Exhibit 10.4

 

Freddie Mac Loan Number 487810724

 

MULTIFAMILY NOTE

MULTISTATE – ADJUSTABLE RATE

(REVISION DATE 3-30-2006)

 

US $152,926,000

Effective Date: October 5, 2007

 

FOR VALUE RECEIVED, the undersigned (together with such party’s or parties’
successors and assigns, “Borrower”), jointly and severally (if more than one)
promises to pay to the order of LEHMAN BROTHERS HOLDINGS INC., a Delaware
corporation, having an address at 399 Park Avenue, New York, New York 10022
(“Lehman”), BANK OF AMERICA, N.A., a national banking association, having an
address at Bank of America Corporate Center, 214 North Tryon Street, Charlotte,
North Carolina 28255 (“BofA”) and BARCLAYS CAPITAL REAL ESTATE INC., a Delaware
corporation, having an address at 200 Park Avenue, New York, New York 10166
(“Barclays”; together with Lehman and BofA, individually and collectively, as
the context may require, “Lender”) the principal sum of ONE HUNDRED FIFTY-TWO
MILLION NINE HUNDRED TWENTY-SIX THOUSAND AND 00/100 DOLLARS ($152,926,000), with
interest on the unpaid principal balance, as hereinafter provided.

 

1.             Defined Terms.

 

(a)           As used in this Note;

 

“Adjustable Interest Rate” means the variable annual interest rate calculated
for each Interest Adjustment Period so as to equal the Index Rate for such
Interest Adjustment Period (truncated at the fifth (5th) decimal place if
necessary) plus the Margin. However, in no event will the Adjustable Interest
Rate exceed the Capped Interest Rate.

 

“Amortization Period” means a period of 0 full consecutive calendar months.

 

“Base Recourse” means a portion of the Indebtedness equal to zero percent (0%)
of the original principal balance of this Note.

 

“Business Day” means any day other than a Saturday, a Sunday or any other day on
which Lender or the national banking associations are not open for business.

 

“Capped Interest Rate” is not applicable, there is no Capped Interest Rate for
the Loan.

 

“Default Rate” means a variable annual interest rate equal to four
(4) percentage points above the Adjustable Interest Rate in effect from time to
time. However, at no time will the Default Rate exceed the Maximum Interest
Rate.

 

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“Index Rate” means, for any Interest Adjustment Period, the LIBOR Index Rate for
such Interest Adjustment Period.

 

“Installment Due Date” means, for any monthly installment of interest only or
principal and interest, the date on which such monthly installment is due and
payable pursuant to Section 3 of this Note. The “First Installment Due Date”
under this Note is December 1, 2007.

 

“Interest Adjustment Period” means each successive one (1) calendar month period
until the entire Indebtedness is paid in full, except that the first Interest
Adjustment Period is the period from the date of this Note through October 31,
2007. Therefore, the second Interest Adjustment Period shall be the period from
November 1, 2007 through November 30, 2007, and so on until the entire
Indebtedness is paid in full.

 

“Lender” means the holder from time to time of this Note.

 

“LIBOR Index” means the British Bankers Association’s (BBA) one (1) month LIBOR
Rate for United States Dollar deposits, as displayed on the LIBOR Index
Page used to establish the LIBOR Index Rate.

 

“LIBOR Index Rate” means, for any Interest Adjustment Period after the first
Interest Adjustment Period, the BBA’s LIBOR Rate for the LIBOR Index released by
the BBA most recently preceding the first day of such Interest Adjustment
Period, as such LIBOR Rate is displayed on the LIBOR Index Page. The LIBOR Index
Rate for the first Interest Adjustment Period means the British Bankers
Association’s (BBA) LIBOR Rate for the LIBOR Index released by the BBA most
recently preceding the first day of the month in which the first Interest
Adjustment Period begins, as such LIBOR Rate is displayed on the LIBOR Index
Page.

 

“LIBOR Index Page” is the Bloomberg L.P., page “BBAM”, or such other page for
the LIBOR Index as may replace page BBAM on that service, or at the option of
Lender (i) the applicable page for the LIBOR Index on another service which
electronically transmits or displays BBA LIBOR Rates, or (ii) any publication of
LIBOR rates available from the BBA. In the event the BBA ceases to set or
publish a LIBOR rate/interest settlement rate for the LIBOR Index, Lender will
designate an alternative index, and such alternative index shall constitute the
LIBOR Index Page.

 

“Loan” means the loan evidenced by this Note.

 

“Lockout Period” is not applicable, there is no Lockout Period under this Note.

 

“Margin” means one and twenty-five thousandths (1.025%) percentage points (102.5
basis points).

 

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“Maturity Date” means the earlier of (i) November 1, 2012 (the “Scheduled
Maturity Date”), and (ii) the date on which the unpaid principal balance of this
Note becomes due and payable by acceleration or otherwise pursuant to the Loan
Documents or the exercise by Lender of any right or remedy under any Loan
Document.

 

“Maximum Interest Rate” means the rate of interest that results in the maximum
amount of interest allowed by applicable law.

 

“Prepayment Premium Period” means the period during which, if a prepayment of
principal occurs, a prepayment premium will be payable by Borrower to Lender.
The Prepayment Premium Period is the period from and including the date of this
Note until but not including the first day of the Window Period.

 

“Reference Bills®” means the unsecured general obligations of the Federal Home
Loan Mortgage Corporation (“Freddie Mac”) designated by Freddie Mac as
“Reference Bills®Securities” and having original durations to maturity most
comparable to the term of the Reference Bill Index, and issued by Freddie Mac at
regularly scheduled auctions. In the event Freddie Mac shall at any time cease
to designate any unsecured general obligations of Freddie Mac as “Reference
Bills Securities”, then at the option of Lender (i) Lender may select from time
to time another unsecured general obligation of Freddie Mac having original
durations to maturity most comparable to the term of the Reference Bill Index
and issued by Freddie Mac at regularly scheduled auctions, and the term
“Reference Bills” as used in this Note shall mean such other unsecured general
obligations as selected by Lender; or (ii) for any one or more Interest
Adjustment Periods, Lender may use the applicable LIBOR Index Rate as the Index
Rate for such Interest Adjustment Period(s).

 

“Reference Bill Index” means the one (1) month(s) Reference Bills. One-month
reference bills have original durations to maturity of approximately 30 days.

 

“Reference Bill Index: Rate” means, for any Interest Adjustment Period after the
first Interest Adjustment Period, the Money Market Yield for the Reference Bills
as established by the Reference Bill auction conducted by Freddie Mac most
recently preceding the first day of such Interest Adjustment Period, as
displayed on the Reference Bill Index Page. The Reference Bill Index Rate for
the first Interest Adjustment Period means the Money Market Yield for the
Reference Bills as established by the Reference Bill auction conducted by
Freddie Mac most recently preceding the first day of the month in which the
first Interest Adjustment Period begins, as displayed on the Reference Bill
Index Page. The

 

“Reference Bill Index Page” is the Freddie Mac Debt Securities Web
Page (accessed via the Freddie Mac internet site at www.freddiemac.com), or at
the option of Lender, any publication of Reference Bills auction results
available

 

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from Freddie Mac. However, if Freddie Mac has not conducted a Reference Bill
auction within the 60-calendar day period prior to the first day of an Interest
Adjustment Period, the Reference Bill Index Rate for such Interest Adjustment
Period will be the LIBOR Index Rate for such Interest Adjustment Period.

 

“Remaining Amortization Period” means, at any point in time, the number of
consecutive calendar months equal to the number of months in the Amortization
Period minus the number of scheduled monthly installments of principal and
interest that have elapsed since the date of this Note.

 

“Security Instrument” means the multifamily mortgage, deed to secure debt or
deed of trust effective as of the effective date of this Note, from Borrower to
or for the benefit of Lender and securing this Note.

 

“Window Period” means the three consecutive calendar month period prior to the
Scheduled Maturity Date.

 

“Yield Maintenance Period” is not applicable, there is no Yield Maintenance
Period under this Note,

 

(b) Other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Security Instrument.

 

2.             Address for Payment. All payments due under this Note shall be
payable at Wachovia Securities, Commercial Real Estate Services, 8739 Research
Drive, URP4, NC1075, Charlotte, NC 28262-1075, or such other place as may be
designated by Notice to Borrower from or on behalf of Lender.

 

3.             Payments.

 

(a)           Interest will accrue on the outstanding principal balance of this
Note at the Adjustable Interest Rate, subject to the provisions of Section 8 of
this Note.

 

(b)           Interest under this Note shall be computed, payable and allocated
on the basis of an actual/360 interest calculation schedule (interest is payable
for the actual number of days in each month, and each months interest is
calculated by multiplying the unpaid principal amount of this Note as of the
first day of the month for which interest is being calculated by the applicable
Adjustable Interest Rate, dividing the product by 360, and multiplying the
quotient by the number of days in the month for which interest is being
calculated). For convenience in determining the amount of a monthly installment
of principal and interest under this Note, Lender will use a 30/360 interest
calculation payment schedule (each year is treated as consisting of twelve
30-day months). However, as provided above, the portion of the monthly
installment actually payable as and allocated to interest will be based upon an
actual/360 interest calculation schedule, and the amount of each installment
attributable to principal and the amount attributable to interest will vary
based upon the number of days in the month for which such installment is

 

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paid. Each monthly payment of principal and interest will first be applied to
pay in full interest due, and the balance of the monthly payment paid by
Borrower will be credited to principal.

 

(c)           Unless disbursement of principal is made by Lender to Borrower on
the first day of a calendar month, interest for the period beginning on the date
of disbursement and ending on and including the last day of such calendar month
shall be payable by Borrower simultaneously with the execution of this Note, If
disbursement of principal is made by Lender to Borrower on the first day of a
calendar month, then no payment will be due from Borrower at the time of the
execution of this Note. The Installment Due Date for the first monthly
installment payment under Section 3(d) of interest only or principal and
interest, as applicable, will be the First Installment Due Date set forth in
Section 1(a) of this Note. Except as provided in this Section 3(c) and in
Section 10, accrued interest will be payable in arrears.

 

(d)           Beginning on the First Installment Due Date, and continuing until
and including the monthly installment due on the Maturity Date, accrued interest
only shall be payable by Borrower in consecutive monthly installments due and
payable on the first day of each calendar month. The amount of the monthly
installment of interest only payable pursuant to this Section 3(d) on an
Installment Due Date shall equal the product of (i) annual interest on the
unpaid principal balance of this Note as of the first day of the Interest
Adjustment Period immediately preceding the Installment Due Date at the
Adjustable Interest Rate in effect for such Interest Adjustment Period, divided
by 360, multiplied by (ii) the number of days in such Interest Adjustment
Period.

 

(e)           All remaining Indebtedness, including all principal and interest,
shall be due and payable by Borrower on the Maturity Date.

 

(f)            Lender shall provide Borrower with Notice, given in the manner
specified in the Security Instrument, of the amount of each monthly installment
due under this Note. However, if Lender has not provided Borrower with prior
notice of the monthly payment due on any Installment Due Date, then Borrower
shall pay on that Installment Due Date an amount equal to the monthly
installment payment for which Borrower last received notice. If Lender at any
time determines that Borrower has paid one or more monthly installments in an
incorrect amount because of the operation of the preceding sentence, or because
Lender has miscalculated the Adjustable Interest Rate or has otherwise
miscalculated the amount of any monthly installment, then Lender shall give
notice to Borrower of such determination. If such determination discloses that
Borrower has paid less than the full amount due for the period for which the
determination was made, Borrower, within 30 calendar days after receipt of the
notice from Lender, shall pay to Lender the full amount of the deficiency. If
such determination discloses that Borrower has paid more than the full amount
due for the period for which the determination was made, then the amount of the
overpayment shall be credited to the next installment(s) of interest only or
principal and interest, as applicable, due under this Note (or, if an Event of
Default has occurred and is continuing, such overpayment shall be credited
against any amount owing by Borrower to Lender).

 

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(g)           All payments under this Note shall be made in immediately
available U.S. funds.

 

(h)           Any regularly scheduled monthly installment of interest only or
principal and interest payable pursuant to this Section 3 that is received by
Lender before the date it is due shall be deemed to have been received on the
due date for the purpose of calculating interest due.

 

(i)            Any accrued interest remaining past due for 30 days or more, at
Lender’s discretion, may be added to and become part of the unpaid principal
balance of this Note and any reference to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any
amount added to principal pursuant to the Loan Documents shall bear interest at
the applicable rate or rates specified in this Note and shall be payable with
such interest upon demand by Lender and absent such demand, as provided in this
Note for the payment of principal and interest.

 

(j)            In accordance with Section 14, interest charged under this Note
cannot exceed the Maximum Interest Rate. If the Adjustable Interest Rate at any
time exceeds the Maximum Interest Rate, resulting in the charging of interest
hereunder to be limited to the Maximum Interest Rate, then any subsequent
reduction in the Adjustable Interest Rate shall not reduce the rate at which
interest under this Note accrues below the Maximum Interest Rate until the total
amount of interest accrued hereunder equals the amount of interest which would
have accrued had the Adjustable Interest Rate at all times been in effect.

 

4.             Application of Payments. If at any time Lender receives, from
Borrower or otherwise, any amount applicable to the Indebtedness which is less
than all amounts due and payable at such time, Lender may apply the amount
received to amounts then due and payable in any manner and in any order
determined by Lender, in Lender’s discretion. Borrower agrees that neither
Lender’s acceptance of a payment from Borrower in an amount that is less than
all amounts then due and payable nor Lender’s application of such payment shall
constitute or be deemed to constitute either a waiver of the unpaid amounts or
an accord and satisfaction.

 

5.             Security. The Indebtedness is secured by, among other things, the
Security Instrument, and reference is made to the Security Instrument for other
rights of Lender as to collateral for the Indebtedness.

 

6.             Acceleration. If an Event of Default has occurred and is
continuing, the entire unpaid principal balance, any accrued interest, any
prepayment premium payable under Section 10, and all other amounts payable under
this Note and any other Loan Document:, shall at once become due and payable, at
the option of Lender, without any prior notice to Borrower (except if notice is
required by applicable law, then after such notice). Lender may exercise this
option to accelerate regardless of any prior forbearance. For purposes of
exercising such option, Lender shall calculate the prepayment premium as if
prepayment occurred on the date of acceleration. If prepayment occurs
thereafter, Lender shall recalculate the prepayment premium as of the actual
prepayment date.

 

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7.             Late Charge.

 

(a)           If any monthly installment of interest or principal and interest
or other amount payable under this Note or under the Security Instrument or any
other Loan Document is not received in full by Lender within five (5) days after
the installment or other amount is due, counting from and including the date
such installment or other amount is due (unless applicable law requires a longer
period of time before a late charge may be imposed, in which event such longer
period shall be substituted), Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to five percent (5%) of such
installment or other amount due (unless applicable law requires a lesser amount
be charged, in which event such lesser amount shall be substituted).

 

(b)           Borrower acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing and processing the
Loan and that it is extremely difficult and impractical to determine those
additional expenses. Borrower agrees that the late charge payable pursuant to
this Section represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional expenses
Lender will incur by reason of such late payment. The late charge is payable in
addition to, and not in lieu of, any interest payable at the Default Rate
pursuant to Section 8.

 

8.            Default Rate.

 

(a)           So long as (i) any monthly installment under this Note remains
past due for thirty (30) days or more or (ii) any other Event of Default has
occurred and is continuing, then notwithstanding anything in Section 3 of this
Note to the contrary, interest under this Note shall accrue on the unpaid
principal balance from the Installment Due Date of the first such unpaid monthly
installment or the occurrence of such other Event of Default, as applicable, at
the Default Rate.

 

(b)           From and after the Maturity Date, the unpaid principal balance
shall continue to bear interest at the Default Rate until and including the date
on which the entire principal balance is paid in full.

 

(c)           Borrower acknowledges that (i) its failure to make timely payments
will cause Lender to incur additional expenses in servicing and processing the
Loan, (ii) during the time that any monthly installment under this Note is
delinquent for thirty (30) days or more, Lender will incur additional costs and
expenses arising from its loss of the use of the money due and from the adverse
impact on Lender’s ability to meet its other obligations and to take advantage
of other investment opportunities; and (iii) it is extremely difficult and
impractical to determine those additional costs and expenses. Borrower also
acknowledges that, during the time that any monthly installment under this Note
is delinquent for thirty (30) days or more or any other Event of Default has
occurred and is continuing, Lender’s risk of nonpayment of this Note will be
materially increased and Lender is entitled to be compensated for such increased
risk. Borrower agrees that the increase in the rate of interest payable under
this Note to the Default Rate represents a fair and reasonable estimate, taking
into account all circumstances existing on the date of this Note, of the
additional costs and expenses Lender will incur by reason

 

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of the Borrower’s delinquent payment and the additional compensation Lender is
entitled to receive for the increased risks of nonpayment associated with a
delinquent loan.

 

9.             Limits on Personal Liability.

 

(a)           Except as otherwise provided in this Section 9, Borrower shall
have no personal liability under this Note, the Security Instrument or any other
Loan Document for the repayment of the Indebtedness or for the performance of
any other obligations of Borrower under the Loan Documents and Lender’s only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender’s exercise of its rights and remedies with respect
to the Mortgaged Property and to any other collateral held by Lender as security
for the Indebtedness. This limitation on Borrower’s liability shall not limit or
impair Lender’s enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any other obligations of Borrower.

 

(b)           Borrower shall be personally liable to Lender for the amount of
the Base Recourse, plus any other amounts for which Borrower has personal
liability under this Section 9.

 

(c)           In addition to the Base Recourse, Borrower shall be personally
liable to Lender for the repayment of a further portion of the Indebtedness
equal to any loss or damage suffered by Lender as a result of the occurrence of
any of the following events:

 

(i)            Borrower fails to pay to Lender upon demand after an Event of
Default all Rents to which Lender is entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits collected by Borrower from
tenants then in residence. However, Borrower will not be personally liable for
any failure described in this subsection (i) if Borrower is unable to pay to
Lender all Rents and security deposits as required by the Security Instrument
because of a valid order issued in a bankruptcy, receivership, or similar
judicial proceeding.

 

(ii)           Borrower fails to apply all insurance proceeds and condemnation
proceeds as required by the Security Instrument. However, Borrower will not be
personally liable for any failure described in this subsection (ii) if Borrower
is unable to apply insurance or condemnation proceeds as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.

 

(iii)          Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports.

 

(iv)          Borrower fails to pay when due in accordance with the terms of the
Security Instrument the amount of any item below marked “Deferred”; provided
however, that if no item is marked “Deferred”, this Section 9(c)(iv) shall be of
no force or effect.

 

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[Deferred]

 

Hazard Insurance premiums or other insurance premiums, [Deferred] Taxes,

[Deferred]

 

water and sewer charges (that could become a lien on the Mortgaged Property),

[N/A]

 

ground rents,

[Deferred]

 

assessments or other charges (that could become a lien on the Mortgaged
Property)

 

(d)           In addition to the Base Recourse, Borrower shall be personally
liable to Lender for:

 

(i)            the performance of all of Borrower’s obligations under Section 18
of the Security Instrument (relating to environmental matters);

 

(ii)           the costs of any audit under Section 14(g) of the Security
Instrument; and

 

(iii)          any costs and expenses incurred by Lender in connection with the
collection of any amount for which Borrower is personally liable under this
Section 9, including Attorneys’ Fees and Costs and the costs of conducting any
independent audit of Borrower’s books and records to determine the amount for
which Borrower has personal liability.

 

(e)           All payments made by Borrower with respect to the Indebtedness and
all amounts received by Lender from the enforcement of its rights under the
Security Instrument and the other Loan Documents shall be applied first to the
portion of the Indebtedness for which Borrower has no personal liability.

 

(f)            Notwithstanding the Base Recourse, Borrower shall become
personally liable to Lender for the repayment of all of the Indebtedness upon
the occurrence of any of the following Events of Default:

 

(i)            Borrower’s ownership of any property or operation of any business
not permitted by Section 33 of the Security Instrument;

 

(ii)           a Transfer (including, but not limited to, a lien or encumbrance)
that is an Event of Default under Section 21 of the Security Instrument, other
than a Transfer consisting solely of the involuntary removal or involuntary
withdrawal of a general partner in a limited partnership or a manager in a
limited liability company; or

 

(iii)          fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in connection with
the application for or creation of the Indebtedness or any request for any
action or consent by Lender.

 

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(g)           To the extent that Borrower has personal liability under this
Section 9, Lender may exercise its rights against Borrower personally without
regard to whether Lender has exercised any rights against the Mortgaged Property
or any other security, or pursued any rights against any guarantor, or pursued
any other rights available to Lender under this Note, the Security Instrument,
any other Loan Document or applicable law. To the fullest extent permitted by
applicable law, in any action to enforce Borrower’s personal liability under
this Section 9, Borrower waives any right to set off the value of the Mortgaged
Property against such personal liability.

 

10.         Voluntary and Involuntary Prepayments.

 

(a)           Any receipt by Lender of principal due under this Note prior to
the Maturity Date, other than principal required to be paid in monthly
installments pursuant to Section 3, constitutes a prepayment of principal under
this Note. Without limiting the foregoing, any application by Lender, prior to
the Maturity Date, of any proceeds of collateral or other security to the
repayment of any portion of the unpaid principal balance of this Note
constitutes a prepayment under this Note.

 

(b)           Borrower may not voluntarily prepay any portion of the principal
balance of this Note during the Lockout Period, if a Lockout Period is
applicable to this Note. However, if any portion of the principal balance of
this Note is prepaid during the Lockout Period by reason of the application by
Lender of any proceeds of collateral or other security to any portion of the
unpaid principal balance of this Note or following a determination that the
prohibition on voluntary prepayments during the Lockout Period is in
contravention of applicable law, then Borrower must also pay to Lender upon
demand by Lender, a prepayment premium equal to five percent (5.0%) of the
amount of principal being prepaid.

 

(c)           Following the end of the Lockout Period, Borrower may voluntarily
prepay all of the unpaid principal balance of this Note on an Installment Due
Date so long as Borrower designates the date for such prepayment in a Notice
from Borrower to Lender given at least 30 days prior to the date of such
prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a
day which is not a Business Day, then with respect to payments made under this
Section 10 only, the term “Installment Due Date” shall mean the Business Day
immediately preceding the scheduled Installment Due Date.

 

(d)           Notwithstanding subsection (c) above, Borrower may voluntarily
prepay all of the unpaid principal balance of this Note on a Business Day other
than an Installment Due Date if Borrower provides Lender with the Notice set
forth in subsection (c) and meets the other requirements set forth in this
subsection. Borrower acknowledges that Lender has agreed that Borrower
may prepay principal on a Business Day other than an Installment Due Date only
because Lender shall deem any prepayment received by Lender on any day other
than an Installment Due Date to have been received on the Installment Due Date
immediately following such prepayment and Borrower shall be responsible for all
interest that would have been due if the prepayment had actually been made on
the Installment Due Date immediately following such prepayment.

 

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(e)           Unless otherwise expressly provided in the Loan Documents,
Borrower may not voluntarily prepay less than all of the unpaid principal
balance of this Note. In order to voluntarily prepay all or any part of the
principal of this Note, Borrower must also pay to Lender, together with the
amount of principal being prepaid, (i) all accrued and unpaid interest due under
this Note, plus (ii) all other sums due to Lender at the time of such
prepayment, plus (iii) any prepayment premium calculated pursuant to
Section 10(f).

 

(f)            Except as provided in Section 10(g), a prepayment premium shall
be due and payable by Borrower in connection with any prepayment of principal
under this Note during the Prepayment Premium Period. The prepayment premium
shall be 1.0% of the amount of principal being prepaid.

 

(g)           Notwithstanding any other provision of this Section 10, no
prepayment premium shall be payable with respect to (i) any prepayment made
during the Window Period, or (ii) any prepayment occurring as a result of the
application of any insurance proceeds or condemnation award under the Security
Instrument, or (iii) any prepayment of the entire principal balance of this Note
that occurs on or after the twelfth (12th) Installment Due Date under this Note
with the proceeds of a fixed interest rate or fixed-to-float interest rate
mortgage loan that is the subject of a binding commitment for purchase between
the Freddie Mac and a Freddie Mac-approved Program Plus® Seller/Servicer.

 

(h)           Unless Lender agrees otherwise in writing, a permitted or required
prepayment of less than the unpaid principal balance of this Note shall not
extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.

 

(i)            Borrower recognizes that any prepayment of any of the unpaid
principal balance of this Note, whether voluntary or involuntary or resulting
from an Event of Default by Borrower, will result in Lender’s incurring loss,
including reinvestment loss, additional expense and frustration or impairment of
Lender’s ability to meet its commitments to third parties. Borrower agrees to
pay to Lender upon demand damages for the detriment caused by any prepayment,
and agrees that it is extremely difficult and impractical to ascertain the
extent of such damages. Borrower therefore acknowledges and agrees that the
formula for calculating prepayment premiums set forth in this Note represents a
reasonable estimate of the damages Lender will incur because of a prepayment.
Borrower further acknowledges that any lockout and the prepayment premium
provisions of this Note are a material part of the consideration for the Loan,
and that the terms of this Note arc in other respects more favorable to Borrower
as a result of the Borrower’s voluntary agreement to the lockout and prepayment
premium provisions.

 

11.          Costs and Expenses. To the fullest extent allowed by applicable
law, Borrower shall pay all expenses and costs, including Attorneys’ Fees and
Costs incurred by Lender as a result of any default under this Note or in
connection with efforts to collect any amount due under this Note, or to enforce
the provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding) or
judicial or non-judicial foreclosure proceeding.

 

11

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12.          Forbearance. Any forbearance by Lender in exercising any right or
remedy under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender’s right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower’s obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

 

13.          Waivers. Borrower and all endorsers and guarantors of this Note and
all other third party obligors waive presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness.

 

14.          Loan Charges. Neither this Note nor any of the other Loan Documents
shall be construed to create a contract for the use, forbearance or detention of
money requiring payment of interest at a rate greater than the Maximum Interest
Rate. If any applicable law limiting the amount of interest or other charges
permitted to be collected from Borrower in connection with the Loan is
interpreted so that any interest or other charge provided for in any Loan
Document, whether considered separately or together with other charges provided
for in any other Loan Document, violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation. The amounts, if any, previously paid to
Lender in excess of the permitted amounts shall be applied by Lender to reduce
the unpaid principal balance of this Note. For the purpose of determining
whether any applicable law limiting the amount of interest or other charges
permitted to be collected from Borrower has been violated, all Indebtedness that
constitutes interest, as well as all other charges made in connection with the
Indebtedness that constitute interest, shall be deemed to be allocated and
spread ratably over the stated term of this Note. Unless otherwise required by
applicable law, such allocation and spreading shall be effected in such a manner
that the rate of interest so computed is uniform throughout the stated term of
this Note.

 

15.          Commercial Purpose. Borrower represents that Borrower is incurring
the Indebtedness solely for the purpose of carrying on a business or commercial
enterprise, and not for personal, family, household, or agricultural purposes.

 

16.          Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of “days” means calendar days, not Business
Days,

 

17.          Governing Law. This Note shall be governed by the law of the
Property Jurisdiction.

 

18.          Captions. The captions of the Sections of this Note are for
convenience only and shall be disregarded in construing this Note.

 

19.          Notices; Written Modifications.

 

12

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(a)           All Notices, demands and other communications required or
permitted to be given pursuant to this Note shall be given in accordance with
Section 31 of the Security Instrument.

 

(b)           Any modification or amendment to this Note shall be ineffective
unless in writing signed by the party sought to be charged with such
modification or amendment; provided, however, that in the event of a Transfer
under the terms of the Security Instrument that requires Lender’s consent, any
or some or all of the Modifications to Multifamily Note set forth in Exhibit A
to this Note may be modified or rendered void by Lender at Lender’s option, by
Notice to Borrower and the transferee, as a condition of Lender’s consent.

 

20.          Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note may be litigated in the
Property Jurisdiction. The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction shall have jurisdiction over all
controversies that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise. However, nothing in this
Note is intended to limit any right that Lender may have to bring any suit,
action or proceeding relating to matters arising under this Note in any court of
any other jurisdiction.

 

21.          WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

 

22.          State-Specific Provisions.

 

None.

 

ATTACHED EXHIBIT. The Exhibit noted below, if marked with an “X” in the space
provided, is attached to this Note:

 

[X]          Exhibit A               Modifications to Multifamily Note

 

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IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend
Borrower the principal amount set forth above, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.

 

 

ASN PARK ESSEX LLC, a Delaware limited

 

liability company

 

 

 

 

 

By:

/s/ Christine Goodgold

 

 

 

Name:

Christine Goodgold

 

 

Title:

Authorized Signatory

 

90-004-2860

 

Borrower’s Social Security/Employer ID

Number

 

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ACKNOWLEDGMENT

 

STATE OF New York

)

 

)ss.

COUNTY OF New York

)

 

On this 4 day of October, 2007, before me, the undersigned notary public,
personally appeared Christine Goodgold, proved to me through satisfactory
evidence of identification, which were [drivers license, picture id], to be the
person whose name is signed on the preceding or attached document, and
acknowledged to me that [he][she] signed it voluntarily for its stated purposes
as Authorized Signatory of ASN PARK ESSEX LLC, a Delaware limited liability
company.

 

 

/s/ R. Douglas Burleson

[official signature and seal of notary]

 

Notary Public (Printed Name): R. Douglas Burleson

My Commission Expires:

 

DOUGLAS BURLESON

Notary Public, State of New York

No. 01BU6110252

Qualified In New York Country

Commission Expires May 24, 2006

 

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EXHIBIT A

 

MODIFICATIONS TO MULTIFAMILY NOTE

 

The following modifications are made to the text of the Note that precedes this
Exhibit.

 

1.             Section 1(a) is amended as follows:

 

(a)           In the definition of “Business Day”, the words “located in New
York, New York” are inserted after the words “banking associations”.

 

(b)           The following are added as new definitions:

 

“Combined Debt” shall mean the original outstanding principal balances owed by
Borrower and affiliates of Borrower under the Loans (as defined in the
Cross-Collateralization Agreement).

 

“Cross-Collateralization Agreement” shall mean that certain
Cross-Collateralization Agreement and Amendment to Security Instrument by and
between Borrower and Lender and dated the date hereof.

 

“Exit Fee” shall mean 1.0% of the outstanding principal balance of the Loan
being repaid.

 

“Present Value Factor” means:

 

1/((1+ Margin) ((12)+n)/12))

 

Where n = the nth Installment Due Date; for example, if the loan is prepaid on
the first Installment Due Date, the Spread Maintenance Premium would be the
Spread Payment times the Present Value Factor for each of the remaining payment
dates in the Prepayment Premium Period beginning with n=2.

 

“Spread Maintenance Premium” means, with respect to any repayment of principal
of the Loan prior to the end of the Prepayment Premium Period, a payment to
Lender in an amount equal to the Spread Payment times the Present Value Factor
for each of the remaining payment dates in the Prepayment Premium Period.

 

“Spread Payment” equals the amount of principal being prepaid times the Margin
divided by 12.

 

(c)           The definition of “Prepayment Premium Period” is deleted in its
entirety and restated as follows:

 

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“Prepayment Premium Period” means the period during which, if a prepayment of
principal occurs, a Spread Maintenance Premium and an Exit Fee will (except as
otherwise expressly set forth in this Note) be payable by Borrower to Lender.
The Prepayment Premium Period is the period from and including the date of this
Note until but not including the first day of the Window Period.

 

(d)           The definition of “Window Period” is deleted in its entirety and
restated as follows:

 

“Window Period” means the period from the twelfth (12th) Installment Due Date
under this Note to the Scheduled Maturity Date.

 

2.             Section 2 is amended as follows:

 

The following is hereby inserted at the end of Section 2:

 

Permitted options as to the method of payment will be provided in writing to
Borrower by the Loan Servicer, if any, or by Lender.

 

3.             Section 3(i) is amended as follows:

 

The words “upon demand by Lender” are deleted and the words “within three
(3) days of Borrower’s receipt of Lender’s written demand therefor” are inserted
in their place in the first sentence of Section 3(i).

 

4.             Section 6 is amended as follows:

 

(a)           In the first sentence, the words “under the Security Instrument or
any other Loan Document or” are inserted after the words “notice is required”.

 

(b)           In the third and fourth sentences, the words “prepayment premium”
are deleted and the words “Spread Maintenance Premium and Exit Fee, if any” are
inserted in their place.

 

5.             Section 7 is amended as follows:

 

The words “(other than the outstanding principal balance due on the Maturity
Date)” are inserted after the words “or any other Loan Document”.

 

6.             Section 8(a) is amended as follows:

 

The words “the first” are deleted.

 

7.             Section 9(a) is amended as follows:

 

(a)           In the first sentence of Section 9(a), the words “Borrower shall
have no” are deleted and the words “neither Borrower nor any Exculpated Party
shall have any” are inserted in their place.

 

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(b) The last sentence of Section 9(a) is deleted in its entirety and restated as
follows:

 

This limitation on Borrower’s and such other parties’ liability shall not limit
or impair Lender’s enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any obligations of Borrower.

 

8.             Section 9(b) is amended as follows:

 

The first sentence of Section 9(b) is deleted in its entirety and restated as
follows:

 

Borrower (but not any Exculpated Party; provided, however, the foregoing shall
not affect the obligations of any guarantor under any indemnity or guaranty
executed (on or after the date hereof) in connection with the Loan) shall be
personally liable to Lender for the amount of Base Recourse, plus any other
amounts for which Borrower has personal liability under this Section 9.

 

9.             Section 9(c) is amended as follows:

 

(a)           The first paragraph of Section 9(c) is amended as follows:

 

the words “if any”, are inserted after the words “Base Recourse”; the words
“(but not any Exculpated Party; provided, however, the foregoing shall not
affect the obligations of any guarantor under any indemnity or guaranty executed
(on or after the date hereof) in connection with the Loan)” are inserted after
the word “Borrower”;

 

(b)           the word “actual” is inserted prior to the word “loss”.

 

(c)           Clause (i) is amended as follows:

 

the word “written” is inserted after the words “pay to Lender upon”; and the
word “residence” is deleted and the word “occupancy” is inserted in its place.

 

(d)           Clause (iv) is amended as follows:

 

the words “except to the extent any such amount is being contested by Borrower
in accordance with the terms of the Security Instrument” are inserted before the
words “provided, however”;

 

(e)           The following is inserted as clause (v):

 

(v)           Borrower fails to comply with any and all indemnification
obligations contained in Section 18 of the Security Instrument (relating to
environmental matters).

 

(f)            The following is inserted as clause (vi):

 

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(vi)          Any claims, actions or other proceedings brought by the unit
holders of Archstone Smith Operating Trust with respect to the merger of
Archstone Smith Operating Trust occurring simultaneously herewith.

 

(g)           The following is inserted as clause (vii):

 

(vii) Borrower fails to obtain any consent required with respect to the transfer
of the Mortgaged Property in connection with the merger of Archstone Smith
Operating Trust occurring simultaneously herewith.

 

(h)           The following is inserted as clause (viii):

 

(viii). Borrower maintains its assets in a way difficult to segregate and
identify in violation of Section 33 of the Security Instrument.

 

10.           Section 9(d) is amended as follows:

 

(a)           The first paragraph of Section 9(d) is amended as follows: the
words “if any”, are inserted after the words “Base Recourse”; the words “(but
not any Exculpated Party; provided, however, the foregoing shall not affect the
obligations of any guarantor under any indemnity or guaranty executed (on or
after the date hereof) in connection with the Loan)” are inserted after the word
“Borrower”.

 

(b)           Clause (ii) is amended as follows: the words “costs of” are
deleted and (the words “actual out-of-pocket costs incurred by Lender to
conduct” are inserted in their place.

 

(c)           Clause (iii) is amended as follows: the words “actual
out-of-pocket” are inserted before the words “costs and expenses”; and the words
“costs of” are deleted and the words “actual out-of-pocket costs incurred by
Lender to conduct” are inserted in their place.

 

11.           Section 9(f) is modified as follows:

 

(a)           Section 9(f) subsection (i) is deleted and replaced with the
following

 

(i)            Borrower’s ownership of any real property other than the
Mortgaged Property or Borrower’s operation of any other business other than the
management and operation of the Mortgaged Property in violation of Section 33A
of the Security Instrument.

 

(b)           Section 9(f) (iii) is modified to delete the phrase “or written
material misrepresentation” so that the subsection reads as follows:

 

(iii)          fraud by Borrower or any officer, director, partner, member of
employee of Borrower in connection with the application for or creation of the
Indebtedness or any request for any action or consent by Lender.

 

(c)           The following new subsection (iv) is added to Section 9(f):

 

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(iv)          written material misrepresentation by Borrower or any officer,
director, partner, member of employee of Borrower in connection with the
application for or creation of the Indebtedness or any request for any action or
consent by Lender; provided, however, Lender must have declared an Event of
Default (other than the Event of Default set forth in Section 22(d)(i) of the
Security Instrument) and declared the Indebtedness due and payable.

 

12.           Section 9(g) is amended as follows:

 

The following words are inserted at the end of the last sentence:

 

; provided, however, Lender’s recovery against the assets of Borrower other than
the Mortgaged Property plus the Related Properties (as defined in the
Cross-Collateralization Agreement executed by Borrower in connection with this
Loan (the “Cross-Collateralization Agreement”) shall not exceed the aggregate of
the Indebtedness plus the Related Indebtedness as defined in the
Cross-Collateralization Agreement. Borrower’s personal liability shall not
exceed the Indebtedness and the Related Indebtedness.

 

13.           Section 9 is further amended as follows:

 

A new subsection (h) is inserted in Section 9 as follows:

 

(h)            Notwithstanding anything to the contrary contained in this Note,
the Security Instrument or any other Loan Document, none of Borrower’s direct or
indirect constituent partners, members or principals, or any shareholder,
director, officer, agent, employee or trustee of Borrower or such constituent
partners, members or principals, including, without limitation, Tishman Speyer
Properties, L.P. and any shareholder, partner, member, principal, director,
officer, agent, employee or trustee of Tishman Speyer Properties, L.P., its
subsidiaries and affiliates (collectively, the “Exculpated Parties”), shall be
personally liable for the payment of the Indebtedness or the performance of any
of the obligations of Borrower hereunder or under the Security Instrument or any
other Loan Document, or for any claim based thereon or in respect thereof, nor
shall any claim be brought against any of the Exculpated Parties; provided,
however, the foregoing shall not affect the obligations of any guarantor under
any indemnity or guaranty executed (on or after the date hereof) in connection
with the Loan.

 

14.           Section 10(a) is amended as follows:

 

The word “any” is inserted after the words “other than”.

 

15.           Section 10(c) is amended as follows:

 

(a)           The words “or any portion” are inserted alter the words
“voluntarily prepay”.

 

(b)           The word “revocable” is inserted before the words “Notice from
Borrower”.

 

(c)           The following is inserted as a new sentence at the end of such
clause (c):

 

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In the event that Borrower revokes any Notice, Borrower shall pay to Lender at
the time of its notice of revocation, all actual out-of-pocket costs and
expenses incurred by Lender in anticipation of the prepayment including, but not
limited to, reasonable attorney’s fees and expenses and any fees and actual
out-of-pocket costs and expenses incurred by any servicer.

 

16.           Section 10(d) is amended as follows:

 

The words “or any portion” are inserted after the words “voluntarily prepay”.

 

17.           Section 10(e) is amended as follows:

 

(a)           The first sentence is deleted in its entirety.

 

(b)           Clause (iii) is amended by deleting the words “prepayment premium
calculated” and inserting the words “Spread Maintenance and Exit Fee due in
connection with such prepayment”.

 

18.           Section 10(f) is deleted in its entirety and restated as follows:

 

(f)            Except as provided in Section 10(g), a Spread Maintenance Premium
and an Exit Fee shall be due and payable by Borrower in connection with any
prepayment of principal under this Note during the Prepayment Premium Period.

 

19.           Section 10(g) is deleted in its entirety and restated as follows:

 

(g)           Notwithstanding any other provision of this Section 10, (i) no
Spread Maintenance Premium shall be payable with respect to any prepayment made
during the Window Period, or (ii) no Spread Maintenance Premium shall be payable
with respect to any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument; (iii) no
Spread Maintenance Premium or Exit Fee shall be due in connection with
prepayments of the first ten percent (10%) of the Combined Debt, provided that
(A) such prepayments occur after the sixth (6th) Installment Due Date, (B) such
prepayments occur in connection with the sale of one or more Related Properties
(as defined in the Cross-Collateralization Agreement) to an unaffiliated third
party pursuant to an arms-length agreement(s) and (C) the Related Properties
that are sold are released from the lien of the Cross-Collateralization
Agreement and the lien of the Related Instrument (as defined in the
Cross-Collateralization Agreement) in accordance with the terms of the Related
Loan Documents (as defined in the Cross-Collateralization Agreement) and (iv) no
Exit Fee shall be due in connection with prepayments of the first fifty percent
(50%) of the Combined Debt.

 

20.           Section 10(h) is amended as follows:

 

The phrase “or change the amount of such installments” is deleted and the
phrase”, but the amount of each monthly installment of interest thereafter shall
be

 

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recomputed to reflect such prepayment of the Indebtedness” shall be inserted
after the last word of this section.

 

21.           Section 11 is amended as follows:

 

The following words “actual out-of-pocket” are inserted before the words
“expenses and costs”.

 

22.           The following words are inserted at the end of the final sentence
in Section 19(b):

 

unless title to the Mortgaged Property is vested in an entity whose Controlling
Interest(s) arc directly or indirectly held by the Tishman Speyer Control
Persons and/or the Lehman entities.

 

23.           Section 20 is amended as follows:

 

The third sentence of the Section is modified to omit the word “service”.

 

24.           A new Section 23 is added, reading as follows:

 

23.           Exhibits Incorporated. The Exhibits attached hereto are hereby
incorporated herein as a part of this Note with the same effect as if set forth
in the body hereof. In the event of any conflict or inconsistency between the
provisions of this Note and the provisions of Exhibit A, the provisions of
Exhibit A shall control.

 

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