transaction relating
to, any property or interests in property blocked pursuant to the Executive Order, or (iii)
engages in or conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.
Borrower shall not (1) conduct any business or engage in making or receiving any
contribution of funds, goods or services to or for the benefit of any Prohibited Person, (ii) deal in, or
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otherwise engage in any transaction relating to, any property or interests in property blocked pursuant
to the Executive Order or any other Anti-Terrorism Law, or (iii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law (and Borrower shall deliver to
Administrative Agent any certification or other evidence requested from time to time by
Administrative Agent in its reasonable discretion, confirming Borrower’s compliance herewith).
Notwithstanding the foregoing, at any time that Borrower retains its status as a publicly held
company, the representations made in this Section 5.29 are limited to the Borrower’s knowledge with
respect to Affiliates who are Affiliates due to ownership due to 10% or more of any class of voting
securities.
5.30.
Survival
. All statements contained in any certificate, financial statement or other instrument delivered by or
on behalf of Borrower or any of its Subsidiaries to the Administrative Agent or any Lender pursuant
to or in connection with this Amendment or the Agreement or any of the other Loan Documents
(including, but not limited to, any such statement made in or in connection with any amendment
thereto or any statement contained in any certificate, financial statement or other instrument delivered
by or on behalf of the Borrower prior to the Amendment Effective Date and delivered to the
Administrative Agent or any Lender in connection with closing the transactions contemplated
hereby) shall constitute representations and warranties made by the Borrower under this
Agreement. All such representations and warranties under this Amendment, the Agreement or any
of the other Loan Documents shall survive the effectiveness of this Amendment, the execution and
delivery of any additional Loan Documents and the making of further Loans and the issuance of
further Facility Letters of Credit.
ARTICLE VI.
COVENANTS
During the term of this Agreement, unless the Required Lenders shall otherwise consent in
writing:
6.1.
Financial Reporting
. The Borrower will maintain for the Consolidated Group a system of accounting established and
administered in accordance with GAAP, and furnish to the Administrative Agent and the Lenders:
(i)
As soon as available, but in any event not later than 45 days after the close of each
fiscal quarter, for the Borrower and its Subsidiaries, financial statements prepared in
accordance with GAAP, including an unaudited consolidated balance sheet as of the close of
each such period and the related unaudited consolidated income statement and statement of
cash flows of the Borrower and its Subsidiaries for such period and the portion of the fiscal
year through the end of such period, setting forth in each case in comparative form the figures
for the previous year, if any, all certified by an Authorized Officer of the Borrower;
(ii)
As soon as available, but in any event not later than 45 days after the close of each
fiscal quarter, for the Borrower and its Subsidiaries, the following reports in form and
substance reasonably satisfactory to the Administrative Agent, all certified by an Authorized
Officer of the Borrower:
(1)
a schedule listing all Projects and summary information for each Project,
including location, square footage, occupancy, Net Operating Income, debt, and such
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additional information on all Projects as may be reasonably requested by the Administrative
Agent,
(2)
rent rolls and operating statements for each of the Initial Collateral Properties
and Qualifying Collateral Pool Properties, as applicable, and
(3)
at any time on or subsequent to September 30, 2009, such information as is
reasonably requested by the Administrative Agent to determine compliance with the
covenants contained in Sections 6.21(iv)- (vii) of this Agreement;
(iii)
As soon as available, but in any event not later than 90 days after the close of each
fiscal year, subject to a thirty (30) day extension right of Borrower if needed for fiscal year
2008 only, for the Borrower and its Subsidiaries, audited financial statements, including a
consolidated balance sheet as at the end of such year and the related consolidated statements
of income and retained earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the audit, prepared by
independent certified public accountants of nationally recognized standing reasonably
acceptable to Administrative Agent, and indicating no material weakness in
Borrower’s internal controls, together with such additional information and consolidating
schedules as may be reasonably requested by the Administrative Agent;
(iv)
As soon as available, but in any event not later than 90 days after the close of each
fiscal year, subject to a thirty (30) day extension right of Borrower for the 2008 fiscal year
only, for the Borrower and its Subsidiaries, a statement detailing the contributions to
Annualized Consolidated NOI from each individual Project for the prior fiscal year in form
and substance reasonably satisfactory to the Administrative Agent, certified by an Authorized
Officer of the Borrower;
(v)
Together with the quarterly and annual financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit A hereto signed by an Authorized
Officer of the Borrower showing the calculations and computations necessary to determine
compliance with this Agreement and stating that, to such officer’s knowledge, no Default or
Unmatured Default exists, or if, to such officer’s knowledge, any Default or Unmatured
Default exists, stating the nature and status thereof;
(vi)
As soon as possible and in any event within 10 days after a responsible officer of the
Borrower knows that any Reportable Event has occurred with respect to any Plan, a
statement, signed by an Authorized Officer of the Borrower, describing said Reportable
Event and the action which the Borrower proposes to take with respect thereto;
(vii)
As soon as possible and in any event within 10 days after receipt by a responsible
officer of the Borrower, a copy of (a) any notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any violation of any federal, state
or local environmental, health or safety law or regulation by such Borrower or any of its
Subsidiaries, which, in either case, could have a Material Adverse Effect;
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(viii)
Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of
all financial statements, reports and proxy statements so furnished, including without
limitation all form 10-K and 10-Q reports filed with the SEC; and
(ix)
Such other information (including, without limitation, financial statements for the
Borrower and non-financial information) as the Administrative Agent or any Lender may
from time to time reasonably request.
6.2.
Use of Proceeds
.
(a) The Borrower will use the proceeds of the Advances solely (i) to finance the cost of the
Borrower’s or its Subsidiaries’ development and redevelopment of Projects, and related tenant
improvements, capital expenditures, leasing commissions, (ii) for bridge debt financing, and (iii) for
working capital (but in all circumstances excluding the repurchase of any common shares of the
Borrower), including without limitation payment of “earn-outs,” other payments Borrower or any
Subsidiary is contractually obligated to make as a result of any prior acquisitions of Projects,
contractually obligated payments for redemptions of membership interests under limited liability
company operating agreements, and margin payments with respect to Marketable Securities.
(b) Borrower may also use the proceeds of the Advances for the acquisition of Projects,
provided that: (i) such acquisitions are only those (A) which Borrower or another member of the
Consolidated Group is contractually obligated to purchase as of the Amendment Effective Date, (B)
which Borrower or another member of the Consolidated Group is purchasing pursuant to a right of
first refusal or other option to purchase which is in existence on the Amendment Effective Date and
either (1) the Advisor has committed in writing to purchase such Project at, or immediately after,
closing in exchange for repayment of Borrower’s entire investment therein or (2) such Project will be
purchased free from any Secured Indebtedness and will be encumbered as of the date of purchase by
a Mortgage and included in the Collateral hereunder, or (C) which are being acquired to complete an
exchange pursuant to Section 1031 of the Code at an acquisition price that does not exceed the
reinvestment necessary to defer recognition of gain from the disposition of another Project; and (ii)
the aggregate amount of such proceeds used for acquisition of Projects does not exceed (A)
$50,000,000 in the aggregate for the period from the Amendment Effective Date through and
including March 31, 2010 and (B) $200,000,000 in the aggregate for the period from the Amendment
Effective Date through the end of the term of this Agreement.
(c) Without limitation of the foregoing, the Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances (i) to purchase or carry any “margin stock”
(as defined in Regulation U) if such usage could constitute a violation of Regulation U by any
Lender, (ii) to fund any purchase of, or offer for, any Capital Stock of any Person, unless such Person
has consented to such offer prior to any public announcements relating thereto, or (iii) to make any
Acquisition other than a Permitted Acquisition.
6.3.
Notice of Default
. The Borrower will give, and will cause each of its Subsidiaries to give, prompt notice in writing to
the Administrative Agent and the Lenders of the occurrence of any Default or Unmatured Default
and of any other development, financial or otherwise (including the filing of material litigation),
which could reasonably be expected to have a Material Adverse Effect.
6.4.
Conduct of Business
. The Borrower will do, and will cause each of its Subsidiaries to do, all things necessary to remain
duly incorporated or duly qualified, validly existing and in good standing as a real estate investment
trust, corporation, general partnership, limited partnership, or limited liability company, as the case
may be, in its jurisdiction of incorporation/formation (except
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with respect to mergers permitted pursuant to Section 6.12 and Permitted Acquisitions) and maintain
all requisite authority to conduct its business in each jurisdiction in which its business is conducted
and to carry on and conduct its businesses in substantially the same manner as they are presently
conducted where the failure to do so could reasonably be expected to have a Material Adverse Effect
and, specifically, neither the Borrower nor its Subsidiaries may undertake any business other than the
acquisition, development, ownership, management, operation and leasing of Projects, and any
business activities and investments incidental thereto, including investments in Marketable
Securities, subject to the limitations on Permitted Investments and Permitted Acquisitions established
hereunder.
6.5.
Taxes
. Subject to any more stringent requirements contained in the Mortgages with respect to the Initial
Collateral Properties and the Qualifying Collateral Properties, the Borrower will pay, and will cause
each of its Subsidiaries to pay, when due all taxes, assessments and governmental charges and levies
upon them or their income, profits or Projects, except those which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves have been set aside.
6.6.
Insurance
. Subject to any more stringent requirements contained in the Mortgages with respect to the Initial
Collateral Properties and the Qualifying Collateral Properties, the Borrower will, and will cause each
of its Subsidiaries to, maintain insurance which is consistent with the representation contained in
Section 5.17 on all their Property and the Borrower will furnish to any Lender upon reasonable
request full information as to the insurance carried.
6.7.
Compliance with Laws
. Subject to any more stringent requirements contained in the Mortgages with respect to the Initial
Collateral Properties and the Qualifying Collateral Properties, the Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which they may be subject, the violation of which could reasonably be expected
to have a Material Adverse Effect.
6.8.
Maintenance of Properties
. The Borrower will, and will cause each of its Subsidiaries to, do all things necessary to maintain,
preserve, protect and keep their respective Projects and Properties, reasonably necessary for the
continuous operation of the Projects, in good repair, working order and condition, ordinary wear and
tear excepted.
6.9.
Inspection
. The Borrower will, and will cause each of its Subsidiaries to, permit the Lenders upon reasonable
notice, by their respective representatives and agents, to inspect any of the Projects, corporate books
and financial records of the Borrower and each of its Subsidiaries, to examine and make copies of the
books of accounts and other financial records of the Borrower and each of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and each of its Subsidiaries with officers
thereof, and to be advised as to the same by, their respective officers at such reasonable times and
intervals as the Lenders may designate.
6.10.
Maintenance of Status
. The Borrower shall at all times maintain its status as a real estate investment trust in compliance
with all applicable provisions of the Code relating to such status.
6.11.
Dividends
. Prior to April 1, 2010, the Borrower shall not (i) make any distributions in redemption of any
Capital Stock of the Borrower, or (ii) make or declare any distributions or similar distributions with
respect to its common Capital Stock which would cause the total of all dividends and distributions
with respect to any period to exceed the minimum amount of dividends necessary to maintain its
status as a real estate investment trust. From and after April 1, 2010, so long
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as the Borrower has achieved compliance with the covenants set forth in Sections 6.21(v)-(vii) that
become effective March 31, 2010, and provided that no Default then exists under the Loan
Documents, the Borrower may resume making redemptions and dividends and distributions in excess
of such minimum so long as the Dividend Payout Ratio of the Borrower shall not, in any event,
exceed 95%. Notwithstanding the foregoing, but subject to the final sentence of this Section 6.11 ,
the Borrower shall not, during the continuation of any Default under the Loan Documents, be
permitted to make or declare any dividends or similar distributions without the written consent of the
Administrative Agent and Required Lenders. The Borrower shall, on a quarterly basis, deliver to the
Administrative Agent evidence satisfactory to the Administrative Agent of the application of
Dividend Reinvestment Proceeds and a certificate from the chief financial officer of the Borrower
that the Borrower shall continue to be in compliance with all applicable provisions of the Code and
its bylaws and operating covenants after giving effect to such dividends or
distributions. Notwithstanding the foregoing, the Borrower shall be permitted at all times to
distribute the minimum amount of dividends necessary to maintain its tax status as a real estate
investment trust.
6.12.
Merger; Sale of Assets
. The Borrower will not, nor will it permit any of its Subsidiaries to, enter into any merger (other
than mergers in which the Borrower or one of its Subsidiaries is the survivor and mergers of
Subsidiaries as part of transactions that are Permitted Acquisitions provided that following such
merger the target entity becomes a Wholly-Owned Subsidiary of Borrower), consolidation,
reorganization or liquidation or transfer or otherwise dispose of all or a Substantial Portion of their
Properties, except for (a) such transactions that occur between Wholly-Owned Subsidiaries or
between Borrower and a Wholly-Owned Subsidiary and (b) mergers solely to change the jurisdiction
of organization of a Subsidiary, provided that, in any event, approval in advance by the Required
Lenders shall be required for transfer or disposition in any quarter of assets with an aggregate value
greater than 10% of Total Asset Value, or any merger resulting in an increase to the Total Asset
Value of more than 25% and the Borrower shall, regardless of any such merger or other transaction,
continue as a surviving entity. Regardless of whether approval of the Required Lenders is necessary,
for any sale, merger, or transfer of any Project or ownership interest in a Project which causes the
aggregate value of such transactions in a single calendar quarter to exceed $250,000,000, the
Borrower will give prior notice to the Administrative Agent and will deliver to the Administrative
Agent a pro-forma compliance certificate based on the results of such transaction demonstrating
compliance with the covenants contained herein.
6.13.
Current Borrower Transactions
. Notwithstanding any provisions of this Agreement to the contrary, Lenders acknowledge the
existence of and waive all right of prior notice, consent and approval to the Pre-Approved
Dispositions listed on Schedule 5 of this Agreement.
6.14.
Sale and Leaseback
. The Borrower will not, nor will it permit any of its Subsidiaries to, sell or transfer a Substantial
Portion of its Property in order to concurrently or subsequently lease such Property as lessee.
6.15.
Acquisitions and Investments
. The Borrower will not, nor will it permit any Subsidiary to, make or suffer to exist any Investments
(including without limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefore, or become or remain a partner in any partnership or joint venture, or to make
any Acquisition of any Person, except:
(i)
Cash Equivalents and Marketable Securities;
(ii)
Investments in existing Subsidiaries, Investments in Subsidiaries formed for the
purpose of developing or acquiring Projects, Investments in joint ventures and
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partnerships engaged solely in the business of purchasing, developing, owning, operating,
leasing and managing Projects;
(iii)
transactions permitted pursuant to Section 6.12 ;
(iv)
Permitted Investments pursuant to Section 6.23 ;
(v)
Acquisitions of Persons whose primary operations consist of the ownership,
development, operation and management of Projects; and
(vi)
Acquisition of the Advisor and/or property management companies.
provided that, after giving effect to such Acquisitions and Investments, Borrower continues to
comply with all its covenants herein. Acquisitions permitted pursuant to this Section 6.15 shall be
deemed to be “ Permitted Acquisitions ”.
6.16.
Liens
. Subject to any more stringent requirements contained in the Mortgages with respect to the Initial
Collateral Properties and the Qualifying Collateral Properties, the Borrower will not, nor will it
permit any of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the Property of
the Borrower or any of its Subsidiaries, except:
(i)
Liens for taxes, assessments or governmental charges or levies on its Property if the
same shall not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and for which adequate reserves
shall have been set aside on its books;
(ii)
Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar liens arising in the ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set aside on their
books;
(iii)
Liens arising out of pledges or deposits under workers’ compensation laws,
unemployment insurance, old age pensions, or other social security or retirement benefits, or
similar legislation;
(iv)
Easements, restrictions and such other encumbrances or charges against real property
as are of a nature generally existing with respect to properties of a similar character and
which do not in any material way affect the marketability of the same or interfere with the
use thereof in the business of the Borrower or its Subsidiaries; and
(v)
First priority Liens other than Liens described in subsections (i) through (iv) above
arising in connection with any Indebtedness permitted hereunder to the extent such Liens will
not result in a Default in any of Borrower’s covenants herein.
Liens permitted pursuant to this Section 6.16 shall be deemed to be “ Permitted Liens ”.
6.17.
Affiliates
. The Borrower will not, nor will it permit any of its Subsidiaries to, enter into any transaction
(including, without limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower’s or such Subsidiary’s business and upon
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fair and reasonable terms no less favorable to the Borrower or such Subsidiary than the Borrower or
such Subsidiary would obtain in a comparable arms-length transaction.
6.18.
Financial Undertakings
. The Borrower will not enter into or remain liable upon, nor will they permit any Subsidiary to
enter into or remain liable upon, any Financial Undertaking, except to the extent required to protect
the Borrower and its Subsidiaries against increases in interest payable by them under variable interest
Indebtedness.
6.19.
Variable Interest Indebtedness
. The Borrower and its Subsidiaries shall not permit the outstanding principal balance of any
Consolidated Outstanding Indebtedness which bears interest at an interest rate that is not fixed
through the maturity date of such Indebtedness to exceed twenty percent (20%) of Total Asset Value,
unless all of such Indebtedness in excess of such amount is subject to a Rate Management
Transaction approved by the Administrative Agent that effectively converts the interest rate on such
excess to a fixed rate.
6.20.
Consolidated Net Worth
. The Borrower shall maintain a Consolidated Net Worth of not less than $1,750,000,000 plus
seventy-five percent (75%) of the equity contributions or sales of treasury stock received by the
Borrower after March 31, 2009.
6.21.
Indebtedness and Cash Flow Covenants
. The Borrower on a consolidated basis with its Subsidiaries shall not permit:
(i)
The Leverage Ratio to exceed (A) seventy percent (70%), at any time prior to March
31, 2010, (B) sixty-five percent (65%) on March 31, 2010 and at any time subsequent to
March 31, 2010 through December 31, 2010, and (C) sixty percent (60%) on and at any time
subsequent to December 31, 2010;
(ii)
The Fixed Charge Coverage Ratio to be less than (A) 1.75 at any time prior to March
31, 2010, and (B) 1.60 on March 31, 2010 and at any time subsequent to March 31, 2010
provided that Borrower is in compliance with Sections 6.21(v)-(vii) , below;
(iii)
The aggregate amount, without duplication, of (A) all Unsecured Indebtedness of the
Borrower or of any of its Subsidiaries, (B) all Guarantee Obligations of the Borrower or of
any of its Subsidiaries, (C) all Recourse Indebtedness of the Borrower or of any of its
Subsidiaries (excluding for purposes of each of clauses (A), (B) and (C) of this Section
6.21(iii) all Indebtedness and Guarantee Obligations owing to the Lenders from time to time
pursuant this Agreement) to exceed $200,000,000, provided that, so long as Borrower has
achieved compliance with the financial covenants set forth in Sections 6.21(v)-(vii) by March
31, 2010, Borrower may incur an additional $100,000,000 in the aggregate of Recourse
Indebtedness, which is also Secured Indebtedness, provided that each such additional loan
included in such secured Recourse Indebtedness had, at the time of origination of such loan, a
loan to value ratio (based on the lesser of appraised value of the collateral securing such
Recourse Indebtedness or the amount of Total Asset Value attributable to such collateral) of
sixty-five percent (65%) or less;
(iv)
As of September 30, 2009, or any time thereafter through but not including March 31,
2010, the Collateral Pool Leverage Ratio to be more than eighty percent (80%);
(v)
As of March 31, 2010, or at any time thereafter the Collateral Pool Leverage Ratio to
be more than sixty percent (60%);
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(vi)
As of March 31, 2010, or any time thereafter (A) the Collateral Pool Value
to be less than $200,000,000, or (B) there to be fewer than five Qualifying Collateral
Pool Properties; or
(vii)
As of March 31, 2010, or any time thereafter, Collateral Pool Debt Service
C
overage to be equal to or less than 1.50 to 1.00.
6.22.
Environmental Matters
. The Borrower and its Subsidiaries shall:
(a)
Comply with, and use all reasonable efforts to ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and obtain
and comply with and maintain, and use all reasonable efforts to ensure that all tenants
and subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental Laws,
except to the extent that failure to do so could not be reasonably expected to have a
Material Adverse Effect; provided that in no event shall the Borrower or its
Subsidiaries be required to modify the terms of leases, or renewals thereof, with
existing tenants (i) at Projects owned by the Borrower or its Subsidiaries as of the
date hereof, or (ii) at Projects hereafter acquired by the Borrower or its Subsidiaries
as of the date of such acquisition, to add provisions to such effect.
(b)
Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under Environmental
Laws and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws, except to
the extent that (i) the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably expected
to have a Material Adverse Effect, or (ii) the Borrower has determined in good faith
that contesting the same is not in the best interests of the Borrower and its
Subsidiaries and the failure to contest the same could not be reasonably expected to
have a Material Adverse Effect.
(c)
Defend, indemnify and hold harmless Administrative Agent and each
Lender, and its respective officers, directors, agents and representatives from and
against any claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the Borrower,
its Subsidiaries or the Projects, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation, attorney’s
and consultant’s fees, investigation and laboratory fees, response costs, court costs
and litigation expenses, except to the extent that any of the foregoing arise out of the
gross negligence or willful misconduct of the party seeking indemnification
therefore. This indemnity shall continue in full force and effect regardless of the
termination of this Agreement.
(d)
Prior to the acquisition of a new Project after the Amendment
Effective Date, perform or cause to be performed an environmental investigation
which investigation shall at a minimum comply with the specifications and
procedures attached hereto as Exhibit C . In connection with any such investigation,
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Borrower shall cause to be prepared a report of such investigation, to be made
available to any Lenders upon reasonable request, for informational purposes and to
assure compliance with the specifications and procedures.
6.23.
Permitted Investments
. The Consolidated Group’s activities shall be limited to acquiring Core Projects, holding First
Mortgage Receivables, engaging in construction activities and any business activities and
investments incidental thereto (including ownership of common and preferred stock in other real
estate investment trusts and investments in Marketable Securities) except that the following
Investments (“ Permitted Investments ”) shall also be permitted so long as the aggregate value of the
Permitted Investments under the following clauses (a) through (d) shall not at any time exceed
twenty-five percent (25%) of Total Asset Value:
(a)
Unimproved Land and any other land not included in Unimproved
Land or Construction in Progress;
(b)
Investments in (i) Investment Affiliates and (ii) any entity which is
not a Wholly-Owned Subsidiary (valued at the greater of the cash investment in that
entity by the Borrower or the portion of Total Asset Value attributable to such entity
or its assets as the case may be);
(c)
Investment in Non-Core Projects; and
(d)
Construction in Progress.
For purposes of this covenant, the Borrower may make a good faith determination as to
whether a mixed use Project is primarily retail or primarily non-retail. The order and method of
calculating the foregoing limitations shall be as shown on the form of compliance certificate attached
as Exhibit A.
6.24.
Minimum Average Occupancy
. The Borrower agrees that the average economic occupancy of the overall portfolio of Projects
(excluding Construction in Progress) owned by the Consolidated Group for each fiscal quarter shall
exceed 80% of the average gross leaseable area of such Projects for such fiscal quarter. As used
herein, economic occupancy shall mean occupancy by a tenant other than an Excluded Tenant,
provided that (i) space in such Projects which is subject to a master lease obligation of the seller may
be included in the calculation of economic occupancy in a Project that is included as economically
occupied space, provided the total master lease space does not exceed 5% of the total space in the
overall portfolio of Projects, and (ii) space in a Project which is subject to a master lease obligation
of the seller of such Project may be included in the calculation of economic occupancy even though
no tenant is in occupancy provided that the amount of square feet of master leased space in a Project
that is included as economically occupied space does not exceed 15% of the total space in such
Project considered to be economically occupied.
6.25.
Prohibited Encumbrances
. The Borrower agrees that neither the Borrower nor any other members of the Consolidated Group
shall (i) create or permit a Lien against any Project other than a single first-priority mortgage, deed
to secure debt or deed of trust, (ii) create or permit a Lien on any Capital Stock or other ownership
interests in any member of the Consolidated Group or any Investment Affiliate (other than the Liens
against the Collateral created under the Loan Documents) or (iii) enter into or be subject to any
agreement governing any Indebtedness which constitutes a “negative pledge”, an unencumbered
asset covenant or other similar covenant or restriction which prohibits or limits the ability of
Borrower or any other member of the Consolidated Group to sell or
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create Liens against any Projects (other than restrictions on further subordinate Liens on Projects
already encumbered by a first-priority mortgage, deed to secure debt or deed of trust).
6.26.
Subsidiary Guaranty
. Borrower shall cause each of its existing Subsidiaries listed on Schedule 4, which includes all
current subsidiaries of Borrower other than Excluded Subsidiaries, to execute and deliver to the
Administrative Agent the Subsidiary Guaranty. Borrower shall cause each Subsidiary which is
hereafter acquired or formed (other than Excluded Subsidiaries) to execute and deliver to the
Administrative Agent a joinder in the Subsidiary Guaranty in the form of Exhibit A attached to the
form of Subsidiary Guaranty. Borrower covenants and agrees that each Subsidiary which it shall
cause to execute the Subsidiary Guaranty shall be fully authorized to do so by its supporting
organizational and authority documents and shall be in good standing in its state of organization and
shall have obtained any necessary foreign qualifications required to conduct its business. If a
Subsidiary that is initially not required to join in a Subsidiary Guaranty because it was an Excluded
Subsidiary is later not precluded from doing so, then Borrower shall cause such Subsidiary to join in
the Subsidiary Guaranty. The delivery by Borrower to the Administrative Agent of any such joinder
shall be deemed a representation and warranty by Borrower that each Subsidiary which Borrower
caused to execute the Subsidiary Guaranty has been fully authorized to do so by its supporting
organizational and authority documents and is in good standing in its state of organization and has
obtained any necessary foreign qualifications required to conduct its business.
6.27
Releases . If any Subsidiary which then is a party to the Subsidiary Guaranty or if any
other Subsidiary with respect to which the Borrower’s direct or indirect ownership interests have
been pledged under a Collateral Assignment or whose Project has been encumbered with a Mortgage
either incurs Secured Indebtedness that will prohibit the continuation of its liability under the
Subsidiary Guaranty or such pledge of ownership interests under the Collateral Assignment or the
continuation of such Mortgage or is selling all of its assets, and if the release of such Collateral has
been approved to the extent required under Section 2.3 above, then such Subsidiary will be released
from its obligations under the Subsidiary Guaranty, or the direct or indirect ownership interests
therein and the Mortgage shall be released, as the case may be, upon receipt by the Agent of all net
proceeds of such Secured Indebtedness or net sale proceeds. Such release shall become effective
upon the date that such Subsidiary Guarantor incurs such Secured Indebtedness or so sells all of its
assets and so remits the proceeds to the Administrative Agent on behalf of the Lenders for
application under Section 2.8 of the Agreement.
6.28.
Amendments to Organizational Documents
. The Borrower shall not permit any material amendment to be made to its organizational documents
without the prior written consent of the Required Lenders.
6.29
Distributions of Excess Funds to Deposit Account . The Borrower shall cause the
Subsidiaries to deposit all of their rental revenue into three lockbox accounts at the Depository Bank
and, directly or through their management agent, to irrevocably direct the Depository Bank to
transfer all funds in such lockbox accounts to the Holdco Account not less frequently than once each
month. The Borrower further agrees to irrevocably direct the Depository Bank to distribute, not less
frequently than once each month, all Excess Funds held in the Holdco Account into the Deposit
Account. Notwithstanding the foregoing, to the extent that rental revenue of any Subsidiaries is held
separately pursuant to separate lockbox agreements required by the holder of Secured Indebtedness
of such Subsidiary, the Borrower shall cause such Subsidiary to direct that any Excess Funds from
such lockbox agreements due to the Borrower after payment of all operating expenses, debt service
and required reserves shall be deposited directly into the Deposit Account.
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ARTICLE VII.
DEFAULTS
The occurrence of any one or more of the following events shall constitute a Default:
7.1.
Nonpayment of any principal payment due hereunder or under any Note when
due.
Nonpayment of interest upon any Note or of any Unused Fee or other payment
Obligations under any of the Loan Documents within five (5) Business Days after the same becomes
due.
7.2.
The breach of any of the terms or provisions of Sections 6.2 through 6.21 and 6.23
through 6.27.
7.3.
Any representation or warranty made or deemed made by or on behalf of the
Borrower or any other members of the Consolidated Group to the Lenders or the Administrative
Agent under or in connection with the Agreement, any Loan, or any material certificate or
information delivered in connection with the Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.4.
The breach by the Borrower (other than a breach which constitutes a Default under
Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of the Agreement which is not remedied
within five (5) days after written notice from the Administrative Agent or any Lender.
7.5.
Failure of the Borrower or any other member of the Consolidated Group to pay when
due any Recourse Indebtedness, regardless of amount, or any other Indebtedness in excess of
$250,000,000 in the aggregate (collectively, “Material Indebtedness”); or the default by the Borrower
or any other member of the Consolidated Group in the performance of any term, provision or
condition contained in any agreement, or any other event shall occur or condition exist, which causes
or permits any such Material Indebtedness to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the stated maturity thereof (provided that (i) the
failure to pay any such Material Indebtedness shall not constitute a Default so long as the Borrower
or such member of the Consolidated Group is diligently contesting the payment of the same by
appropriate legal proceedings and the Borrower or such member of the Consolidated Group has set
aside, in a manner reasonably satisfactory to Administrative Agent, a sufficient reserve to repay such
Indebtedness plus all accrued interest thereon calculated at the default rate thereunder and costs of
enforcement in the event of an adverse outcome or (ii) in the case of Secured Indebtedness
encumbering a Project which is not Recourse Indebtedness, the failure to pay any such Material
Indebtedness shall not constitute a Default so long as the only default by Borrower or such member is
the failure to pay such Indebtedness when due at maturity and Borrower or such member is actively
pursuing the extension or refinancing of such Indebtedness and the holder of such Indebtedness has
not initiated a foreclosure of its Lien or proceedings to have a receiver appointed for the collateral
securing such Indebtedness, provided that the deferral under this clause (ii) shall not extend for more
than ninety (90) days after the maturity date of such Secured Indebtedness, subject to extension of
such deferral period for an additional thirty (30) days if prior to the expiration of such 90 day period
Borrower has provided to the Administrative Agent evidence reasonably satisfactory to the
Administrative Agent that Borrower or such member is continuing to diligently pursue such an
extension or refinancing).
7.6.
The Borrower or any other member of the Consolidated Group shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect,
(ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in,
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the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an order for relief under the
Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it as a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (v) take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 7.6, (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.8 or (vii) admit in writing its inability to pay its debts generally as
they become due.
7.7.
A receiver, trustee, examiner, liquidator or similar official shall be appointed for the
Borrower or any other member or for any Substantial Portion of the Property of the Borrower or such
other member of the Consolidated Group, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any such other member of the Consolidated Group and such
appointment continues undischarged or such proceeding continues undismissed or unstayed for a
period of ninety (90) consecutive days.
7.8.
The Borrower or any other member of the Consolidated Group shall fail within sixty
(60) days to pay, bond or otherwise discharge any judgments or orders issued in proceedings with
respect to which Borrower has been properly served or has been given due and proper written notice
for the payment of money in an amount which, (excluding, however, any such judgments or orders
related to any then outstanding Indebtedness which is not Recourse Indebtedness and which was not
paid when due or is otherwise in default as described in Section 7.5 above, not to exceed in the
aggregate the $250,000,000 limit on such Indebtedness set forth in such Section 7.5 ) , when added to
all other judgments or orders outstanding against the Borrower or any other member of the
Consolidated Group would exceed $50,000,000 in the aggregate, which have not been stayed on
appeal or otherwise appropriately contested in good faith.
7.9.
The Borrower or any other member of the Controlled Group shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid
to Multiemployer Plans by the Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $500,000 per annum.
7.10.
The Borrower or any other member of the Controlled Group shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other members of the
Controlled Group (taken as a whole) to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer Plan immediately preceding the plan
year in which the reorganization or termination occurs by an amount exceeding $500,000.
7.11.
Failure to remediate within the time period permitted by law or governmental order,
after all administrative hearings and appeals have been concluded (or within a reasonable time in
light of the nature of the problem if no specific time period is so established), material environmental
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problems at Properties owned by the Borrower or any other Member of the Consolidated Group or
Investment Affiliates where aggregate book values are in excess of $50,000,000.
7.12.
The occurrence of any “Default” as defined in any Loan Document or the breach of
any of the terms or provisions of any Loan Document, which default or breach continues beyond any
period of grace therein provided.
7.13.
The attempted revocation, challenge, disavowment, or termination by the Borrower
of any of the Loan Documents.
7.14.
Any Change in Control shall occur.
7.15
Any Change in Management shall occur.
ARTICLE VIII.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1.
Acceleration
. If any Default described in Section 7.7 or 7.8 occurs with respect to the Borrower, the obligations
of the Lenders to make Loans and hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of the Administrative
Agent or any Lender. If any other Default occurs, so long as a Default exists Lenders shall have no
obligation to make any Loans and the Required Lenders, at any time prior to the date that such
Default has been fully cured, may permanently terminate the obligations of the Lenders to make
Loans hereunder and declare the Obligations to be due and payable, or both, whereupon (i) if the
Required Lenders have elected to accelerate, the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives and (ii) if any automatic or optional acceleration has occurred, the
Administrative Agent, as directed by the Required Lenders (or if no such direction is given within 30
days after a request for direction, as the Administrative Agent deems in the best interests of the
Lenders, in its sole discretion, until receipt of a subsequent direction from the Required Lenders),
shall use its good faith efforts to collect, including without limitation, by filing and diligently
pursuing judicial action, all amounts owed by the Borrower under the Loan Documents and to
exercise all other rights and remedies available under applicable law.
In addition to the foregoing, following the occurrence of an Unmatured Default and so long
as any Facility Letter of Credit has not been fully drawn and has not been cancelled or expired by its
terms, upon demand by the Required Lenders the Borrower shall deposit in the Letter of Credit
Collateral Account cash in an amount equal to the aggregate undrawn face amount of all outstanding
Facility Letters of Credit and all fees and other amounts due or which may become due with respect
thereto. The Borrower shall have no control over funds in the Letter of Credit Collateral Account
and shall not be entitled to receive any interest thereon. Such funds shall be promptly applied by the
Administrative Agent to reimburse the Issuing Bank for drafts drawn from time to time under the
Facility Letters of Credit and associated issuance costs and fees. Such funds, if any, remaining in the
Letter of Credit Collateral Account following the payment of all Obligations in full shall, unless the
Administrative Agent is otherwise directed by a court of competent jurisdiction, be promptly paid
over to the Borrower.
If, within 10 days after acceleration of the maturity of the Obligations or termination of the
obligations of the Lenders to make Loans hereunder as a result of any Default (other than any Default
as described in Section 7.7 or 7.8 with respect to the Borrower) and before any judgment or decree
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for the payment of the Obligations due shall have been obtained or entered, all of the Lenders (in
their sole discretion) shall so direct, the Administrative Agent shall, by notice to the Borrower,
rescind and annul such acceleration and/or termination.
8.2.
Amendments
. Subject to the provisions of this Article VIII the Required Lenders (or the Administrative Agent
with the consent in writing of the Required Lenders) and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents
or changing in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement or waiver shall, without
the consent of all Lenders:
(i)
Extend the Facility Termination Date (except as provided in Section 2.1 ), forgive all
or any portion of the principal amount of any Loan or accrued interest thereon or of the
Facility Letter of Credit Obligations or of the Unused Fee, reduce the Applicable Margins (or
modify any definition herein which would have the effect of reducing the Applicable
Margins) or the underlying interest rate options or extend the time of payment of any such
principal, interest or Unused Fees and Facility Letter of Credit Fees.
(ii)
Change the percentage specified in the definition of Required Lenders.
(iii)
Increase the Aggregate Commitment beyond $300,000,000, provided that no
Lender’s Commitment can be increased without the consent of such Lender.
(iv)
Permit the Borrower to assign its rights under the Agreement or otherwise release the
Borrower from any portion of the Obligations.
(v)
Release any Subsidiary Guarantor (other than a Subsidiary Guarantor released
pursuant to Section 6.27) from the Subsidiary Guaranty and from any liability it may
undertake with respect to the Obligations.
(vi)
Amend Sections 2.13 , 8.1 , 8.2 or 11.2 .
No amendment of any provision of the Agreement relating to the Administrative Agent shall be
effective without the written consent of the Administrative Agent.
8.3.
Preservation of Rights
. No delay or omission of the Lenders or the Administrative Agent to exercise any right under the
Loan Documents shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 8.2 , and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders
until the Obligations have been paid in full.
8.4.
Insolvency of Borrower
. In the event of the insolvency of the Borrower, the Commitments shall automatically terminate, the
Lenders shall have no obligation to make further disbursements of the Facility, and the outstanding
principal balance of the Facility, including accrued and unpaid interest thereon, shall be immediately
due and payable.
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ARTICLE IX.
GENERAL PROVISIONS
9.1.
Survival of Representations
. All representations and warranties of the Borrower contained in the Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.
9.2.
Governmental Regulation
. Anything contained in the Agreement to the contrary notwithstanding, no Lender shall be obligated
to extend credit to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3.
Taxes
. Any taxes (excluding taxes on the overall net income of any Lender) or other similar assessments
or charges made by any governmental or revenue authority in respect of the Loan Documents shall be
paid by the Borrower, together with interest and penalties, if any.
9.4.
Headings
. Section headings in the Loan Documents are for convenience of reference only, and shall not
govern the interpretation of any of the provisions of the Loan Documents.
9.5.
Entire Agreement
. The Loan Documents embody the entire agreement and understanding among the Borrower, the
Administrative Agent and the Lenders and supersede all prior commitments, agreements and
understandings among the Borrower, the Administrative Agent and the Lenders relating to the
subject matter thereof.
9.6.
Several Obligations; Benefits of the Agreement
. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall
be the partner or agent of any other (except to the extent to which the Administrative Agent is
authorized to act as such). The failure of any Lender to perform any of its obligations hereunder
shall not relieve any other Lender from any of its obligations hereunder. The Agreement shall not
be construed so as to confer any right or benefit upon any Person other than the parties to the
Agreement and their respective successors and assigns.
9.7.
Expenses; Indemnification
. The Borrower shall reimburse the Administrative Agent for any costs, internal charges and
out-of-pocket expenses (including, without limitation, all Appraisal costs, all reasonable fees for
consultants and fees and reasonable expenses for attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent) paid or incurred by the Administrative
Agent in connection with the administration, amendment, modification, and enforcement of the Loan
Documents. The Borrower also agrees to reimburse the Administrative Agent and the Lenders for
any reasonable costs, internal charges and out-of-pocket expenses (including, without limitation, all
fees and reasonable expenses for attorneys for the Administrative Agent and the Lenders, which
attorneys may be employees of the Administrative Agent or the Lenders) paid or incurred by the
Administrative Agent or any Lender in connection with the collection and enforcement of the Loan
Documents (including, without limitation, any workout). The Borrower further agrees to indemnify
the Administrative Agent, each Lender and their Affiliates, and their directors, employees, and
officers against all losses, claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all fees and reasonable expenses for attorneys of the indemnified parties, all
expenses of litigation or preparation therefore whether or not the Administrative Agent, or any
Lender is a party thereto) which any of them may pay or incur arising out of or relating to the
Agreement, the other Loan Documents, the Projects, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any Loan hereunder, except
to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefore. The Borrower agrees not to assert
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any claim against the Administrative Agent or any Lender, any of their respective Affiliates, or any
of their or their respective Affiliates’ officers, directors, employees, attorneys and agents, on any
theory of liability, for consequential or punitive damages arising out of or otherwise relating to any
facility hereunder, the actual or proposed use of the Loans or any Letter of Credit, the Loan
Documents or the transactions contemplated thereby. The Borrower agrees that during the term of the
Agreement, it shall under no circumstances claim, and hereby waives, any right of offset,
counterclaim or defense against the Administrative Agent or any Lender with respect to the
Obligations arising from, due to, related to or caused by any obligations, liability or other matter or
circumstance which is not the Obligations and is otherwise unrelated to the Agreement. Any assignee
of a Lender’s interest in and to the Agreement, its Note and the other Loan Documents shall take the
same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents
which the Borrower may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by the Borrower in any action or
proceeding brought by any such assignee upon such documents and any such right to interpose or
assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by the Borrower. The obligations of the Borrower under this Section shall survive
the termination of the Agreement.
9.8.
Numbers of Documents
. All statements, notices, closing documents, and requests hereunder shall be furnished to the
Administrative Agent with sufficient counterparts so that the Administrative Agent may furnish one
to each of the Lenders.
9.9.
Accounting
. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and
all accounting determinations hereunder shall be made in accordance with GAAP.
9.10.
Severability of Provisions
. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11.
Nonliability of Lenders
. The relationship between the Borrower, on the one hand, and the Lenders and the Administrative
Agent, on the other, shall be solely that of borrowers and lender. Neither the Administrative Agent
nor any Lender shall have any fiduciary responsibilities to the Borrower. Neither the Administrative
Agent nor any Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower’s business or operations.
9.12.
CHOICE OF LAW
. T
HE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13.
CONSENT TO JURISDICTION
.
THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS
AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR
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PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14.
WAIVER OF JURY TRIAL
.
THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15.
USA Patriot Act Notice
. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.
ARTICLE X.
THE ADMINISTRATIVE AGENT
10.1.
Appointment
. KeyBank National Association, is hereby appointed Administrative Agent hereunder and under
each other Loan Document, and each of the Lenders irrevocably authorizes the Administrative Agent
to act as the agent of such Lender. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article X . Notwithstanding the use of the defined term “Administrative
Agent,” it is expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of the Agreement or any other Loan Document and
that the Administrative Agent is merely acting as the contractual representative of the Lenders with
only those duties as are expressly set forth in the Agreement and the other Loan Documents. In its
capacity as the Lenders’ contractual representative, the Administrative Agent (i) shall perform its
duties with respect to the administration of the Facility in the same manner as it does when it is the
sole lender under this type of facility but does not hereby assume any fiduciary duties to any of the
Lenders, (ii) is a “representative” of the Lenders within the meaning of the term “secured party” as
defined in the Illinois Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in the Agreement and the other
Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Administrative
Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives, provided that the Administrative Agent shall, in any case, not be
released from liability to the Lenders for damages or losses incurred by them as a result of the
Administrative Agent’s gross negligence or willful misconduct.
10.2.
Powers
. The Administrative Agent shall have and may exercise such powers under the Loan Documents as
are specifically delegated to the Administrative Agent by the terms of each thereof, together with
such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied
duties to the Lenders, or any obligation to the Lenders to take any action
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thereunder except any action specifically provided by the Loan Documents to be taken by the
Administrative Agent.
10.3.
General Immunity
. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be
liable to the Borrower, the Lenders or any Lender for (i) any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or therewith except
for its or their own gross negligence or willful misconduct or, in the case of the Administrative
Agent, its breach of an express obligation under the Agreement; or (ii) any determination by the
Administrative Agent that compliance with any law or any governmental or quasi-governmental rule,
regulation, order, policy, guideline or directive (whether or not having the force of law) requires the
Advances and Commitments hereunder to be classified as being part of a “highly leveraged
transaction”.
10.4.
No Responsibility for Loans, Recitals, etc.
Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the satisfaction of any condition specified in Article IV , except receipt of items
required to be delivered to the Administrative Agent; (iv) the validity, effectiveness or genuineness
of any Loan Document or any other instrument or writing furnished in connection therewith; (v) the
value, sufficiency, creation, perfection, or priority of any interest in any collateral security; or (vi) the
financial condition of the Borrower. Except as otherwise specifically provided herein, the
Administrative Agent shall have no duty to disclose to the Lenders information that is not required to
be furnished by the Borrower to the Administrative Agent at such time, but is voluntarily furnished
by the Borrower to the Administrative Agent (either in its capacity as Administrative Agent or in its
individual capacity).
10.5.
Action on Instructions of Lenders
. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with written instructions
signed by the required percentage of the Lenders needed to take such action or refrain from taking
such action, and such instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. The Lenders hereby acknowledge that the Administrative Agent shall
be under no duty to take any discretionary action permitted to be taken by it pursuant to the
provisions of the Agreement or any other Loan Document unless it shall be requested in writing to do
so by the Required Lenders. The Administrative Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall first be indemnified
to its reasonable satisfaction by the Lenders pro rata against any and all liability, cost and expense
that it may incur by reason of taking or continuing to take any such action.
10.6.
Employment of Agents and Counsel
. The Administrative Agent may execute any of its duties as Administrative Agent hereunder and
under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the Lenders, except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable
care. The Administrative Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder and under any other Loan Document.
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10.7.
Reliance on Documents; Counsel
. The Administrative Agent shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and
to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent.
10.8.
Administrative Agent’s Reimbursement and Indemnification
. The Lenders agree to reimburse and indemnify the Administrative Agent ratably in proportion to
their respective Commitments (i) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii)
for any other expenses incurred by the Administrative Agent on behalf of the Lenders, in connection
with the preparation, execution, delivery, administration and enforcement of the Loan Documents, if
not paid by Borrower and (iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way relating to or
arising out of the Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including without limitation, for any such amounts incurred by or
asserted against the Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the
terms thereof or of any such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful misconduct or a breach of the
Administrative Agent’s express obligations and undertakings to the Lenders. The obligations of the
Lenders and the Administrative Agent under this Section 10.8 shall survive payment of the
Obligations and termination of the Agreement.
10.9.
Rights as a Lender
. In the event the Administrative Agent is a Lender, the Administrative Agent shall have the same
rights and powers hereunder and under any other Loan Document as any Lender and may exercise
the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall,
at any time when the Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative Agent may accept
deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by the Agreement or any other Loan Document, with
the Borrower or any of its Subsidiaries in which the Borrower or such Subsidiaries are not restricted
hereby from engaging with any other Person. The Administrative Agent, in its individual capacity,
is not obligated to remain a Lender.
10.10.
Lender Credit Decision
. Each Lender acknowledges that it has, independently and without reliance upon the Administrative
Agent or any other Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into the Agreement and the other Loan Documents. Each Lender also
acknowledges that it will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under the Agreement and
the other Loan Documents.
10.11.
Successor Administrative Agent
. Except as otherwise provided below, KeyBank National Association shall at all times serve as the
Administrative Agent during the term of this Facility. The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days
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after the retiring Administrative Agent gives notice of its intention to resign. The Administrative
Agent may be removed at any time with cause by written notice received by the Administrative
Agent from the Required Lenders (but excluding, for purposes of calculating the percentage needed
to constitute Required Lenders in such instance, the Commitment of the Administrative Agent from
the Aggregate Commitment and the Advances held by the Administrative Agent from the total
outstanding Advances), such removal to be effective on the date specified by such Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of
the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders within thirty days after the resigning
Administrative Agent’s giving notice of its intention to resign, then the resigning Administrative
Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent. Notwithstanding the previous sentence, the Administrative Agent may at any time without
the consent of the Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If the Administrative Agent has resigned or been
removed and no successor Administrative Agent has been appointed, the Lenders may perform all
the duties of the Administrative Agent hereunder and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with
the Lenders. No successor Administrative Agent shall be deemed to be appointed hereunder until
such successor Administrative Agent has accepted the appointment. Any such successor
Administrative Agent shall be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the resigning or removed
Administrative Agent. Upon the effectiveness of the resignation or removal of the Administrative
Agent, the resigning or removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness of the resignation or
removal of an Administrative Agent, the provisions of this Article X shall continue in effect for the
benefit of such Administrative Agent in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent hereunder and under the other Loan Documents.
10.12.
Notice of Defaults
. If a Lender becomes aware of a Default or Unmatured Default, such Lender shall notify the
Administrative Agent of such fact provided that the failure to give such notice shall not create
liability on the part of a Lender. Upon receipt of such notice that a Default or Unmatured Default
has occurred or upon it otherwise having actual knowledge of any Default or Unmatured Default, the
Administrative Agent shall notify each of the Lenders of such fact.
10.13.
Requests for Approval
. If the Administrative Agent requests in writing the consent or approval of a Lender, such Lender
shall respond and either approve or disapprove definitively in writing to the Administrative Agent
within ten Business Days (or sooner if such notice specifies a shorter period for responses based on
Administrative Agent’s good faith determination that circumstances exist warranting its request for
an earlier response) after such written request from the Administrative Agent. If the Lender does not
so respond, that Lender shall be deemed to have approved the request.
10.14.
Defaulting Lenders
. At such time as a Lender becomes a Defaulting Lender, such Defaulting Lender’s right to vote on
matters which are subject to the consent or approval of the Required Lenders, each affected Lender
or all Lenders shall be immediately suspended until such time as the Lender is no longer a Defaulting
Lender, except that the amount of the Commitment of the Defaulting Lender may not be changed
without its consent. If a Defaulting Lender has failed to fund its pro rata share of any Advance and
until such time as such Defaulting Lender subsequently
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funds its pro rata share of such Advance, all Obligations owing to such Defaulting Lender hereunder
shall be subordinated in right of payment, as provided in the following sentence, to the prior payment
in full of all principal of, interest on and fees relating to the Loans funded by the other Lenders in
connection with any such Advance in which the Defaulting Lender has not funded its pro rata share
(such principal, interest and fees being referred to as “Senior Loans” for the purposes of this
section). All amounts paid by the Borrower and otherwise due to be applied to the Obligations
owing to such Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective pro rata shares
(recalculated for the purposes hereof to exclude the Defaulting Lender) until all Senior Loans have
been paid in full. After the Senior Loans have been paid in full equitable adjustments will be made
in connection with future payments by the Borrower to the extent a portion of the Senior Loans had
been repaid with amounts that otherwise would have been distributed to a Defaulting Lender but for
the operation of this Section 10.14 . This provision governs only the relationship among the
Administrative Agent, each Defaulting Lender and the other Lenders; nothing hereunder shall limit
the obligation of the Borrower to repay all Loans in accordance with the terms of the
Agreement. The provisions of this section shall apply and be effective regardless of whether a
Default occurs and is continuing, and notwithstanding (i) any other provision of the Agreement to the
contrary, (ii) any instruction of the Borrower as to its desired application of payments or (iii) the
suspension of such Defaulting Lender’s right to vote on matters which are subject to the consent or
approval of the Required Lenders or all Lenders.
10.15.
Additional Agents
. Neither the Documentation Agent nor the Syndication Agent as designated on the cover of the
Agreement have any rights or obligations under the Loan Documents as a result of such designation
or of any actions undertaken in such capacity, such parties having only those rights or obligations
arising hereunder in their capacities as a Lender.
ARTICLE XI.
SETOFF; RATABLE PAYMENTS
11.1.
Setoff
. In addition to, and without limitation of, any rights of the Lenders under applicable law, if the
Borrower or any of the Subsidiary Guarantors becomes insolvent, however evidenced, or any Default
occurs, any and all deposits (including all account balances, whether provisional or final and whether
or not collected or available) and any other Indebtedness at any time held or owing by any Lender
or any of its Affiliates to or for the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender at any time prior to the date that such
Default has been fully cured, whether or not the Obligations, or any part hereof, shall then be due.
11.2.
Ratable Payments
. If any Lender, whether by setoff or otherwise, has payment made to it upon its Loans (other than
payments of Swingline Loans and payments received pursuant to Sections 3.1 , 3.2 , 3.4 or 3.5 ) in a
greater proportion than that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share in the benefits of
such collateral ratably in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
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ARTICLE XII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1.
Successors and Assigns
. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of
the Borrower and the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the Loan Documents and
(ii) any assignment by any Lender must be made in compliance with Section 12.3 . The parties to
the Agreement acknowledge that clause (ii) of this Section 12.1 relates only to absolute assignments
and does not prohibit assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under the Agreement and any
Note to a Federal Reserve Bank or (y) in the case of a Lender which is a fund, any pledge or
assignment of all or any portion of its rights under the Agreement and any Note to its trustee in
support of its obligations to its trustee; provided, however, that no such pledge or assignment creating
a security interest shall release the transferor Lender from its obligations hereunder unless and until
the parties thereto have complied with the provisions of Section 12.3 . The Administrative Agent
may treat the Person which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3 ; provided, however, that
the Administrative Agent may in its discretion (but shall not be required to) follow instructions from
the Person which made any Loan or which holds any Note to direct payments relating to such Loan
or Note to another Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in
evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights
to such Loan.
12.2.
Participations
.
(i)
Permitted Participants; Effect . Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks, financial institutions, pension
funds, or any other funds or entities (“ Participants ”) participating
interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan Documents,
all amounts payable by the Borrower under the Agreement shall be
determined as if such Lender had not sold such participating interests,
and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s
rights and obligations under the Loan Documents.
(ii)
Voting Rights . Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan
or Commitment in which such Participant has an interest which would
require consent of all the Lenders pursuant to the terms of Section 8.2
or of any other Loan Document.
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(iii)
Benefit of Setoff . The Borrower agree that each Participant
which has previously advised the Borrower in writing of its purchase
of a participation in a Lender’s interest in its Loans shall be deemed to
have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to
the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents. Each
Lender shall retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each
Participant, provided that such Lender and Participant may not each
setoff amounts against the same portion of the Obligations, so as to
collect the same amount from the Borrower twice. The Lenders
agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1 , agrees to share
with each Lender, any amount received pursuant to the exercise of its
right of setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender.
12.3.
Assignments
.
(i)
Permitted Assignments . Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to any of such Lender’s affiliates or to one or more banks,
financial institutions or pension funds or with the prior approval of the
Borrower, which shall not be unreasonably withheld or delayed, to
any other entity (“ Purchasers ”) all or any portion (greater than or
equal to $5,000,000 for each assignee, so long as the hold position of
the assigning Lender is not less than $5,000,000) of its rights and
obligations under the Loan Documents. Notwithstanding the
foregoing, no approval of the Borrower shall be required for any such
assignment if a Default has occurred and is then continuing. Such
assignment shall be substantially in the form of Exhibit B hereto or in
such other form as may be agreed to by the parties thereto. The
consent of the Administrative Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is
not a Lender or an Affiliate thereof. Such consent shall not be
unreasonably withheld.
(ii)
Effect; Effective Date . Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit “I” to Exhibit B hereto (a “ Notice of
Assignment ”), together with any consents required by Section 12.3.1
, and (ii) payment of a $3,500 fee by the assignor or assignee to the
Administrative Agent for processing such assignment, such
assignment shall become effective on the effective date specified in
such Notice of Assignment. The Notice of Assignment shall contain
a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and
Loans under the applicable assignment agreement are “plan assets” as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be “plan assets” under
ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to the Agreement
and any other Loan Document executed by the Lenders and shall have
all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender, and the
transferor Lender shall automatically be released on the effective date
of such assignment, with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this
Section 12.3.2 , the transferor Lender, the Administrative Agent and
the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new
Notes
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or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting its Commitment, as adjusted
pursuant to such assignment.
12.4.
Dissemination of Information
. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a “ Transferee ”) and
any prospective Transferee any and all information in such Lender’s possession concerning the
creditworthiness of the Borrower and its Subsidiaries, subject to Section 9.11 of the Agreement.
12.5.
Tax Treatment
. If any interest in any Loan Document is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5 .
ARTICLE XIII.
NOTICES
13.1.
Giving Notice
. Except as otherwise permitted by Section 2.14 with respect to borrowing notices, all notices and
other communications provided to any party hereto under the Agreement or any other Loan
Document shall be in writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address (or to counsel for such party)
as may be designated by such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received; any notice, if
transmitted by telex or facsimile, shall be deemed given when transmitted (answerback confirmed in
the case of telexes).
13.2.
Change of Address
. The Borrower, the Administrative Agent and any Lender may each change the address for service
of notice upon it by a notice in writing to the other parties hereto.
ARTICLE XIV.
COUNTERPARTS
This Amendment may be executed in any number of counterparts, all of which taken together
shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be effective when it has been executed by the
Borrower, the Administrative Agent and the Required Lenders and each party has notified the
Administrative Agent by telex or telephone, that it has taken such action.
(Remainder of page intentionally left blank.)
-74-
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have
executed this Amendment as of the date first above written.
INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC.
By:
Print Name: Steven P. Grimes
Title: Chief Operating Officer and Chief Financial
Officer
2901 Butterfield Road
Oak Brook, Illinois 60523
Phone: 630-218-8000
Facsimile: 630-368-2308
Attention: Steven P. Grimes
with a copy to:
2901 Butterfield Road
Oak Brook, Illinois 60523
Phone: 630-368-2861
Facsimile: 630-586-6446
Attention: Dennis Holland
Signature Page to Credit Agreement
S-75
COMMITMENT:
KEYBANK NATIONAL ASSOCIATION,
$31,111,111.11
Individually and as Administrative Agent
By:
Print Name: Kevin P. Murray
Title: Senior Vice President
127 Public Square
8 th Floor
Cleveland, Ohio 44114
Phone: 216-689-4660
Facsimile: 216-689-5819
Attention: Kevin P. Murray
Signature Page to Credit Agreement
S-76
COMMITMENT:
NORDDEUTSCHE LANDESBANK
$31,111,111.11
GIROZENTRALE, NEW YORK BRANCH
By:
Print Name: Malte Stoeckhert
Title: Senior Director
By:
Print Name: Lita Kot
Title: Director
1114 Avenue of the Americas
37 th Floor
New York, NY 10036
Phone: 212-812-6989
Facsimile: 212-812-6850
Attention: Portfolio Management Group-Real Estate
Signature Page to Credit Agreement
S-77
COMMITMENT:
DEUTSCHE BANK TRUST COMPANY
$22,222,222.22
AMERICAS
By:
Print Name: Perry Forman
Title: Director
Phone: 212-250-3447
Facsimile: 212-797-8988
By:
Print Name: James Rolison
Title: Managing Director
Phone: 212-250-3352
Facsimile: 646-324-7450
60 Wall Street - 10 th Floor
Mail Stop: NYC60-1015
New York, NY 10005-2836
Signature Page to Credit Agreement
S-78
COMMITMENT:
CITICORP NORTH AMERICA, INC.
$22,222,222.22
By:
Print Name: Ricardo James
Title: Director
390 Greenwich Street
1 st Floor
New York, NY 10013
Phone: 212-723-9647
Facsimile: 646-291-5996
Attention: Archana Shah
Signature Page to Credit Agreement
S-79
COMMITMENT:
BANK OF AMERICA, NATIONAL ASSOCIATION
$22,222,222.22
By:
Print Name: Trent A. Deguzis
Title: Senior Vice President
Bank of America, N.A.
600 Peachtree St. NE
GA1-006-06-25
Atlanta, Georgia 30308
Phone: 404-607-4186
Facsimile: 404-607-4145
Attention: Trent A. Deguzis
Signature Page to Credit Agreement
S-80
COMMITMENT:
MERRILL LYNCH BANK USA
$22,222,222.22
By:
Print Name: Louis Alder
Title: Director
15 West South Temple Street
Suite 300
Salt Lake City, UT 84101
Phone: 801-526-8324
Facsimile: 801-531-7470
Attention: Derek Befus
Signature Page to Credit Agreement
S-81
COMMITMENT:
BMO CAPITAL MARKETS FINANCING, INC.
$22,222,222.22
By:
Print Name: Aaron Lanski
Title: Vice President
111 West Monroe Street
10 Floor West
Chicago IL 60603
Phone: (312) 461-6364
Facsimile: (312) 293-4856
Signature Page to Credit Agreement
S-82
COMMITMENT:
RBS CITIZENS, NATIONAL ASSOCIATION,
$26,666,666.67
d/b/a Charter One
By:
Print Name: Michele S. Jawyn
Title: Vice President
1215 Superior Avenue, 6 th Floor
Cleveland, Ohio 44114
Phone: (216)277-0471
Facsimile: (216)277-4607
Attention: Michele S. Jawyn
Signature Page to Credit Agreement
S-83
EXHIBIT A
COMPLIANCE CERTIFICATE
KeyBank National Association, as Administrative Agent
127 Public Square
Cleveland, Ohio 44114
Re:
Credit Agreement dated October 15, 2007, as amended by the Comprehensive
Amendment to Credit Agreement dated as of April __, 2009 (as amended, modified,
supplemented, restated, or renewed, from time to time, the “Agreement”) between
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC. (the “Borrower”), and
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent for itself and the
other lenders parties thereto from time to time (“Lenders”).
Reference is made to the Agreement. Capitalized terms used in this Certificate (including
schedules and other attachments hereto, this “Certificate”) without definition have the meanings
specified in the Agreement.
Pursuant to applicable provisions of the Agreement, Borrower hereby certifies to the Lenders
that the information furnished in the attached schedules, including, without limitation, each of the
calculations listed below are true, correct and complete in all material respects as of the last day of
the fiscal periods subject to the financial statements and associated covenants being delivered to the
Lenders pursuant to the Agreement together with this Certificate (such statements the “Financial
Statements” and the periods covered thereby the “reporting period”) and for such reporting periods.
The undersigned hereby further certifies to the Lenders that:
1.
Compliance with Financial Covenants . Schedule A attached hereto sets forth
financial data and computations evidencing the Borrower’s compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
2.
Review of Condition . The undersigned has reviewed the terms of the Agreement,
including, but not limited to, the representations and warranties of the Borrower set forth in the
Agreement and the covenants of the Borrower set forth in the Agreement, and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the transactions and condition
of the Borrower through the reporting periods.
3.
Representations and Warranties . To the undersigned’s actual knowledge, the
representations and warranties of the Borrower contained in the Loan Documents, including those
contained in the Agreement, are true and accurate in all material respects as of the date hereof and
were true and accurate in all material respects at all times during the reporting period except as
expressly noted on Schedule B hereto.
4.
Covenants . To the undersigned’s actual knowledge, during the reporting period, the
Borrower observed and performed all of the respective covenants and other agreements under the
Agreement and the Loan Documents, and satisfied each of the conditions contained therein to be
observed, performed or satisfied by the Borrower, except as expressly noted on Schedule B hereto.
A-1
5.
No Unmatured Default . To the undersigned’s actual knowledge, no Default or
Unmatured Default exists as of the date hereof or existed at any time during the reporting period,
except as expressly noted on Schedule B hereto.
IN WITNESS WHEREOF, this Certificate is executed by the undersigned this ___ day of
_________.
INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC.
By:
N
ame:
Title:
A-2
SCHEDULE A TO COMPLIANCE CERTIFICATE
COMPLIANCE CALCULATION METHOD
A-3
SCHEDULE B TO COMPLIANCE CERTIFICATE
EXCEPTIONS, IF ANY
A-4
EXHIBIT B
ASSIGNMENT AGREEMENT
This Assignment Agreement (this “Assignment Agreement”) between KEYBANK
NATIONAL ASSOCIATION (the “Assignor”) and _________________________ (the “Assignee”)
is dated as of _____________, 200_. The parties hereto agree as follows:
1.
PRELIMINARY STATEMENT . The Assignor is a party to a Credit Agreement
dated as of October 15, 2007, as amended by Comprehensive Amendment to Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is herein called the
“Credit Agreement”) described in Item 1 of Schedule 1 attached hereto (“Schedule 1”). Capitalized
terms used herein and not otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2.
ASSIGNMENT AND ASSUMPTION . The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor’s rights and obligations under the Credit Agreement such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment Agreement the percentage
interest specified in Item 3 of Schedule 1 of all outstanding rights and obligations under the Credit
Agreement and the other Loan Documents. The Commitment purchased by the Assignee hereunder
is set forth in Item 4 of Schedule 1.
3.
EFFECTIVE DATE . The effective date of this Assignment Agreement (the
“Effective Date”) shall be the later of the date specified in Item 5 of Schedule 1 or two (2) Business
Days (or such shorter period agreed to by the Agent) after a Notice of Assignment substantially in the
form of Exhibit “I” attached hereto has been delivered to the Agent. Such Notice of Assignment
must include the consent of the Agent required by Section 12.3.1 of the Credit Agreement. In no
event will the Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date under Section 4 hereof are not made on the proposed Effective
Date. The Assignor will notify the Assignee of the proposed Effective Date no later than the
Business Day prior to the proposed Effective Date. As of the Effective Date, (i) the Assignee shall
have the rights and obligations of a Lender under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its rights and be
released from its corresponding obligations under the Loan Documents with respect to the rights and
obligations assigned to the Assignee hereunder.
4.
PAYMENTS OBLIGATIONS . On and after the Effective Date, the Assignee shall
be entitled to receive from the Agent all payments of principal, interest and fees with respect to the
interest assigned hereby. The Assignee shall advance funds directly to the Agent with respect to all
Loans and reimbursement payments made on or after the Effective Date with respect to the interest
assigned hereby. In consideration for the sale and assignment of Loans hereunder, the Assignee
shall pay the Assignor, on the Effective Date, an amount equal to the principal amount of the portion
of all Loans assigned to the Assignee hereunder which is outstanding on the Effective Date. The
Assignee will promptly remit to the Assignor (i) the portion of any principal payments assigned
hereunder and received from the Agent and (ii) any amounts of interest on Loans and fees received
from the Agent to the extent either (i) or (ii) relate to the portion of the Loans assigned to the
Assignee hereunder for periods prior to the Effective Date and have not been previously paid by the
Assignee to the Assignor. In the event that either party hereto receives any payment to which the
other party hereto
B-1
is entitled under this Assignment Agreement, then the party receiving such amount shall promptly
remit it to the other party hereto.
5.
REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE
ASSIGNOR’S LIABILITY . The Assignor represents and warrants: (a) that it is the legal and
beneficial owner of the interest being assigned by it hereunder, (b) that such interest is free and clear
of any adverse claim created by the Assignor, (c) that it has all necessary right and authority to enter
into this Assignment, (d) that the Credit Agreement has not been modified or amended, (e) that the
Assignor is not in default under the Credit Agreement, and (f) that, to the Assignor’s actual
knowledge, the Borrowers are not in default under the Credit Agreement. It is understood and
agreed that the assignment and assumption hereunder is made without recourse to the Assignor and
that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i)
the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any
Loan Document, including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any representation,
warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial
condition or creditworthiness of the Borrower or any guarantor, (iv) the performance of or
compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of
the Property, books or records of the Borrowers, (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to secure the Loans or (vii)
any mistake, error of judgment, or action taken or omitted to be taken in connection with the Loans
or the Loan Documents.
6.
REPRESENTATIONS OF THE ASSIGNEE . The Assignee (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial statements requested
by the Assignee and such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender, (v) agrees that its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, and (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are “plan assets” as defined
under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be
“plan assets” under ERISA.
7.
INDEMNITY . The Assignee agrees to indemnify and hold the Assignor harmless
against any and all losses, costs and expenses (including, without limitation, reasonable attorneys’
fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the
Assignee’s non-performance of the obligations assumed by Assignee under this Assignment
Agreement on and after the Effective Date. The Assignor agrees to indemnify and hold the Assignee
harmless against any and all losses, costs and expenses (including, without limitation, reasonable
attorneys’ fees) and liabilities incurred by the Assignee in connection with or arising in any manner
from the Assignor’s non-performance of the obligations assigned to Assignee under this Assignment
Agreement prior to the Effective Date.
B-2
8.
SUBSEQUENT ASSIGNMENTS . After the Effective Date, the Assignee shall have
the right pursuant to Section 12.3.1 of the Credit Agreement to assign the rights which are assigned
to the Assignee hereunder to any entity or person, provided that (i) any such subsequent assignment
does not violate any of the terms and conditions of the Loan Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under the terms of the Loan
Documents has been obtained and (ii) unless the prior written consent of the Assignor is obtained, the
Assignee is not thereby released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under Sections 4 and 7 hereof.
9.
REDUCTIONS OF AGGREGATE COMMITMENT . If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and the Effective
Date, the percentage interest specified in Item 3 of Schedule 1 shall remain the same, but the dollar
amount purchased shall be recalculated based on the reduced Aggregate Commitment.
10.
ENTIRE AGREEMENT . This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties hereto and
supersede all prior agreements and understandings between the parties hereto relating to the subject
matter hereof.
11.
GOVERNING LAW . This Assignment Agreement shall be governed by the internal
law, and not the law of conflicts, of the State of [Assignor’s State].
12.
NOTICES . Notices shall be given under this Assignment Agreement in the manner
set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until
notice of a change is delivered) shall be the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement by
their duly authorized officers as of the date first above written.
ASSIGNOR:
[_____________________________________]
By:
Name: ___________________________________
Title:
ASSIGNEE:
[_____________________________________]
By:
Name: ___________________________________
Title:
B-3
SCHEDULE 1
to Assignment Agreement
1.
Description and Date of Credit
Agreement:
2.
Date of Assignment Agreement:
, 200__
3.
Amounts (As of Date of Item 2 above):
a.
Aggregate Commitment
under Credit Agreement
b.
Assignee’s Percentage
of the Aggregate Commitment
purchased under this
Assignment Agreement**
%
4.
Amount of Assignee’s
Commitment Purchased under this
Assignment Agreement:
$
5.
Proposed Effective Date:
Accepted and Agreed:
KEYBANK NATIONAL ASSOCIATION
[NAME OF ASSIGNEE]
By:
By:
Title:
Title:
** Percentage taken to 10 decimal places.
B-4
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor’s Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
[to be provided by KeyBank]
B-5
EXHIBIT “I”
to Assignment Agreement
NOTICE OF ASSIGNMENT
________________, ____
To:
KeyBank National Association
Attention:
Borrower:
Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention: Steven P. Grimes
From:
[NAME OF ASSIGNOR] (the “Assignor”)
[NAME OF ASSIGNEE] (the “Assignee”)
1.
We refer to that Credit Agreement dated as of October 15, 2007 as amended
by the Comprehensive Amendment to Credit Agreement (the “Credit Agreement”) described in Item
1 of Schedule 1 attached hereto (“Schedule 1”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit Agreement.
2.
This Notice of Assignment (this “Notice”) is given and delivered to the Agent
pursuant to Section 12.3.2 of the Credit Agreement.
3.
The Assignor and the Assignee have entered into an Assignment Agreement,
dated as of , (the “Assignment”), pursuant to which, among other things, the Assignor has sold,
assigned, delegated and transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement. The Effective Date of the
Assignment shall be the later of the date specified in Item 5 of Schedule 1 or two (2) Business Days
(or such shorter period as agreed to by the Agent) after this Notice of Assignment and any fee
required by Section 12.3.2 of the Credit Agreement have been delivered to the Agent, provided that
the Effective Date shall not occur if any condition precedent agreed to by the Assignor and the
Assignee has not been satisfied.
4.
The Assignor and the Assignee hereby give to the Agent notice of the
assignment and delegation referred to herein. The Assignor will confer with the Agent before the
date specified in Item 5 of Schedule 1 to determine if the Assignment Agreement will become
effective on such date pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor shall notify the
Agent if the Assignment Agreement does not become effective on any proposed Effective Date as a
result of the failure to satisfy the conditions precedent agreed to by the Assignor and the
Assignee. At the request of the Agent, the Assignor will give the Agent written confirmation of the
satisfaction of the conditions precedent.
5.
If Notes are outstanding on the Effective Date, the Assignor and the Assignee
request and direct that the Agent prepare and cause the Borrowers to execute and deliver new Notes
or, as appropriate, replacements notes, to the Assignor and the Assignee. The Assignor and, if
B-6
applicable, the Assignee each agree to deliver to the Agent the original Note received by it from the
Borrowers upon its receipt of a new Note in the appropriate amount.
6.
The Assignee advises the Agent that notice and payment instructions are set
forth in the attachment to Schedule 1.
7.
The Assignee hereby represents and warrants that none of the funds, monies,
assets or other consideration being used to make the purchase pursuant to the Assignment are “plan
assets” as defined under ERISA and that its rights, benefits, and interests in and under the Loan
Documents will not be “plan assets” under ERISA.
8.
The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that the Agent has no
duty to supply information with respect to the Borrowers or the Loan Documents to the Assignee
until the Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the Effective Date.
NAME OF ASSIGNOR
NAME OF ASSIGNEE
By:
By:
Title:
Title:
ACKNOWLEDGED AND, IF REQUIRED BY THE CREDIT AGREEMENT, CONSENTED TO
BY KEYBANK, NATIONAL ASSOCIATION, AS AGENT
By:
Title:
[Attach photocopy of Schedule 1 to Assignment]
B-7
EXHIBIT C
ENVIRONMENTAL INVESTIGATION SPECIFICATIONS AND PROCEDURES
Phase I Environmental Site Assessments to be prepared in accordance with the ASTM
Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment
Process (ASTM Designation E1527-94), a summary of which follows:
This ASTM practice is generally considered the industry standard for conducting a Phase I
Environmental Site Assessment (ESA). The purpose of this standard is to “define good commercial
and customary practice in the Untied States of America for conducting an ESA of a parcel of
commercial real estate with respect to the range of contaminants within the scope of the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and
petroleum products.” The ASTM Phase I ESA is intended to permit a user to satisfy one of the
requirements to qualify for the innocent landowner defense to CERCLA liability; that is, the practice
that constitutes “all appropriate inquiry into the previous ownership and uses of the property
consistent with good commercial or customary practices” as defined in 42 USC 9601(35)(B).
The goal of the ASTM Phase I ESA is to identify “recognized environmental
conditions.” Recognized environmental conditions means the presence or likely presence of any
hazardous substances or petroleum products on a property under conditions that indicate an existing
release, a past release, or a material threat of a release of any hazardous substances or petroleum
products into structures on the property or into the ground, groundwater, or surface water of the
property. The term includes hazardous substances or petroleum products even under conditions in
compliance with laws. The term is not intended to include de minimus conditions that generally
would not be the subject of an enforcement action if brought to the attention of appropriate
governmental agencies.
The ASTM standard indicates that a Phase I ESA should consist of four main
components: 1) Records Review; 2) Site Reconnaissance; 3) Interviews; and 4) Report. The
purpose of the records review is to obtain and review records that will help identify recognized
environmental conditions in connection with the property. The site reconnaissance involves physical
observation of the property’s exterior and interior, as well as an observation of adjoining
properties. Interviews with previous and current owners and occupants, and local government
officials provides insight into the presence or absence of recognized environmental conditions in
connection with the property. The final component of the ESA, the report, contains the findings of
the ESA and conclusions regarding the presence or absence of recognized environmental conditions
in connection with the property. It includes documentation to support the analysis, opinions, and
conclusions found in the report.
While the use of this practice is intended to constitute appropriate inquiry for purposes of
CERCLA’s innocent landowner defense, it is not intended that its use be limited to that
purpose. The ASTM standard is intended to be an approach to conducting an inquiry designed to
identify recognized environmental conditions in connection with a property, and environmental site
assessments.
C-1
EXHIBIT D
FORM OF OPINION OF BORROWER’S COUNSEL
April __, 2009
KeyBank National Association,
as Administrative Agent for the Lenders
127 Public Square, 8 th Floor
Cleveland, Ohio 44114
Re:
Credit Agreement dated as of October 15, 2007, as amended by a Comprehensive
Amendment to Credit Agreement dated as of April __, 2009 (the “Credit
Agreement”), by and among Inland Western Retail Real Estate Trust, Inc., a
corporation organized under the laws of the State of Maryland (the Borrower”),
KeyBank National Association, a national banking association, and the several
banks, financial institutions and other entities from time to time parties to the
Credit Agreement (collectively, the “Lenders”) and KeyBank National
Association, not individually, but as “Administrative Agent”
Ladies and Gentlemen:
We have acted as special counsel to the Borrower in connection with the Credit
Agreement. Capitalized terms used but not otherwise defined herein shall have the respective
meanings assigned thereto in the Credit Agreement.
We have reviewed the Credit Agreement, the Subsidiary Guaranty, the Collateral
Assignment, the Account Pledge Agreement and the Notes (collectively, the “Loan
Documents”).
For purposes hereof, we have made certain assumptions hereinafter described without
independent verification. We have also assumed, without independent verification, that there are
no facts inconsistent with the assumptions hereinafter set forth. We know of no facts
inconsistent with such assumptions, but we have not conducted an independent investigation or
verification.
The opinion set forth herein is qualified as stated herein and is qualified further by the
following:
A.
This opinion is based upon existing laws, ordinances and regulations in effect as
of the date hereof and as they presently apply.
B.
In rendering the opinion set forth below, we have relied as to matters of fact, upon
(i) certificates or statements of public officials (including Certificates of Good Standing and
Existence in Illinois and Maryland for Borrower dated April ______, 2009 and April __, 2009
respectively, the validity of which we assume remains unchanged as of the date hereof) and of
officers of the Borrower and (ii) representations and warranties contained in the Loan
Documents. Further, we have assumed that (a) each document submitted to us is accurate and
complete, (b) there are no events, facts or circumstances currently and actually known to the
Borrower or the Lenders which have not been disclosed to us to the extent such events, facts or
D-1
circumstances would render any provision of the Loan Documents invalid or unenforceable in
any material respect, and (c) there are and have been no agreements or understandings among the
Borrower and the Lenders, written or oral, and there is and has been no usage of trade or course
of prior dealing among such parties that in either case would materially define, supplement,
amend or qualify the terms of the Loan Documents so as to render inaccurate any opinion
expressed herein. For purposes of rendering the first two opinions expressed below, we have
relied exclusively upon certificates issued by governmental authorities in the relevant
jurisdictions, and such opinions are not intended to provide any conclusion or assurance beyond
that conveyed by such certificates.
C.
We express no opinion as to the enforceability, under certain circumstances, of
provisions imposing penalties or forfeitures, late payment charges or an increase in interest rate
upon delinquency in payment or the occurrence of a default.
D.
We express no opinion as to:
(i)
the existence of any Person’s ownership rights in or title to, the existence
or priority of, any lien or with respect to any property;
(ii)
any agreement by the Borrower to waive jury trial or appoint an agent for
acceptance of service of process;
(iii)
any provision of the Loan Documents purporting to waive any objection to
the laying of venue or any claim that an action or proceeding has been brought in an
inconvenient forum; and
(iv)
any provision of the Loan Documents which authorizes or permits any
purchaser of a participation interest from any party to set off or apply any deposit or property or
any indebtedness with respect to any participation interest.
E.
We have assumed that (i) the transactions contemplated by the Loan Documents
are within the Lenders’ corporate powers; (ii) the Lenders and the Borrower have been in
compliance with all applicable laws, rules and regulations governing and affecting the conduct of
their respective businesses to the extent that non-compliance would have a material adverse
effect on the validity or enforceability of any of the Loan Documents; (iii) the Loan Documents
will be enforced in good faith and in circumstances and in a manner that are commercially
reasonable; (iv) the Lenders are not subject to any statute, rule or regulation or any impediment
that requires them to obtain the authorization, approval or consent of, or to make any declaration
or filing with, any governmental authority or regulatory body, or all of such authorizations,
approvals or filings have been obtained or made, in connection with (A) the transactions
contemplated by the Loan Documents or (B) the due execution, delivery, recordation,
consummation and undertaking of the performance of the Loan Documents or (C) the exercise
of any rights and remedies under the Loan Documents; (v) all filings or actions necessary in
connection with or for the effectiveness of the transactions contemplated by the Loan Documents
with any governmental authority or regulatory body have been or will be made with the
appropriate governmental authority or regulatory body and in accordance the requirements of all
applicable laws, codes, ordinances and regulations (including without limitation the payment of
all fees in connection therewith); and (vi) all material terms, provisions and conditions relating to
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the transactions contemplated by the Loan Documents are correctly and completely reflected in
the Loan Documents.
F.
The opinion hereafter expressed is qualified to the extent that: (i) the
characterization of, and the enforceability of any rights or remedies in, any agreement or
instrument may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer, equitable subordination, or similar laws and doctrines
affecting the rights of creditors generally and general equitable principles; (ii) the availability of
specific performance, injunctive relief or any other equitable remedy is subject to the discretion
of a court of competent jurisdiction; and (iii) the provisions of the Loan Documents that (a) may
require indemnification or contribution with respect to the negligence or wrongful conduct of the
indemnified party or its representatives or agents, (b) purports to confer, waive or consent to the
jurisdiction of any court, or (c) waives any right granted by common or statutory law, may be
unenforceable as against public policy.
G.
Requirements in the Loan Documents specifying that provisions thereof only may
be waived in writing may not be valid, binding or enforceable to the extent that an oral
agreement or an implied agreement by trade practice or course of conduct has been created
modifying any provision of the Loan Documents.
H.
We express no opinion on provisions in the Loan Documents that provide for the
waiver of the statute of limitations, waiver of the right to bring counterclaims, the appointment of
any party as attorney-in-fact, the waiver of the right to assert lack of consideration, or the waiver
of the requirements of good faith and fair dealing, notice and commercial reasonableness to the
extent such requirements cannot be waived by consent. We further advise that the amount of
attorneys’ fees are subject to the discretion of the court before which any proceeding involving
the Loan Documents may be brought.
I.
We have not undertaken any independent review of the effect upon the Loan
Documents and the transactions contemplated thereby of any applicable state or federal
environmental, securities or taxation law, code or regulation, and we render no opinion with
respect to any of the foregoing.
J.
We have assumed that: (i) each of the Lenders is duly organized and validly
existing and in good standing under applicable state or federal laws; (ii) the execution and
delivery of the Loan Documents and the undertaking of the performance by the Lenders of their
respective obligations thereunder do not contravene (a) their organizational documents, including
the articles of association and any amendments thereto, or Bylaws, including all amendments
thereto, or (b) any law or contractual restriction affecting the Lenders or their respective
properties; and (iii) there is no pending action or proceeding before any court, governmental
agency or arbitrator against or directly involving the Lenders, and there is no threatened action or
proceeding affecting the Lenders or any of the assets of the Lenders before any court,
governmental agency or arbitrator which, in any case, would affect the validity or enforceability
of any of the Loan Documents.
K. Whenever our opinion, with respect to the existence or absence of facts, is qualified
by the phrase “to our knowledge” or a phrase of similar import, it indicates that no information
has come to the attention of Drew J. Scott, Esq., the attorney who has provided substantive legal
representation to the Borrower with respect to the Loan Documents, which would give us current
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actual knowledge that is inconsistent with the existence or absence of facts qualified by such
phrase. However, except to the extent expressly set forth herein, we have not undertaken any
independent investigation to determine, or otherwise attempted to verify, the existence or
absence of such facts, and no inference as to our knowledge of the existence or absence of such
facts should be drawn from the fact of our representation of the Borrower or any other
matter. Only the actual knowledge of the attorney who has worked on this matter for us as
described above shall be imputed or ascribed to us in our capacity as counsel.
L.
We render no opinion with respect to the validity or enforceability under Illinois
law of any provision of any of the Loan Documents which provides for the compounding of
interest or the payment or accrual of interest on interest. Please note that the Illinois Supreme
Court has held in Bowman v. Neely , 151 Ill. 37 (1894) and 137 Ill. 443 (1891) and its progeny
that compounding of interest and charging interest on interest are contrary to the public policy of
the State of Illinois.
M.
We have assumed that each of the opinions numbered 1 through 2 below and each
of the assumptions and qualifications expressed in this opinion which relate to opinions
numbered 1 through 3 below apply to the opinion concerning the Advisor which we express
below in our opinion numbered 3.
We have investigated such questions of law as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. In addition, we have assumed (i)
the genuineness of the signatures of, and the authority of, persons signing all documents in
connection with which this opinion is expressed other than the Borrower, (ii) the legal capacity
of natural persons, and (iii) that the Loan Documents constitute the legal, valid and binding
obligations of all parties thereto other than the Borrower.
Based upon the foregoing and subject to the assumptions, limitations and qualifications
set forth herein, we are of the following opinion:
1.
The Borrower is a Maryland corporation, duly organized and validly existing and
authorized to transact business under the laws of the State of Maryland and is qualified to
transact business in the State of Illinois.
2.
The execution, delivery and undertaking of performance by the Borrower and the
consummation of the transactions contemplated by the Loan Documents are within the corporate
powers of the Borrower, have been duly authorized by all necessary corporate action (including
any necessary shareholder or stockholder action, if any) of the Borrower, and do not and will not
(a) conflict with or result in a breach of any of the provisions of the certificate or articles of
incorporation or certificate of existence, as applicable, and bylaws of the Borrower, or (b) to our
knowledge, result in a breach or violation of or constitute a default under (x) any contractual
obligation to which the Borrower is a party or by the Borrower or its properties are bound or
(y) any writ, order, judgment or decree of any governmental authority or (z) any law, regulation,
ruling or order binding on the Borrower.
3.
The Borrower has duly executed and delivered the Loan Documents to which it is
a named party. The Loan Documents constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms. The Subsidiary Guaranty
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attached to the Credit Agreement as Exhibit F is in form appropriate to constitute a legal, valid
and binding obligation enforceable in accordance with its terms.
4.
To our knowledge, no authorization, consent or approval or other action by, and
no notice to or filing with, any governmental authority or other Person is required to be obtained
or made by the Borrower for the due execution, delivery and performance by the Borrower of the
Loan Documents to which it is a named party, except such as have been duly obtained or made
and are in full force and effect.
5.
Based solely upon a search of our docket and the representations and warranties
of the Borrower contained in the Loan Documents , there are no actions, suits, or proceedings
pending or threatened against the Borrower before any court or governmental entity or
instrumentality which could reasonably be expected to have a Material Adverse Effect (as
defined in the Credit Agreement).
6.
The Loan Documents are governed by the laws of the State of Illinois, and the Loan, including the
interest rate reserved in the Note and all fees and charges paid or to be paid by or on behalf of Borrower in
connection with such Loan pursuant to the applicable Loan Documents, is not in violation of the usury laws of the
State of Illinois.
[ Add additional opinion regarding creation of security interest in collateral ]
While we are not members of the Bar of the State of Maryland, we have reviewed provisions of the
Maryland General Corporation Law (the “Maryland Corporation Law”). We are members of the Bar of the State of
Illinois, and we express no opinion herein as to any laws, codes, ordinances or regulations or the effects thereof upon
the Loan Documents or the transactions contemplated thereby, other than the Maryland Corporation Law (as to the
organization and existence of the Borrower under the laws of the State of Maryland), the laws, codes, ordinances
and regulations of the State of Illinois and the federal laws of the United States of America. The opinions expressed
herein are limited in all respects to applicable law as existing on the date hereof. In rendering this opinion, we do
not undertake to advise you of any change in any applicable law or any fact that may occur after the date hereof.
We call your attention to the fact that, although we represent the Borrower in connection with the Loan
Documents and the transactions contemplated thereby, our engagement has been limited to specific matters as to
which we have been consulted. This opinion is limited to the matters stated herein, and we do not express any
opinion, either implicitly or otherwise, on any issue not expressly addressed herein. We disavow any obligation to
update or supplement this opinion in response to subsequent changes in the law or future events or circumstances or
to advise you of any changes in our opinion in the event additional or newly discovered information is brought to
our attention. This opinion is provided to you as a legal opinion only and not as a guaranty or warranty of the
matters discussed herein or in the documents referred to herein. No opinion may be inferred or implied beyond the
matters expressly stated herein, and no portion of this opinion may be quoted or in any other way published without
the prior written consent of the undersigned. Further, this opinion may be relied upon only by the addressee
hereof. Without our prior written consent, this opinion may not be: (a) relied upon by you for any purpose other
than that stated and set forth in this opinion; or (b) relied upon by any other person or entity for any purpose other
than permitted successors, assigns and participants under the Loan Documents.
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Very truly yours,
SCOTT & KRAUS, LLC
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EXHIBIT E
BORROWING NOTICE
Date:
KeyBank National Association
Real Estate Capital
Attention: Vicky Heineck
800 Superior
Cleveland, OH 44114
Borrowing Notice
Inland Western Retail Real Estate Trust, Inc. hereby requests a Loan Advance pursuant to Section 2.9 of
the Credit Agreement dated as of October 15, 2007, as amended by the Comprehensive Amendment to
Credit Agreement, dated as of April __, 2009 (as amended or modified from time to time, the “Credit
Agreement”), among Inland Western Retail Real Estate Trust, Inc., the Lenders referenced therein, and
you, as Agent for the Lenders.
An Advance is requested to be made in the amount of $__________, to be made on _____________. Such
Loan shall be a [LIBOR] [Floating] [Swingline] Rate Advance. [The applicable LIBOR Interest Period
shall be _____________.]
The proceeds of this Advance will be used either: (check one)
(i) to refinance the Existing Credit Agreement
(ii) for working capital purposes,
(iii) for bridge debt financing purposes,
(iv) for the development or redevelopment of the following Project, including tenant
impr
ovements, capital expenditures or leasing commissions related thereto, or
(v) for the acquisition of the following Project:
Name of Project:
Address of Project:
Description of Project:
For further information see Schedule I and the one page Project summary attached to this Borrowing
Notice.
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The proceeds of the requested Advance shall be directed to the following account:
Wiring Instructions:
(Bank Name)
(ABA No.)
(Beneficiary)
(Account No. to Credit)
(Notification Requirement)
In support of this request, Inland Western Retail Real Estate Trust, Inc. hereby represents and warrants to
the Agent and the Lenders that all requirements of Section 4.2 of the Credit Agreement in connection with
such Advance have been satisfied at the time such proceeds are disbursed.
Date:_________________________________
For Borrower: Inland Western Retail Real Estate Trust, Inc.
By:
_________________________________
Name:
_________________________________
Its:
_________________________________
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Inland Western Retail Real Estate Trust, Inc.
Acquisition Property / Schedule 1 to Borrowing Notice
Acquisition
Date
Property
Name
Location
Property
Type
Acquisition Cost % Owned
100% of
Secured
Acquisition Cost Indebtedness, If
Any
E-3
Ground
Lease?
Stabilized?
Occupancy
12-m
N
EXHIBIT F
SUBSIDIARY GUARANTY
This Guaranty is made as of April __, 2009 by the parties identified in the signature pages
thereto, and any Joinder to Guaranty hereafter delivered (collectively, the “ Subsidiary Guarantors ”),
to and for the benefit of KeyBank National Association, individually (“ KeyBank ”) and as
administrative agent (“ Administrative Agent ”) for itself and the lenders under the Credit Agreement
(as defined below) and their respective successors and assigns (collectively, the “ Lenders ”).
RECITALS
A.
Inland Western Retail Real Estate Trust, Inc., a corporation organized under the laws
of the State of Maryland (“ Borrower ”), and Subsidiary Guarantors have requested that the Lenders
make a revolving credit facility available to Borrower in an aggregate principal amount of
$200,000,000 (the “ Facility ”).
B.
The Lenders have agreed to make available the Facility to Borrower pursuant to the
terms and conditions set forth in a Credit Agreement dated October 15, 2007 as amended by a
Comprehensive Amendment to Credit Agreement of even date herewith among Borrower, KeyBank,
individually, and as Administrative Agent, and the Lenders named therein (as amended, modified or
restated from time to time, the “ Credit Agreement ”). All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.
C.
Borrower has executed and delivered or will execute and deliver to the Lenders
promissory notes in the principal amount of each Lender’s Commitment and promissory notes in the
principal amount, if any, of each Lender’s Loan as evidence of Borrower’s indebtedness to each such
Lender with respect to the Facility (the promissory notes described above, together with any
amendments or allonges thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Credit Agreement, are collectively referred to herein as
the “ Notes ”).
D.
Subsidiary Guarantors are subsidiaries of Borrower. Subsidiary Guarantors
acknowledge that the extension of credit by the Administrative Agent and the Lenders to Borrower
pursuant to the Credit Agreement will benefit Subsidiary Guarantors by making funds available to
Subsidiary Guarantors through Borrower and by enhancing the financial strength of the consolidated
group of which Subsidiary Guarantors and Borrower are members. The execution and delivery of
this Guaranty by Subsidiary Guarantors are conditions precedent to the performance by the Lenders
of their obligations under the Credit Agreement.
AGREEMENTS
NOW, THEREFORE, Subsidiary Guarantors, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part hereof, and for other good
and valuable consideration, hereby agree as follows:
1.
Subsidiary Guarantors absolutely, unconditionally, and irrevocably guaranty to each
of the Lenders:
(a)
the full and prompt payment of the principal of and interest on the Notes
when due, whether at stated maturity, upon acceleration or otherwise, and at all times
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thereafter, and the prompt payment of all sums which may now be or may hereafter become
due and owing under the Notes, the Credit Agreement, and the other Loan Documents;
(b)
the payment of all Enforcement Costs (as hereinafter defined in Paragraph 7
hereof); and
(c)
the full, complete, and punctual observance, performance, and satisfaction of
all of the obligations, duties, covenants, and agreements of Borrower under the Credit
Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in subparagraphs (a) and (b) of
this Paragraph 1 are referred to herein as the “ Facility Indebtedness .” All obligations described in
subparagraph (c) of this Paragraph 1 are referred to herein as the “ Obligations .” Subsidiary
Guarantors and Lenders agree that Subsidiary Guarantors’ obligations hereunder shall not exceed the
greater of: (i) the aggregate amount of all monies received, directly or indirectly, by Subsidiary
Guarantors from Borrower after the date hereof (whether by loan, capital infusion or other means), or
(ii) the maximum amount of the Facility Indebtedness not subject to avoidance under Title 11 of the
United States Code, as same may be amended from time to time, or any applicable state law (the “
Bankruptcy Code ”). To that end, to the extent such obligations would otherwise be subject to
avoidance under the Bankruptcy Code if Subsidiary Guarantors are not deemed to have received
valuable consideration, fair value or reasonably equivalent value for its obligations hereunder, each
Subsidiary Guarantor’s obligations hereunder shall be reduced to that amount which, after giving
effect thereto, would not render such Subsidiary Guarantor insolvent, or leave such Subsidiary
Guarantor with an unreasonably small capital to conduct its business, or cause such Subsidiary
Guarantor to have incurred debts (or intended to have incurred debts) beyond its ability to pay such
debts as they mature, as such terms are determined, and at the time such obligations are deemed to
have been incurred, under the Bankruptcy Code. In the event a Subsidiary Guarantor shall make any
payment or payments under this Guaranty each other Subsidiary Guarantor of the Facility
Indebtedness shall contribute to such Subsidiary Guarantor an amount equal to such non-paying
Subsidiary Guarantor’s pro rata share (based on their respective maximum liabilities hereunder) of
such payment or payments made by such Subsidiary Guarantor, provided that such contribution right
shall be subordinate and junior in right of payment in full of all the Facility Indebtedness to Lenders.
2.
In the event of any default by Borrower in making payment of the Facility
Indebtedness, or in performance of the Obligations, as aforesaid, in each case beyond the expiration
of any applicable grace period, Subsidiary Guarantors agree, on demand by the Administrative Agent
or the holder of a Note, to pay all the Facility Indebtedness and to perform all the Obligations as are
then or thereafter become due and owing or are to be performed under the terms of the Notes, the
Credit Agreement, and the other Loan Documents.
3.
Subsidiary Guarantors do hereby waive (i) notice of acceptance of this Guaranty by
the Administrative Agent and the Lenders and any and all notices and demands of every kind which
may be required to be given by any statute, rule or law, (ii) any defense, right of set-off or other
claim which Subsidiary Guarantors may have against Borrower or which Subsidiary Guarantors or
Borrower may have against the Administrative Agent or the Lenders or the holder of a Note,
(iii) presentment for payment, demand for payment (other than as provided for in Paragraph 2
above), notice of nonpayment (other than as provided for in Paragraph 2 above) or dishonor, protest
and notice of protest, diligence in collection and any and all formalities which otherwise might be
legally required to charge Subsidiary Guarantors with liability, (iv) any failure by the Administrative
Agent and the Lenders to inform Subsidiary Guarantors of any facts the Administrative Agent and
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the Lenders may now or hereafter know about Borrower, the Facility, or the transactions
contemplated by the Credit Agreement, it being understood and agreed that the Administrative Agent
and the Lenders have no duty so to inform and that Subsidiary Guarantors are fully responsible for
being and remaining informed by Borrower of all circumstances bearing on the existence or creation,
or the risk of nonpayment of the Facility Indebtedness or the risk of nonperformance of the
Obligations, and (v) any and all right to cause a marshalling of assets of Borrower or any other action
by any court or governmental body with respect thereto, or to cause the Administrative Agent and the
Lenders to proceed against any other security given to a Lender in connection with the Facility
Indebtedness or the Obligations. Credit may be granted or continued from time to time by the
Lenders to Borrower without notice to or authorization from Subsidiary Guarantors, regardless of the
financial or other condition of Borrower at the time of any such grant or continuation. The
Administrative Agent and the Lenders shall have no obligation to disclose or discuss with Subsidiary
Guarantors the Lenders’ assessment of the financial condition of Borrower. Subsidiary Guarantors
acknowledge that no representations of any kind whatsoever have been made by the Administrative
Agent and the Lenders to Subsidiary Guarantors. No modification or waiver of any of the provisions
of this Guaranty shall be binding upon the Administrative Agent and the Lenders except as expressly
set forth in a writing duly signed and delivered on behalf of the Administrative Agent and the
Lenders. Subsidiary Guarantors further agree that any exculpatory language contained in the Credit
Agreement, the Notes, and the other Loan Documents shall in no event apply to this Guaranty, and
will not prevent the Administrative Agent and the Lenders from proceeding against Subsidiary
Guarantors to enforce this Guaranty.
4.
Subsidiary Guarantors further agree that Subsidiary Guarantors’ liability as guarantor
shall in no way be impaired by any renewals or extensions which may be made from time to time,
with or without the knowledge or consent of Subsidiary Guarantors of the time for payment of
interest or principal under a Note or by any forbearance or delay in collecting interest or principal
under a Note, or by any waiver by the Administrative Agent and the Lenders under the Credit
Agreement, or any other Loan Documents, or by the Administrative Agent or the Lenders’ failure or
election not to pursue any other remedies they may have against Borrower, or by any change or
modification in a Note, the Credit Agreement, or any other Loan Documents, or by the acceptance by
the Administrative Agent or the Lenders of any security or any increase, substitution or change
therein, or by the release by the Administrative Agent and the Lenders of any security or any
withdrawal thereof or decrease therein, or by the application of payments received from any source to
the payment of any obligation other than the Facility Indebtedness, even though a Lender might
lawfully have elected to apply such payments to any part or all of the Facility Indebtedness, it being
the intent hereof that Subsidiary Guarantors shall remain liable as principal for payment of the
Facility Indebtedness and performance of the Obligations until all indebtedness has been paid in full
and the other terms, covenants and conditions of the Credit Agreement, and other Loan Documents
and this Guaranty have been performed, notwithstanding any act or thing which might otherwise
operate as a legal or equitable discharge of a surety. Subsidiary Guarantors further understand and
agree that the Administrative Agent and the Lenders may at any time enter into agreements with
Borrower to amend and modify a Note, the Credit Agreement or any of the other Loan Documents,
or any other documents related thereto, and may waive or release any provision or provisions of a
Note, the Credit Agreement, or any other Loan Document and, with reference to such instruments,
may make and enter into any such agreement or agreements as the Administrative Agent, the Lenders
and Borrower may deem proper and desirable, without in any manner impairing this Guaranty or any
of the Administrative Agent and the Lenders’ rights hereunder or any of Subsidiary Guarantors’
obligations hereunder. Each of the Subsidiary Guarantors agrees not to assert any claim any claim
against the Administrative Agent or any Lender, any of their respective Affiliates, or any of their or
their respective Affiliates, officers, directors, employees, attorneys and agents, on any theory of
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liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating
to any facility hereunder, the actual or proposed use of the Loans or any Letter of Credit, the Loan
Documents or the transactions contemplated thereby.
5.
This is an absolute, unconditional, complete, present and continuing guaranty of
payment and performance and not of collection. Subsidiary Guarantors agree that its obligations
hereunder shall be joint and several with any and all other guarantees given in connection with the
Facility from time to time. Subsidiary Guarantors agree that this Guaranty may be enforced by the
Administrative Agent and the Lenders without the necessity at any time of resorting to or exhausting
any security or collateral, if any, given in connection herewith or with a Note, the Credit Agreement,
or any of the other Loan Documents or by or resorting to any other guaranties, and Subsidiary
Guarantors hereby waive the right to require the Administrative Agent and the Lenders to join
Borrower in any action brought hereunder or to commence any action against or obtain any judgment
against Borrower or to pursue any other remedy or enforce any other right. Subsidiary Guarantors
further agree that nothing contained herein or otherwise shall prevent the Administrative Agent and
the Lenders from pursuing concurrently or successively all rights and remedies available to them at
law and/or in equity or under a Note, the Credit Agreement or any other Loan Documents, and the
exercise of any of their rights or the completion of any of their remedies shall not constitute a
discharge of any of Subsidiary Guarantors’ obligations hereunder, it being the purpose and intent of
Subsidiary Guarantors that the obligations of such Subsidiary Guarantors hereunder shall be primary,
absolute, independent and unconditional under any and all circumstances whatsoever. Neither
Subsidiary Guarantors’ obligations under this Guaranty nor any remedy for the enforcement thereof
shall be impaired, modified, changed or released in any manner whatsoever by any impairment,
modification, change, release or limitation of the liability of Borrower under a Note, the Credit
Agreement or any other Loan Document or by reason of Borrower’s bankruptcy or by reason of any
creditor or bankruptcy proceeding instituted by or against Borrower. This Guaranty shall continue to
be effective and be deemed to have continued in existence or be reinstated (as the case may be) if at
any time payment of all or any part of any sum payable pursuant to a Note, the Credit Agreement or
any other Loan Document is rescinded or otherwise required to be returned by the payee upon the
insolvency, bankruptcy, or reorganization of the payor, all as though such payment to such Lender
had not been made, regardless of whether such Lender contested the order requiring the return of
such payment. The obligations of Subsidiary Guarantors pursuant to the preceding sentence shall
survive any termination, cancellation, or release of this Guaranty.
6.
This Guaranty shall be assignable by a Lender to any assignee of all or a portion of
such Lender’s rights under the Loan Documents.
7.
If: (i) this Guaranty, a Note, or any of the Loan Documents are placed in the hands
of an attorney for collection or is collected through any legal proceeding; (ii) an attorney is retained
to represent the Administrative Agent or any Lender in any bankruptcy, reorganization, receivership,
or other proceedings affecting creditors’ rights and involving a claim under this Guaranty, a Note, the
Credit Agreement, or any Loan Document; (iii) an attorney is retained to enforce any of the other
Loan Documents or to provide advice or other representation with respect to the Loan Documents in
connection with an enforcement action or potential enforcement action; or (iv) an attorney is retained
to represent the Administrative Agent or any Lender in any other legal proceedings whatsoever in
connection with this Guaranty, a Note, the Credit Agreement, any of the Loan Documents, or any
property subject thereto (other than any action or proceeding brought by any Lender or participant
against the Administrative Agent alleging a breach by the Administrative Agent of its duties under
the Loan Documents), then Subsidiary Guarantors shall pay to the Administrative Agent or such
Lender upon demand all reasonable attorney’s fees, costs and expenses, including, without limitation,
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court costs, filing fees and all other costs and expenses incurred in connection therewith (all of which
are referred to herein as “ Enforcement Costs ”), in addition to all other amounts due hereunder.
8.
The parties hereto intend that each provision in this Guaranty comports with all
applicable local, state and federal laws and judicial decisions. However, if any provision or
provisions, or if any portion of any provision or provisions, in this Guaranty is found by a court of
law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court should declare such portion, provision or
provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is
the intent of all parties hereto that such portion, provision or provisions shall be given force to the
fullest possible extent that they are legal, valid and enforceable, that the remainder of this Guaranty
shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and interest of the
Administrative Agent and the Lender or the holder of a Note under the remainder of this Guaranty
shall continue in full force and effect.
9.
Any indebtedness of Borrower to Subsidiary Guarantors now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Subsidiary Guarantors will not seek, accept, or
retain for Subsidiary Guarantors’ own account, any payment from Borrower on account of such
subordinated debt at any time when a Default or Event of Default exists under the Credit Agreement
or the Loan Documents, and any such payments to Subsidiary Guarantors made while any Default or
Event of Default then exists under the Credit Agreement or the Loan Documents on account of such
subordinated debt shall be collected and received by Subsidiary Guarantors in trust for the Lenders
and shall be paid over to the Administrative Agent on behalf of the Lenders on account of the Facility
Indebtedness without impairing or releasing the obligations of Subsidiary Guarantors hereunder.
10.
Subsidiary Guarantors hereby subordinate to the Facility Indebtedness any and all
claims and rights, including, without limitation, subrogation rights, contribution rights,
reimbursement rights and set-off rights, which Subsidiary Guarantors may have against Borrower
arising from a payment made by Subsidiary Guarantors under this Guaranty and agree that, until the
entire Facility Indebtedness is paid in full, not to assert or take advantage of any subrogation rights of
Subsidiary Guarantors or the Lenders or any right of Subsidiary Guarantors or the Lenders to proceed
against (i) Borrower for reimbursement, or (ii) any other guarantor or any collateral security or
guaranty or right of offset held by the Lenders for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Subsidiary Guarantors seek or be entitled to seek any
contribution or reimbursement from Borrower or any other guarantor in respect of payments made by
Subsidiary Guarantors hereunder. It is expressly understood that the agreements of Subsidiary
Guarantors set forth above constitute additional and cumulative benefits given to the Lenders for
their security and as an inducement for their extension of credit to Borrower.
11.
Any amounts received by a Lender from any source on account of any indebtedness
may be applied by such Lender toward the payment of such indebtedness, and in such order of
application, as a Lender may from time to time elect.
12.
Subsidiary Guarantors hereby submit to personal jurisdiction in the State of Illinois
for the enforcement of this Guaranty and waive any and all personal rights to object to such
jurisdiction for the purposes of litigation to enforce this Guaranty. Subsidiary Guarantors hereby
consent to the jurisdiction of either the Circuit Court of Cook County, Illinois, or the United States
District Court for the Northern District of Illinois, in any action, suit, or proceeding which the
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Administrative Agent or a Lender may at any time wish to file in connection with this Guaranty or
any related matter. Subsidiary Guarantors hereby agree that an action, suit, or proceeding to enforce
this Guaranty may be brought in any state or federal court in the State of Illinois and hereby waives
any objection which Subsidiary Guarantors may have to the laying of the venue of any such action,
suit, or proceeding in any such court; provided, however, that the provisions of this Paragraph shall
not be deemed to preclude the Administrative Agent or a Lender from filing any such action, suit, or
proceeding in any other appropriate forum.
13.
All notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing or by telex or by facsimile and addressed
or delivered to such party at its address set forth below or at such other address as may be designated
by such party in a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted by facsimile, shall
be deemed given when transmitted. Notice may be given as follows:
To Subsidiary Guarantors:
c/o Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention:
Steven P. Grimes
Telephone:
630-218-8000
Facsimile:
630-368-2308
With a copy to:
Inland Western Retail Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attention:
Dennis Holland
Telephone:
630-368-2861
Facsimile:
630-586-6446
To KeyBank as Administrative Agent and as a Lender:
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114
Attention:
Kevin P. Murray
Phone:
216-689-4660
Facsimile:
216-689-3566
With a copy to:
Sonnenschein Nath & Rosenthal LLP
8000 Sears Tower
Chicago, Illinois 60606
Attention:
Patrick G. Moran, Esq.
Telephone:
(312) 876-8132
Facsimile:
(312) 876-7934
F-6
If to any other Lender, to its address set forth in the Credit Agreement.
14.
This Guaranty shall be binding upon the heirs, executors, legal and personal
representatives, successors and assigns of Subsidiary Guarantors and shall inure to the benefit of the
Administrative Agent and the Lenders’ successors and assigns.
15.
This Guaranty shall be construed and enforced under the internal laws of the State of
Illinois.
16.
SUBSIDIARY GUARANTORS, THE ADMINISTRATIVE AGENT AND THE
LENDERS, BY THEIR ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR
RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS
THE SUBJECT OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
17.
From time to time, additional parties may execute a joinder substantially in the form
of Exhibit A hereto, and thereby become a party to this Guaranty. From and after delivery of such
joinder, the Subsidiary delivering such joinder shall be a Subsidiary Guarantor, and be bound by all
of the terms and provisions of this Guaranty. From time to time certain Subsidiary Guarantors shall
automatically be released from their obligations under this Guaranty upon satisfaction of the
conditions to such release established pursuant to Section 6.27 of the Credit Agreement.
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IN WITNESS WHEREOF, Subsidiary Guarantors have delivered this Guaranty in the State
of Illinois as of the date first written above.
Inland Western New Britain Main, L.L.C.,
a Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-0516778
Inland Western Blytheville, L.L.C.,
a Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-1198854
Inland Western Austin Southpark Meadows II Limited
Partnership, an Illinois limited partnership
By:
Inland Western Austin Southpark Meadows II
GP, L.L.C., a Delaware limited liability company,
its general partner
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-8574543
F-8
Inland Western Hartford New Park Member II,
L.L.C., a Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-3144319
Inland Western Phillipsburg Greenwich Member II,
L.L.C., a Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20- 2729764
Inland Western Oswego Gerry Centennial, L.L.C., a
Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-2934910
Inland Western Town and Country, L.L.C., a
Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation, its sole member
By:
Its:
FEIN: 20-1431000
F-9
IWR Protective Corporation, a Delaware corporation
By:
__________________
Its:
FEIN:
F-10
EXHIBIT A TO SUBSIDIARY GUARANTY
FORM OF JOINDER TO GUARANTY
THIS JOINDER is executed as of ___________, 200__ by the undersigned, each of which
hereby agrees as follows:
1.
All capitalized terms used herein and not defined in this Joinder shall have the
meanings provided in that certain Subsidiary Guaranty (the “Guaranty”) dated as of April __, 2009
executed for the benefit of KeyBank National Association, as agent for itself and certain other
lenders, with respect to a loan from the Lenders to Inland Western Retail Real Estate Trust, Inc.
(“Borrower”).
2.
As required by the Credit Agreement described in the Guaranty, each of the
undersigned is executing this Joinder to become a party to the Guaranty.
3.
Each and every term, condition, representation, warranty, and other provision of the
Guaranty, by this reference, is incorporated herein as if set forth herein in full and the undersigned
agrees to fully and timely perform each and every obligation of a Subsidiary Guarantor under such
Guaranty.
[INSERT SUBSIDIARY GUARANTOR SIGNATURE BLOCKS AND FEIN
NUMBER]
FEIN NO. ______________________
By:
By:
Its:
F-11
EXHIBIT G-1
FORM OF COLLATERAL ASSIGNMENT OF INTERESTS
COLLATERAL ASSIGNMENT OF INTERESTS
THIS COLLATERAL ASSIGNMENT OF INTERESTS (this “Assignment”),
made this ___ day of March, 2009, by INLAND WESTERN RETAIL REAL ESTATE TRUST,
INC. a corporation organized under the laws of the State of Maryland (“Assignor”) to KEYBANK
NATIONAL ASSOCIATION , a national banking association (“KeyBank”), as Agent for itself and
other Lenders from time to time party to the “Credit Agreement” (as hereinafter defined) (KeyBank,
in its capacity as Agent, hereinafter referred to as “Agent”).
W I T N E S S E T H:
WHEREAS , Assignor is the direct or indirect and beneficial owner of all or a
percentage of the membership interests of each of the limited liability companies, or of the
partnership interests of each of the limited partnerships, set forth on Exhibit “A” attached hereto and
made a part hereof (collectively, the “Companies”);
WHEREAS , the Companies are presently governed by the certificates of formation
and the operating agreements, or the certificates of partnership and limited partnership agreements
described on Exhibit “A” attached hereto opposite the name of the respective Company (collectively,
the “Organizational Agreements”);
WHEREAS, Assignor, KeyBank, individually and as agent, and the “Lenders”
identified therein entered into that certain Credit Agreement dated October 15, 2007, as amended by
that certain Comprehensive Amendment to Credit Agreement of even date herewith (as the same may
be varied, extended, supplemented, consolidated, amended, replaced, increased, renewed, modified
or amended, the “Credit Agreement”);
WHEREAS , pursuant to the Credit Agreement, the Lenders have agreed to provide
a secured revolving credit facility to Assignor in the aggregate amount of up to $200,000,000
(collectively, the “Loans”);
WHEREAS , as a condition to the execution of the Credit Agreement and the
making of the Loans, the Lenders and Agent have required that Assignor execute this Assignment;
NOW, THEREFORE , for and in consideration of the sum of Ten and No/100
Dollars ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby covenant and agree as follows:
1.
Definitions . Capitalized terms used herein that are not otherwise defined herein shall have the
meaning set forth in the Credit Agreement.
2.
Grant of Security Interest . As collateral security for the payment and performance by Assignor of
its duties, responsibilities and obligations under this Agreement and the other Loan Documents (which duties,
responsibilities and obligations of Assignor are hereinafter referred to collectively as the “Obligations”), Assignor
does hereby transfer, assign,
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pledge and convey to Agent, and does hereby grant a security interest to Agent for the ratable benefit of the Lenders,
in and to the following:
(a)
All right, title, interest and claims of Assignor now or hereafter acquired as the direct and
beneficial owner of all or such lesser percentage shown on Exhibit A of all membership interests and partnership
interests in the Companies (the "Pledged Equity Interests") together with any and all voting rights and privileges
attaching to, existing or arising in connection with the Pledged Equity Interests, any and all other securities, cash,
certificates or other property, option or right in respect of, in addition to or substitution or exchange for any of the
Pledged Equity Interests or any of the foregoing, or other property at any time and from time to time receivable or
otherwise distributed in respect of or in exchange for the Pledged Equity Interests; and
(b)
Any and all profits, proceeds, income, dividends, distributions, payments upon
dissolution or liquidation of any of the Companies, and any return of capital, repayment of loans, and payments of
any kind or nature whatsoever, now or hereafter distributable or payable by any of the Companies to Assignor, by
reason of Assignor’s interest in the Companies, or now or hereafter distributable or payable to Assignor from any
other source by reason of Assignor being a member or partner in any of the Companies, by reason of services
performed by Assignor for or on behalf of any of the Companies, and any and all proceeds from any transfer,
assignment or pledge of any interest of Assignor in, or claim or right against, any of the Companies (regardless of
whether such transfer, assignment or pledge is permitted under the terms hereof or the other Loan Documents), and
all claims, choses in action or things in action now or hereafter arising against any of the Companies (collectively,
the "Distributions"); and
(c)
All notes or other documents or instruments now or hereafter evidencing or securing any
such Distributions from any of the Companies; and
(d)
All rights of Assignor to collect and enforce payment of the Distributions pursuant to the
terms of any of the Organizational Agreements or otherwise; and
(e)
All proceeds of any of the foregoing.
All of the foregoing described in this Section 2 are hereinafter referred to collectively as the
“Collateral.”
3.
Obligations Secured . This Assignment secures the payment and performance by Assignor of the
Obligations.
4.
Collection of Distributions .
(a)
It is acknowledged and agreed by the parties hereto that Agent shall have sole and
exclusive possession of the Distributions and that this Assignment constitutes a present, absolute and current
assignment of all the Distributions and is effective upon the execution and delivery hereof. Payments under or with
respect to the Distributions shall be made as follows:
(i)
Assignor shall have no right to receive payments made under or with respect to
the Distributions, or upon any redemption or conversion of the Collateral, other
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than by deposit thereof into the Deposit Account, and all such payments shall be delivered directly by the
Companies to the Deposit Account.
(ii)
If Assignor shall receive any payments made under or with respect to the
Distributions, or upon any redemption or conversion of the Collateral, Assignor shall hold all such payments in trust
for Agent, and will immediately deposit all such payments directly to the Deposit Account pursuant to the Account
Pledge Agreement for further distribution and application pursuant to the terms thereof.
(iii)
In furtherance of the foregoing, Assignor does hereby notify and direct each of
the Companies that all payments under or with respect to the Distributions shall be made directly to the Deposit
Account set forth herein.
(b)
Assignor shall cause each of the Companies to promptly distribute all net proceeds of the
sale or other disposition of, or any financing or refinancing of, any of their respective assets or properties, and any
and all other Distributions distributable or payable by the Companies under the terms of the applicable
Organizational Agreements in accordance with the Credit Agreement.
(c)
Assignor hereby irrevocably designates and appoints Agent its true and lawful
attorney-in-fact, which appointment is coupled with an interest, either in the name of Agent, or in the name of
Assignor, at Assignor’s sole cost and expense, and regardless of whether or not Agent becomes a member in any of
the Companies, to take any or all of the following actions at such time as a Default or Unmatured Default has
occurred and is continuing:
(i)
to ask, demand, sue for, attach, levy, settle, compromise, collect, recover,
receive and give receipt for any and all Collateral and to take any and all actions as Agent may deem necessary or
desirable in order to realize upon the Collateral, or any portion thereof, including, without limitation, making any
statements and doing and taking any actions on behalf of Assignor which are otherwise required of Assignor under
the terms of any agreement as conditions precedent to the payment of the Distributions, and the right and power to
endorse, in the name of Assignor, any checks, notes, drafts and other instruments received in payment of all or any
portion of the Collateral; and
(ii)
to institute one or more actions against any of the Companies or any member
thereof in connection with the collection of the Distributions, to prosecute to judgment, settle or dismiss any such
actions, and to make any compromise or settlement deemed desirable, in Agent’s sole discretion, with respect to
such Distributions, to extend the time of payment, arrange for payment in installments or otherwise modify the terms
of any of the Organizational Agreements with respect to the Distributions or release any of the Companies or any
member thereof, from their respective obligations to pay any Distribution, without incurring responsibility to, or
affecting any liability of, Assignor under any of the Organizational Agreements; it being specifically understood and
agreed, however, that Agent shall not be obligated in any manner whatsoever to exercise any such power or
authority or be in any way responsible for the collection of or realizing upon the Collateral, or any portion
thereof. The foregoing appointment is irrevocable and continuing and any such rights, powers and privileges shall
be exclusive in Agent, its successors and assigns until this Assignment terminates as provided in Section 13, below.
G-1-3
5.
Warranties and Covenants . Assignor does hereby warrant and represent to, and covenants and
agrees with Agent, as follows:
(a)
This Assignment has been duly executed and delivered by Assignor and constitutes the
valid, legal and binding obligation of Assignor.
(b)
None of the Pledged Equity Interests is evidenced by any certificate, instrument,
document or other writing other than the Organizational Agreements.
(c)
True, correct and complete copies of each of the Organizational Agreements, together
with all amendments thereto, have been delivered to Agent by Assignor, each of the Organizational Agreements is in
full force and effect and is enforceable in accordance with its terms, and, so long as this Assignment remains in
effect, Assignor shall not materially modify, amend, cancel, release, surrender or terminate, or permit the
modification, amendment, cancellation, release, surrender or termination of, any of the Organizational Agreements,
or dissolve, liquidate or permit the expiration of any of the Organizational Agreements or the termination or
cancellation thereof, without in each instance the prior written consent of Agent, which consent shall not be
unreasonably withheld, conditioned or delayed.
(d)
Assignor is and shall remain the sole lawful, beneficial and record owner of the Pledged
Equity Interests, and the right to receive the Distributions, free and clear of all liens, restrictions, claims, pledges,
encumbrances, charges, claims of third parties and rights of set-off or recoupment whatsoever (other than those in
favor of Agent hereunder), and Assignor has the full and complete right, power and authority to grant a security
interest in the Collateral in favor of Agent, in accordance with the terms and provisions of this
Assignment. Assignor is not and will not become a party to or otherwise be bound by or subject to any agreement,
other than the Loan Documents, that restricts in any manner the rights of any present or future holder of the
Collateral with respect thereto. No Person has any option, right of first refusal, right of first offer or other right to
acquire all or any portion of the Collateral.
(e)
This Assignment creates
Collateral securing the payment and performance of
performed, nor will Assignor perform or permit any
Agent from enforcing the terms and conditions of
enforcement.
a valid and binding first priority security interest in the
the Obligations. Neither Assignor nor any other Person has
such other Person to perform, any acts which might prevent
this Assignment or which would limit Agent in any such
(f)
Assignor consents (to the extent applicable Law does not prohibit Assignor from
pre-consenting) to the admission of Agent or any other purchaser of the Pledged Equity Interests upon a foreclosure
sale as a substitute member of the applicable Company with all of the rights and privileges of a member under the
applicable Organizational Agreements in the event that Agent exercises its rights under this Assignment and Agent
or such other purchaser succeeds to ownership of all or any portion of the Pledged Equity Interests.
(g)
Assignor’s correct legal name indicated on the public record of Assignor’s jurisdiction,
mailing address, identity or corporate structure, residence or chief executive office, jurisdiction of organization,
organizational identification number, and federal tax identification number, are as set forth on Schedule 1 attached
hereto and by this reference made a part hereof. Assignor has been using or operating under said name, identity or
corporate structure without change for the time period set forth on Schedule 1 attached hereto. In order to perfect
the pledge
G-1-4
and security interests granted herein against Assignor, an appropriate UCC Financing Statement must be filed with
the Secretary of State of Maryland and with the Secretary of State of Delaware. Assignor covenants and agrees that
Assignor shall not change any of the matters addressed by the first two sentences of this subsection unless it has
given Agent thirty (30) days prior written notice of any such change and caused to be filed at the request of Agent,
or Agent’s counsel to file, such additional financing statements or other instruments in such jurisdictions as Agent
may deem necessary or advisable in its sole discretion to prevent any filed financing statement from becoming
misleading or losing its perfected status.
(h)
Assignor agrees to do such further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements, documents, endorsements, assurances and instruments as Agent
may reasonably at any time request in connection with the administration or enforcement of this Assignment or
related to the Collateral or any part thereof or in order to better assure and confirm unto Agent its rights, powers and
remedies hereunder. Without limiting the generality of the foregoing, at any time and from time to time, Assignor
shall, at the request of Agent, make, execute, acknowledge, and deliver or authorize the execution and delivery of
and where appropriate, cause to be recorded and/or filed and from time to time thereafter to be re-recorded and/or
refiled at such time in such offices and places as shall be deemed desirable by Agent all such other and further
assignments, security agreements, financing statements, continuation statements, endorsements, assurances,
certificates and other documents as Agent from time to time may require for the better assuring, conveying,
assigning and confirming to Agent the Collateral and the rights hereby conveyed or assigned or intended now or
hereafter to be conveyed or assigned, and for carrying out the intention or facilitating the performance of the terms
of this Assignment. Upon any failure of Assignor to do so, Agent may make, execute, record, file, re-record and/or
refile, acknowledge and deliver any and all such further assignments, security agreements, financing statements,
continuation statements, endorsements, assurances, instruments, certificates and documents for and in the name of
Assignor, and Assignor hereby irrevocably appoints Agent the agent and attorney-in-fact with full power of
substitutions of Assignor so to do. This power is coupled with an interest and is irrevocable. Without limiting the
generality of the foregoing, Assignor will obtain such waivers of lien, estoppel certificates or subordination
agreements as Agent may reasonably require to insure the priority of its security interest in the Collateral. Assignor
also shall furnish to Agent such evidence as Agent reasonably may require from time to time to establish a valid
security interest in and to further protect and perfect its security interest in the Collateral.
(i)
Assignor hereby authorizes Agent, its counsel or its representative, at any time and from
time to time, to file financing statements, amendments and continuations that describe or relate to the Collateral or
any portion thereof in such jurisdictions as Agent may deem necessary or desirable in order to perfect the security
interests granted by Assignor under this Assignment or any other Loan Document, and such financing statements
may contain, among other items as Agent may deem advisable to include therein, the federal tax identification
number and organizational number of Assignor. Agent shall upon request provide Assignor with copies of any and
all such filings made by Agent.
(j)
The Pledged Equity Interests and the Distributions are not and will not (A) be dealt in or
traded on securities exchanges or in securities markets, (B) be “investment company securities” (as defined in
Section 8-103(b) of the UCC), and (C) be credited to a securities account. None of the Organizational Documents
expressly provides that the Pledged
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Equity Interests are securities governed by Article 8 of the Uniform Commercial Code of any jurisdiction.
6.
General Covenants . Assignor covenants and agrees that, so long as this Assignment is
continuing:
(a)
Except as may be specifically set forth in the Credit Agreement, Assignor shall not,
without the prior written consent of Agent, which consent may be withheld by Agent in its sole and absolute
discretion, directly or indirectly or by operation of law, sell, transfer, assign, dispose of, pledge, convey, option,
mortgage, hypothecate or encumber any of the Collateral.
(b)
Assignor shall at all times defend the Collateral against all claims and demands of all
Persons at any time claiming any interest in the Collateral adverse to Agent’s interest in the Collateral as granted
hereunder.
(c)
Assignor shall perform in all material respects all of its duties, responsibilities and
obligations under each of the Organizational Agreements and with respect to the Collateral.
(d)
Assignor shall pay all taxes and other charges against the Collateral.
(e)
Assignor shall promptly deliver to Agent as additional Collateral any note or other
document or instrument entered into after the date hereof which evidences, constitutes, guarantees or secures any of
the Distributions or any right to receive a Distribution, which notes or other documents and instruments shall be
accompanied by such endorsements or assignments as Agent may require to create a perfected security interest
therein in favor Agent.
(f)
Assignor will provide to Agent such documents and reports respecting the Collateral in
such form and detail as Agent may reasonably request from time to time.
(g)
Anything herein to the contrary notwithstanding, (i) Assignor shall remain liable under
each of the Organizational Agreements and all other contracts, agreements and instruments included in, giving rise
to, creating, establishing, evidencing or relating to the Collateral to the extent set forth therein to perform all of its
duties and obligations (including, without limitation, any obligation to make capital contributions or provide other
funds to such entities) to the same extent as if this Assignment had not been executed, (ii) the exercise by Agent of
any of its rights hereunder shall not release Assignor from any of its duties or obligations under any of the
Organizational Agreements or any such contracts, agreements and instruments, and (iii) neither Agent nor any of the
Lenders shall have any obligation or liability under any of the Organizational Agreements or any such contract,
agreement or instrument by reason of this Assignment, nor shall Agent or any of the Lenders be obligated to
perform any of the obligations or duties of Assignor thereunder or to take any action to collect or enforce any claim
for payment or other right or privilege assigned to Agent hereunder.
(h)
If Assignor shall at any time be entitled to receive or shall receive any cash, certificate or
other property, option or right upon, in respect of, as an addition to, or in substitution or exchange for any of the
Collateral, whether for value paid by Assignor or otherwise, Assignor agrees that the same shall be deemed to be
Collateral and shall be delivered directly to Agent in each case, accompanied by proper instruments of assignment
and powers
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duly executed by Assignor in such a form as may be required by Agent, to be held by Agent subject to the terms
hereof, as further security for the Obligations (except as otherwise provided herein with respect to the application of
the foregoing to the Obligations). If Assignor receives any of the foregoing directly, Assignor agrees to hold such
cash or other property in trust for the benefit of Agent, and to surrender such cash or other property to Agent (or, to
the extent it constitutes cash, to the Deposit Account) immediately. In the event that Assignor purchases or
otherwise acquires or obtains any additional interest in any Company, or any rights or options to acquire such
interest, all rights to receive profits, proceeds, accounts, income, dividends, distributions or other payments as a
result of such additional interest, rights and options shall automatically be deemed to be a part of the Collateral. All
certificates, if any, representing such interests shall be promptly delivered to Agent, together with assignments
related thereto, or other instruments appropriate to transfer a certificate representing any such interest, duly executed
in blank.
7.
Event of Default . An Event of Default shall exist hereunder upon the occurrence of any of the
following:
(a)
The occurrence of a Default or Unmatured Default under the Credit Agreement; or
(b)
Any amendment to or termination of a financing statement naming Assignor as debtor
and Agent as secured party, or any correction statement with respect thereto, is filed in any jurisdiction by any party
other than Agent or Agent’s counsel without the prior written consent of Agent and the effect of such filing is not
completely nullified to the reasonable satisfaction of Agent within ten (10) days after notice to Assignor thereof.
8.
Remedies .
(a)
Upon the occurrence of any Event of Default, Agent may take any action deemed by
Agent to be necessary or appropriate to the enforcement of the rights and remedies of Agent under this Assignment
and the other Loan Documents, including, without limitation, the exercise of its rights and remedies with respect to
any or all of the Pledged Equity Interests. The remedies of Agent shall include, without limitation, all rights and
remedies specified in the Loan Documents and this Assignment, all remedies of Agent under applicable general or
statutory Law, and the remedies of a secured party under the UCC, regardless of whether the UCC has been enacted
or enacted in that form in any other jurisdiction in which such right or remedy is asserted. In addition to such other
remedies as may exist from time to time, whether by way of set-off, banker’s lien, consensual security interest or
otherwise, upon the occurrence of an Event of Default, Agent is authorized at any time and from time to time,
without notice to or demand upon Assignor (any such notice or demand being expressly waived by Assignor) to
charge any and all deposits (general or special, time or demand, provisional or final) at any time held and other
obligations at any time owing by Agent to or for the credit of or the account of Assignor against any and all of the
Obligations, irrespective of whether or not Agent shall have made any demand for payment and although such
Obligations may be unmatured. Any notice required by Law, including, but not limited to, notice of the intended
disposition of all or any portion of the Collateral, shall be reasonable and properly given in the manner prescribed
for the giving of notice herein, and, in the case of any notice of disposition, if given at least five (5) business days
prior to such disposition. Agent may require Assignor to assemble the Collateral and make it
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available to Agent at any place to be designated by Agent which is reasonably convenient to both parties. It is
expressly understood and agreed that Agent shall be entitled to dispose of the Collateral at any public or private sale,
and that Agent shall be entitled to bid and purchase at any such sale without recourse to judicial proceedings and
without either demand, appraisement, advertisement or notice (except such notice as is otherwise required under this
Assignment) of any kind, all of which are expressly waived. In the event that Agent is the successful bidder at any
public or private sale of the Collateral or any portion thereof, the amount bid by the Agent may be credited against
the Obligations as provided in the Credit Agreement. To the extent the Collateral consists of marketable securities,
Agent shall not be obligated to sell such securities for the highest price obtainable, but shall sell them at the market
price available on the date of sale. Agent shall not be obligated to make any sale of the Collateral if it shall
determine not to do so regardless of the fact that notice of sale of the Collateral may have been given. Agent may,
without notice or publication, adjourn any public sale from time to time by announcement at the time and place fixed
for sale, and such sale may, without further notice, be made at the time and place to which the same was so
adjourned. Each such purchaser at any such sale shall hold the Collateral sold absolutely free from claim or right on
the part of Assignor. In the event that any consent, approval or authorization of any Governmental Agency or
commission will be necessary to effectuate any such sale or sales, Assignor shall execute all such applications or
other instruments as Agent may deem reasonably necessary to obtain such consent, approval or
authorization. Agent may notify any account debtor or obligor with respect to the Collateral to make payment
directly to Agent, and may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose or realize upon
the Collateral as Agent may determine whether or not the Obligations are due, and for the purpose of realizing
Agent’s rights therein, Agent may receive, open and dispose of mail addressed to Assignor and endorse notes,
checks, drafts, money orders, documents of title or other evidences of payment, shipment or storage of any form of
Collateral on behalf and in the name of Assignor, as its attorney-in-fact. In addition, Assignor hereby irrevocably
designates and appoints Agent its true and lawful attorney-in-fact either in the name of Agent or Assignor to (i) sign
Assignor’s name on any Collateral, drafts against account debtors, assignments, any proof of claim in any
bankruptcy or other insolvency proceeding involving any account debtor, any notice of lien, claim of lien or
assignment or satisfaction of lien, or on any financing statement or continuation statement under the UCC; (ii) send
verifications of accounts receivable to any account debtor; and (iii) in connection with a transfer of the Collateral as
described above, sign in Assignor’s name any documents necessary to transfer title to the Collateral to Agent or any
third party. All acts of said power of attorney are hereby ratified and approved and Agent shall not be liable for any
mistake of law or fact made in connection therewith. This power of attorney is coupled with an interest and shall be
irrevocable so long as any amounts remain unpaid on any of the Obligations. All remedies of Agent shall be
cumulative to the full extent provided by Law, all without liability except to account for property actually received,
but the Agent shall have no duty to exercise such rights and shall not be responsible for any failure to do so or delay
in so doing. Pursuit by Agent of certain judicial or other remedies shall not abate nor bar other remedies with
respect to the Obligations or to other portions of the Collateral. Agent may exercise its rights to the Collateral
without resorting or regard to other collateral or sources of security or reimbursement for the Obligations. In the
event that any transfer tax, deed tax, conveyance tax or similar tax is payable in connection with the foreclosure,
conveyance in lieu of foreclosure or otherwise of all or any portion of the Collateral, Assignor shall pay such amount
to Agent upon demand and if Assignor fail to pay such amount on demand, Agent may advance such amount on
behalf of Assignor and the amount
G-1-8
thereof shall become a part of the Obligations and bear interest at the rate for overdue amounts under the Credit
Agreement until paid.
(b)
If Assignor fails to perform any agreement or covenant contained in this Assignment
beyond any applicable period for notice and cure, Agent may itself perform, or cause to be performed, any
agreement or covenant of Assignor contained in this Assignment that Assignor fails to perform, and the cost of such
performance, together with any reasonable expenses, including reasonable attorneys’ fees actually incurred
(including attorneys’ fees incurred in any appeal) by Agent in connection therewith, shall be payable by Assignor
upon demand and shall constitute a part of the Obligations and shall bear interest at the rate for overdue amounts as
set forth in the Credit Agreement.
(c)
Whether or not an Event of Default has occurred and whether or not Agent is the absolute
owner of the Collateral, Agent may take such action as Agent may deem necessary to protect the Collateral or its
security interest therein, Agent being hereby authorized to pay, purchase, contest and compromise any encumbrance,
charge or lien that in the reasonable judgment of Agent appears to be prior or superior to its security interest, and in
exercising any such powers and authority to pay necessary expenses, employ counsel and pay reasonable attorney’s
fees. Any such advances made or expenses incurred by Agent shall be deemed advanced under the Loan
Documents, shall increase the indebtedness evidenced and secured thereby, shall be payable upon demand and shall
bear interest at the rate for overdue payments set forth in the Credit Agreement.
(d)
Any certificates or securities held by Agent as Collateral hereunder may, at any time, and
at the option of Agent, be registered in the name of Agent or its nominee, endorsed or assigned in blank or in the
name of any nominee and Agent may deliver any or all of the Collateral to the issuer or issuers thereof for the
purpose of making denominational exchanges or registrations or transfer or for such other purposes in furtherance of
this Assignment as Agent may deem desirable. Until the occurrence of an Event of Default, Assignor shall retain
the right to vote any of the Collateral, or exercise membership rights, in a manner not inconsistent with the terms of
this Assignment and the other Loan Documents, and Agent hereby grants to Assignor its proxy to enable Assignor to
so vote any of the Collateral (except that Assignor shall not have any right to exercise any such power if the
exercise thereof would violate or result in a violation of any of the terms of this Assignment or any of the other Loan
Documents). At any time after the occurrence and during the continuance of any Event of Default, Agent or its
nominee shall, without notice or demand, automatically have the sole and exclusive right to give all consents,
waivers and ratifications in respect of the Collateral and exercise all voting, approval or other rights at any meeting
of the members of any of the Companies, respectively (and the right to call such meetings) or otherwise (and to give
written consents in lieu of voting thereon), and exercise any and all rights of conversion, exchange, subscription or
any of the rights, privileges or options pertaining to the Collateral and otherwise act with respect thereto and
thereunder as if Agent or its nominee were the absolute owner thereof (all of such rights of the Assignor ceasing to
exist and terminating upon the occurrence of an Event of Default) including, without limitation, the right to
exchange, at its discretion, any and all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or the readjustment of the issuer thereof, all without liability except to account for property actually
received and in such manner as Agent shall determine in its sole and absolute discretion, but Agent shall have no
duty to exercise any of the aforesaid rights, privileges or options and shall
G-1-9
not be responsible for the failure to do so or delay in so doing. The exercise by Agent of any of its rights and
remedies under this paragraph shall not be deemed a disposition of collateral under Article 9 of the UCC nor an
acceptance by Agent of any of the Collateral in satisfaction of the Obligations.
9.
Duties of Agent . The powers conferred on Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. Agent’s duty with reference to the
Collateral shall be solely to use slight care in the custody and preservation of the Collateral, which shall not include
any steps necessary to preserve rights against prior parties. Agent shall have no responsibility or liability for the
collection of any Collateral or by reason of any invalidity, lack of value or uncollectability of any of the payments
received by it.
10.
Indemnification .
(a)
It is specifically understood and agreed that this Assignment shall not operate to place
any responsibility or obligation whatsoever upon Agent or any of the Lenders, or cause Agent or any of the Lenders
to be, or to be deemed to be, a member in any of the Companies and that in accepting this Assignment, Agent and
the Lenders neither assume nor agree to perform at any time whatsoever any obligation or duty of Assignor under
any of the Organizational Agreements or any other mortgage, indenture, contract, agreement or instrument to which
Assignor is a party or to which it is subject, all of which obligations and duties shall be and remain with and upon
Assignor.
(b)
Assignor agrees to indemnify, defend and hold Agent and the Lenders harmless from and
against any and all claims, expenses, losses and liabilities growing out of or resulting from this Assignment
(including, without limitation, enforcement of this Assignment or acts taken or omitted to be taken by Agent or the
Lenders hereunder or in connection therewith), except claims, expenses, losses or liabilities resulting from Agent’s
or such Lender’s gross negligence or willful misconduct.
(c)
Assignor upon demand shall pay to Agent the amount of any and all reasonable expenses,
including, without limitation, the reasonable fees and disbursements of counsel actually incurred (including those
incurred in any appeal), and of any experts and agents, which Agent may incur in connection with (i) the
administration of this Assignment, (ii) the sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Agent hereunder, or (iv) the failure by Assignor to perform or
observe any of the provisions hereof.
11.
Security Interest Absolute . All rights of Agent, and the security interests hereunder, and all of the
Obligations secured hereby, shall be absolute and unconditional, irrespective of:
(a)
Any lack of validity or enforceability of the Loan Documents or any other agreement or
instrument relating thereto;
(b)
Any change in the time (including the extension of the initial maturity date of the Loan as
provided in the Credit Agreement), manner or place of payment of, or in any other
G-1-10
term of, all or any of the Obligations or any other amendment or waiver of or any consent to any departure from the
Loan Documents;
(c)
Any exchange, release or nonperfection of any other collateral for the Obligations, or any
release or amendment or waiver of or consent to departure from any of the Loan Documents with respect to all or
any part of the Obligations; or
(d)
Any other circumstance (other than payment of the Obligations in full) that might
otherwise constitute a defense available to, or a discharge of, Assignor, the Companies or any third party for the
Obligations or any part thereof.
12.
Amendments and Waivers . No amendment or waiver of any provision of this Assignment nor
consent to any departure therefrom shall in any event be effective unless the same shall be in writing and signed by
Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given. No delay or omission of Agent to exercise any right, power or remedy accruing upon any Event of
Default shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such
Event of Default, or acquiescence therein; and every right, power and remedy given by this Assignment to Agent
may be exercised from time to time and as often as may be deemed expedient by Agent. Failure on the part of
Agent to complain of any act or failure to act that constitutes an Event of Default, irrespective of how long such
failure continues, shall not constitute a waiver by Agent of Agent’s rights hereunder or impair any rights, powers or
remedies consequent on any Event of Default. Assignor hereby waives to the extent permitted by Law all rights that
Assignor has or may have under and by virtue of the UCC and any federal, state, county or municipal statute,
regulation, ordinance, Constitution or charter, now or hereafter existing, similar in effect thereto providing any right
of Assignor to notice and to a judicial hearing prior to seizure by Agent of any of the Collateral. Assignor hereby
waives and renounces for itself, its heirs, successors and assigns, presentment, demand, protest, advertisement or
notice of any kind (except for any notice required by Law or the Loan Documents) and all rights to the benefits of
any statute of limitations and any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension,
homestead, redemption and appraisement now provided or that may hereafter be provided by the Constitution and
Laws of the United States and of any state thereof, both as to itself and in and to all of its property, real and personal,
against the enforcement of this Assignment and the collection of any of the Obligations.
13.
Continuing Security Interest; Transfer of Loan; Release of Collateral . This Assignment shall
create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full of the Obligations and the Lenders have no further obligation to make any advances of
the Loan, (b) be binding upon Assignor and its heirs, successors and assigns, and (c) inure, together with the rights
and remedies of Agent hereunder, to the benefit of Agent and the Lenders and their respective successors,
transferees and assigns. Upon the indefeasible payment in full of the Obligations and the termination or expiration
of any obligation of the Lenders to make further advances of the Loan or to issue any Facility Letters of Credit, the
security interest granted hereby shall terminate and all rights to the Collateral shall revert to Assignor. Upon any
such termination, Agent will, at Assignor’s expense, execute and deliver to Assignor such documents as Assignor
shall reasonably request to evidence such termination.
G-1-11
14.
Securities Laws and Other Limitations . In view of the position of Assignor in relation to the
Collateral, or because of other current or future circumstances, a question may arise under the federal and state
securities Laws, the Organizational Agreements, or under any intercreditor agreement, that may now or hereafter be
entered into among the Agent and any other bank a party to the Credit Agreement or under any intercreditor
agreement, which may now or hereafter be entered into among the Agent and any other party with respect to the
Loans or the Collateral (as the same may be modified or amended from time to time, collectively, the “Intercreditor
Agreements”) with respect to any disposition of the Collateral permitted hereunder. Assignor understands that
compliance with the federal and state securities Laws, the Organizational Agreements, or Intercreditor Agreements
might very strictly limit the course of conduct of Agent if Agent were to attempt to dispose of all or any part of the
Collateral in accordance with the terms hereof, and might also limit the extent to which or the manner in which any
subsequent transferee of any Collateral could dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Agent in any attempt to dispose of all or part of the Collateral in accordance with the terms
hereof under applicable Blue Sky or other state securities Laws. Assignor recognizes that in light of the foregoing
restrictions and limitations Agent may, with respect to any sale of the Collateral, limit the purchasers to those who
will agree, among other things, to acquire such Collateral for their own account, for investment, and not with a view
to the distribution or resale thereof and who are able to satisfy any conditions or requirements set forth in the
Organizational Agreements, and the Intercreditor Agreements, and Agent may sell the Collateral in parcels and at
such times and to such Persons as Agent may reasonably determine is necessary to comply with such conditions or
requirements. Assignor acknowledges and agrees that in light of the foregoing restrictions and limitations, the
Agent in its sole and absolute discretion may, in accordance with federal and state securities Law, the Organizational
Agreements and the Intercreditor Agreements, (a) proceed to make such a sale whether or not a registration
statement for the purpose of registering such Collateral or part thereof shall have been filed under the federal and
state securities Laws (b) approach and negotiate with a single potential purchaser to effect such sale and (c) sell the
Collateral in parcels and at such times and in such manner and to such Persons as Agent may reasonably determine
is necessary to comply with such conditions and requirements. Assignor acknowledges and agrees that any such
sale might result in prices and other terms less favorable to the seller if such sale were a public sale without such
restrictions. In the event of any such sale, Agent shall incur no responsibility or liability for selling all or any part of
the Collateral in accordance with the terms hereof at a price that Agent, in its sole and absolute discretion, may in
good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as aforesaid or if more than a single
purchaser were approached or if all the Collateral were sold at a single sale. Assignor further agrees that any sale or
sales by Agent of the Collateral made as provided in this Section 14 shall be commercially reasonable. The
provisions of this Section 14 will apply notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the Agent sells. Agent and the Lenders shall
not be liable to Assignor for any loss in the value of any portion of the Collateral by reason of any delay in the sale
of the Collateral.
15.
Governing Law; Terms . THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES OF ANY JURISDICTION).
G-1-12
16.
Notices . Each notice, demand, election or request provided for or permitted to be given pursuant
to this Assignment must be in writing and shall be deemed to have been properly given or served if given in the
manner prescribed in the Credit Agreement.
17.
No Unwritten Agreements . THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
18.
Miscellaneous . Time is of the essence of this Assignment. Title or captions of paragraphs hereof
are for convenience only and neither limit nor amplify the provisions hereof. If, for any circumstances whatsoever,
fulfillment of any provision of this Assignment shall involve transcending the limited validity presently prescribed
by Law, the obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or provision
herein operates or would prospectively operate to invalidate this Assignment, in whole or in part, then such clause or
provision only shall be held for naught, as though not herein contained, and the remainder of this Assignment shall
remain operative and in full force and effect. If more than one entity comprises the Assignor, the liability of each
such entity shall be joint and several
19.
Modifications, Etc. Assignor hereby consents and agrees that Agent or the Lenders may at any
time and from time to time, without notice to or further consent from Assignor, either with or without consideration,
surrender any property or other security of any kind or nature whatsoever held by it or by any Person on its behalf or
for its account, securing the Obligations; substitute for any Collateral so held by it, other collateral of like kind;
agree to modification of the terms of the Loan Documents; extend or renew the Loan Documents for any period;
grant releases, compromises and indulgences with respect to the Loan Documents for any period or to any persons
or entities now or hereafter liable thereunder or hereunder; release any guarantor, endorser or any other Person liable
with respect to the Obligations; or take or fail to take any action of any type whatsoever; and no such action that
Agent or the Lenders shall take or fail to take in connection with the Loan Documents, or any of them, or any
security for the payment of the Obligations or for the performance of any obligations or undertakings of Assignor,
nor any course of dealing with Assignor or any other person, shall release Assignor’s obligations hereunder, affect
this Assignment in any way or afford Assignor any recourse against Agent or any Lender.
20.
Attorney-in-Fact . Notwithstanding anything to the contrary contained in this Assignment, Agent
agrees that Agent will not take any action as attorney-in-fact of Assignor as permitted hereunder unless and until an
Event of Default has occurred.
21.
Counterparts . This Assignment may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the parties hereto may execute this
Assignment by signing any such counterpart.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
G-1-13
IN WITNESS WHEREOF , Assignor and Agent have executed this Assignment under seal
on the date first above written.
ASSIGNOR :
INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC.
By:
Steven P. Grimes
Chief Operating Officer and Chief Financial
O
fficer
AGENT :
KEYBANK NATIONAL ASSOCIATION , a
national banking association, as Agent
By:
Kevin P. Murray
Senior Vice President
G-1-14
EXHIBIT “A”
COMPANIES
(Initial Collateral Properties Only)
Property Name
1. Shaws-New Britain
Amount of
Total
Total
Percentage
Percentage
Held
Held by
State of
Constituting
Assignor
Organization
Company Name
Pledged Equity
Interests
100%
2. WalMart Super
Center-Blytheville
Inland Western
Blytheville,
L.L.C.
100%
All
Delaware
3. Manchester Meadows
Inland Western
Town and
Country
Manchester,
L.L.C.
Inland Western
Hartford New
Park Member II,
L.L.C.
100%
All
Delaware
100%
80%
Delaware
20-3144319 Limited Liability
Inland Western
Phillipsburg
Greenwich
Member II,
L.L.C.
100%
Delaware
Company
Agreement dated as
of June 16, 2005
20-2729764 Limited Liability
Company
Agreement dated as
of June 22, 2005
5. Greenwich Center
G-1-15
80%
Delaware
Organizational
Agreements
Inland Western
New Britain
Main, L.L.C.
4. Crown Theater
All
EIN
20-0516778 Limited Liability
Company
Agreement dated
January 12, 2004.
20-1198854 Limited Liability
Company
Agreement dated
May 28, 2004.
20-1431000 Limited Liability
Company
Agreement dated
July 28, 2004.
6A.
Southpark
Meadows II
Inland Western
Austin South
Park Meadows
II GP, L.L.C.
100%
All
6B.
Southpark
Meadows II
Inland Western
Austin South
Park Meadows
II LP, L.L.C.
100%
All
Delaware
7.
Gerry
Centennial
Plaza
Inland Western
Oswego Gerry
Centennial,
L.L.C.
100%
All
Delaware
G-1-16
Delaware
20-1752490 Limited
Liability
Company
Agreement
dated June 22,
2005.
26-4460825 Limited
Liability
Company
Agreement
dated June 22,
2005.
20-2934910 Limited
Liability
Company
Agreement
dated December
13, 2007.
Schedule 1
DESCRIPTION OF ASSIGNOR
1.
Assignor has been using or operating under the name Inland Western Retail Real
Estate Trust, Inc. without change since 2003.
Names and Tradenames used within the last five years:
Same
Location of all chief executive offices over last five years:
2901 Butterfield Road
Oak Brook, Illinois 60523
Mailing address: 2901 Butterfield Road
Oak Brook, Illinois 60523
Organizational Identification Number:
Federal Tax Identification Number: 42-1579325
G-2-17
EXHIBIT G-2
FORM OF COLLATERAL ASSIGNMENT OF INTERESTS
COLLATERAL ASSIGNMENT OF INTERESTS
THIS COLLATERAL ASSIGNMENT OF INTERESTS (this “Assignment”),
made this ___ day of March, 2009, by IWR PROTECTIVE CORPORATION , a corporation
organized under the laws of the State of Delaware (“Assignor”) to KEYBANK NATIONAL
ASSOCIATION , a national banking association (“KeyBank”), as Agent for itself and other Lenders
from time to time party to the “Credit Agreement” (as hereinafter defined) (KeyBank, in its capacity
as Agent, hereinafter referred to as “Agent”).
W I T N E S S E T H:
WHEREAS , Assignor is the direct or indirect and beneficial owner of a percentage
of the membership interests of each of the limited liability companies, or of the partnership interests
of each of the limited partnerships, set forth on Exhibit “A” attached hereto and made a part hereof
(collectively, the “Companies”);
WHEREAS , the Companies are presently governed by the certificates of formation
and the operating agreements, or the certificates of partnership and limited partnership agreements
described on Exhibit “A” attached hereto opposite the name of the respective Company (collectively,
the “Organizational Agreements”);
WHEREAS, Inland Western Retail Real Estate Trust, Inc., a corporation organized
under the laws of Maryland (“Inland”), KeyBank, individually and as agent, and the “Lenders”
identified therein entered into that certain Credit Agreement dated October 15, 2007, as amended by
that certain Comprehensive Amendment to Credit Agreement of even date herewith (as the same may
be varied, extended, supplemented, consolidated, amended, replaced, increased, renewed, modified
or amended, the “Credit Agreement”);
WHEREAS , pursuant to the Credit Agreement, the Lenders have agreed to provide
a secured revolving credit facility to Inland in the aggregate amount of up to $200,000,000
(collectively, the “Loans”);
WHEREAS, Assignor is a wholly-owned subsidiary of Inland and will directly
benefit from the extension of credit represented by the Credit Agreement;
WHEREAS , as a condition to the execution of the Credit Agreement and the
making of the Loans, the Lenders and Agent have required that Assignor execute this Assignment;
NOW, THEREFORE , for and in consideration of the sum of Ten and No/100
Dollars ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby covenant and agree as follows:
1.
Definitions . Capitalized terms used herein that are not otherwise defined herein shall have the
meaning set forth in the Credit Agreement.
G-2-1
2.
Grant of Security Interest . As collateral security for the payment and performance by Assignor of
its duties, responsibilities and obligations under this Agreement and the other Loan Documents (which duties,
responsibilities and obligations of Assignor are hereinafter referred to collectively as the “Obligations”), Assignor
does hereby transfer, assign, pledge and convey to Agent, and does hereby grant a security interest to Agent for the
ratable benefit of the Lenders, in and to the following:
(a)
All right, title, interest and claims of Assignor now or hereafter acquired as the direct and
beneficial owner of the percentage shown on Exhibit A of all membership interests and partnership interests in the
Companies (the "Pledged Equity Interests") together with any and all voting rights and privileges attaching to,
existing or arising in connection with the Pledged Equity Interests, any and all other securities, cash, certificates or
other property, option or right in respect of, in addition to or substitution or exchange for any of the Pledged Equity
Interests or any of the foregoing, or other property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for the Pledged Equity Interests; and
(b)
Any and all profits, proceeds, income, dividends, distributions, payments upon
dissolution or liquidation of any of the Companies, and any return of capital, repayment of loans, and payments of
any kind or nature whatsoever, now or hereafter distributable or payable by any of the Companies to Assignor, by
reason of Assignor’s interest in the Companies, or now or hereafter distributable or payable to Assignor from any
other source by reason of Assignor being a member or partner in any of the Companies, by reason of services
performed by Assignor for or on behalf of any of the Companies, and any and all proceeds from any transfer,
assignment or pledge of any interest of Assignor in, or claim or right against, any of the Companies (regardless of
whether such transfer, assignment or pledge is permitted under the terms hereof or the other Loan Documents), and
all claims, choses in action or things in action now or hereafter arising against any of the Companies (collectively,
the "Distributions"); and
(c)
All notes or other documents or instruments now or hereafter evidencing or securing any
such Distributions from any of the Companies; and
(d)
All rights of Assignor to collect and enforce payment of the Distributions pursuant to the
terms of any of the Organizational Agreements or otherwise; and
(e)
All proceeds of any of the foregoing.
All of the foregoing described in this Section 2 are hereinafter referred to collectively as the
“Collateral.”
3.
Obligations Secured . This Assignment secures the payment and performance by Assignor of the
Obligations.
4.
Collection of Distributions .
(a)
It is acknowledged and agreed by the parties hereto that Agent shall have sole and
exclusive possession of the Distributions and that this Assignment constitutes a present, absolute and current
assignment of all the Distributions and is effective upon the execution and delivery hereof. Payments under or with
respect to the Distributions shall be made as follows:
G-2-2
(i)
Assignor shall have no right to receive payments made under or with respect to
the Distributions, or upon any redemption or conversion of the Collateral, other than by deposit thereof into the
Deposit Account, and all such payments shall be delivered directly by the Companies to the Deposit Account.
(ii)
If Assignor shall receive any payments made under or with respect to the
Distributions, or upon any redemption or conversion of the Collateral, Assignor shall hold all such payments in trust
for Agent, and will immediately deposit all such payments directly to the Deposit Account pursuant to the Account
Pledge Agreement for further distribution and application pursuant to the terms thereof.
(iii)
In furtherance of the foregoing, Assignor does hereby notify and direct each of
the Companies that all payments under or with respect to the Distributions shall be made directly to the Deposit
Account set forth herein.
(b)
Assignor shall cause each of the Companies to promptly distribute all net proceeds of the
sale or other disposition of, or any financing or refinancing of, any of their respective assets or properties, and any
and all other Distributions distributable or payable by the Companies under the terms of the applicable
Organizational Agreements in accordance with the Credit Agreement.
(c)
Assignor hereby irrevocably designates and appoints Agent its true and lawful
attorney-in-fact, which appointment is coupled with an interest, either in the name of Agent, or in the name of
Assignor, at Assignor’s sole cost and expense, and regardless of whether or not Agent becomes a member in any of
the Companies, to take any or all of the following actions at such time as a Default or Unmatured Default has
occurred and is continuing:
(i)
to ask, demand, sue for, attach, levy, settle, compromise, collect, recover,
receive and give receipt for any and all Collateral and to take any and all actions as Agent may deem necessary or
desirable in order to realize upon the Collateral, or any portion thereof, including, without limitation, making any
statements and doing and taking any actions on behalf of Assignor which are otherwise required of Assignor under
the terms of any agreement as conditions precedent to the payment of the Distributions, and the right and power to
endorse, in the name of Assignor, any checks, notes, drafts and other instruments received in payment of all or any
portion of the Collateral; and
(ii)
to institute one or more actions against any of the Companies or any member
thereof in connection with the collection of the Distributions, to prosecute to judgment, settle or dismiss any such
actions, and to make any compromise or settlement deemed desirable, in Agent’s sole discretion, with respect to
such Distributions, to extend the time of payment, arrange for payment in installments or otherwise modify the terms
of any of the Organizational Agreements with respect to the Distributions or release any of the Companies or any
member thereof, from their respective obligations to pay any Distribution, without incurring responsibility to, or
affecting any liability of, Assignor under any of the Organizational Agreements; it being specifically understood and
agreed, however, that Agent shall not be obligated in any manner whatsoever to exercise any such power or
authority or be in any way responsible for the collection of or realizing upon the Collateral, or any portion
thereof. The foregoing appointment is irrevocable and continuing and any such rights, powers and privileges
G-2-3
shall be exclusive in Agent, its successors and assigns until this Assignment terminates as provided in Section 13,
below.
5.
Warranties and Covenants . Assignor does hereby warrant and represent to, and covenants and
agrees with Agent, as follows:
(a)
This Assignment has been duly executed and delivered by Assignor and constitutes the
valid, legal and binding obligation of Assignor. No consent from any other partner or member in the Companies is
required as a condition to the effectiveness of this Assignment, except for the consent of The Townsend Company,
LLC with respect to the Pledged Equity Interest in Stroud Commons, LLC, which consent has been obtained and
delivered to the Agent in the form attached hereto as Exhibit “B” and made a part hereof.
(b)
None of the Pledged Equity Interests is evidenced by any certificate, instrument,
document or other writing other than the Organizational Agreements.
(c)
True, correct and complete copies of each of the Organizational Agreements, together
with all amendments thereto, have been delivered to Agent by Assignor, each of the Organizational Agreements is in
full force and effect and is enforceable in accordance with its terms, and, so long as this Assignment remains in
effect, Assignor shall not materially modify, amend, cancel, release, surrender or terminate, or permit the
modification, amendment, cancellation, release, surrender or termination of, any of the Organizational Agreements,
or dissolve, liquidate or permit the expiration of any of the Organizational Agreements or the termination or
cancellation thereof, without in each instance the prior written consent of Agent, which consent shall not be
unreasonably withheld, conditioned or delayed.
(d)
Assignor is and shall remain the sole lawful, beneficial and record owner of the Pledged
Equity Interests, and the right to receive the Distributions, free and clear of all liens, restrictions, claims, pledges,
encumbrances, charges, claims of third parties and rights of set-off or recoupment whatsoever (other than those in
favor of Agent hereunder), and Assignor has the full and complete right, power and authority to grant a security
interest in the Collateral in favor of Agent, in accordance with the terms and provisions of this
Assignment. Assignor is not and will not become a party to or otherwise be bound by or subject to any agreement,
other than the Loan Documents, that restricts in any manner the rights of any present or future holder of the
Collateral with respect thereto. No Person has any option, right of first refusal, right of first offer or other right to
acquire all or any portion of the Collateral, except the express rights of The Townsend Company, LLC under the
Organizational Agreements with respect to Stroud Commons, LLC.
(e)
This Assignment creates
Collateral securing the payment and performance of
performed, nor will Assignor perform or permit any
Agent from enforcing the terms and conditions of
enforcement.
a valid and binding first priority security interest in the
the Obligations. Neither Assignor nor any other Person has
such other Person to perform, any acts which might prevent
this Assignment or which would limit Agent in any such
(f)
Assignor consents (to the extent applicable Law does not prohibit Assignor from
pre-consenting) to the admission of Agent or any other purchaser of the Pledged Equity Interests upon a foreclosure
sale as a substitute member of the applicable Company with all of the rights and privileges of a member under the
applicable Organizational Agreements in
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the event that Agent exercises its rights under this Assignment and Agent or such other purchaser succeeds to
ownership of all or any portion of the Pledged Equity Interests.
(g)
Assignor’s correct legal name indicated on the public record of Assignor’s jurisdiction,
mailing address, identity or corporate structure, residence or chief executive office, jurisdiction of organization,
organizational identification number, and federal tax identification number, are as set forth on Schedule 1 attached
hereto and by this reference made a part hereof. Assignor has been using or operating under said name, identity or
corporate structure without change for the time period set forth on Schedule 1 attached hereto. In order to perfect
the pledge and security interests granted herein against Assignor, an appropriate UCC Financing Statement must be
filed with the Secretary of State of Maryland and with the Secretary of State of Delaware. Assignor covenants and
agrees that Assignor shall not change any of the matters addressed by the first two sentences of this subsection
unless it has given Agent thirty (30) days prior written notice of any such change and caused to be filed at the
request of Agent, or Agent’s counsel to file, such additional financing statements or other instruments in such
jurisdictions as Agent may deem necessary or advisable in its sole discretion to prevent any filed financing statement
from becoming misleading or losing its perfected status.
(h)
Assignor agrees to do such further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements, documents, endorsements, assurances and instruments as Agent
may reasonably at any time request in connection with the administration or enforcement of this Assignment or
related to the Collateral or any part thereof or in order to better assure and confirm unto Agent its rights, powers and
remedies hereunder. Without limiting the generality of the foregoing, at any time and from time to time, Assignor
shall, at the request of Agent, make, execute, acknowledge, and deliver or authorize the execution and delivery of
and where appropriate, cause to be recorded and/or filed and from time to time thereafter to be re-recorded and/or
refiled at such time in such offices and places as shall be deemed desirable by Agent all such other and further
assignments, security agreements, financing statements, continuation statements, endorsements, assurances,
certificates and other documents as Agent from time to time may require for the better assuring, conveying,
assigning and confirming to Agent the Collateral and the rights hereby conveyed or assigned or intended now or
hereafter to be conveyed or assigned, and for carrying out the intention or facilitating the performance of the terms
of this Assignment. Upon any failure of Assignor to do so, Agent may make, execute, record, file, re-record and/or
refile, acknowledge and deliver any and all such further assignments, security agreements, financing statements,
continuation statements, endorsements, assurances, instruments, certificates and documents for and in the name of
Assignor, and Assignor hereby irrevocably appoints Agent the agent and attorney-in-fact with full power of
substitutions of Assignor so to do. This power is coupled with an interest and is irrevocable. Without limiting the
generality of the foregoing, Assignor will obtain such waivers of lien, estoppel certificates or subordination
agreements as Agent may reasonably require to insure the priority of its security interest in the Collateral. Assignor
also shall furnish to Agent such evidence as Agent reasonably may require from time to time to establish a valid
security interest in and to further protect and perfect its security interest in the Collateral.
(i)
Assignor hereby authorizes Agent, its counsel or its representative, at any time and from
time to time, to file financing statements, amendments and continuations that describe or relate to the Collateral or
any portion thereof in such jurisdictions as Agent may deem necessary or desirable in order to perfect the security
interests granted by Assignor under
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this Assignment or any other Loan Document, and such financing statements may contain, among other items as
Agent may deem advisable to include therein, the federal tax identification number and organizational number of
Assignor. Agent shall upon request provide Assignor with copies of any and all such filings made by Agent.
(j)
The Pledged Equity Interests and the Distributions are not and will not (A) be dealt in or
traded on securities exchanges or in securities markets, (B) be “investment company securities” (as defined in
Section 8-103(b) of the UCC), and (C) be credited to a securities account. None of the Organizational Documents
expressly provides that the Pledged Equity Interests are securities governed by Article 8 of the Uniform Commercial
Code of any jurisdiction.
6.
General Covenants . Assignor covenants and agrees that, so long as this Assignment is
continuing:
(a)
Except as may be specifically set forth in the Credit Agreement, Assignor shall not,
without the prior written consent of Agent, which consent may be withheld by Agent in its sole and absolute
discretion, directly or indirectly or by operation of law, sell, transfer, assign, dispose of, pledge, convey, option,
mortgage, hypothecate or encumber any of the Collateral.
(b)
Assignor shall at all times defend the Collateral against all claims and demands of all
Persons at any time claiming any interest in the Collateral adverse to Agent’s interest in the Collateral as granted
hereunder.
(c)
Assignor shall perform in all material respects all of its duties, responsibilities and
obligations under each of the Organizational Agreements and with respect to the Collateral.
(d)
Assignor shall pay all taxes and other charges against the Collateral.
(e)
Assignor shall promptly deliver to Agent as additional Collateral any note or other
document or instrument entered into after the date hereof which evidences, constitutes, guarantees or secures any of
the Distributions or any right to receive a Distribution, which notes or other documents and instruments shall be
accompanied by such endorsements or assignments as Agent may require to create a perfected security interest
therein in favor Agent.
(f)
Assignor will provide to Agent such documents and reports respecting the Collateral in
such form and detail as Agent may reasonably request from time to time.
(g)
Anything herein to the contrary notwithstanding, (i) Assignor shall remain liable under
each of the Organizational Agreements and all other contracts, agreements and instruments included in, giving rise
to, creating, establishing, evidencing or relating to the Collateral to the extent set forth therein to perform all of its
duties and obligations (including, without limitation, any obligation to make capital contributions or provide other
funds to such entities) to the same extent as if this Assignment had not been executed, (ii) the exercise by Agent of
any of its rights hereunder shall not release Assignor from any of its duties or obligations under any of the
Organizational Agreements or any such contracts, agreements and instruments, and (iii) neither Agent nor any of the
Lenders shall have any obligation or liability under any of the Organizational Agreements or any such contract,
agreement or instrument by
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reason of this Assignment, nor shall Agent or any of the Lenders be obligated to perform any of the obligations or
duties of Assignor thereunder or to take any action to collect or enforce any claim for payment or other right or
privilege assigned to Agent hereunder.
(h)
If Assignor shall at any time be entitled to receive or shall receive any cash, certificate or
other property, option or right upon, in respect of, as an addition to, or in substitution or exchange for any of the
Collateral, whether for value paid by Assignor or otherwise, Assignor agrees that the same shall be deemed to be
Collateral and shall be delivered directly to Agent in each case, accompanied by proper instruments of assignment
and powers duly executed by Assignor in such a form as may be required by Agent, to be held by Agent subject to
the terms hereof, as further security for the Obligations (except as otherwise provided herein with respect to the
application of the foregoing to the Obligations). If Assignor receives any of the foregoing directly, Assignor agrees
to hold such cash or other property in trust for the benefit of Agent, and to surrender such cash or other property to
Agent (or, to the extent it constitutes cash, to the Deposit Account) immediately. In the event that Assignor
purchases or otherwise acquires or obtains any additional interest in any Company, or any rights or options to
acquire such interest, all rights to receive profits, proceeds, accounts, income, dividends, distributions or other
payments as a result of such additional interest, rights and options shall automatically be deemed to be a part of the
Collateral. All certificates, if any, representing such interests shall be promptly delivered to Agent, together with
assignments related thereto, or other instruments appropriate to transfer a certificate representing any such interest,
duly executed in blank.
7.
Event of Default . An Event of Default shall exist hereunder upon the occurrence of any of the
following:
(a)
The occurrence of a Default or Unmatured Default under the Credit Agreement; or
(b)
Any amendment to or termination of a financing statement naming Assignor as debtor
and Agent as secured party, or any correction statement with respect thereto, is filed in any jurisdiction by any party
other than Agent or Agent’s counsel without the prior written consent of Agent and the effect of such filing is not
completely nullified to the reasonable satisfaction of Agent within ten (10) days after notice to Assignor thereof.
8.
Remedies .
(a)
Upon the occurrence of any Event of Default, Agent may take any action deemed by
Agent to be necessary or appropriate to the enforcement of the rights and remedies of Agent under this Assignment
and the other Loan Documents, including, without limitation, the exercise of its rights and remedies with respect to
any or all of the Pledged Equity Interests. The remedies of Agent shall include, without limitation, all rights and
remedies specified in the Loan Documents and this Assignment, all remedies of Agent under applicable general or
statutory Law, and the remedies of a secured party under the UCC, regardless of whether the UCC has been enacted
or enacted in that form in any other jurisdiction in which such right or remedy is asserted. In addition to such other
remedies as may exist from time to time, whether by way of set-off, banker’s lien, consensual security interest or
otherwise, upon the occurrence of an Event of Default, Agent is authorized at any time and from time to time,
without notice to or demand upon Assignor (any such notice or demand being expressly waived by Assignor) to
charge any
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and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at
any time owing by Agent to or for the credit of or the account of Assignor against any and all of the Obligations,
irrespective of whether or not Agent shall have made any demand for payment and although such Obligations may
be unmatured. Any notice required by Law, including, but not limited to, notice of the intended disposition of all or
any portion of the Collateral, shall be reasonable and properly given in the manner prescribed for the giving of
notice herein, and, in the case of any notice of disposition, if given at least five (5) business days prior to such
disposition. Agent may require Assignor to assemble the Collateral and make it available to Agent at any place to
be designated by Agent which is reasonably convenient to both parties. It is expressly understood and agreed that
Agent shall be entitled to dispose of the Collateral at any public or private sale, and that Agent shall be entitled to
bid and purchase at any such sale without recourse to judicial proceedings and without either demand, appraisement,
advertisement or notice (except such notice as is otherwise required under this Assignment) of any kind, all of which
are expressly waived. In the event that Agent is the successful bidder at any public or private sale of the Collateral
or any portion thereof, the amount bid by the Agent may be credited against the Obligations as provided in the
Credit Agreement. To the extent the Collateral consists of marketable securities, Agent shall not be obligated to sell
such securities for the highest price obtainable, but shall sell them at the market price available on the date of sale.
Agent shall not be obligated to make any sale of the Collateral if it shall determine not to do so regardless of the fact
that notice of sale of the Collateral may have been given. Agent may, without notice or publication, adjourn any
public sale from time to time by announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so adjourned. Each such purchaser at any such
sale shall hold the Collateral sold absolutely free from claim or right on the part of Assignor. In the event that any
consent, approval or authorization of any Governmental Agency or commission will be necessary to effectuate any
such sale or sales, Assignor shall execute all such applications or other instruments as Agent may deem reasonably
necessary to obtain such consent, approval or authorization. Agent may notify any account debtor or obligor with
respect to the Collateral to make payment directly to Agent, and may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose or realize upon the Collateral as Agent may determine whether or not the
Obligations are due, and for the purpose of realizing Agent’s rights therein, Agent may receive, open and dispose of
mail addressed to Assignor and endorse notes, checks, drafts, money orders, documents of title or other evidences of
payment, shipment or storage of any form of Collateral on behalf and in the name of Assignor, as its
attorney-in-fact. In addition, Assignor hereby irrevocably designates and appoints Agent its true and lawful
attorney-in-fact either in the name of Agent or Assignor to (i) sign Assignor’s name on any Collateral, drafts against
account debtors, assignments, any proof of claim in any bankruptcy or other insolvency proceeding involving any
account debtor, any notice of lien, claim of lien or assignment or satisfaction of lien, or on any financing statement
or continuation statement under the UCC; (ii) send verifications of accounts receivable to any account debtor; and
(iii) in connection with a transfer of the Collateral as described above, sign in Assignor’s name any documents
necessary to transfer title to the Collateral to Agent or any third party. All acts of said power of attorney are hereby
ratified and approved and Agent shall not be liable for any mistake of law or fact made in connection
therewith. This power of attorney is coupled with an interest and shall be irrevocable so long as any amounts
remain unpaid on any of the Obligations. All remedies of Agent shall be cumulative to the full extent provided by
Law, all without liability except to account for property actually received, but the Agent shall have no duty to
exercise such rights and shall not be responsible for any failure to do so or delay in so doing. Pursuit by Agent of
certain judicial or
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other remedies shall not abate nor bar other remedies with respect to the Obligations or to other portions of the
Collateral. Agent may exercise its rights to the Collateral without resorting or regard to other collateral or sources
of security or reimbursement for the Obligations. In the event that any transfer tax, deed tax, conveyance tax or
similar tax is payable in connection with the foreclosure, conveyance in lieu of foreclosure or otherwise of all or any
portion of the Collateral, Assignor shall pay such amount to Agent upon demand and if Assignor fail to pay such
amount on demand, Agent may advance such amount on behalf of Assignor and the amount thereof shall become a
part of the Obligations and bear interest at the rate for overdue amounts under the Credit Agreement until paid.
(b)
If Assignor fails to perform any agreement or covenant contained in this Assignment
beyond any applicable period for notice and cure, Agent may itself perform, or cause to be performed, any
agreement or covenant of Assignor contained in this Assignment that Assignor fails to perform, and the cost of such
performance, together with any reasonable expenses, including reasonable attorneys’ fees actually incurred
(including attorneys’ fees incurred in any appeal) by Agent in connection therewith, shall be payable by Assignor
upon demand and shall constitute a part of the Obligations and shall bear interest at the rate for overdue amounts as
set forth in the Credit Agreement.
(c)
Whether or not an Event of Default has occurred and whether or not Agent is the absolute
owner of the Collateral, Agent may take such action as Agent may deem necessary to protect the Collateral or its
security interest therein, Agent being hereby authorized to pay, purchase, contest and compromise any encumbrance,
charge or lien that in the reasonable judgment of Agent appears to be prior or superior to its security interest, and in
exercising any such powers and authority to pay necessary expenses, employ counsel and pay reasonable attorney’s
fees. Any such advances made or expenses incurred by Agent shall be deemed advanced under the Loan
Documents, shall increase the indebtedness evidenced and secured thereby, shall be payable upon demand and shall
bear interest at the rate for overdue payments set forth in the Credit Agreement.
(d)
Any certificates or securities held by Agent as Collateral hereunder may, at any time, and
at the option of Agent, be registered in the name of Agent or its nominee, endorsed or assigned in blank or in the
name of any nominee and Agent may deliver any or all of the Collateral to the issuer or issuers thereof for the
purpose of making denominational exchanges or registrations or transfer or for such other purposes in furtherance of
this Assignment as Agent may deem desirable. Until the occurrence of an Event of Default, Assignor shall retain
the right to vote any of the Collateral, or exercise membership rights, in a manner not inconsistent with the terms of
this Assignment and the other Loan Documents, and Agent hereby grants to Assignor its proxy to enable Assignor to
so vote any of the Collateral (except that Assignor shall not have any right to exercise any such power if the
exercise thereof would violate or result in a violation of any of the terms of this Assignment or any of the other Loan
Documents). At any time after the occurrence and during the continuance of any Event of Default, Agent or its
nominee shall, without notice or demand, automatically have the sole and exclusive right to give all consents,
waivers and ratifications in respect of the Collateral and exercise all voting, approval or other rights at any meeting
of the members of any of the Companies, respectively (and the right to call such meetings) or otherwise (and to give
written consents in lieu of voting thereon), and exercise any and all rights of conversion, exchange, subscription or
any of the rights, privileges or options pertaining to the Collateral and otherwise
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act with respect thereto and thereunder as if Agent or its nominee were the absolute owner thereof (all of such rights
of the Assignor ceasing to exist and terminating upon the occurrence of an Event of Default) including, without
limitation, the right to exchange, at its discretion, any and all of the Collateral upon the merger, consolidation,
reorganization, recapitalization or the readjustment of the issuer thereof, all without liability except to account for
property actually received and in such manner as Agent shall determine in its sole and absolute discretion, but Agent
shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for the
failure to do so or delay in so doing. The exercise by Agent of any of its rights and remedies under this paragraph
shall not be deemed a disposition of collateral under Article 9 of the UCC nor an acceptance by Agent of any of the
Collateral in satisfaction of the Obligations.
9.
Duties of Agent . The powers conferred on Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. Agent’s duty with reference to the
Collateral shall be solely to use slight care in the custody and preservation of the Collateral, which shall not include
any steps necessary to preserve rights against prior parties. Agent shall have no responsibility or liability for the
collection of any Collateral or by reason of any invalidity, lack of value or uncollectability of any of the payments
received by it.
10.
Indemnification .
(a)
It is specifically understood and agreed that this Assignment shall not operate to place
any responsibility or obligation whatsoever upon Agent or any of the Lenders, or cause Agent or any of the Lenders
to be, or to be deemed to be, a member in any of the Companies and that in accepting this Assignment, Agent and
the Lenders neither assume nor agree to perform at any time whatsoever any obligation or duty of Assignor under
any of the Organizational Agreements or any other mortgage, indenture, contract, agreement or instrument to which
Assignor is a party or to which it is subject, all of which obligations and duties shall be and remain with and upon
Assignor.
(b)
Assignor agrees to indemnify, defend and hold Agent and the Lenders harmless from and
against any and all claims, expenses, losses and liabilities growing out of or resulting from this Assignment
(including, without limitation, enforcement of this Assignment or acts taken or omitted to be taken by Agent or the
Lenders hereunder or in connection therewith), except claims, expenses, losses or liabilities resulting from Agent’s
or such Lender’s gross negligence or willful misconduct.
(c)
Assignor upon demand shall pay to Agent the amount of any and all reasonable expenses,
including, without limitation, the reasonable fees and disbursements of counsel actually incurred (including those
incurred in any appeal), and of any experts and agents, which Agent may incur in connection with (i) the
administration of this Assignment, (ii) the sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of Agent hereunder, or (iv) the failure by Assignor to perform or
observe any of the provisions hereof.
11.
Security Interest Absolute . All rights of Agent, and the security interests hereunder, and all of the
Obligations secured hereby, shall be absolute and unconditional, irrespective of:
G-2-10
(a)
Any lack of validity or enforceability of the Loan Documents or any other agreement or
instrument relating thereto;
(b)
Any change in the time (including the extension of the initial maturity date of the Loan as
provided in the Credit Agreement), manner or place of payment of, or in any other term of, all or any of the
Obligations or any other amendment or waiver of or any consent to any departure from the Loan Documents;
(c)
Any exchange, release or nonperfection of any other collateral for the Obligations, or any
release or amendment or waiver of or consent to departure from any of the Loan Documents with respect to all or
any part of the Obligations; or
(d)
Any other circumstance (other than payment of the Obligations in full) that might
otherwise constitute a defense available to, or a discharge of, Assignor, the Companies or any third party for the
Obligations or any part thereof.
12.
Amendments and Waivers . No amendment or waiver of any provision of this Assignment nor
consent to any departure therefrom shall in any event be effective unless the same shall be in writing and signed by
Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given. No delay or omission of Agent to exercise any right, power or remedy accruing upon any Event of
Default shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such
Event of Default, or acquiescence therein; and every right, power and remedy given by this Assignment to Agent
may be exercised from time to time and as often as may be deemed expedient by Agent. Failure on the part of
Agent to complain of any act or failure to act that constitutes an Event of Default, irrespective of how long such
failure continues, shall not constitute a waiver by Agent of Agent’s rights hereunder or impair any rights, powers or
remedies consequent on any Event of Default. Assignor hereby waives to the extent permitted by Law all rights that
Assignor has or may have under and by virtue of the UCC and any federal, state, county or municipal statute,
regulation, ordinance, Constitution or charter, now or hereafter existing, similar in effect thereto providing any right
of Assignor to notice and to a judicial hearing prior to seizure by Agent of any of the Collateral. Assignor hereby
waives and renounces for itself, its heirs, successors and assigns, presentment, demand, protest, advertisement or
notice of any kind (except for any notice required by Law or the Loan Documents) and all rights to the benefits of
any statute of limitations and any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension,
homestead, redemption and appraisement now provided or that may hereafter be provided by the Constitution and
Laws of the United States and of any state thereof, both as to itself and in and to all of its property, real and personal,
against the enforcement of this Assignment and the collection of any of the Obligations.
13.
Continuing Security Interest; Transfer of Loan; Release of Collateral . This Assignment shall
create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full of the Obligations and the Lenders have no further obligation to make any advances of
the Loan, (b) be binding upon Assignor and its heirs, successors and assigns, and (c) inure, together with the rights
and remedies of Agent hereunder, to the benefit of Agent and the Lenders and their respective successors,
transferees and assigns. Upon the indefeasible payment in full of the Obligations and the termination or expiration
of any
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obligation of the Lenders to make further advances of the Loan or to issue any Facility Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall revert to Assignor. Upon any such
termination, Agent will, at Assignor’s expense, execute and deliver to Assignor such documents as Assignor shall
reasonably request to evidence such termination.
14.
Securities Laws and Other Limitations . In view of the position of Assignor in relation to the
Collateral, or because of other current or future circumstances, a question may arise under the federal and state
securities Laws, the Organizational Agreements, or under any intercreditor agreement, that may now or hereafter be
entered into among the Agent and any other bank a party to the Credit Agreement or under any intercreditor
agreement, which may now or hereafter be entered into among the Agent and any other party with respect to the
Loans or the Collateral (as the same may be modified or amended from time to time, collectively, the “Intercreditor
Agreements”) with respect to any disposition of the Collateral permitted hereunder. Assignor understands that
compliance with the federal and state securities Laws, the Organizational Agreements, or Intercreditor Agreements
might very strictly limit the course of conduct of Agent if Agent were to attempt to dispose of all or any part of the
Collateral in accordance with the terms hereof, and might also limit the extent to which or the manner in which any
subsequent transferee of any Collateral could dispose of the same. Similarly, there may be other legal restrictions or
limitations affecting the Agent in any attempt to dispose of all or part of the Collateral in accordance with the terms
hereof under applicable Blue Sky or other state securities Laws. Assignor recognizes that in light of the foregoing
restrictions and limitations Agent may, with respect to any sale of the Collateral, limit the purchasers to those who
will agree, among other things, to acquire such Collateral for their own account, for investment, and not with a view
to the distribution or resale thereof and who are able to satisfy any conditions or requirements set forth in the
Organizational Agreements, and the Intercreditor Agreements, and Agent may sell the Collateral in parcels and at
such times and to such Persons as Agent may reasonably determine is necessary to comply with such conditions or
requirements. Assignor acknowledges and agrees that in light of the foregoing restrictions and limitations, the
Agent in its sole and absolute discretion may, in accordance with federal and state securities Law, the Organizational
Agreements and the Intercreditor Agreements, (a) proceed to make such a sale whether or not a registration
statement for the purpose of registering such Collateral or part thereof shall have been filed under the federal and
state securities Laws (b) approach and negotiate with a single potential purchaser to effect such sale and (c) sell the
Collateral in parcels and at such times and in such manner and to such Persons as Agent may reasonably determine
is necessary to comply with such conditions and requirements. Assignor acknowledges and agrees that any such
sale might result in prices and other terms less favorable to the seller if such sale were a public sale without such
restrictions. In the event of any such sale, Agent shall incur no responsibility or liability for selling all or any part of
the Collateral in accordance with the terms hereof at a price that Agent, in its sole and absolute discretion, may in
good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as aforesaid or if more than a single
purchaser were approached or if all the Collateral were sold at a single sale. Assignor further agrees that any sale or
sales by Agent of the Collateral made as provided in this Section 14 shall be commercially reasonable. The
provisions of this Section 14 will apply notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the Agent sells. Agent and the Lenders shall
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not be liable to Assignor for any loss in the value of any portion of the Collateral by reason of any delay in the sale
of the Collateral.
15.
Governing Law; Terms . THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES OF ANY JURISDICTION).
16.
Notices . Each notice, demand, election or request provided for or permitted to be given pursuant
to this Assignment must be in writing and shall be deemed to have been properly given or served if given in the
manner prescribed in the Credit Agreement.
17.
No Unwritten Agreements . THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
18.
Miscellaneous . Time is of the essence of this Assignment. Title or captions of paragraphs hereof
are for convenience only and neither limit nor amplify the provisions hereof. If, for any circumstances whatsoever,
fulfillment of any provision of this Assignment shall involve transcending the limited validity presently prescribed
by Law, the obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or provision
herein operates or would prospectively operate to invalidate this Assignment, in whole or in part, then such clause or
provision only shall be held for naught, as though not herein contained, and the remainder of this Assignment shall
remain operative and in full force and effect. If more than one entity comprises the Assignor, the liability of each
such entity shall be joint and several
19.
Modifications, Etc. Assignor hereby consents and agrees that Agent or the Lenders may at any
time and from time to time, without notice to or further consent from Assignor, either with or without consideration,
surrender any property or other security of any kind or nature whatsoever held by it or by any Person on its behalf or
for its account, securing the Obligations; substitute for any Collateral so held by it, other collateral of like kind;
agree to modification of the terms of the Loan Documents; extend or renew the Loan Documents for any period;
grant releases, compromises and indulgences with respect to the Loan Documents for any period or to any persons
or entities now or hereafter liable thereunder or hereunder; release any guarantor, endorser or any other Person liable
with respect to the Obligations; or take or fail to take any action of any type whatsoever; and no such action that
Agent or the Lenders shall take or fail to take in connection with the Loan Documents, or any of them, or any
security for the payment of the Obligations or for the performance of any obligations or undertakings of Assignor,
nor any course of dealing with Assignor or any other person, shall release Assignor’s obligations hereunder, affect
this Assignment in any way or afford Assignor any recourse against Agent or any Lender.
20.
Attorney-in-Fact . Notwithstanding anything to the contrary contained in this Assignment, Agent
agrees that Agent will not take any action as attorney-in-fact of Assignor as permitted hereunder unless and until an
Event of Default has occurred.
G-2-13
21.
Counterparts . This Assignment may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and any of the parties hereto may execute this
Assignment by signing any such counterpart.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
G-2-14
IN WITNESS WHEREOF , Assignor and Agent have executed this Assignment under seal
on the date first above written.
ASSIGNOR :
IWR PROTECTIVE CORPORATION, a Delaware
corporation
By:
N
ame:
Title:
AGENT :
KEYBANK NATIONAL ASSOCIATION , a
national banking association, as Agent
By:
Kevin P. Murray
Senior Vice President
G-2-15
EXHIBIT “A”
COMPANIES
(Initial Collateral Properties Only)
1.
Property Name
Company Name
The Shoppes at Stroud
Township
Stroud Commons, L.L.C.
Total
Percentage
Held by
Assignor
Amount of Total
Percentage Held
Constituting
Pledged Equity
Interests
50%
All
State of
Organization
Delaware
G-2-16
Organizational Agreem
EIN
26-0101120 Amended and Restated
Liability Company Agre
dated as of November 3
EXHIBIT “B”
April __, 2009
IWR Protective Corporation
2901 Butterfield Road
Oak Brook, IL 60523
Attention:
KeyBank National Association
c/o KeyBank Real Estate Capital
Institutional Group
1200 Abernathy Road, Suite 1550
Atlanta, GA 30328
Attention: Kevin Murray
Re:
Stroud Commons, LLC (the “Company”)
Gentlemen:
This letter will confirm the consent of the undersigned, The Townsend Company, LLC, an
Ohio limited liability company (“Townsend”), in its capacities as Manager and a Member under that
certain Amended and Restated Limited Liability Company Agreement of the Company dated as of
November 30, 2006 (the “Company Agreement”), to the collateral assignment by IWR Protective
Corporation (“Inland Member”) to KeyBank National Association, as agent for itself and other
lenders from time to time (the “Agent”) of 100% of Inland Member’s membership interest in the
Company and all rights related thereto, including the right to receive any and all distributions due to
Inland Member from the Company, all as provided for in that certain Collateral Assignment of
Interests dated as of April __, 2009 made by Inland Member and its parent, Inland Western Retail
Real Estate Trust, Inc., in favor of Agent. All capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Company Agreement.
The undersigned further agrees that, in the event Agent shall exercise its rights under such
Collateral Assignment of Interests and cause such rights of Inland Member in the Company to be
transferred to Agent or another purchaser at any sale of such rights held pursuant to such Collateral
Assignment of Interests, that, notwithstanding any rights of Townsend under the Company
Agreement, Townsend hereby grants its Approval of such transfer and agrees that Agent or such
purchaser shall be admitted as a substituted party for the Inland Member upon compliance with the
other conditions to transfer set forth in Section 8.1.4 of the Company Agreement and thereafter shall
have all rights and remedies of a Member in the Company.
Townsend further agrees to send to Agent at the address shown above a copy of any notices
given to Inland Member under the Company Agreement.
THE TOWNSEND COMPANY, LLC,
an Ohio limited liability company
By:
Charles Townsend, Manager
G-2-17
Schedule 1
DESCRIPTION OF ASSIGNORS
1.
Assignor has been using or operating under the name IWR Protective Corporation
without change since September 29, 2004.
Names and Tradenames used within the last five years:
Location of all chief executive offices over last five years:
2901 Butterfield Road
Oak Brook, Illinois 60523
Mailing address: 2901 Butterfield Road
Oak Brook, Illinois 60523
Organizational Identification Number:
Federal Tax Identification Number: 20-1777568
G-2-18
EXHIBIT H
FORM OF ACCOUNT SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
ACCOUNT SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
THIS ACCOUNT SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT (this
“Agreement”), dated as of April ___, 2009, by and between INLAND WESTERN RETAIL REAL
ESTATE TRUST, INC. , a corporation organized under the laws of the state of Maryland (“
Borrower ”) and KEYBANK NATIONAL ASSOCIATION , a national banking association
(“KeyBank”), as Administrative Agent for itself and the other Lenders from time to time parties to
the “Credit Agreement” (as hereinafter defined) (KeyBank in its capacity as Administrative Agent, is
hereinafter referred to as “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated October 15, 2007, as amended
by the Comprehensive Amendment to Credit Agreement dated as of the date hereof among
Borrower, the Lenders and Agent (as the same may be varied, extended, supplemented,
consolidated, amended, replaced, renewed, increased, modified or restated, the “Credit Agreement”),
the Lenders have agreed to provide a secured revolving credit facility to Borrower in the amount of
$200,000,000 (as modified or amended from time to time, the “Loan”), which Loan is evidenced by
those certain Notes made by Borrower to the order of Lenders in the aggregate face amount of
$200,000,000 (such Notes, and each other Note as may be issued under the Credit Agreement, as the
same may be varied, extended, supplemented, consolidated, amended, replaced, renewed, modified,
increased or restated, are hereinafter referred to collectively as the “Note”), the payment of which has
been guarantied by certain Subsidiaries of Borrower as evidenced by that certain Subsidiary
Guaranty, and secured by a pledge of the Borrower’s interest in certain of its Subsidiaries;
WHEREAS, the Lenders and Agent have required, as a condition to making the Loan to
Borrower, that Borrower enter into this Agreement as additional security for the Obligations (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements
set forth hereinbelow, and for other good and valuable consideration, the receipt, adequacy, and
sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:
1.
Defined Terms . Capitalized terms used in this Agreement, but that
are not otherwise expressly defined in this Agreement, shall have the respective meanings given
thereto in the Credit Agreement. In addition, the following terms shall have the following meanings:
Bank : Bank of America, N.A., as depository bank.
Bankruptcy Code . Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.
Collateral : As defined in §2, below.
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Control Agreement : That certain Deposit Account Control Agreement of even date
herewith made by and among Borrower, Agent and Bank with respect to the Deposit Account, in the
form attached hereto as Attachment No. 1 and made a part hereof.
Deposit Account : A segregated deposit account held at Bank with the name “Inland
Western Retail Real Estate Trust, Inc.”, Account No. 5800427196 the title of which account shall be
held in the name of Borrower and shall indicate that, subject to Section 7, funds held therein are held
for the benefit of Agent for the uses and purposes set forth herein, or any successor deposit account
approved by Agent.
Event of Default : As defined in §8, below.
Excess Funds : That portion of the revenues of Borrower and Borrower’s
Subsidiaries from the operation of their Properties, which is distributable to the Borrower as
represented by the amounts remaining in the Holdco Account as a result of deposits therein from
those three certain lockbox accounts maintained by the Borrower’s three management subsidiaries
with Bank for receipt of all revenues from such Properties (collectively, the “Lockboxes”), after
payment of all debt service and operating expenses related to such Properties from the Holdco
Account, and which Borrower hereby irrevocably directs Bank to cause to be transferred from the
Holdco Account to the Deposit Account as provided herein.
Holdco Account : That certain account maintained at Bank by Inland Holdco
Management, LLC, a Delaware limited liability company, which is the sole owner of Borrower’s
three management subsidiaries
UCC : The Uniform Commercial Code as in effect in the State of Illinois.
2.
Security for Obligations . To secure the full and punctual payment and performance
by Borrower of all duties, responsibilities and obligations under this Agreement, the Credit
Agreement, the Note, and the other Loan Documents, together with any and all renewals,
restatements, modifications, consolidations, amendments, increases and extensions thereof (such
duties, responsibilities and obligations are hereinafter referred to as the “Obligations”), Borrower
hereby collaterally assigns, conveys, grants, pledges, hypothecates and transfers to Agent a
first-in-lien-priority continuing security interest in Borrower’s right, title and interest in and to the
Deposit Account and all cash and property, whether now owned or existing or hereafter acquired, in
the Deposit Account, including without limitation, all checks, drafts, wire transfers (whether made or
in the process of being made) and other items deposited in or transferred to the Deposit Account (the
“Collateral”).
3.
Agent’s Control of the Account . Pursuant to the Control Agreement, Bank has
agreed to comply with any instruction (within the meaning of Section 9-104 of the UCC, i.e., an
order directing the disposition of funds in the Deposit Account) originated by the Agent. Subject to
Section 7, the parties acknowledge and agree that by this Agreement and the Control Agreement
Agent shall have sole and exclusive control of the Collateral within the meaning of Section 9-104 of
the UCC. Borrower and Agent agree that the Control Agreement is an authenticated record for the
purposes of Section 9-104(a) of the UCC.
4.
Warranties and Covenants . Borrower hereby warrants and represents to Agent, and
covenants and agrees with Agent, as follows:
H-2
(a)
Borrower is and shall remain the sole, lawful, beneficial and record owner of
the Collateral, free and clear of all liens, restrictions, claims, pledges, encumbrances, charges, claims
of third parties and rights of set off or recoupment whatsoever other than Liens in favor of the Agent
and the Bank hereunder, and Borrower has the full and complete right, power and authority to pledge
and grant a security interest in the Collateral in favor of Agent, in accordance with the terms and
provisions of this Agreement.
(b)
This Agreement creates a valid and binding first-in-lien priority pledge and
assignment of and security interest in the Collateral securing the payment and performance of the
Obligations. Neither Borrower nor any other Person has performed or will perform or permit any
other Person to perform any acts that might prevent Agent from enforcing any of the terms and
conditions of this Agreement or that would limit Agent in any such enforcement.
(c)
There are no accounts maintained by Borrower, any Subsidiary of Borrower
or any other Person for the receipt of Excess Funds other than the Lockboxes, the Holdco Account
and the Deposit Account, or such accounts as are required by individual mortgage lenders for
property level financings, and there are no agreements regarding the distribution or disposition of the
Excess Funds other than this Agreement and the other Loan Documents.
5.
General Covenants . Borrower covenants and agrees with Agent that so long as any
of the Obligations are outstanding or have not been paid or performed:
(a)
Subject to Section 7, Borrower, without the prior written consent of Agent,
which consent may be withheld by Agent in its sole and absolute discretion, shall not directly,
indirectly or by operation of law sell, transfer, assign, dispose of, pledge, convey, option, mortgage,
hypothecate or encumber any of the Collateral.
(b)
Borrower shall at all times defend the Collateral against all claims and
demands of all Persons at any time claiming any interest in the Collateral adverse to Agent’s interest
in the Collateral as granted hereunder.
(c)
Borrower shall pay all taxes and other charges against the Collateral to the
extent due and payable.
(d)
Borrower authorizes Agent, its counsel or its representative, at any time and
from time to time, at the expense of Borrower, to execute and/or file any financing statements or
financing statement amendments or continuations, that describe or relate to the Collateral or any
portion thereof in such jurisdictions as Agent may deem necessary or desirable to perfect its security
interest in any of the Collateral and such financing statements may contain, among other items as
Agent may deem advisable to include therein, the federal tax identification number and
organizational number of Borrower. Borrower will make, execute, acknowledge and deliver or
authorize the execution and delivery of and where appropriate, cause to be recorded and/or filed and
from time to time thereafter be re-recorded and/or refiled at such time in such offices and places as
shall be deemed desirable by Agent any financing statements, further assignments, security
agreements, continuation statements, endorsements, assurances, certificates and other documents, and
perform such other acts as Agent reasonably may deem necessary from time to time to establish and
maintain in favor of Agent, valid and perfected security interests in the Collateral, free of all other
liens, encumbrances, security interests and claims other than the Liens of the Agent
hereunder. Upon any failure of Borrower to do so, Agent may make, execute, record, file, rerecord
and/or refile, acknowledge and deliver any and all such further assignments, security agreements,
financing statements, continuation statements, endorsements, assurances, instruments, certificates
and
H-3
documents for and in the name of Borrower, and Borrower hereby irrevocably appoints Agent the
agent and attorney-in-fact with full power of substitution of Borrower so to do. This power is
coupled with an interest and is irrevocable. Without limiting the generality of the foregoing,
Borrower will obtain such waivers of lien, estoppel certificates, deposit account control agreements
or subordination agreements as Agent may require to insure the priority of its security interest in the
Collateral. Borrower shall also do anything else Agent may reasonably require from time to time to
establish a valid security interest in and to further protect and perfect its security interest in the
Collateral.
(e)
So long as any of the Obligations shall be outstanding, neither Borrower nor
any Subsidiary of Borrower shall open any account for the receipt of Excess Funds other than the
Deposit Account and neither Borrower nor any Subsidiary of Borrower shall enter any agreement
regarding the distribution or disposition of the Excess Funds other than this Agreement.
6.
Establishment and Funding of Deposit Account.
(a)
Establishment of Deposit Account . Borrower has established and currently
maintains the Deposit Account with the Bank and acknowledges that the Deposit Account is a
“deposit account” (as defined in Section 9-102(a)(29) of the UCC).
(b)
Distributions as Property Only of Borrower . Borrower warrants and
represents to, and covenants and agrees with, Agent that all Excess Funds, when transferred from any
account to the Deposit Account, (i) are intended to be and are hereby agreed to be at that time
property of only Borrower, subject, however, in all events, to the security interests granted by this
Agreement to Agent, (ii) shall constitute a distribution from the Borrower’s Subsidiaries to Borrower
and (iii) shall be held by Bank for the benefit of Agent free of any liens or claim on the part of
creditors of the Borrower other than Liens in favor of Agent and the Bank.
(c)
Jurisdiction . Notwithstanding any provision to the contrary in any other
agreement between Borrower and Agent, Borrower and Agent hereby agree that the “bank’s
jurisdiction” as said term is used in Section 9-304 of the UCC is and shall be the State of Illinois as
provided in the Control Agreement and the Laws of such state shall govern the perfection or
nonperfection, and the priority of security interest of Agent, in the Deposit Account.
7.
Transfer of Funds Out of Deposit Account . Notwithstanding anything in this
Agreement to the contrary, provided no Event of Default has occurred and is then continuing, Agent
shall permit Bank, in accordance with its customary cash management practices, to sweep all funds
from the Deposit Account on a daily basis to an account designated by Borrower. Each transfer of
funds from the Deposit Account shall be made only to the extent that immediately available funds are
on deposit in the Deposit Account, and Agent shall not have any responsibility to make additional
funds available in the event that funds on deposit in the Deposit Account are insufficient. From and
after Bank’s transfer of such funds, Agent shall have no further liability or responsibility with respect
to, or control over, or security interest in, the funds so transferred. Notwithstanding anything in this
Agreement to the contrary, if an Event of Default has occurred and is then continuing, Agent is
hereby irrevocably authorized to direct Bank to hold all funds in the Deposit Account and only
release such funds on a weekly basis to pay such expenses as the Administrative Agent has approved
in writing in response to a written payment direction from Borrower certifying the proposed amounts
and payees with respect to the requested disbursements describing in detail by category the expenses
for such week.
H-4
8.
Event of Default . An Event of Default shall exist hereunder upon the occurrence of
any of the following:
(a)
Any warranty, representation or statement made by or on behalf of Borrower
in this Agreement proves untrue or misleading in any material respect upon the date when made or
deemed to have been made or repeated; or
(b)
Borrower shall fail to, or Borrower shall fail to cause any other Person to,
duly and fully comply with any covenant, condition or agreement in §5(a) of this Agreement; or
(c)
Borrower shall fail to duly and fully comply with any other covenant,
condition or agreement of this Agreement (other than those specified in subsection (b) above or any
default excluded from any provision of cure of defaults contained in the Credit Agreement) and the
same is not cured in the applicable time period provided in the Credit Agreement, if any; or
(d)
The occurrence of a “Default” (as defined in the Credit Agreement); or
(e)
Any amendment to or termination of a financing statement naming Borrower
as debtor and Agent as secured party, or any correction statement with respect thereto, is filed in any
jurisdiction by any party other than Agent or Agent’s counsel without the prior written consent of
Agent and the effect of such filing is not completely nullified to the reasonable satisfaction of Agent
within ten (10) Business Days after written notice to Borrower thereof.
9.
Remedies .
(a)
Upon the occurrence and during the continuance of an Event of Default,
Agent, without limitation, may:
(i)
without notice to Borrower, except as required by Law, and at any
time or from time to time, charge, set-off, and otherwise apply all or any part of the
Collateral against the Obligations or any part thereof;
(ii)
in its sole discretion, at any time and from time to time, exercise any
and all rights and remedies available to it under this Agreement, and/or as a secured
party under the UCC; and
(iii)
demand, collect, take possession of, receipt for, settle, compromise,
adjust, sue for, foreclose, or otherwise realize upon the Collateral (or any portion
thereof) as Agent may determine in its sole discretion.
(b)
Borrower hereby expressly waives, to the fullest extent permitted by Law,
presentment, demand, protest or any notice of any kind in connection with this Agreement or the
Collateral. Agent may take any action deemed by Agent to be necessary or appropriate to the
enforcement of the rights and remedies of Agent under this Agreement, and/or under any of the other
Loan Documents. The remedies of Agent shall include, without limitation, all rights and remedies
specified in this Agreement and the other Loan Documents, all remedies of Agent under applicable
Law, and the remedies of a secured party under the UCC as enacted in the State of Ohio, regardless
of whether the UCC has been enacted or enacted in that form in any other jurisdiction in which such
right or remedy is asserted.
H-5
(c)
If Borrower fails to perform any agreement or covenant contained in this
Agreement beyond any applicable period for notice and cure, Agent may itself perform, or cause to
be performed, any agreement or covenant of Borrower contained in this Agreement that Borrower
shall fail to perform, and the cost of such performance, together with any reasonable expenses,
including reasonable attorneys’ fees actually incurred (including attorneys’ fees incurred in any
appeal) by Agent in connection therewith, shall be payable by Borrower upon demand and shall
constitute a part of the Obligations and shall bear interest at the rate for overdue payments under the
Credit Agreement.
(d)
Whether or not an Event of Default has occurred and whether or not Agent is
the absolute owner of the Collateral, Agent may take such action as Agent may deem reasonably
necessary to protect the Collateral or its security interest therein, Agent being hereby authorized to
pay, purchase, contest and compromise any encumbrance, charge or lien that in the reasonable
judgment of Agent appears to be prior or superior to its security interest and in exercising any such
powers and authority to pay reasonably necessary expenses, employ counsel and pay reasonable
attorney’s fees. Any such advances made or expenses incurred by Agent shall constitute a part of the
Obligations, shall be payable upon demand and shall bear interest at the rate for overdue payments
under the Credit Agreement.
10.
Duties of Agent . The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Such
care as Agent gives to the safekeeping of its own property of like kind shall constitute reasonable
care of the Collateral when in Agent’s possession; provided that Agent shall not be required to make
any presentment, demand or protest or give any notice of nonperformance, dishonor, protest or of any
other nature and need not take any action to preserve any rights against any prior party or any other
Person in connection with the Indebtedness or with respect to the Collateral. Agent shall not have
any responsibility or liability for the collection of any Collateral or by reason of any invalidity, lack
of value or uncollectability of any of the payments received by it.
11.
Indemnification .
(a)
It is specifically understood and agreed that this Agreement shall not operate
to place any responsibility or obligation whatsoever upon Agent, or cause Agent to be, or to be
deemed to be, a partner, shareholder or member, as applicable in Borrower and that in accepting this
Agreement, Agent does not assume or agree to perform at any time whatsoever any obligation or
duty of Borrower relating to the Collateral or any other mortgage, indenture, contract, agreement or
instrument to which Borrower is a party or to which it is subject, all of which obligations and duties
shall be and remain with and upon Borrower.
(b)
Borrower agrees to indemnify, defend and hold Agent and its officers,
directors, agents and employees harmless from and against any and all claims, expenses, losses and
liabilities growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement) or acts taken or omitted by Agent hereunder or in connection
herewith, except claims, expenses, losses or liabilities arising from Agent’s gross negligence or
willful misconduct.
(c)
Borrower upon demand shall pay to Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and disbursements of counsel
actually incurred (including those incurred in any appeal), and of any experts and agents, that Agent
may incur in connection with (i) the administration of this Agreement, (ii) the sale of, collection
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from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the
rights of Agent hereunder, or (iv) the failure by Borrower to perform or observe any of the provisions
hereof beyond any applicable period for notice and cure.
12.
Security Interest Absolute . All rights of Agent, and the security interests hereunder,
and all of the obligations secured hereby, shall be absolute and unconditional, irrespective of:
(a)
Any lack of validity or enforceability of the Loan Documents or any other
agreement or instrument relating thereto;
(b)
Any change in the time (including the extension of the maturity date of the
Note), manner or place of payment of, or in any other term of, all or any of the Obligations or any
other amendment or waiver of or any consent to any departure from the Loan Documents;
(c)
Any exchange, release or nonperfection of any other collateral for the
Obligations, or any release or amendment or waiver of or consent to departure from any of the Loan
Documents with respect to all or any part of the Obligations; or
(d)
Any other circumstance (other than payment of the Obligations in full) that
might otherwise constitute a defense available to, or a discharge of, Borrower or any third party for
the Obligations or any part thereof.
13.
Amendments and Waivers . No amendment or waiver of any provision of this
Agreement nor consent to any departure therefrom shall in any event be effective unless the same
shall be in writing and signed by Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No delay or omission of Agent to
exercise any right, power or remedy accruing upon any Event of Default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such Event of Default, or
acquiescence therein; and every right, power and remedy given by this Agreement to Agent may be
exercised from time to time and as often as may be deemed expedient by Agent. Failure on the part
of Agent to complain of any act or failure to act that constitutes an Event of Default, irrespective of
how long such failure continues, shall not constitute a waiver by Agent of Agent’s rights hereunder
or impair any rights, powers or remedies consequent on any such or Event of Default. Borrower
hereby waives to the extent permitted by Law all rights that Borrower has or may have under and by
virtue of the UCC or in any other state, and any federal, state, county or municipal statute, regulation,
ordinance, Constitution or charter, now or hereafter existing, similar in effect thereto providing any
right of Borrower to notice and to a judicial hearing prior to seizure by Agent of any of the
Collateral. Borrower hereby waives and renounces for itself, its successors and assigns,
presentment, demand, protest, advertisement or notice of any kind (except for any notice required by
Law or the Loan Documents) and all rights to the benefits of any statute of limitations and any
moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, homestead,
redemption and appraisement now provided or that may hereafter be provided by the Constitution
and laws of the United States and of any state thereof, both as to itself and in and to all of its
property, real and personal, against the enforcement of this Agreement and the collection of any of
the Obligations.
14.
Continuing Security Interest; Release of Collateral . This Agreement shall create a
continuing security interest in the Collateral and shall (a) remain in full force and effect until the
performance of all obligations of Borrower under the Credit Agreement and the indefeasible payment
in full of the Obligations, (b) be binding upon Borrower and their permitted successors and assigns,
and (c) inure, together with the rights and remedies of Agent hereunder, to the benefit of Bank,
Agent and their respective successors, transferees and assigns. Upon the performance of all
obligations of
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Borrower under the Credit Agreement and the indefeasible payment in full of the Obligations, the
security interest granted hereby shall terminate and all rights to the Collateral shall revert to
Borrower. Upon any such termination, Agent will at Borrower’s expense execute and deliver to
Borrower such documents as Borrower shall reasonably request to evidence such termination and the
release of any lien created by this Agreement. No third Person shall be or be deemed to be a
beneficiary of this Agreement.
15.
Assignment Binding Upon Successors . This Agreement may be assigned by
Borrower only with the prior written consent of Agent. All rights of Agent under this Agreement
shall inure to the benefit of its successors and assigns. All obligations of Borrower shall bind its
heirs, executors, administrators, successors and assigns.
16.
Governing Law; Terms . THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF ILLINOIS (EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS AND CHOICE OF LAW).
17.
Notices . Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement shall be deemed to have been properly given or served if given in
the manner provided in the Credit Agreement.
18.
No Unwritten Agreements . THE AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
19.
Cash Collateral . In the event that Borrower becomes the subject of a proceeding
under the Bankruptcy Code, the parties hereto agree that the Collateral shall constitute “cash
collateral” of Agent under Section 363 of the Bankruptcy Code.
20.
Miscellaneous . Time is of the essence of this Agreement. Title or captions of
paragraphs hereof are for convenience only and neither limit nor amplify the provisions
hereof. References to a particular section refer to that section of this Agreement unless otherwise
indicated. If, for any circumstances whatsoever, fulfillment of any provision of this Agreement shall
involve transcending the limit of validity presently prescribed by applicable Law, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or provision herein operates
or would prospectively operate to invalidate this Agreement, in whole or in part, then such clause or
provision only shall be held for naught, as though not herein contained, and the remainder of this
Agreement shall remain operative and in full force and effect.
21.
Counterparts . This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original. Said counterparts shall constitute but one and the same
instrument and shall be binding upon each of the undersigned individually as fully and completely as
if all had signed but one instrument.
[ Remainder Of Page Intentionally Left Blank ]
H-8
IN WITNESS WHEREOF, the parties hereto, acting by and through their respective duly
authorized officers and/or other representatives, have duly executed this Agreement, under seal, as of
the day and year first above written.
BORROWER :
INLAND WESTERN RETAIL REAL ESTATE
TRUST , INC. , a Maryland corporation
By:
Steven P. Grimes
Chief Operating Officer and Chief
Financial Officer
AGENT :
KEYBANK NATIONAL ASSOCIATION , a
national banking association, as Administrative Agent
By:
Kevin P. Murray
Senior Vice President
H-9
ATTACHMENT NO. 1 TO ACCOUNT SECURITY,
PLEDGE AND ASSIGNMENT AGREEMENT
Form of Deposit Account Control Agreement
H-10
EXHIBIT I
FORM OF MORTGAGE
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[CONFORM TO LOCAL RECORDING REQUIREMENTS]
MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING
MADE BY
[______________________________________________],
as Mortgagor
to
KEYBANK NATIONAL ASSOCIATION,
not individually but as Administrative Agent
for itself and certain other Lenders,
as Mortgagee
Dated as of: [___________________]
PREPARED BY AND UPON RECORDATION RETURN TO:
Sonnenschein Nath & Rosenthal LLP
233 South Wacker Drive, Suite 7800
Chicago, Illinois 60606
Attention: Patrick G. Moran, Esq.
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MORTGAGE,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING
Project Commonly Known As
[“_____________________________”]
THIS MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this “ Mortgage ”) is made as of [_______________], by [_________], a
Delaware limited liability company (“ Mortgagor ”) whose address is c/o Inland Western Retail Real
Estate Trust, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523, for the benefit of KEYBANK
NATIONAL ASSOCIATION, as administrative agent (together with its successors and assigns in
such capacity, the “ Mortgagee ”) for itself and one or more Lenders (as defined in the Credit
Agreement described below), whose address is 127 Public Square, Cleveland, Ohio 44114.
Grant and Secured Obligations .
Grant . Inland Western Retail Real Estate Trust, Inc., a corporation organized under the laws
of the State of Maryland (the “ Borrower ”), KeyBank National Association, individually and as
administrative agent, and certain other lenders are parties to that certain Credit Agreement dated as of
October 15, 2007, as amended by a Comprehensive Amendment to Credit Agreement dated April __,
2009 (as it may be amended, modified and/or restated from time to time, the “ Credit Agreement
”). All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to
such terms in the Credit Agreement. Borrower has executed and delivered to the Lenders certain
promissory notes and may in the future execute and deliver to the Lenders additional promissory
notes (the promissory notes, made in favor of the Lenders, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, or new promissory notes to new Lenders
under the Credit Agreement, are collectively referred to herein as the “ Notes ”), in and by which the
Borrower promises to pay the principal of all Loans under such Credit Agreement and interest at the
rate and in installments as provided in the Credit Agreement, with a final payment of the outstanding
principal balance and accrued and unpaid interest being due on or before October 14, 2010, subject to
extension to October 14, 2011 in accordance with the terms of the Credit Agreement. Mortgagor has
guaranteed payment and performance of Borrower’s obligations under the Notes and the Credit
Agreement pursuant to a Subsidiary Guaranty (the “ Guaranty ”). The maximum aggregate principal
amount of the Loans evidenced by the Notes shall be $200,000,000. The indebtedness secured
hereby shall be governed by the terms and conditions of the Credit Agreement.
In consideration of the debt evidenced by the Notes and the Commitments evidenced by the
Credit Agreement and to secure the timely payment of both principal and interest in accordance with
the terms and provisions of the Notes and the Guaranty and in accordance with the terms, provisions
and limitations of this Mortgage, to secure the payment of any and all amounts advanced by the
Mortgagee with respect to the Premises for the payment of taxes, assessments, insurance premiums
or any other costs incurred in the protection of the Premises, and to secure the performance of the
covenants and agreements contained herein and in the Notes, the Credit Agreement, the Subsidiary
Guaranty, the Security Documents and any other documents evidencing or securing the loans secured
hereby or delivered to Mortgagee pursuant to the Credit Agreement (collectively, the “ Loan
Documents ”) to be performed by Borrower or any Guarantor, and for the purpose of securing
payment and performance of the Secured Obligations defined and described in Section 1.2 below,
Mortgagor hereby irrevocably and unconditionally grants, bargains, sells, conveys, mortgages and
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warrants to Mortgagee, with power of sale and with right of entry and possession, all estate, right,
title and interest which Mortgagor now has or may later acquire in and to the following property (all
or any part of such property, or any interest in all or any part of it, as the context may require, the “
Property ”):
The real property located in the County of [_____], State of [________], as described
in Exhibit A , together with all existing and future easements and rights affording access to it
(the “ Premises ”); together with
All buildings, structures and improvements now located or later to be constructed on
the Premises (the “ Improvements ”); together with
All existing and future appurtenances, privileges, easements, franchises and
tenements of the Premises, including all minerals, oil, gas, other hydrocarbons and associated
substances, sulphur, nitrogen, carbon dioxide, helium and other commercially valuable
substances which may be in, under or produced from any part of the Premises, all
development rights and credits, air rights, water, water rights (whether riparian, appropriative
or otherwise, and whether or not appurtenant) and water stock, and any Premises lying in the
streets, roads or avenues, open or proposed, in front of or adjoining the Premises and
Improvements; together with
All existing and future leases, subleases, subtenancies, licenses, occupancy
agreements and concessions (“ Leases ”) relating to the use and enjoyment of all or any part
of the Premises and Improvements, and any and all guaranties and other agreements relating
to or made in connection with any of such Leases; together with
All real property and improvements on it, and all appurtenances and other property
and interests of any kind or character, whether described in Exhibit A or not, which may be
reasonably necessary or desirable to promote the present and any reasonable future beneficial
use and enjoyment of the Premises and Improvements; together with
All goods, materials, supplies, chattels, furniture, fixtures, equipment and machinery
now or later to be attached to, placed in or on, or used in connection with the use, enjoyment,
occupancy or operation of all or any part of the Premises and Improvements, whether stored
on the Premises or elsewhere, including all pumping plants, engines, pipes, ditches and
flumes, and also all gas, electric, cooking, heating, cooling, air conditioning, lighting,
refrigeration and plumbing fixtures and equipment, all of which shall be considered to the
fullest extent of the law to be real property for purposes of this Mortgage and any
manufacturer’s warranties with respect thereto; together with
All building materials, equipment, work in process or other personal property of any
kind, whether stored on the Premises or elsewhere, which have been or later will be acquired
for the purpose of being delivered to, incorporated into or installed in or about the Premises
or Improvements; together with
All of Mortgagor’s interest in and to all operating accounts pertaining to the Property;
together with
All rights to the payment of money, accounts, accounts receivable, reserves, deferred
payments, refunds (including real estate tax refunds), cost savings, payments and deposits,
whether now or later to be received from third parties (including all earnest money sales
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deposits) or deposited by Mortgagor with third parties (including all utility deposits), contract
rights (including any property management agreements), development and use rights,
governmental permits and licenses, applications, architectural and engineering plans,
specifications and drawings, as-built drawings, chattel paper, instruments, documents, notes,
drafts and letters of credit (other than letters of credit in favor of Mortgagee), which arise
from or relate to construction on the Premises or to any business now or later to be conducted
on it, or to the Premises and Improvements generally and any builder’s or manufacturer’s
warranties with respect thereto; together with
All insurance policies pertaining to the Premises and all proceeds, including all
claims to and demands for them, of the voluntary or involuntary conversion of any of the
Premises, Improvements or the other property described above into cash or liquidated claims,
including proceeds of all present and future fire, hazard or casualty insurance policies and all
condemnation awards or payments now or later to be made by any public body or decree by
any court of competent jurisdiction for any taking or in connection with any condemnation or
eminent domain proceeding, and all causes of action and their proceeds for any damage or
injury to the Premises, Improvements or the other property described above or any part of
them, or breach of warranty in connection with the construction of the Improvements,
including causes of action arising in tort, contract, fraud or concealment of a material fact;
together with
All books and records pertaining to any and all of the property described above,
including computer-readable memory and any computer hardware or software necessary to
access and process such memory (“ Books and Records ”); together with
All proceeds of, additions and accretions to, substitutions and replacements for, and
changes in any of the property described above.
Secured Obligations .
Mortgagor makes the grant, conveyance, and mortgage set forth in Section 1.1 above,
and grants the security interest set forth in Section 3 below for the purpose of securing the
following obligations (the “ Secured Obligations ”) in any order of priority that Mortgagee
may choose:
Payment of all obligations at any time owing under the Notes under the terms
of the Credit Agreement; and
Payment and performance of all obligations of Mortgagor under this
Mortgage; and
Payment and performance of all other obligations of the Borrower and/or any
Subsidiary Guarantor(s) under the other Loan Documents; and
Payment and performance of all future advances and other obligations that
Mortgagor or any successor in ownership of all or part of the Property may agree to
pay and/or perform (whether as principal, surety or guarantor) for the benefit of
Mortgagee, when a writing evidences the parties’ agreement that the advance or
obligation be secured by this Mortgage; and
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Payment and performance of all modifications, amendments, extensions, and
renewals, however evidenced, of any of the Secured Obligations.
All persons who may have or acquire an interest in all or any part of the Property will
be considered to have notice of, and will be bound by, the terms of the Secured Obligations
and each other agreement or instrument made or entered into in connection with each of the
Secured Obligations. Such terms include any provisions in the Note or the Credit Agreement
which permit borrowing, repayment and reborrowing, or which provide that the interest rate
on one or more of the Secured Obligations may vary from time to time.
Assignment of Rents .
Assignment . Mortgagor hereby irrevocably, absolutely, presently and unconditionally
assigns to Mortgagee all of Mortgagor’s title and interest, if any, in all existing and future Leases
relating to the use and enjoyment of all or any part of the Premises and Improvements, and any and
all guaranties and other agreements relating to or made in connection with any of such Leases. 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 Leases or otherwise impose any obligation
on Mortgagee. Mortgagor hereby irrevocably, absolutely, presently and unconditionally assigns to
Mortgagee all rents, sublease rents, royalties, issues, profits, revenue, income, accounts, proceeds and
other benefits of the Property, whether now due, past due or to become due, including all prepaid
rents and security deposits, and including any termination payments under any Lease or sublease
(some or all collectively, as the context may require, “ Rents ”). This is an absolute assignment, not
an assignment for security only.
Grant of License . Mortgagee hereby confers upon Mortgagor a license (“ License ”) to
collect and retain the Rents as they become due and payable, so long as no Default, as defined in
Section 6.2 below, shall exist and be continuing. If a Default has occurred and is continuing,
Mortgagee shall have the right, which it may choose to exercise in its sole discretion, to terminate
this License without notice to or demand upon Mortgagor, and without regard to the adequacy of
Mortgagee’s security under this Mortgage.
Collection and Application of Rents . Subject to the License granted to Mortgagor under
Section 2.2 above, Mortgagee has the right, power and authority to collect any and all
Rents. Mortgagor hereby appoints Mortgagee its attorney-in-fact to perform any and all of the
following acts, if and at the times when Mortgagee in its sole discretion may so choose:
Demand, receive and enforce payment of any and all Rents; or
Give receipts, releases and satisfactions for any and all Rents; or
Sue either in the name of Mortgagor or in the name of Mortgagee for any and all
Rents.
Mortgagee and Mortgagor agree that the mere recordation of the assignment granted herein entitles
Mortgagee immediately to collect and receive rents upon the occurrence of a Default, as defined in
Section 6.2 , without first taking any acts of enforcement under applicable law, such as, but not
limited to, providing notice to Mortgagor, filing foreclosure proceedings, or seeking and/or obtaining
the appointment of a receiver. Further, Mortgagee’s right to the Rents does not depend on whether
or not Mortgagee takes possession of the Property as permitted under Subsection 6.3(c) . In
Mortgagee’s sole discretion, Mortgagee may choose to collect Rents either with or without taking
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possession of the Property. Mortgagee shall apply all Rents collected by it in the manner provided
under Section 6.6 . If a Default occurs while Mortgagee is in possession of all or part of the Property
and is collecting and applying Rents as permitted under this Mortgage, Mortgagee and any receiver
shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them
under this Mortgage and at law or in equity.
Mortgagee Not Responsible . Under no circumstances shall Mortgagee have any duty to
produce Rents from the Property. Regardless of whether or not Mortgagee, in person or by agent,
takes actual possession of the Premises and Improvements, unless Mortgagee agrees in writing to the
contrary, Mortgagee is not and shall not be deemed to be:
A “mortgagee in possession” for any purpose; or
Responsible for performing any of the obligations of the lessor under any Lease; or
Responsible for any waste committed by lessees or any other parties, any dangerous
or defective condition of the Property, or any negligence in the management, upkeep, repair
or control of the Property, unless caused by the gross negligence, willful misconduct or bad
faith of Mortgagee; or
Liable in any manner for the Property or the use, occupancy, enjoyment or operation
of all or any part of it.
Leasing . Mortgagor shall not accept any deposit or prepayment of rents under the Leases
for any rental period exceeding one (1) month without Mortgagee’s prior written
consent. Mortgagor covenants and agrees that it shall not enter into, modify, waive or release any party
from the performance or observance of any material obligation or condition, or terminate or accept the
surrender, of any Lease (including, but not limited to, any guaranty, letter of credit or other credit
support thereof) (each of the foregoing circumstances being a “ Material Lease Event ”) which
affects any one space comprising 10,000 square feet or more of gross leaseable area (a “ Major Lease
”), without the prior written approval of Mortgagee in each instance, which approval shall not be
unreasonably withheld. Each request for approval shall be made in writing to Mortgagee and shall
include the following in all capital, bold and block letters:
“THE FOLLOWING REQUEST REQUIRES A RESPONSE
WITHIN 15 DAYS OF RECEIPT. FAILURE TO DO SO WILL BE
DEEMED AN APPROVAL OF THE REQUEST.”
Failure of Mortgagee to approve or disapprove a Material Lease Event within fifteen (15) days after
receipt of such written request and all documents and information reasonably required by Mortgagee,
shall be deemed approval, provided that the written request for approval specifically mentioned the
same as required above.
Grant of Security Interest .
Security Agreement . The parties intend for this Mortgage to create a lien on the Property,
and an absolute assignment of the Leases and Rents, all in favor of Mortgagee. The parties
acknowledge that some of the Property and some or all of the Rents may be determined under
applicable law to be personal property or fixtures. To the extent that any Property, Leases or Rents
may be or be determined to be personal property, Mortgagor as debtor hereby grants Mortgagee as
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secured party a security interest in all such Property, Leases and Rents, to secure payment and
performance of the Secured Obligations. This Mortgage constitutes a security agreement under the
Uniform Commercial Code of the State in which the Property is located, covering all such Property,
Leases and Rents.
Financing Statements . Mortgagor hereby authorizes Mortgagee to file one or more
financing statements. In addition, Mortgagor shall execute such other documents as Mortgagee may
from time to time require to perfect or continue the perfection of Mortgagee’s security interest in any
Property, Leases or Rents. As provided in Section 5.10 below, Mortgagor shall pay all fees and
costs that Mortgagee may incur in filing such documents in public offices and in obtaining such
record searches as Mortgagee may reasonably require. In case Mortgagor fails to execute any
financing statements or other documents for the perfection or continuation of any security interest,
Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact to execute any such
documents on its behalf. If any financing statement or other document is filed in the records
normally pertaining to personal property, that filing shall never be construed as in any way
derogating from or impairing this Mortgage or the rights or obligations of the parties under it.
Fixture Filing .
This Mortgage constitutes a financing statement filed as a fixture filing under Article 9 of the
Uniform Commercial Code in the State in which the Property is located, as amended or recodified
from time to time, covering any Property which now is or later may become fixtures attached to the
Premises or Improvements. For this purpose, the respective addresses of Mortgagor, as debtor, and
Mortgagee, as secured party, are as set forth in the preamble of this Mortgage.
Rights and Duties of the Parties .
Representations and Warranties . Mortgagor represents and warrants that:
Mortgagor lawfully possesses and holds fee simple title to all of the Premises and
Improvements;
Mortgagor has or will have good title to all Property other than the Premises and
Improvements;
Mortgagor has the full and unlimited power, right and authority to encumber the
Property and assign the Rents;
This Mortgage creates a first and prior lien on the Property;
The Property includes all property and rights which may be reasonably necessary or
desirable to promote the present and any reasonable future beneficial use and enjoyment of
the Premises and Improvements;
Mortgagor owns any Property which is personal property free and clear of any
security agreements, reservations of title or conditional sales contracts, and there is no
financing statement affecting such personal property on file in any public office;
Mortgagor’s place of business, or its chief executive office if it has more than one
place of business, is located at the address set forth in the preamble of this Mortgage;
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There has been no material adverse change in the physical or financial condition of
the Property since the most recent date on which Mortgagor delivered to Mortgagee rent rolls
and other information regarding the physical and financial condition of the Property.
Taxes, and Assessments . Mortgagor shall, prior to delinquency, pay or cause to be paid
each installment of all taxes and special assessments of every kind, now or hereafter levied against
the Property or any part thereof, without notice or demand, and shall provide Mortgagee with
evidence of the payment of same upon the request of Mortgagee. Mortgagor shall pay all taxes and
assessments which may be levied upon Mortgagee’s or the Lenders’ interest herein or upon this
Mortgage or the debt secured hereby (excluding any income taxes or similar charges imposed upon
Mortgagee or the Lenders), without regard to any law that may be enacted imposing payment of the
whole or any part thereof upon the Mortgagee or any Lender. Notwithstanding anything contained
in this Section to the contrary, Mortgagor shall have the right to pay or cause to be paid any such tax
or special assessment under protest or to otherwise contest any such tax or special assessment but
only if (i) such contest has the effect of preventing the collection of such tax or special assessment so
contested and also prevent the sale or forfeiture of the Property or any part thereof or any interest
therein, (ii) Mortgagor promptly notifies Mortgagee in writing of its intent to contest such tax or
special assessment, and (iii) if so requested in writing by Mortgagee, Mortgagor has deposited
security in form and amount reasonably satisfactory to Mortgagee, and increases the amount of such
security so deposited promptly after Mortgagee’s request therefor. Mortgagor shall prosecute or
cause the prosecution of all such contest actions in good faith and with due diligence and, promptly
after request from Mortgagee, report to Mortgagee on the status and results of such contest actions. If
any such contest action is unsuccessful Mortgagor shall promptly pay all sums determined to be due
as required by the final order or ruling in such contest action and in any event such payment shall be
made prior to the date on which the Property may be sold, lost or forfeited under any writ or order
issued pursuant to such final order or ruling.
Performance of Secured Obligations. Mortgagor shall promptly pay and perform each
Secured Obligation in accordance with its terms.
Liens, Charges and Encumbrances . Mortgagor shall not permit any lien, charge or
encumbrance on or against the Property other than those permitted under clauses (i)-(iv) of Section
6.16 of the Credit Agreement and shall immediately discharge any such unpermitted lien, charge or
encumbrance on the Property promptly after written demand from the Mortgagee.
Damages, Restoration, and Insurance Proceeds . As long as no Default has occurred and is
then continuing, all insurance proceeds for losses at the Property of less than $1,000,000.00 shall be
adjusted with and payable to the Mortgagor. In case of loss, Mortgagee shall have the right (but not
the obligation) to participate in and reasonably approve the settlement of any insurance claim in
excess of $1,000,000.00, and with respect to claims in excess of $1,000,000.00, Mortgagee is
authorized to collect and receive any insurance money for such claims.
So long as no Default has occurred and is then continuing, and to the extent that either (i)
Mortgagor is obligated to carry out such repair or restoration under one or more of the Leases or (ii)
the costs of restoration do not exceed thirty percent (30%) of the value of the Improvements
immediately prior to such casualty, the Mortgagee shall make such insurance proceeds available to
pay for such costs of repair and restoration on a monthly basis during such repair and restoration. The
Premises shall be so restored or rebuilt as to be substantially the same quality and character as the
Premises were prior to such damage or destruction in accordance with the original plans and
specifications or to such other condition as Mortgagee shall reasonably approve in writing. If the
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conditions to Mortgagee’s obligation to make such insurance proceeds are not satisfied, the
Mortgagee shall have the right, if so directed by the Required Lenders, to apply such insurance
proceeds to payment of the Secured Obligations, whether due or not. .
If Mortgagee is holding any such insurance proceeds, any request by Mortgagor for a
disbursement by Mortgagee of fire or casualty insurance proceeds or of funds deposited by
Mortgagor with Mortgagee pursuant to this Section 5.5 shall be conditioned upon Borrower’s
providing to Mortgagee: updated title insurance; satisfactory evidence, as reasonably determined by
Mortgagee, that the Premises shall be so restored or rebuilt as to be of at least equal value and quality
and substantially the same character as the Premises were prior to such damage or destruction in
accordance with the original plans and specifications or to such other condition as Mortgagee shall
reasonably approve in writing; satisfactory evidence of the estimated cost of completion thereof; and
with such architect’s certificates, waivers of lien, contractors’ sworn statements and other evidence of
cost and of payments as Mortgagee may reasonably require and approve. The undisbursed balance
of insurance proceeds shall at all times be sufficient to pay for the cost of completion of the work free
and clear of liens and if such proceeds are insufficient, Mortgagor shall deposit the amount of such
deficiency with Mortgagee prior to the disbursement by Mortgagee of any insurance proceeds.
Condemnation Proceeds . Mortgagor hereby assigns, transfers and sets over unto Mortgagee
its entire interest in the proceeds (the “ Condemnation Proceeds ”) of any award or any claim for
damages for any of the Property taken or damaged under the power of eminent domain or by
condemnation or any transaction in lieu of condemnation (“ Condemnation ”), unless,
notwithstanding the foregoing, such taking, damage or condemnation does not cause a material
diminution in the value of the Premises. So long as the portion of the Premises taken in such
Condemnation does not exceed fifteen percent (15%) of the total square footage of the Premises and
the portion of the Improvements taken in such Condemnation does not exceed five percent (5%) of
the total gross leaseable area of the Improvements, Mortgagee shall be obligated to make the
Condemnation Proceeds available to Mortgagor for the restoration of the Property, if Mortgagor
satisfies all of the conditions set forth in Section 5.5 hereof for disbursement of insurance
proceeds. In all other cases Mortgagee shall have the right, if so directed by the Required Lenders,
to apply the Condemnation Proceeds to payment of the Secured Obligations, whether due or not. If
the Condemnation Proceeds are required to be used as aforesaid to reimburse Mortgagor for the cost
of rebuilding or restoring buildings or improvements on the Property, or if Mortgagee elects that the
Condemnation Proceeds be so used, and the buildings and other improvements shall be rebuilt or
restored, the Condemnation Proceeds shall be paid out in the same manner as is provided in
Section 5.5 hereof for the payment of insurance proceeds toward the cost of rebuilding or restoration
of such buildings and other improvements. Any surplus which may remain out of the Condemnation
Proceeds after payment of such cost of rebuilding or restoration shall, at the option of Mortgagee, be
applied on account of the indebtedness secured hereby or be paid to any other party entitled thereto.
Maintenance and Preservation of Property .
Mortgagor shall keep the Property in good condition and repair, ordinary wear and
tear excepted, as provided in Section 6.8 of the Credit Agreement.
Mortgagor shall not remove or demolish the Property or any material part of it in any
way, or materially alter, restore or add to the Property, or initiate or allow any material
change or variance in any zoning or other Premises use classification which adversely affects
the Property or any material part of it, except with Mortgagee’s express prior written consent
in each instance.
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Mortgagor shall not commit or allow any act upon or use of the Property which
would violate: (i) any applicable Laws or order of any Governmental Authority, whether
now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or
private covenant, condition, restriction or equitable servitude affecting the
Property. Mortgagor shall not bring or keep any article on the Property or cause or allow any
condition to exist on it, if that could invalidate or would be prohibited by any insurance
coverage required to be maintained by Mortgagor on the Property or any part of it under the
Credit Agreement.
Mortgagor shall not commit or allow waste of the Property, including those acts or
omissions characterized under the Credit Agreement as waste which arises out of Materials of
Environmental Concern.
Mortgagor shall perform all other acts which from the character or use of the Property
may be reasonably necessary to maintain and preserve its value.
(f)
Mortgagor shall insure the Property as required by Section 5.17 of the Credit
Agreement and shall also carry worker’s compensation insurance as and to the extent
required by law. During the term of the Credit Agreement, the premium on each such
insurance policy shall be paid on or prior to the date when due and the policy term renewed
annually in the same form and with at least the same coverage as the preceding year, with
Mortgagee to receive notice of renewal at least thirty (30) days prior to expiration. Further,
no such policy shall be subject to cancellation, nonrenewal or reduction of coverage unless
the insurer has given Mortgagee at least thirty (30) days' (or in the case of non-payment of
premium, ten (10) days) prior written notice of such action. All policies described herein
must be issued by insurance companies and agencies licensed by the Insurance Commission
(or comparable agency) of the state in which the Property is located (the " State ") to conduct
business in the State and approved by Mortgagee. Mortgagee shall have the right to approve
each and every insurance carrier and policy (in form and content), such approval not to be
unreasonably withheld. All policies shall include a standard, non-contributory mortgagee
clause naming Mortgagee as additional insured under all liability insurance policies, as first
mortgagee and loss payee on all property insurance policies and as the loss payee on all loss
of rents insurance policies.
Releases, Extensions, Modifications and Additional Security . From time to time, Mortgagee
may perform any of the following acts without incurring any liability or giving notice to any person:
Release any person liable for payment of any Secured Obligation;
Extend the time for payment, or otherwise alter the terms of payment, of any Secured
Obligation;
Accept additional real or personal property of any kind as security for any Secured
Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other
instruments of security;
Alter, substitute or release any property securing the Secured Obligations;
Consent to the making of any plat or map of the Property or any part of it;
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Join in granting any easement or creating any restriction affecting the Property; or
Join in any subordination or other agreement affecting this Mortgage or the lien of it;
or
Release the Property or any part of it.
Release . If (a) Borrower shall fully pay all principal and interest on the Notes, and all other
indebtedness secured hereby and comply with all of the other terms and provisions hereof to be
performed and complied with by Mortgagor, and terminate the obligations of the Lenders to make
additional advances under the Credit Agreement; or (b) Borrower shall comply with the terms and
conditions as set forth in Section 2.3(d) of the Credit Agreement for release of this Mortgage,
Mortgagee, upon written request of Mortgagor stating that the requirements of either clause (a) or
clause (b) above have been satisfied, shall release this Mortgage and the lien thereof by proper
instrument upon payment and discharge of the amounts required under the Credit Agreement and
payment of any filing fee in connection with such release. Mortgagor shall pay any costs of
preparation and recordation of such release.
Compensation, Exculpation, Indemnification .
Mortgagor agrees to pay fees required by and pursuant to the Credit Agreement, for
any services that Mortgagee may render in connection with this Mortgage, including
Mortgagee’s providing a statement of the Secured Obligations or providing the release
pursuant to Section 5.9 above. Mortgagor shall also pay or reimburse all of Mortgagee’s
costs and expenses which may be incurred in rendering any such services. Mortgagor further
agrees to pay or reimburse Mortgagee for all costs, expenses and other advances which may
be incurred or made by Mortgagee in any efforts to enforce any terms of this Mortgage,
including any rights or remedies afforded to Mortgagee under Section 6.3 , whether any
lawsuit is filed or not, or in defending any action or proceeding arising under or relating to
this Mortgage, including attorneys’ fees and other legal costs, costs of any Foreclosure Sale
(as defined in Subsection 6.3(i) below) and any cost of evidence of title. If Mortgagee
chooses to dispose of Property through more than one Foreclosure Sale, Mortgagor shall pay
all costs, expenses or other advances that may be incurred or made by Mortgagee in each of
such Foreclosure Sales. In any suit to foreclose the lien hereof or enforce any other remedy
of Mortgagee under this Mortgage or the Note, there shall be allowed and included as
additional indebtedness in the decree for sale or other judgment or decree all expenditures
and expenses which may be paid or incurred by or on behalf of Mortgagee for attorneys’
costs and fees (including the costs and fees of paralegals), survey charges, appraiser’s fees,
inspecting engineer’s and/or architect’s fees, fees for environmental studies and assessments
and all additional expenses incurred by Mortgagee with respect to environmental matters,
outlays for documentary and expert evidence, stenographers’ charges, publication costs, and
costs (which may be estimated as to items to be expended after entry of the decree) of
procuring all such abstracts of title, title searches and examinations, title insurance policies,
and similar data and assurances with respect to title as Mortgagee may deem reasonably
necessary either to prosecute such suit or to evidence to bidders at any sale which may be had
pursuant to such decree the true condition of the title to, the value of or the environmental
condition of the Property. All expenditures and expenses of the nature in this Subsection
mentioned, and such expenses and fees as may be incurred in the protection of the Property
and maintenance of the lien of this Mortgage, including the fees of any attorney (including
the costs and fees of paralegals) employed by Mortgagee in any litigation or proceeding
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affecting this Mortgage, the Note or the Property, including probate and bankruptcy
proceedings, or in preparation for the commencement or defense of any proceeding or
threatened suit or proceeding, shall be immediately due and payable by Mortgagor, with
interest thereon at the Default Rate applicable to Floating Rate Advances and shall be secured
by this Mortgage.
Mortgagee shall not be directly or indirectly liable to Mortgagor or any other person
as a consequence of any of the following:
Mortgagee’s exercise of or failure to exercise any rights, remedies or powers
granted to Mortgagee in this Mortgage;
Mortgagee’s failure or refusal to perform or discharge any obligation or
liability of Mortgagor under any agreement related to the Property or under this
Mortgage; or
Any loss sustained by Mortgagor or any third party resulting from
Mortgagee’s failure to lease the Property, or from any other act or omission of
Mortgagee in managing the Property, after a Default, unless the loss is caused by the
willful misconduct, gross negligence, or bad faith of Mortgagee.
Mortgagor hereby expressly waives and releases all liability of the types described above,
and agrees that no such liability shall be asserted against or imposed upon Mortgagee.
Mortgagor agrees to indemnify Mortgagee against and hold it harmless from all
losses, damages, liabilities, claims, causes of action, judgments, court costs, attorneys’ fees
and other legal expenses, cost of evidence of title, cost of evidence of value, and other costs
and expenses which it may suffer or incur, unless caused by the negligence, willful
misconduct or bad faith of the Mortgagee:
In performing any act required or permitted by this Mortgage or any of the
other Loan Documents or by law;
Because of any failure of Mortgagor to perform any of its obligations; or
Because of any alleged obligation of or undertaking by Mortgagee to perform
or discharge any of the representations, warranties, conditions, covenants or other
obligations in any document relating to the Property other than the Loan Documents.
This agreement by Mortgagor to indemnify Mortgagee shall survive the release and
cancellation of any or all of the Secured Obligations and the full or partial release of this
Mortgage.
Mortgagor shall pay all obligations to pay money arising under this Section 5.10
immediately upon demand by Mortgagee. Each such obligation shall be added to, and
considered to be part of, the principal of the Note, and shall bear interest from the date the
obligation arises at the Default Rate applicable to Floating Rate Advances.
Defense and Notice of Claims and Actions . At Mortgagor’s sole expense, Mortgagor shall
protect, preserve and defend the Property and title to and right of possession of the Property, and the
security of this Mortgage and the rights and powers of Mortgagee created under it, against all adverse
I-11
claims. Mortgagor shall give Mortgagee prompt notice in writing if any claim is asserted which does
or could affect any such matters, or if any action or proceeding is commenced which alleges or
relates to any such claim.
Subrogation . Mortgagee shall be subrogated to the liens of all encumbrances, whether
released of record or not, which are discharged in whole or in part by Mortgagee in accordance with
this Mortgage or with the proceeds of any loan secured by this Mortgage.
Site Visits, Observation and Testing . Mortgagee and its agents and representatives shall
have the right to enter and visit the Property in accordance with the terms of Section 6.9 of the Credit
Agreement for the purpose of performing appraisals, observing the Property, and conducting
non-invasive tests (unless Mortgagee has a good faith reason to believe that the taking and removing
soil or groundwater samples is required, and in such case, conducting such tests) on any part of the
Property. Mortgagee has no duty, however, to visit or observe the Property or to conduct tests, and
no site visit, observation or testing by Mortgagee, its agents or representatives shall impose any
liability on any of Mortgagee, its agents or representatives. In no event shall any site visit,
observation or testing by Mortgagee, its agents or representatives be a representation that Materials
of Environmental Concern are or are not present in, on or under the Property, or that there has been
or shall be compliance with any law, regulation or ordinance pertaining to Materials of
Environmental Concern or any other applicable governmental law. Neither Mortgagor nor any other
party is entitled to rely on any site visit, observation or testing by any of Mortgagee, its agents or
representatives. Neither Mortgagee, its agents or representatives owe any duty of care to protect
Mortgagor or any other party against, or to inform Mortgagor or any other party of, any Materials of
Environmental Concern or any other adverse condition affecting the Property. Mortgagee shall give
Mortgagor reasonable notice before entering the Property. Mortgagee shall make reasonable efforts
to avoid interfering with Mortgagor’s use of the Property in exercising any rights provided in this
Section 5.13 . Notwithstanding the foregoing, all rights granted to Mortgagee under this Section
5.13 are subject to all rights of tenants to the Property.
Notice of Change . Mortgagor shall give Mortgagee prior written notice of any change
in: (a) the location of its place of business or its chief executive office if it has more than one place
of business; (b) the location of any of the Property, including the Books and Records; and
(c) Mortgagor’s name or business structure. Unless otherwise approved by Mortgagee in writing, all
Property that consists of personal property (other than the Books and Records) will be located on the
Premises and all Books and Records will be located at Mortgagor’s place of business or chief
executive office if Mortgagor has more than one place of business.
Transfers, Default and Remedies .
Transfers . Mortgagor acknowledges that Mortgagee is making one or more advances under
the Credit Agreement in reliance on the expertise, skill and experience of Mortgagor; thus, the
Secured Obligations include material elements similar in nature to a personal service contract. In
consideration of Mortgagee’s reliance, Mortgagor agrees that Mortgagor shall not make any transfer
of the Property or transfer of its interests therein, except for leases in the ordinary course (a “
Transfer ”), unless the Transfer is preceded by Mortgagee’s express written consent to the particular
transaction and transferee. Mortgagee may withhold such consent in its sole discretion.
Events of Default . Mortgagor will be in default under this Mortgage upon the occurrence of
any one or more of the following events (each a “ Default ”):
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If a default shall occur with respect to covenants, agreements and obligations of
Mortgagor under this Mortgage involving the payment of money (other than a default in the
payment of principal when due as provided in Section 7.1 of the Credit Agreement) and shall
continue for a period of five (5) business days after the due date thereof; or
If there is a failure to perform or observe any of the other covenants, agreements and
conditions contained in this Mortgage in accordance with the terms hereof, and such default
continues unremedied for a period of thirty (30) days after written notice from Mortgagee to
defaulting Mortgagor of the occurrence thereof;
A “Default” (as defined in the Credit Agreement) occurs under the Credit Agreement.
Remedies . At any time after a Default, Mortgagee shall be entitled to invoke any and all of
the rights and remedies described below, in addition to all other rights and remedies available to
Mortgagee at law or in equity. All of such rights and remedies shall be cumulative, and the exercise
of any one or more of them shall not constitute an election of remedies.
Acceleration . Upon the occurrence and continuation of any Default, the whole of
said principal sum hereby secured shall, at the election of Mortgagee as described in Section
8.1 of the Credit Agreement, become immediately due and payable, together with accrued
interest thereon, without any presentment, demand, protest or notice of any kind to
Mortgagor.
Receiver . Mortgagee shall, as a matter of right, without notice and without giving
bond to Mortgagor or anyone claiming by, under or through Mortgagor, and without regard
for the solvency or insolvency of Mortgagor or the then value of the Property, to the extent
permitted by applicable law, be entitled to have a receiver appointed for all or any part of the
Property and the Rents, and the proceeds, issues and profits thereof, with the rights and
powers referenced below and such other rights and powers as the court making such
appointment shall confer, and Mortgagor hereby consents to the appointment of such receiver
and shall not oppose any such appointment. Such receiver shall have all powers and duties
prescribed by applicable law, all other powers which are necessary or usual in such cases for
the protection, possession, control, management and operation of the Property, and such
rights and powers as Mortgagee would have, upon entering and taking possession of the
Property under subsection (c) below.
Entry . Mortgagee, in person, by agent or by court-appointed receiver, may enter,
take possession of, manage and operate all or any part of the Property, and may also do any
and all other things in connection with those actions that Mortgagee may in its sole discretion
consider necessary and appropriate to protect the security of this Mortgage. Such other
things may include: taking and possessing all of Mortgagor’s or the then owner’s Books and
Records; entering into, enforcing, modifying or canceling Leases on such terms and
conditions as Mortgagee may consider proper; obtaining and evicting tenants; fixing or
modifying Rents; collecting and receiving any payment of money owing to Mortgagee;
completing any unfinished construction; and/or contracting for and making repairs and
alterations. If Mortgagee so requests, Mortgagor shall assemble all of the Property that has
been removed from the Premises and make all of it available to Mortgagee at the site of the
Premises. Mortgagor hereby irrevocably constitutes and appoints Mortgagee as Mortgagor’s
attorney-in-fact to perform such acts and execute such documents as Mortgagee in its sole
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discretion may consider to be appropriate in connection with taking these measures, including
endorsement of Mortgagor’s name on any instruments.
Cure; Protection of Security . Mortgagee may cure any breach or default of
Mortgagor, and if it chooses to do so in connection with any such cure, Mortgagee may also
enter the Property and/or do any and all other things which it may in its sole discretion
consider necessary and appropriate to protect the security of this Mortgage. Such other
things may include: appearing in and/or defending any action or proceeding which purports
to affect the security of, or the rights or powers of Mortgagee under, this Mortgage; paying,
purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien
which in Mortgagee’s sole judgment is or may be senior in priority to this Mortgage, such
judgment of Mortgagee or to be conclusive as among the parties to this Mortgage; obtaining
insurance and/or paying any premiums or charges for insurance required to be carried under
the Credit Agreement; otherwise caring for and protecting any and all of the Property; and/or
employing counsel, accountants, contractors and other appropriate persons to assist
Mortgagee. Mortgagee may take any of the actions permitted under this Subsection 6.3(d)
either with or without giving notice to any person. Any amounts expended by Mortgagee
under this Subsection 6.3(d) shall be secured by this Mortgage and the other Loan
Documents.
Uniform Commercial Code Remedies . Mortgagee may exercise any or all of the
remedies granted to a secured party under the Uniform Commercial Code in the State in
which the Property is located.
Foreclosure; Lawsuits . Mortgagee shall have the right, in one or several concurrent
or consecutive proceedings, to foreclose the lien hereof upon the Property or any part thereof,
for the Secured Obligations, or any part thereof, by any proceedings appropriate under
applicable law. Mortgagee or its nominee may bid and become the purchaser of all or any
part of the Property at any foreclosure or other sale hereunder, and the amount of
Mortgagee’s successful bid shall be credited on the Secured Obligations. Without limiting
the foregoing, Mortgagee may proceed by a suit or suits in law or equity, whether for specific
performance of any covenant or agreement herein contained or in aid of the execution of any
power herein granted, or for any foreclosure under the judgment or decree of any court of
competent jurisdiction. In addition to the right provided in Subsection 6.3(b), upon, or at any
time after the filing of a complaint to foreclose this Mortgage, Mortgagee shall be entitled to
the appointment of a receiver of the property by the court in which such complaint is filed,
and Mortgagor hereby consents to such appointment.
Other Remedies . Mortgagee may exercise all rights and remedies contained in any
other instrument, document, agreement or other writing heretofore, concurrently or in the
future executed by Mortgagor or any other person or entity in favor of Mortgagee in
connection with the Secured Obligations or any part thereof, without prejudice to the right of
Mortgagee thereafter to enforce any appropriate remedy against Mortgagor. Mortgagee shall
have the right to pursue all remedies afforded to a mortgagee under applicable law, and shall
have the benefit of all of the provisions of such applicable law, including all amendments
thereto which may become effective from time to time after the date hereof.
Sale of Personal Property . Mortgagee shall have the discretionary right to cause
some or all of the Property, which constitutes personal property, to be sold or otherwise
disposed of in any combination and in any manner permitted by applicable law.
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For purposes of this power of sale, Mortgagee may elect to treat as personal
property any Property which is intangible or which can be severed from the Premises
or Improvements without causing structural damage. If it chooses to do so,
Mortgagee may dispose of any personal property, in any manner permitted by Article
9 of the Uniform Commercial Code of the State in which the Property is located,
including any public or private sale, or in any manner permitted by any other
applicable law.
In connection with any sale or other disposition of such Property, Mortgagor
agrees that the following procedures constitute a commercially reasonable
sale: Mortgagee shall mail written notice of the sale to Mortgagor not later than
thirty (30) days prior to such sale. Mortgagee will publish notice of the sale in a
local daily newspaper of general circulation. Upon receipt of any written request,
Mortgagee will make the Property available to any bona fide prospective purchaser
for inspection during reasonable business hours. Notwithstanding, Mortgagee shall
be under no obligation to consummate a sale if, in its judgment, none of the offers
received by it equals the fair value of the Property offered for sale. The foregoing
procedures do not constitute the only procedures that may be commercially
reasonable.
Single or Multiple Foreclosure Sales . If the Property consists of more than one lot,
parcel or item of property, Mortgagee may:
Designate the order in which the lots, parcels and/or items shall be sold or
disposed of or offered for sale or disposition; and
Elect to dispose of the lots, parcels and/or items through a single consolidated
sale or disposition to be held or made under or in connection with judicial
proceedings, or by virtue of a judgment and decree of foreclosure and sale; or through
two or more such sales or dispositions; or in any other manner Mortgagee may deem
to be in its best interests (any such sale or disposition, a “ Foreclosure Sale ;” and any
two or more, “ Foreclosure Sales ”).
If Mortgagee chooses to have more than one Foreclosure Sale, Mortgagee at its
option may cause the Foreclosure Sales to be held simultaneously or successively, on
the same day, or on such different days and at such different times and in such order
as Mortgagee may deem to be in its best interests. No Foreclosure Sale shall
terminate or affect the liens of this Mortgage on any part of the Property which has
not been sold, until all of the Secured Obligations have been paid in full.
Credit Bids . At any Foreclosure Sale, any person, including Mortgagor or Mortgagee, may
bid for and acquire the Property or any part of it to the extent permitted by then applicable
law. Instead of paying cash for such property, Mortgagee may settle for the purchase price by
crediting the sales price of the property against the following obligations:
First, the portion of the Secured Obligations attributable to the expenses of sale, costs
of any action and any other sums for which Mortgagor is obligated to pay or reimburse
Mortgagee under Section 5.10 of this Mortgage; and
Second, all other Secured Obligations in any order and proportions as Mortgagee in
its sole discretion may choose.
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Application of Foreclosure Sale Proceeds . Mortgagee shall apply the proceeds of any
Foreclosure Sale in the following manner:
First, to pay the portion of the Secured Obligations attributable to the expenses of
sale, costs of any action and any other sums for which Mortgagor is obligated to reimburse
Mortgagee under Section 5.10 of this Mortgage;
Second, to pay the portion of the Secured Obligations attributable to any sums
expended or advanced by Mortgagee under the terms of this Mortgage which then remain
unpaid;
Third, to pay all other Secured Obligations in any order and proportions as Mortgagee
in its sole discretion may choose; and
Fourth, to remit the remainder, if any, to the person or persons entitled to it.
Application of Rents and Other Sums . Mortgagee shall apply any and all Rents collected by
it, and any and all sums other than proceeds of a Foreclosure Sale which Mortgagee may receive or
collect under Section 6.3 above, in the following manner:
First, to pay the portion of the Secured Obligations attributable to the costs and
expenses of operation and collection that may be incurred by Mortgagee or any receiver;
Second, to pay all other Secured Obligations in any order and proportions as
Mortgagee in its sole discretion may choose; and
Third, to remit the remainder, if any, to the person or persons entitled to it.
Mortgagee shall have no liability for any funds which it does not actually receive.
Miscellaneous Provisions .
Additional Provisions . The Loan Documents fully state all of the terms and conditions of
the parties’ agreement regarding the matters mentioned in or incidental to this Mortgage. The Loan
Documents also grant further rights to Mortgagee and contain further agreements and affirmative and
negative covenants by Borrower and Mortgagor which apply to this Mortgage and to the Property.
No Waiver or Cure .
Each waiver by Mortgagee must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from any delay or failure by Mortgagee to
take action on account of any default of Mortgagor. Consent by Mortgagee to any act or
omission by Mortgagor shall not be construed as a consent to any other or subsequent act or
omission or to waive the requirement for Mortgagee’s consent to be obtained in any future
or other instance.
If any of the events described below occurs, that event alone shall not: cure or waive
any breach, Default or notice of default under this Mortgage or invalidate any act performed
pursuant to any such default or notice; or nullify the effect of any notice of default or sale
(unless all Secured Obligations then due have been paid and performed and all other defaults
under the Loan Documents have been cured); or impair the security of this Mortgage; or
I-16
prejudice Mortgagee or any receiver in the exercise of any right or remedy afforded any of
them under this Mortgage; or be construed as an affirmation by Mortgagee of any tenancy,
lease or option, or a subordination of the lien of this Mortgage.
Mortgagee, its agent or a receiver takes possession of all or any part of the
Property in the manner provided in Subsection 6.3(c).
Mortgagee collects and applies Rents as permitted under Sections 2.3 and 6.6
above, either with or without taking possession of all or any part of the Property.
Mortgagee receives and applies to any Secured Obligation any proceeds of
any Property, including any proceeds of insurance policies, condemnation awards, or
other claims, property or rights assigned to Mortgagee under Section 5.5 and Section
5.6 above.
Mortgagee makes a site visit, observes the Property and/or conducts tests as
permitted under Section 5.13 above.
Mortgagee receives any sums under this Mortgage or any proceeds of any
collateral held for any of the Secured Obligations, and applies them to one or more
Secured Obligations.
Mortgagee or any receiver invokes any right or remedy provided under this
Mortgage.
Powers of Mortgagee .
If Mortgagee performs any act which it is empowered or authorized to perform under
this Mortgage, including any act permitted by Section 5.8 or Subsection 6.3(d) of this
Mortgage, that act alone shall not release or change the personal liability of any person for
the payment and performance of the Secured Obligations then outstanding, or the lien of this
Mortgage on all or the remainder of the Property for full payment and performance of all
outstanding Secured Obligations. The liability of the original Mortgagor shall not be
released or changed if Mortgagee grants any successor in interest to Mortgagor any extension
of time for payment, or modification of the terms of payment, of any Secured
Obligation. Mortgagee shall not be required to comply with any demand by the original
Mortgagor that Mortgagee refuse to grant such an extension or modification to, or commence
proceedings against, any such successor in interest.
Mortgagee may take any of the actions permitted under Subsections 6.3(b) and/or
6.3(c) regardless of the adequacy of the security for the Secured Obligations, or whether any
or all of the Secured Obligations have been declared to be immediately due and payable, or
whether notice of default and election to sell has been given under this Mortgage.
From time to time, Mortgagee may apply to any court of competent jurisdiction for
aid and direction in executing and enforcing the rights and remedies created under this
Mortgage. Mortgagee may from time to time obtain orders or decrees directing, confirming
or approving acts in executing and enforcing these rights and remedies.
Merger . No merger shall occur as a result of Mortgagee’s acquiring any other estate in or
any other lien on the Property unless Mortgagee consents to a merger in writing.
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Joint and Several Liability . If Mortgagor consists of more than one person, each shall be
jointly and severally liable for the faithful performance of all of Mortgagor’s obligations under this
Mortgage.
Applicable Law . The creation, perfection and enforcement of the lien of this Mortgage shall
be governed by the law of the State in which the property is located. Subject to the foregoing, in all
other respects, this Mortgage shall be governed by the substantive laws of the State of Illinois.
Successors in Interest . The terms, covenants and conditions of this Mortgage shall be
binding upon and inure to the benefit of the heirs, successors and assigns of the parties. However,
this Section 7.7 does not waive the provisions of Section 6.1 above.
Interpretation .
Whenever the context requires, all words used in the singular will be construed to
have been used in the plural, and vice versa, and each gender will include any other
gender. The captions of the sections of this Mortgage are for convenience only and do not
define or limit any terms or provisions. The word “include(s)” means “include(s), without
limitation,” and the word “including” means “including, but not limited to.”
The word “obligations” is used in its broadest and most comprehensive sense, and
includes all primary, secondary, direct, indirect, fixed and contingent obligations. It further
includes all principal, interest, prepayment charges, late charges, loan fees and any other fees
and charges accruing or assessed at any time, as well as all obligations to perform acts or
satisfy conditions.
No listing of specific instances, items or matters in any way limits the scope or
generality of any language of this Mortgage. The Exhibits to this Mortgage are hereby
incorporated in this Mortgage.
Waiver of Statutory Rights . To the extent permitted by law, Mortgagor hereby agrees that it
shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or
exemption laws, or any so-called “Moratorium Laws,” now existing or hereafter enacted, in order to
prevent or hinder the enforcement or foreclosure of this Mortgage, but hereby waives the benefit of
such laws. Mortgagor for itself and all who may claim through or under it waives any and all right
to have the property and estates comprising the Property marshalled upon any foreclosure of the lien
hereof and agrees that any court having jurisdiction to foreclose such lien may order the Property
sold as an entirety. Mortgagor hereby waives any and all rights of redemption from sale under any
judgment of foreclosure of this Mortgage on behalf of Mortgagor and on behalf of each and every
person acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the
date of this Mortgage. The foregoing waiver of right of redemption is made pursuant to the
provisions of applicable law.
Severability . If any provision of this Mortgage should be held unenforceable or void, that
provision shall be deemed severable from the remaining provisions and shall in no way affect the
validity of this Mortgage except that if such provision relates to the payment of any monetary sum,
then Mortgagee may, at its option, declare all Secured Obligations immediately due and payable.
Notices . Any notice, demand, request or other communication which any party hereto may
be required or may desire to give hereunder shall be in writing and shall be deemed to have been
properly given if given in accordance with Section 13.1 of the Credit Agreement.
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Any notice or demand delivered to the person or entity named above to accept notices and
demands for Mortgagor shall constitute notice or demand duly delivered to Mortgagor, even if
delivery is refused.
Future Advances . This Mortgage is given to, and the parties intend that it shall secure
indebtedness, exclusive of interest thereon, in a maximum amount equal to the Aggregate
Commitment from time to time under the Credit Agreement which shall be an amount up to
$200,000,000 which indebtedness may include advances made at the request of Borrower or
Mortgagor or its respective successor(s) in title after this Mortgage is filed of record to the fullest
extent and with the highest priority contemplated by law (including disbursements that the Lenders
may, but shall not be obligated to, make under this Mortgage, the Loan Documents or any other
document with respect thereto) plus interest thereon, and any disbursements made for the
enforcement of this Mortgage and any remedies hereunder, payment of taxes, special assessments,
utilities or insurance on the Property and interest on such disbursements and all disbursements by
Mortgagee pursuant to applicable law (all such indebtedness being hereinafter referred to as the
maximum amount secured hereby). This Mortgage shall be valid and have priority to the extent of
the maximum amount secured hereby over all subsequent liens and encumbrances, including
statutory liens, excepting solely taxes and assessments levied on the Property given priority by
law. All future advances under the Credit Agreement, the Notes, this Mortgage and the other Loan
Documents shall have the same priority as if the future advance was made on the date that this
Mortgage was recorded.
Mortgagee’s Lien for Service Charge and Expenses . At all times, regardless of whether any
Loan proceeds have been disbursed, this Mortgage secures the payment of any and all loan
commissions, service charges, liquidated damages, expenses and advances due to or incurred by
Mortgagee not to exceed the maximum amount secured hereby.
Advances . The loan evidenced by the Notes is a “revolving credit loan”. The lien of the
Mortgage shall secure all advances made pursuant to the terms of the Agreement to the same extent
as if such future advances were made on the date of execution of the Mortgage, provided that such
advances are made within twenty (20) years from the date hereof. Although there may be no
indebtedness outstanding on the Note at the time any such advance is made, the lien of the Mortgage
as to third persons without actual notice thereof, shall be valid as to all such indebtedness and future
advances from the time this Mortgage is filed for record. The total amount of the indebtedness
evidenced by the Notes and secured by the Mortgage may increase or decrease from time to time, but
the total unpaid balance so secured at any one time shall not exceed the maximum amount specified
in Section 7.13 plus interest thereon and any disbursements made for the payment of taxes, special
assessments, insurance or other disbursements made pursuant to the terms of this Mortgage, the
Credit Agreement, or the other Loan Documents.
WAIVER OF TRIAL BY JURY . MORTGAGOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH
THIS MORTGAGE, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN
OR
ANY
OTHER
STATEMENTS
OR
ACTIONS
OF
MORTGAGOR
OR
MORTGAGEE. MORTGAGOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN
THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT
HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. MORTGAGOR
FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE
MEANING AND RAMIFICATIONS OF
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THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR MORTGAGEE TO
MAKE THE LOAN, ENTER INTO THIS MORTGAGE AND EACH OF THE OTHER LOAN
DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH
OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.
Incorporation of Credit Agreement . The terms and provisions of the Credit Agreement are
incorporated herein by express reference. All advances and indebtedness arising and accruing under
the Credit Agreement from time to time, whether or not the resulting indebtedness secured hereby
may exceed the face amount of the Notes, shall be secured hereby to the same extent as though said
Credit Agreement were fully incorporated in this Mortgage, and the occurrence of any Default under
said Credit Agreement shall constitute a Default under this Mortgage entitling Mortgagee to all of the
rights and remedies conferred upon Mortgagee by the terms of both this Mortgage and the Credit
Agreement. Mortgagor hereby agrees to comply with all covenants and fulfill all obligations set
forth in the Credit Agreement which pertain to the Premises as if Mortgagor were a party to such
documents. In the event of any conflict or inconsistency between the terms of this Mortgage and the
Credit Agreement, the terms and provisions of the Credit Agreement shall in each instance govern
and control.
Inconsistencies . In the event of any inconsistency between this Mortgage and the Credit
Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or maintain a
valid security interest upon the Property, otherwise the provisions of the Credit Agreement shall be
controlling.
Partial Invalidity; Maximum Allowable Rate of Interest . Mortgagor and Mortgagee intend
and believe that each provision in this Mortgage and the Notes comports with all applicable local,
state and federal laws and judicial decisions. However, if any provision or provisions, or if any
portion of any provision or provisions, in this Mortgage or the Notes is found by a court of law to be
in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial
decision, or public policy, and if such court should declare such portion, provision or provisions of
this Mortgage and the Notes to be illegal, invalid, unlawful, void or unenforceable as written, then it
is the intent both of Mortgagor and Mortgagee that such portion, provision or provisions shall be
given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder
of this Mortgage and the Notes shall be construed as if such illegal, invalid, unlawful, void or
unenforceable portion, provision or provisions were not contained therein, and that the rights,
obligations and interest of Mortgagor and Mortgagee under the remainder of this Mortgage and the
Notes shall continue in full force and effect. All agreements herein and in the Notes are expressly
limited so that in no contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof, acceleration of maturity of the unpaid principal balance of the Notes, or otherwise,
shall the amount paid or agreed to be paid to the Lenders for the use, forbearance or detention of the
money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury
laws. If, from any circumstances whatsoever, fulfillment of any provision hereof or of the Notes or
any other agreement referred to herein, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then, ipso facto , the obligation to be fulfilled shall be reduced to the
limit of such validity and if from any circumstance the Lenders shall ever receive as interest an
amount which would exceed the highest lawful rate, such amount which would be excessive interest
shall be applied to the reduction of the unpaid principal balance due under the Notes and not to the
payment of interest.
I-20
UCC Financing Statements . Mortgagor hereby authorizes Mortgagee to file UCC financing
statements to perfect Mortgagee’s security interest in any part of the Property. In addition,
Mortgagor agrees to sign any and all other documents that Mortgagee deems necessary in its sole
discretion to perfect, protect, and continue Mortgagee’s lien and security interest on the Property.
Declaration of Subordination . At the option of Mortgagee, this Mortgage shall become
subject and subordinate, in whole or in part (but not with respect to priority of entitlement to
insurance proceeds or any Condemnation Proceeds), to any and all Leases of all or any part of the
Premises upon the execution by Mortgagee and recording thereof, at any time hereafter in the
appropriate official records of the County wherein the Premises are situated, of a unilateral
declaration to that effect.
Certain Matters Relating to Property Located in the State of [
] . Notwithstanding
anything contained herein to the contrary the provisions contained in the Rider attached hereto as
Exhibit B (the “Rider”) are incorporated by reference as if fully set forth herein. If there is any
inconsistency between the terms contained in this Mortgage and the terms contained in the Rider, the
terms in the Rider shall prevail.
[remainder of this page intentionally left blank]
I-21
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date first above
written.
CONFORM TO LOCAL
ATTESTATION, ETC.)
SIGNATORY
REQUIREMENTS
(SEALS,
WITNESSES,
Mortgagor:
,
a Delaware limited liability company
By:
Inland Western Retail Real Estate Trust, Inc..
a Maryland corporation, its sole member
By:
Its:
I-22
CONFORM TO LOCAL NOTARY REQUIREMENTS
STATE OF ____________
)
)
SS:
COUNTY OF __________
)
The foregoing instrument was acknowledged before me this ____ day of ____________,
______, by ____________________, the _________________ of _________________, a
___________________, on behalf of said________________. He/She is personally known to me or
has produced a State of ______________ driver’s license as identification.
Sign Name:
Notary Public
Print Name:
Serial No. (if any):
[NOTARIAL SEAL]
My Commission Expires: ____________________
I-23
EXHIBIT A
Description of Premises
[LEGAL DESCRIPTION MUST CONFORM WITH LOCAL RECORDING
REQUIREMENTS]
I-24
EXHIBIT B
SPECIFIC STATE PROVISIONS RIDER
I-25
SCHEDULE 1
List of Initial Collateral Properties
Property Name
Owner Name
State of
Organization
1. Shaws-New Britain
Inland Western
New Britain Main,
L.L.C.
Delaware
2. WalMart Super
Center-Blytheville
Inland Western
Blytheville, L.L.C.
Delaware
3. Manchester Meadows
Inland Western
Town and Country
Manchester, L.L.C.
Delaware
4. Crown Theater
Inland Western
Hartford New Park,
L.L.C.
Delaware
5. Greenwich Center
Inland Western
Phillipsburg
Greenwich, L.L.C.
Delaware
6. Southpark Meadows II
Inland Western
Austin South Park
Meadows, II
Limited Partnership
Inland Western
Oswego Gerry
Centennial, L.L.C.
Delaware
7. Gerry Centennial Plaza
Delaware
EIN
Organizational
Agreements
20-0516778 Limited Liability
Company
Agreement dated
January 12, 2004.
20-1198854 Limited Liability
Company
Agreement dated
May 28, 2004.
20-1431000 Limited Liability
Company
Agreement dated
July 28, 2004.
20-2785007 Limited Liability
Company
Agreement dated as
of June 16, 2005
20-2729764 Limited Liability
Company
Agreement dated as
of June 22, 2005
20-8574543 Limited Liability
Company
Agreement dated
June 22, 2005.
20-2934910 Limited Liability
Company
Agreement dated
December 13, 2007.
8.
The Shoppes at Stroud Stroud Commons,
Township
L.L.C.
Delaware
26-0101120 Amended and
Restated Limited
Liability Company
Agreement dated
as of November 30,
2006
SCHEDULE 2
LITIGATION
(See Section 5.6)
City of St. Clair Shores General Employees Retirement System v. Inland Western Retail Real
Estate Trust, Inc.
This litigation is described in Note (19) to the consolidated financial statements included in the
Borrower’s Form 10-Q filed for the quarter ending September 30, 2008 and in Item 1 of Part II
of such Form 10-Q
SCHEDULE 3
ENVIRONMENTAL MATTERS
(See Section 5.19)
None
SCHEDULE 4
LIST OF INITIAL SUBSIDIARY GUARANTORS
Inland Western New Britain Main, L.L.C., a Delaware limited liability company
Inland Western Blytheville, L.L.C., a Delaware limited liability company
Inland Western Austin South Park Meadows II Limited Partnership, an Illinois limited partnership
Inland Western Town and Country Manchester, L.L.C., a Delaware limited liability company
Inland Western Hartford New Park Member II, L.L.C., a Delaware limited liability company
Inland Western Phillipsburg Greenwich Member II, L.L.C., a Delaware limited liability company
Inland Western Oswego Gerry Centennial, L.L.C., a Delaware limited liability company
IWR Protective Corporation, a Delaware corporation
SCHEDULE 5
List of Pre-Approved Dispositions
Name of Property
Computershare/Equiserve
Fisher Scientific
American Express (Greensboro)
American Express (Taylorsville)
East Stone Commons - Olive Garden
Coventry
Diebold Warehouse
Sprint Data Systems
Whole Foods
Zurich Towers
Location
250 Royall St.
Canton MA
4481 Campus Dr.
Kalamazoo MI
7701 Airport Center
Greensboro NC
4315 South 2700 West
Salt Lake City UT
2003 North Eastman Road
Kingsport TN
3900 Rogers Rd.
San Antonio TX
5400 Lauby Rd. Northwest
Canton OH
1350 Duane Ave.
Santa Clara CA
500 East Ogden Ave.
Hinsdale IL
1400-50 E. American Ln.
Schaumburg IL
Endnotes
(Illinois)
(Illinois)