Exhibit 10.1

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WACHOVIA

January 11, 2008

 

Mr. Carl Valeri

The Hamilton Company

39 Brighton Avenue

Boston, Massachusetts 02134

 

Re:

Project Name:

Hamilton Portfolio

 

Location:

See Attached Exhibit C

 

Number of Units

See Attached Exhibit C

 

Borrower:

See Attached Exhibit C

Key Principal:

Harold Brown and The Harold Brown 1999 Revocable Trust

Proposed Loan Amount:

See Attached Exhibit C

Loan Term:

15 years

Interest Only/Amortization Period:

15 years interest only

Processed Interest Rate:

5.60%

Accrual Basis:

Actual/360

Prepayment Terms:

14 1/2 years Yield Maintenance

Fannie Mae DUS Program:

DUS Cash ERL

Maximum LTV:

See Attached Exhibit C

Minimum DSCR:

See Attached Exhibit C

Financing Fee:

As described in Section 7(b) below

Good Faith Deposit:

$929,102.00

Completion Repair Deposit:

TBD (Subject to Final Engineering Report)

Initial Deposit to Replacement Reserve:

TBD (Subject to Final Engineering Report)

Monthly Deposit to Replacement Reserve

TBD (Subject to Final Engineering Report) in accordance with Section 8(a)

Commitment Acceptance Date:

No later than 7 days from date of this Commitment

Commitment Expiration Date:

Seventy-five (75) days from the date of this Commitment

Rate Setting Expiration Date:

No later than 30 days from the date of the Commitment Acceptance Date

Special Conditions:

The provisions of the Special Conditions set forth in Exhibit A are incorporated
into this Commitment and made a part hereof. In the event that the provisions of
Exhibit A conflict with any other provisions of this Commitment, the provisions
of Exhibit A shall govern and control.

 

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Dear Mr. Valeri:

 

Wachovia Multifamily Capital, Inc. (“Lender”) is pleased to advise you that your
application for permanent financing on the above referenced property (the
“Property”) has been approved subject to and upon strict compliance by Borrower
with each of the terms, conditions and provisions of this commitment letter
(collectively, with the “Special Conditions”, “General Conditions” and all
Exhibits attached hereto, the “Commitment”). Lender hereby agrees to make the
mortgage loan (the “Mortgage Loan”) in the proposed amount (the “Loan Amount”)
set forth above to Borrower pursuant to the Fannie Mae Multifamily Delegated
Underwriting and Servicing product line for early rate lock execution (“DUS ERL
Program”) as set forth in the Fannie Mae Delegated Underwriting and Servicing
Guide in its present form and as amended, supplemented and reissued from time to
time (the “DUS Guide”). This Commitment is issued in material reliance upon
(i) the continuing truth and accuracy of all information and documentation
furnished (or to be furnished) to Lender in connection with the Lender DUS
Program Loan Application (“Loan Application”) or otherwise with respect to
Borrower, its principals (including the Key Principals) and the Property;
(ii) the continuing accuracy of the recitations of fact set forth in this
Commitment; and (iii) Borrower’s covenant, evidenced by its acceptance of this
Commitment, to comply with each of the terms, conditions and provisions of this
Commitment.

 

1.             (a) Borrower. Borrower shall be the Borrower identified above. If
there is any change in the organizational structure or ownership of the Borrower
from that previously disclosed to Lender, then at Lender’s option, this
Commitment shall terminate and Lender shall have no obligations hereunder
including the obligation to make the Loan. The Borrower shall be in good
standing and duly authorized to transact business in the state of its formation
and, in the event the Property is located in a different state, the state where
the Property is located. The Borrower shall hold legal and beneficial title to
the Property on the Closing Date (hereinafter defined) and for the entire
Mortgage Loan Term, shall be a single purpose entity having no other assets,
legal purpose or business other than the ownership and operation of the
Property.

 

(b) Key Principals. The Key Principals shall be as identified above and shall be
required to sign certain loan documents to evidence their liability for the
exceptions to non-recourse liability provisions contained in the loan documents.

 

2.                                  Mortgage Loan Terms.

 

                                                     (a) Interest Rate.

 

(i) Processed Interest Rate. Based on the related materials submitted to date to
Lender, the Mortgage Loan has been partially underwritten, and this Commitment
is being issued, on the basis of the Processed Interest Rate set forth above.
Borrower understands and

 

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acknowledges that as of the date hereof Lender has not obtained a Commitment
from Fannie Mae to purchase the Mortgage Loan (“Fannie Mae Commitment”) and that
the Fannie Mae Commitment will not be obtained by Lender pursuant to this
Section 2 unless and until Borrower has satisfied all of the conditions
precedent set forth in Section 3 of this Commitment. Accordingly, since Fannie
Mae interest rates and pricing options fluctuate from time to time, the actual
interest rate selected by Borrower pursuant to subsection (ii) below (“Selected
Interest Rate”) may be other than the Processed Interest Rate based on the
Fannie Mae interest rate and price quotations at the time the Fannie Mae
Commitment is obtained. Borrower acknowledges that the rates quoted by Lender
will also include the servicing fee payable to Lender in connection with
servicing of the Mortgage Loan. Any difference between the Selected Interest
Rate and the Processed Interest Rate may, in accordance with applicable Fannie
Mae DUS ERL Program underwriting guidelines, result in a corresponding change in
the Loan Amount. By accepting this Commitment, Borrower expressly acknowledges
and agrees that Lender shall have no liability for fluctuations in the Fannie
Mae interest rate and pricing options.

 

(ii) Selected Interest Rate. On the date (subsequent to Borrower’s satisfaction
of the conditions precedent set forth in Section 3 of this Commitment and
payment to Lender of the Good Faith Deposit described in this Commitment) that
Borrower selects a current interest rate and price (“Rate Setting Date”) and
immediately prior to Lender obtaining the Fannie Mae Commitment, Borrower must
sign and return by telecopier Lender’s DUS rate setting authorization in a form
to be provided on such date by Lender (“Rate Setting Form”) by 2:00 p.m. New
York, New York time. The Rate Setting Form shall confirm the Selected Interest
Rate, Loan Amount, the monthly interest payment shall be based upon an
Actual/360 payment schedule and the date by which the Closing Date must occur.

 

If Borrower has not satisfied the preconditions set forth in Section 3 of this
Commitment and selected an interest rate and price by 2:00 p.m. New York, New
York time on the Rate Setting Expiration Date, this Commitment shall
automatically terminate, Lender shall have no obligation to make the Mortgage
Loan and shall be relieved of any further obligations to Borrower hereunder or
otherwise. Unless the Rate Setting Expiration Date has been extended, which
extension may be granted or denied in Lender’s sole and absolute discretion,
Lender shall return to Borrower, without interest, the Good Faith Deposit, if
previously received from Borrower, less any amounts due and owing by the
Borrower to Lender pursuant to the terms of this Commitment.

 

Borrower hereby acknowledges that Lender has issued this Commitment and may
accept the Rate Setting Form and allow Borrower to select the Interest Rate in
reliance on Borrower’s agreement that it shall provide the balance of the
documents required for underwriting and close the Mortgage Loan in accordance
with the terms of this Commitment as such terms may be modified. Borrower shall
be liable for any and all actual damages (which amounts may exceed the Good
Faith Deposit) that Lender and/or Fannie Mae may incur as a result of the
Borrower’s failure to close the Mortgage Loan or, if the Borrower has provided
false or materially misleading information in connection with the Loan
Application.

 

(b) Maturity Date. The Mortgage Loan term shall commence on the Closing Date and
shall terminate on the date that is the fifteenth (15th) anniversary of the
first day of the first

 

 

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calendar month following the Closing Date (the “Maturity Date”).

 

(c)     Monthly Mortgage Payment. On the Closing Date, the Borrower shall pay
interest due on the Mortgage Loan, at the Selected Interest Rate, from the
Closing Date to and including the last day of the month in which the Closing
occurs. Thereafter, commencing on the first day of the second calendar month
following the Closing Date (the “Payment Commencement Date”), and on the first
day of each and every calendar month thereafter, the Borrower shall make a fixed
payment of interest only at the Selected Interest Rate. If the Closing Date is
the first day of a month, the monthly payments of interest only described in
this paragraph shall commence on the first day of the calendar month that
follows the month in which the Closing occurs. Interest during the term of the
Mortgage Loan shall be calculated on the basis of a 360 day year for the actual
number of calendar days elapsed during such month. The Borrower understands that
the amount allocated to interest for each month will vary depending on the
actual number of calendar days during such month. As a result, loans using
Actual/360 payment schedule amortize more slowly and generate more interest than
a loan at the same note rate using a 30/360 payment schedule. Unless sooner
paid, the entire unpaid principal balance of the Mortgage Loan and all accrued
and unpaid interest thereon shall be due and payable in full on the Maturity
Date.

 

(d)     Prepayment Terms. The Mortgage Loan may be prepaid only in accordance
with the terms and conditions contained in the Fannie Mae Multifamily Note. The
Yield Maintenance Period applicable to the Mortgage Loan Term shall be fourteen
and one-half (14.5) years and the “Specified U.S. Treasury Security” will be
determined by Fannie Mae at the time Lender obtains the Fannie Mae Commitment.

 

(e)     Late Charges; Default Interest Rate; Notice and Cure. Any payment on the
Note that has not been received by Lender on or before the tenth (10th) day of
the month shall be subject to a late charge of five (5.0%) percent on such
payment. If any payment on the Note has not been received by Lender on or before
the thirtieth (30th) day after the scheduled payment date, the Mortgage Loan
shall accrue interest on the unpaid principal balance of the Note on a per annum
rate equal to four (4%) percent above the Selected Interest Rate. Lender shall
not be obligated to include in the Loan Documents clauses providing Borrower
with notice of defaults and the opportunity to cure such defaults.

 

3.             Conditions Precedent for Selecting the Interest Rate and Fannie
Mae Commitment. In addition to Lender’s receipt of the Good Faith Deposit
described in this Commitment, Lender’s obtaining of the Fannie Mae Commitment
shall be expressly conditioned upon satisfaction of each of the following
conditions precedent, to the satisfaction of Lender and Lender’s Counsel (as
hereinafter defined). All documents and other instruments to be delivered
hereunder shall be at Borrower’s sole cost and expense.

 

a.               Receipt by Lender of a fully executed DUS Cash Extended Rate
Lock Borrower Certification (the “Borrower Certification”) executed by Borrower
and Key Principal, the form of which is annexed hereto as Exhibit B.

 

4.             Conditions Precedent to Lender completing its full underwriting
and Closing the

 

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Mortgage Loan. In addition to the satisfaction of the conditions and
requirements of Section 3 and other conditions and requirements set forth in
this Commitment, Lender’s obligation to close the Mortgage Loan shall be
expressly conditioned upon compliance with each of the following conditions to
the satisfaction of Lender and Lender’s Counsel. All documents and other
instruments to be delivered hereunder shall be at Borrower’s sole cost and
expense.

 

a.                    The satisfaction of all of the terms and conditions set
forth in this Commitment;

 

b.                   Receipt and approval of a current title insurance
commitment;

 

c.                    Receipt and approval of complete copies of the
organizational documents of Borrower and, if applicable, each general partner or
managing member of Borrower, including, but not limited to, agreement(s) of
general or limited partnership, operating agreements, articles of organization,
certificates of limited partnership, good standing certificates, trust
documentation, certificates of authority to transact business in the
jurisdiction in which the Property is located, articles of incorporation,
corporate by-laws, resolutions and incumbency certificates, all evidencing the
due organization, valid existence and good standing of such entities, and the
full power and authority to execute, deliver and perform under the Loan
Documents;

 

d.                   Receipt and approval of a current as-built ALTA/ACSM survey
of the Property prepared in accordance with all Fannie Mae and Lender’s
requirements and containing, without amendment, the Fannie Mae promulgated form
of Surveyor’s Certificate. Borrower expressly acknowledges that any deviations
from the form provided by Fannie Mae will require Lender’s Counsel to seek the
prior written approval of Fannie Mae and will delay obtaining the Fannie Mae
Commitment and Closing;

 

e.       Receipt and approval of a pro forma or specimen title insurance policy
from a title insurer satisfactory to Lender in its sole discretion (including
legible copies of all recorded exceptions referenced therein) issued with
respect to the Property and prepared in accordance with all Fannie Mae and
Lender’s requirements;

 

f.       Receipt and approval of evidence of zoning compliance, ability to
rebuild the Property in the event of casualty and permanent certificates of
occupancy (or the legal equivalent in the event certificates of occupancy are
not issued in the jurisdiction in which the Property is located) with respect to
all of the improvements on the Property. In the event zoning compliance is
unattainable, a zoning opinion or zoning report will be required;

 

g.      Receipt and approval of the results of a current judgment, lien,
bankruptcy and UCC searches performed in the appropriate state and local office
with respect to the Borrower and each Key Principals (and each general partner
or managing member of the Borrower, if the Borrower is a partnership or limited
liability company);

 

h.      Receipt and approval of a draft of Borrower’s Counsel’s opinion in the
form promulgated by Fannie Mae. Borrower expressly acknowledges that any
deviations from the form provided by Fannie Mae will require Lender’s Counsel to
seek the prior written approval of Fannie Mae and will

 

 

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delay obtaining the Fannie Mae Commitment and Closing;

 

i.    Receipt and approval by Lender and Lender’s Counsel of each lease demising
a portion of the Property for non-residential purposes, including, without
limitation, laundry leases, as well as copies of all service contracts executed
in connection with the Property, together with such estoppel certificates and
subordination and non-disturbance agreements as Lender shall require;

 

j.    Borrower’s compliance with the insurance requirements set forth in the DUS
Guide, including, without limitation, ordinance and law coverage and evidence of
flood insurance (if applicable);

 

k.   Receipt and approval by Lender any and all outstanding processing and
underwriting due diligence documents required by Lender in order to finalize the
underwriting of this transaction;

 

I.    Receipt by Lender of any and all required Fannie Mae waivers;

 

m.  Receipt by Lender’s Counsel of any and all outstanding legal due diligence
documents;

 

n.   The absence of any (i) change in federal, state or local law, (ii) decision
of any court or administrative body, (iii) ruling or regulation (if a Treasury
Regulation, including any final, temporary or proposed provisions of the
Treasury Regulation), or (iv) other action or event, which materially adversely
affects or which may, directly or indirectly, materially adversely affect
(A) the transactions to be affected pursuant to this Commitment and the Fannie
Mae Commitment or (B) Lender’s ability to deliver the Mortgage Loan to Fannie
Mae in accordance with and in the manner provided in the Fannie Mae Commitment;

 

o.   The execution and delivery by the Borrower and the Key Principal(s) of all
Loan Documents (as hereinafter defined); and

 

p.   Borrower’s timely payment of all fees and other charges required by this
Commitment.

 

All documents to be delivered to Lender or Lender’s Counsel pursuant to this
Section 4, other than those documents customarily delivered at closing, shall be
delivered no later than ten (10) days prior to the Closing Date. Notwithstanding
anything in this Commitment to the contrary, the effectiveness of this
Commitment shall at all times be contingent upon (i) completion of all due
diligence required by the DUS ERL Program, (ii) the issuance by Fannie Mae of
the Fannie Mae Commitment, (iii) the continued validity and enforceability of
the Fannie Mae Commitment as such Commitment may be revised by Fannie Mae, and
(iv) Borrower’s compliance with the terms and conditions of this Commitment and
the DUS ERL Program requirements then in effect.

 

5.             Security. The Mortgage Loan shall constitute a valid first lien,
subject to no other liens or encumbrances, on the good and marketable fee simple
title to the Property, subject only to such exceptions as shall be approved by
Lender and Lender’s Counsel, and free from all mechanics’ or materialmen’s
liens, claims or special assessments for work completed or under construction on
the Closing Date. The Mortgage Loan shall be evidenced by a promissory note of
the Borrower

 

 

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(including any addendum or attachment thereto, the “Note”) which shall be
secured by, among other things, (i) a first lien mortgage, deed of trust, or
deed to secure debt (including any addendum or attachment thereto, the
“Mortgage”) on the Property, (ii) a valid and perfected security interest in all
personal property owned by the Borrower and located on or used in connection
with the Property or any improvements thereon and (iii) such other instruments
and documents as may be required by Lender or Lender’s Counsel or as Lender or
Lender’s Counsel shall determine to be necessary or desirable (the Note, the
documents described in clauses (i) through (iii) above, and any documents
relating to secondary financing, if applicable, collectively the “Loan
Documents”). Although the Loan Documents will generally be non-recourse, there
will be certain exceptions to non-recourse liability and certain indemnification
requirements contained in the Fannie Mae form of Note which create personal
liability and indemnification obligations for Borrower and/or the Key
Principals, if any, identified above. By acceptance of this Commitment,
Borrower, for itself and on behalf of its principals and the Key Principals, if
any, expressly acknowledges and agrees to such provisions.

 

6.     Closing. The date of closing of the Mortgage Loan (the “Closing” or
“Closing Date”) shall be held on or before the date set forth in the Rate
Setting Form.

 

7.     Fees and Charges To Be Paid By Borrower.

 

a.             Application Fee. Upon execution of this Commitment, Borrower
shall pay to Lender the sum of $0.00 which fee constitutes the Application Fee
and which Borrower acknowledges was earned by Lender upon the receipt of the
executed Loan Application and is non-refundable. Borrower acknowledges that
Lender will incur out-of-pocket expenses in connection with the processing of
the Loan and Borrower agrees that it will remit to Lender upon demand such
amounts as Lender shall incur with respect to such processing.

 

b.             Financing Fee. Borrower shall pay Lender a Financing Fee equal to
.50% of the Proposed Loan Amount, which Financing Fee shall be deemed earned by
Lender upon the Rate Setting Date and shall be payable on the Closing Date from
proceeds of the Loan. In no event shall the Financing Fee be deemed unearned
after the Rate Setting Date unless (i) Lender determines to materially modify
the terms of this Commitment, (ii) the Closing does not occur due solely to the
willful default by Lender of its obligations under this Commitment, (iii) the
suspension of Lender’s DUS ERL Program license, (iv) Fannie Mae’s suspension or
termination of the DUS ERL Program; or (v) there occurs a change in any law
which causes the making of the Mortgage Loan by the Lender or the acquisition
thereof by Fannie Mae unlawful.

 

c.             Good-Faith Deposit. Before the Rate Setting Date, but in no event
later than 24 hours prior to the Rate Setting Date, Borrower shall deposit with
Lender, in immediately available funds, $929,102 (the “Good Faith Deposit”) to
secure the performance of Borrower’s obligations under this Commitment and the
Fannie Mae Commitment. Lender and Fannie Mae shall deem the Good Faith Deposit
earned upon receipt. Except as set forth below, if for any reason closing and
funding of the Mortgage Loan does not occur, the Good Faith Deposit will be
forfeited to Fannie Mae. Borrower hereby acknowledges and agrees that the Good
Faith Deposit shall be refundable to Borrower only in the event:

 

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(i)            Lender materially modifies the terms of this Commitment based
upon final underwriting of the Loan and Borrower does not accept such
modifications, in which event the Good Faith Deposit will be refunded to
Borrower, less Fannie Mae’s and Lender’s actual out-of-pocket expenses incurred
in connection with the underwriting and processing of the Loan Application. For
purposes of this Commitment, a “material modification” shall mean a change that
Lender and Fannie Mae deem to be material. Borrower acknowledges that Borrower
is obligated to accept all changes to this Commitment that are not material; or

 

(ii)           purchase of the Loan by Fannie Mae, in which event the Good Faith
Deposit will be refunded to Borrower.

 

Notwithstanding anything in this Commitment to the contrary, Borrower
acknowledges and agrees that the greater of the Good Faith Deposit or the
Pair-Off Fee (herein after defined in Exhibit C) shall be due from Borrower if:

 

(i)            Borrower fails to provide Lender with all required information in
a timely fashion to enable Lender to submit the full underwriting package to
Lender’s loan committee by February, 11, 2008 or

 

(ii)           Fannie Mae rejects the Loan on the basis of Fannie Mae’s
determination that any representation, warranty, statement, certificate, or
other data and information made or furnished to Lender in connection with the
proposed Loan is materially false or misleading as of the date given; or

 

(iii)          a material adverse change in the financial condition or credit of
Borrower, any Key Principals or any Principal has occurred subsequent to Rate
Setting Date; or

 

(iv)          a material adverse change in the Property’s value, net operating
income, title, physical or operating condition has occurred subsequent to the
Rate Setting Date; or

 

(v)           the third-party reports, including, without limitation, the
appraisal, the engineering reports/surveys, the environmental reports/surveys
and the final title policy, reveal material adverse conditions that were known
(or should have been known) by Borrower that were not disclosed to Lender, and
such conditions are unacceptable to Lender or Fannie Mae.

 

Borrower hereby expressly acknowledges that Lender and/or Fannie Mae will incur
certain financial liabilities in connection with this setting the Interest Rate
and obtaining the Fannie Mae Commitment in reliance upon the truth and accuracy
of all representations, warranties, statements, certificates and other
information furnished to Lender and/or Fannie Mae, Borrower shall be liable for,
and agrees to defend, indemnify and hold Lender and Fannie Mae harmless from and
against, any and all claims, losses, and direct and consequential damages that
Lender and/or Fannie Mae may incur as a result of Borrower’s failure to close
the Loan in accordance with the terms and conditions set forth in this
Convnitment. Such direct and

 

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consequential damages may not be limited to the amount of the Good Faith
Deposit. To the extent any conflict exists between this Section 7(c) and the
Borrower Certification, the Borrower Certification shall prevail.

 

8.     FUNDS AND ACCOUNTS.

 

a.     Reserve Fund for Replacements. On the Closing Date, Borrower shall
execute and deliver a Replacement Reserve and Security Agreement and, in
accordance therewith, shall establish a reserve fund for replacements (the
“Replacement Reserve”) to be held by Lender in escrow for major maintenance and
replacements of improvements to be designated by Lender. The Borrower shall
deposit the Initial Deposit and Monthly Deposits as set forth above. The
Borrower hereby acknowledges that the amounts of the Initial Deposit and Monthly
Deposit may be revised upon completion of underwriting the Mortgage Loan by
Lender.

 

Notwithstanding the foregoing, Lender shall waive the monthly deposits to the
Replacement Reserve however, the Loan Documents will provide that Lender may
reinstate the monthly deposits to the Replacement Reserve upon the conditions
contained in the Replacement Reserve Agreement.

 

b.     Completion/Repair Fund. On the Closing Date, Borrower may be required to
deposit with Lender an amount which equals 150% of Lender’s estimate of the cost
of certain required repairs estimated by Lender’s engineer to correct items
requiring immediate repair as described in Lender’s engineering and
environmental inspections to be performed upon acceptance of this Commitment by
Borrower. Any such escrow (the “Completion Reserve”), will be held by Lender in
accordance with the terms and conditions of a Completion/Repair and Security
Agreement to be executed and delivered by the Borrower in the standard Fannie
Mae form.

 

c.     Administration of Funds. The Replacement Reserve and Completion Reserve,
if required, shall be deposited into respective custodial accounts in an FDIC
insured institution that meet the standards of Fannie Mae. The Replacement
Reserve and Completion Reserve, if any, shall constitute additional security for
the Mortgage Loan. The Borrower shall not make a request for release from the
Replacement Reserve or Completion Reserve more frequently than once in any
quarter. Lender may, at its option, inspect the Property prior to releasing any
funds and charge a fee for such inspection.

 

9.       Lender’s Counsel. Lender shall be represented by its attorney, Cassin
Cassin & Joseph LLP by Dennis Mensi, Esq. (212-972-6161) 711 Third Avenue,
20th Floor, New York, New York 10017 (“Lender’s Counsel”), in connection with
the preparation and review of the an Documents and in all matters relating to
the Mortgage Loan. The Borrower’s acceptance of this Commitment shall constitute
an authorization for Lender’s Counsel to proceed at the Borrower’s expense with
the preparation of the Loan Documents, examination of the title to the Property
and to take such other steps as may be necessary or appropriate to consummate
this transaction.

 

Borrower acknowledges that Lender’s Counsel fees, expenses and disbursements,
will be due and payable at the time of the closing of the Mortgage Loan, or upon
demand in the event the

 

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Mortgage Loan does not close.

 

10.   General Conditions and Exhibits. The General Conditions and Exhibits
attached to this Commitment are an integral part of this Commitment and are
incorporated into and made a part hereof by this reference.

 

11.   Assignment of Commitment. This Commitment is issued directly to the
Borrower and may not be assigned by the Borrower without the express written
consent of Lender which may be withheld in its sole and absolute discretion.
This Commitment, the Mortgage Loan and all related closing documentation may be
assigned by Lender without the Borrower’s consent. If required by Lender, the
Borrower agrees to execute and deliver all documents necessary to effectuate
such assignment, assuming that such documents will not change the economic terms
of the Mortgage Loan and will not cause any material, adverse change to the
Borrower with respect to the terms and conditions of the Mortgage Loan.

 

12.   No Change in Conditions or Circumstances. This Commitment has been issued
in full reliance upon financial statements and other documentation submitted by
the Borrower to Lender. Lender may, at its option, terminate its obligations
hereunder if any material adverse change occurs in the business, operations,
affairs, prospects, condition or the financial position of the Borrower or the
Property, or in the financial condition of any individuals or entities listed as
sponsors or principals in the Borrower’s Loan Application.

 

13.   Borrower’s Covenant to Close; Termination of Commitment; Damages. Borrower
hereby covenants to Lender that it shall close the Mortgage Loan with Lender in
accordance with the terms and conditions of this Commitment. In the event that
any condition of this Commitment is not met as and when such condition is
required to be satisfied under this Commitment, Lender may, in its sole and
absolute discretion and without any liability of any kind, terminate this
Commitment, in which event any fees, deposits or other sums of money previously
advanced or paid to Lender (other than the Good Faith Deposit prior to Rate Lock
as provided herein) shall be retained by Lender and the Borrower shall pay to
Lender, promptly upon demand, any other costs, fees or expenses payable by
Borrower pursuant to the terms of this Commitment. In addition, Borrower shall
be liable to Lender for any damages, losses and expenses, including reasonable
attorneys’ fees, incurred by Lender as a result of Lender’s inability to deliver
the Mortgage Loan to Fannie Mae as required by the Fannie Mae Commitment
resulting directly or indirectly from a default by the Borrower hereunder.

 

14.   Complete Agreement; Survival; Time of the Essence. This Commitment,
together with the General Conditions incorporated herein and any exhibits
hereto, when executed by the parties hereto, contains the complete and entire
understanding of the parties hereto of Lender’s agreement to provide the
Mortgage Loan as indicated, and no changes or waivers will be recognized as
valid unless they are made in writing and similarly executed. Nothing
transmitted or executed by Lender shall be effective or enforceable against
Lender unless signed by the undersigned signatory, who is the sole authorized
representative of Lender with respect to this Commitment. No specific waiver of
any of the terms hereof shall be considered as a general waiver. The terms and
conditions of this Commitment shall survive the closing of the Mortgage

 

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Loan. In the event of any conflict between the terms and conditions of this
Commitment and the terms and conditions of the Loan Documents, the Loan
Documents shall control. In the event of any conflict between the terms of this
Commitment and the terms and conditions of the Fannie Mae Commitment or the DUS
Guide, the terms and conditions of the Fannie Mae Commitment and/or the DUS
Guide shall control. Time is of the essence with respect to all of Borrower’s
covenants and obligations under this Commitment.

 

15.   Applicable Law. The rights and obligations of the parties with respect to
this Commitment shall be determined in accordance with the laws of the State of
New York.

 

16.   Counterparts. This Commitment may be executed in any number of
counterparts, each of which together shall constitute one and the same
instrument.

 

17.   Expiration of Commitment. Unless all conditions have been met and the
Closing Date has occurred, this Commitment shall automatically expire
seventy-five (75) days from the date hereof without further notice and Lender’s
offer to make the Mortgage Loan shall be void and of no further force or effect.

 

18.   Acceptance of Commitment. If the terms and conditions of this Commitment
are satisfactory, please acknowledge Borrower’s acceptance of this Commitment by
executing and delivering one (1) copy of this Commitment to Lender. Borrower’s
acceptance of this Commitment must be received by Lender by not later than
5:00 P.M. New York New York Time on the seventh (7th) day following the date of
this Commitment (the “Commitment Acceptance Date”). If this Commitment has not
been received by Lender by the Acceptance Date, then this Commitment shall
automatically expire without further notice and Lender’s offer to make the
Mortgage an shall be void and of no further force or effect.

 

 

Very truly yours,

 

 

 

WACHOVIA MULTIFAMILY CAPITAL, INC.

 

By:

 

 

 

/s/ Marie Carolo

 

Name:

Marie Carolo

 

Title:

Director

 

 

SIGNATURES CONTINUED ON THE FOLLOWING PAGES

 

11

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EXHIBIT A

 

SPECIAL CONDITIONS

 

1.

Borrower may be required to satisfy additional conditions set forth by Lender,
Lender’s Counsel and/or Fannie Mae as a result of Lender’s completion of its
full underwriting of the transaction.

2.

Borrower must confirm that the student population for any Property does not
exceed 80%.

3.

Borrower may be required to execute at Closing an Operations and Maintenance
PIan for Asbestos, which Plan shall be acceptable to Lender in its sole
discretion.

4.

Borrower may be required execute at Closing an Operations and Maintenance Plan
for Lead-Based Paint which Plan shall be acceptable to Lender in its sole
discretion.

5.

Borrower may be required execute at Closing an Operations and Maintenance Plan
for Mold which Plan shall be acceptable to Lender in its sole discretion.

6.

Confirmation from Borrower and Borrower’s counsel that there are no other
principals other than the following:

 

New England Realty Associates LP

 

NewReal, Inc.

 

Harold Brown

 

Ronald Brown

 

Harold Brown 1999 Revocable Trust

 

Juilliaen Aertsen, if confirmation exists of Aertsen Ventures within any of the
borrower structures as a principal

7.

Confirmation from Borrower and Borrower’s counsel that Harold Brown and/or
Ronald Brown has the controlling interest of NewReal, Inc.

8.

Confirmation from Borrower and Borrower’s counsel as to role, if any, of Aertsen
Ventures in ownership of the Hamilton Portfolio.

 

15

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EXHIBIT B

 

DUS CASH EXTENDED RATE LOCK BORROWER CERTIFICATION
(Preliminary Underwriting Prior to Rate Lock)

 

Property Name:

 

Hamilton Portfolio

Address:

 

See Attached

Rate Lock Loan Amount:

 

See Attached

Borrower Name:

 

See Attatched

Key Principal(s):

 

Harold Brown and The Harold Brown 1999 Revocable Trust

Lender:

 

Wachovia Multifamily Capital, Inc.

 

The undersign undersigned Borrower is entering i into a commitment (the “Loan
Commitment”) with the Lender, specified above regarding a loan (the “Loan”), in
the above-referenced amount (the “Rate Lock Loan Amount”) to be made by the
Lender to the Borrower and secured by a first lien on the property, described
above (the “Property”). The Lender is entering into a commitment (the “DUS ERL
Commitment”) to sell the Loan to Fannie Mae pursuant to Fannie Mae’s DUS
requirements even though the Lender has not yet fully completed its underwriting
of the Loan.

 

The DUS ERL Commitment entered into between Fannie Mae and the Lender has
allowed the Borrower to (i) lock the interest rate for the Loan in the Loan
Commitment prior to completion of the underwriting process, and (ii) delay the
delivery of the Loan to Fannie Mae until the date referenced in the DUS ERL
Commitment (the “DUS ERL Commitment Expiration Date”). The Borrower agrees that
it is obligated to deliver the Loan to the Lender on or prior to February 11,
2008 (the “Loan Commitment Expiration Date”). Borrower and Key
Principal(s) acknowledge that by rate locking the Loan, Borrower is causing
Fannie Mae to take a position in the financial markets in reliance on the
delivery of the Loan in accordance with the Lender’s DUS ERL Commitment with
Fannie Mae. Failure of the Borrower to close the Loan in accordance with the
Loan Commitment will cause Fannie Mae to incur economic damages.

 

It is a condition of the an Commitment and the DUS ERL Commitment that the
Borrower and its Key Principal(s) execute this Certification. Therefore, in
order to induce the Lender to make the Loan and to enter into the Loan
Commitment and to induce Fannie Mae to enter into the DUS ERL Commitment with
the Lender, each of the undersigned hereby certifies and agrees as follows:

 

1.                                       Representations and Warranties.
Borrower and Key Principals represent and warrant that all of the following
statements are true, complete, and correct in all material respect:

 

a.               To the best of the undersigned’s knowledge, with regards to the
Property (i) there are no structural, mechanical, electrical, plumbing or other
building component, roofs or system defects, latent or otherwise (“Building
Components”), (ii) all Building Components are

 

16

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in good and proper working order, and (iii) there is no material deferred
maintenance on the Property (each except as otherwise noted on Exhibit A).

 

b.              No part of the Property has been taken in condemnation or other
like proceeding, nor is any such proceeding pending or known to be contemplated
(except as otherwise noted on Exhibit A).

 

c.               The Borrower and the Property are in compliance with all
provisions of all zoning, subdivision, environmental protection, disability
accommodation, land use, fire and building code, and occupational safety and
health act rules, regulations, and statutes to which they are subject, and all
licenses, permits, and approvals necessary for the ownership of the Borrower’s
Property and the conduct of its business have been obtained (except as otherwise
noted on Exhibit A).

 

d.              To the best of the undersigned’s knowledge (i) no part of the
Property contains underground storage tanks, asbestos containing materials, or
lead based paint, and (ii) there are no hazardous waste facilities that could
affect the operation or value of the Property. In addition, the Property is not
subject to any hazardous materials operations and maintenance programs (each
except as otherwise noted on Exhibit A).

 

e.               The Borrower is the legal and equitable owner of the Property
(or will be so at the time of Loan Closing) and there are no recorded or
unrecorded leases, easements, deed restrictions, covenants, conditions, or
restrictions, or other agreements, that could affect the marketability of title
to the Property or the Borrower’s right to occupy and operate the Property. The
Property has all reciprocal use agreements in place necessary to use and operate
the Property as represented to the Lender, and the Lender will have the benefit
of all such agreements (in such form as the Lender shall request) at Loan
closing (except as otherwise noted on Exhibit A).

 

f.                 Each of the undersigned have reviewed the forms of all Loan
Documents that the Lender will use to consummate the Loan, and each of the
undersigned will accept and execute, or will cause to be accepted and executed,
such documents in the form reviewed. (Subject to any subsequent changes required
to comply with applicable law.)

 

2.                                       Preliminary Underwriting. Each of the
undersigned understands that the Net Operating Income and the Property Value
developed by the Lender to determine the Rate Lock Loan Amount are preliminary
and may change once the Lender completes its underwriting of the Loan. Such
change could affect the Loan Amount available under the Loan Commitment and the
DUS ERL Commitment. The Lender is obligated to complete its underwriting of the
Loan no later than 30 days after the rate lock date and the Borrower agrees to
provide the necessary assistance and documentation to enable the Lender to
fulfill this obligation.

 

After completion of final underwriting, the Lender shall determine if any
changes to the terms of the Loan Commitment are necessary in order to close the
Loan transaction. Each of the undersigned acknowledges that the Borrower is
obligated to accept non-material

 

17

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modifications (if any) to the Loan Commitment. The Lender, in consultation with
Fannie Mae, shall make the determination as to whether a change to the Loan
Commitment and, as a result, to the DUS ERL Commitment, is material. A
modification will be deemed to be a material change if, based on the parties’
understanding of the transaction, a reasonable borrower or lender would find the
modification to be a substantial change to the terms and conditions of the Loan
which would cause the parties to terminate the transaction (a “Material
Modification”). In the event of any Material Modification, the Borrower may
accept or reject the change. The Borrower is not obligated to accept Material
Modifications (if any) to the Loan Commitment.

 

If the Borrower refuses to accept a proposed Material Modification, the Borrower
shall not be liable to the Lender for any damages incurred, and the Good Faith
Deposit collected by the Lender as provided in the Loan Commitment (the “Good
Faith Deposit”) will be refunded in full to the Borrower.

 

3.                                       Replacement Reserves and
Completion/Repair Deposits. The following are estimates (to be finalized upon
the Lender’s review of consultants’ reports, inspection of the Property, and the
Lender’s final underwriting of the Loan) of replacement reserve and repair
deposits that the Borrower shall be required to make and/or maintain in
connection with the Loan:

 

Replacement Reserves:

 

Initial Deposit:

TBD (Subject to Final Engineering Report)

Monthly Deposit:

TBD (Subject to Final Engineering Report)

 

 

Completion/Repair:

TBD (Subject to Final Engineering Report)

 

Any changes to the required funding of deposits for Replacement Reserves or
Completion/Repair after Lender’s review of third party reports and final
underwriting shall not be deemed to be a Material Modification. The Borrower
will be required to accept such change and close the Loan pursuant to all other
terms of the Loan Commitment.

 

4.                                       Non-Delivery Prior to Completion of
Underwritinn. Each of the undersigned agrees that the Lender will be entitled to
terminate the Loan Commitment upon the occurrence of any of the following prior
to the time the Lender completes its underwriting of the Loan:

 

a.               The third party reports (i.e., Appraisal, Environmental
Assessments, Physical Needs Assessment) reveal material adverse conditions;

 

b.              The state of title of the Property as evidenced by a title
insurance commitment reveals material adverse conditions;

 

c.               A material adverse change in the Property’s Net Operating
Income, title, physical or operating condition has occurred since the Lender
determined the Rate Lock Loan Amount;

 

18

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d.              A material adverse change in the financial condition or credit
of the Borrower, Key Principals or Principals has occurred since the Lender
determined the Rate Lock Loan Amount.

 

If the Loan Commitment is terminated as a result of any one or more of the
events described above, then the Borrower and Key Principal(s), jointly and
severally, shall be liable for such failure to close the Loan transaction in an
amount equal to the Pair-Off Fee defined in Exhibit B.

 

5.                                       Events of Default. Each of the
undersigned agrees that the Borrower will be in breach of the Loan Commitment
and that the Lender will be entitled to terminate the Loan Commitment at any
time upon the occurrence of any of the following:

 

a.               The Borrower fails to deliver the loan in accordance with the
terms of the Loan Commitment for any reason after the Lender has completed its
underwriting of the Loan and confirmed the terms of the Loan Commitment;

 

b.              The Borrower otherwise elects not to honor the terms of the Loan
Commitment, or fails to perform its obligations under the Loan Commitment;

 

c.               Any representation, warranty, statement, certificate or other
data and information provided by the Borrower to the Lender, including but not
limited to the statements made in this Certification, is materially false or
misleading as of the date given.

 

If the Loan is not delivered as a result of any one or more of the events of
default described above, then the Borrower and Key Principal(s), jointly and
severally, shall be liable for such failure to close the Loan transaction in an
amount equal to the Default Fee defined in Exhibit C.

 

At Fannie Mae’s election, the Lender may be required to assign to Fannie Mae any
claims the Lender may have against the Borrower and or the Key
Principal(s) relating to the Borrower’s failure to close the Loan, and, in such
respect, Fannie Mae will be deemed to be a third party beneficiary.

 

The undersigned acknowledges that the Lender and Fannie Mae are relying upon the
truth and accuracy of all representations made in this Certification and all
representations, warranties, statements, certificates and other information
furnished to the Lender in connection with the issuance of this Loan Commitment.

 

19

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This Certification is executed by the undersigned parties as of the          day
of                    , 2008.

 

BORROWERS:

 

Olde English Apts., L.P.

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Commonwealth 1137, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Commonwealth 1144, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Clovelly Apartments, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Highland 38, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

North Beacon 140, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

20

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River Drive, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Redwood Hills, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Executive Apartments, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Arrow Associates, LLC

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

WCB Associates, LLC

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Hamilton Oaks Associates, LLC

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

21

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Atrium on Commonwealth, LP

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Coach, L.P.

Tax ID #

 

 

 

 

 

By:

/s/ Ronald Brown

 

 

 

Name:

 

 

 

Title:

 

 

 

 

KEY PRINCIPALS:

/s/ Harold Brown

 

 

Harold Brown

 

 

Social Security Number:

 

 

 

 

 

 

 

 

 

/s/ Harold Brown

 

 

The Harold Brown 1999 Revocable Trust

 

 

Tax ID Number:

 

 

 

 

22

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Exhibit A
Exceptions to Representations and Warranties

 

 

23

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Exhibit B
Pair-Off Fee

 

The “Pair-Off Fee” is the greater of

 

(1)           2% of the Rate Lock Loan Amount; or

 

(2)           an amount calculated by multiplying:

 

·                                          the difference between (i) the Note
Rate in the DUS ERL Commitment less the Guaranty Fee and Servicing Fee (the
Required Net Coupon Rate”) and (ii) the Required Net Coupon Rate offered for
purchase by Fannie Mae for an immediate funding loan with the same terms as the
Loan on the DUS ERL Commitment Expiration Date or, if terminated prior to the
DUS ERL Commitment Expiration Date, the last day of the calendar month in which
the DUS ERL Commitment is terminated; TIMES

 

·                                          the Rate Lock Loan Amount; TIMES

 

·                                          a present value factor, calculated
using the following formula:

 

1 - (1+r)-n
r

 

·                                          where:

 

                                                r               =             
the Required Net Coupon Rate used in (ii) above; and

 

                                                n              =             
the number of years the Loan Term on the DUS ERL Commitment.

 

In the event of a partial reduction to the Loan Amount, the Pair-Off Fee that is
due will be determined based on the amount of the reduction that exceeds 5% of
the Rate Lock Loan Amount. No Pair-Off Fee is due on a reduction to the Loan
Amount that does not exceed 5% of the Rate Lock Loan Amount.

 

24

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Exhibit C
Default Fee

 

The “Default Fee” is the greater of

 

(1)           2% of the Rate Lock Loan Amount; or

 

(2)           an amount calculated by multiplying:

 

·                                          the difference between (i) the
interest rate for the Loan in the DUS ERL Commitment and (ii) the yield rate
(“Yield Rate”) of the on the run U.S. Treasury security whose maturity is
closest to the maturity of the Loan, as the Yield Rate is reported in The Wall
Street Journal on the DUS ERL Commitment Expiration Date or, if terminated prior
to the DUS ERL Commitment Expiration Date, the last day of the calendar month in
which the DUS ERL Commitment is terminated; TIMES

 

·                                          the Rate Lock Loan Amount; TIMES

 

·                                          a present value factor, calculated
using the following formula:

 

1 - (1+r)-n
r

 

·                                          where:

 

                                                r               =             
the Yield Rate; and

 

                                                n              =             
the number of years the Loan Term on the DUS ERL Commitment.

 

 

 

25

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GENERAL CONDITIONS AND TERMS
STANDARD ADDITIONAL REQUIREMENTS

 

The following General Conditions are incorporated into the Commitment to which
such conditions are attached and incorporated by reference therein. Capitalized
terms not defined herein shall have the respective meanings ascribed thereto in
the Commitment.

 

A.  Loan Documents:

 

The Loan Documents shall be prepared by, and shall be in form and substance
acceptable to, Lender’s Counsel and shall include such covenants,
representations, and warranties as are customarily required to assure the
legality of the Mortgage Loan, protection against mechanics’ and materialmen’s
liens, and full compliance with this Commitment.

 

B.  Additional Liens; Change of Ownership:

 

Except as otherwise approved by Lender and Fannie Mae, neither secondary
financing to be secured by the Property nor the imposition of any other junior
liens on the Property, or beneficial interests in the Borrower or Key
Principals, if any, shall be permitted without Lender’s prior written consent.
The Mortgage will provide that transfers of the Property or of the beneficial
interest in the Borrower will be prohibited and subject to applicable
restrictions, limitations and penalties as provided in the Loan Documents.

 

C.  Real Estate Tax and Insurance Escrow:

 

The Borrower shall be required to make escrow deposits together with the monthly
payments of principal and interest in an amount determined by Lender, which
monthly amount shall be not less than 1/ 12 of the annual real estate taxes,
hazard insurance and rent insurance premiums, special assessments (if
applicable), ground lease payments (if applicable), and water and sewer rates
(if applicable) at and in respect of the Property. Lender shall not collect
imposition deposits with respect to Personal Property Taxes, if any, and water
and sewer charges, provided such charges are metered and not deemed a frontage
or sewer tax.

 

At closing, Borrower shall be required to fund these escrow deposits in such
amount as will, together with the monthly deposits, be sufficient, in Lender’s
determination, to make the next scheduled payments of these items and provide a
reasonable cushion against increases.

 

Notwithstanding the foregoing, Lender shall waive the collection of escrow
deposits for impositions provided Borrower pays all such items in a timely
manner, provides Lender with proof of payment of all such impositions within
five (5) days of the date said impositions are due and is not in default of any
of the terms and covenants contained in the Loan Documents. Lender reserves the
right to require monthly escrows for all impositions should Borrower be in
default under the Loan Documents or fail to provide Lender with proof of payment
as required.

 

26

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D.         Annual Statements:

 

The Borrower will be required to furnish Lender with annual financial
statements, within 120 calendar days of the close of each fiscal year of the
Borrower, which financial statements shall be prepared by and certified by
Borrower and, at Lender’s option, prepared and certified by an independent
certified public accountant, and shall be in form satisfactory to Lender.

 

The Borrower shall, at Lender’s option, furnish Lender with owner certified
unaudited quarterly financial statements within thirty (30) days of the end of
each calendar quarter during which any portion of the Mortgage Loan is
outstanding or more frequently as may be reasonably required by Lender.

 

The Borrower shall furnish, on a periodic basis, operating and financial
information which shall include, without limitation, certified rent rolls,
occupancy information, operating expense and capital expenditures data, as may
be required by Lender.

 

E.         Hazard Insurance; Eminent Domain:

 

The Property must be continuously insured during the term of the Mortgage Loan
by carriers at all times satisfactory to Lender and Fannie Mae pursuant to
policies in form, substance and amount satisfactory to Lender and Fannie Mae.
Not less than fifteen (15) days prior to closing, Borrower shall deliver to
Lender policies acceptable to Lender, issued by companies rated A -Class V or
better in the most recent publication of Best’s Key Rating Guide
Property-Casualty, naming Fannie Mae, c/o Lender as Mortgagee.

 

The delivery of such required policies shall be accompanied by a paid receipt
evidencing payment in full of the required premiums for at least the first full
year of the Mortgage Loan term. Evidence of acceptable coverage accompanied by a
paid premium receipt evidencing payment in full of the required renewal premiums
shall thereafter be delivered to Lender at least 30 days before the expiration
date of the existing policies. All of such policies shall provide that they are
not subject to cancellation or reduction unless Lender shall have first received
thirty (30) days prior written notice.

 

F.         No Condemnation Proceeding or Casualty:

 

As of closing, no proceeding shall have been threatened or commenced by any
governmental or other authority having the power of eminent domain to condemn
any part of the Property, which Lender in its sole judgment deems substantial.

 

As of the Closing Date, no portion of the Property shall have been damaged and
not repaired to Lender’s satisfaction unless an escrow shall have been
established with Lender in an amount and on terms satisfactory to Lender and
Fannie Mae to ensure the prompt and complete repair of such damage. In the event
of any such condemnation or casualty, Lender shall have the option to terminate
this Commitment and retain all amounts previously paid by the Borrower
thereunder.

 

27

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G.         Application of Insurance and Condemnation Proceeds:

 

Insurance proceeds will be payable to the Lender and applied by the Lender
either to the repayment of the Mortgage Loan or the restoration of the Property
in accordance with the standard Fannie Mae provisions set forth in the Mortgage.

 

Condemnation proceeds will be payable to the Lender and applied in accordance
with the standard Fannie Mae provisions set forth in the Mortgage.

 

H.         Taxes and Assessments:

 

All taxes and any assessments affecting the Property which are due and payable
within sixty (60) days of Closing shall have been paid and discharged in full
prior to Closing or an escrow established with the title insurer so that same
shall not be an exception to Lender’s title insurance policy.

 

I.          Opinions of Borrower’s Counsel:

 

Lender shall be furnished with opinions of the Borrower’s counsel in the form
provided and approved by Lender.

 

J.         Hazardous Waste:

 

The Borrower shall comply with the requirements, if any, set forth in the report
prepared by Lender’s environmental consultant. The Borrower shall maintain the
Property from and after the date of this Commitment and during the term of the
Mortgage Loan in accordance with the requirements set forth in such report and
in accordance with applicable environmental laws and regulations and any
applicable operations and maintenance plans, and shall comply with all
requirements regarding environmental hazards set forth in the Loan Documents.

 

Borrower shall be obligated to provide at Borrower’s expense, such supplemental
environmental reports as Lender may require from time to time. In the event
Lender determines in its sole and absolute discretion at any time following the
date of the Commitment that the Property does not satisfy the environmental
requirements of Fannie Mae, Lender may cancel and terminate the Commitment and
shall be under no further obligation to make the Mortgage an, and all amounts
deposited hereunder shall be retained by Lender.

 

The Fannie Mae Mortgage contains various covenants, representations, agreements
and indemnifications with respect to environmental issues and hazards and
Borrower, by its acceptance of this Commitment, hereby acknowledges that it will
be bound by such provisions.

 

K.         Leases:

 

All existing and future tenant leases for residential and commercial space at
the

 

28

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Property shall be subordinate to the lien of the Mortgage. Borrower shall
deliver to Lender a true and correct copy of its standard form of residential
and commercial lease in connection with the Property for approval by Lender. All
leases shall be executed on such approved forms of leases with only minor
non-material changes.

 

L.         Access to Property; Inspections:

 

From the date Borrower accepts this Commitment and during the term of the
Mortgage Loan, Lender or its designated agents and representatives shall at all
reasonable times and at Borrower’s expense, have access to the Property and the
right to inspect the condition and operations of the Property, including,
without limitation, the right to perform environmental testing on the Property
in the event Borrower has failed to perform any such tests as required by Lender
from time to time.

 

M.        Payment of Costs:

 

The Borrower agrees to pay, whether or not the Mortgage Loan closes, all costs
incident to the preparation of this Commitment and the closing of the Mortgage
Loan, including, without limitation, all appraisal, engineering and
environmental costs, all taxes and assessments due at Closing and all recording
fees, registration taxes, title insurance premiums, survey costs, the fees and
expenses of Lender’s Counsel and the fees and expenses of Lender’s local
counsel, if any.

 

N.         Indemnification for Brokerage Commissions:

 

Borrower acknowledges and agrees that any fee due for mortgage brokerage or
related mortgage origination services shall be Borrower’s sole responsibility.
Borrower shall indemnify and hold Lender harmless from any claims for brokerage
commissions, finder’s fees assignment fees or any other fees or compensation in
connection with the Commitment or the Mortgage Loan.

 

O.        Approval of Managing Agent.

 

Lender shall have the right to approve any existing or proposed managing agent,
and the terms of the related managing agreement, for the Property.

 

P.         No Reliance on Underwriting.

 

Borrower acknowledges and agrees that (a) Lender’s analysis of the Property,
including appraisals, engineering reports, environmental reports, inspections,
etc. are for the sole benefit of Lender and Fannie Mae in underwriting the
Mortgage Loan, (b) such analysis may not be relied upon by Borrower or any other
party, other than Lender and Fannie Mae, and (c) such analysis, reports and
underwriting elements do not constitute a representation or warranty by Lender
or Fannie Mae as to the value or condition of the Property or its quality of
operations. Lender shall not be responsible for or bound by any erroneous quote
or commitment given to Lender by Fannie Mae or any other investor. Fannie Mae is
not a party to this commitment letter and

 

29

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Fannie Mae makes no representation or warranty concerning the Loan or the
Mortgaged Property.

 

Q.        Publicity.

 

Borrower agrees to permit Lender to issue press releases and advertising,
disclose the identity and the amount, purpose and other information pertaining
to the Loan.

 

R.         Disclosure of Information:

 

Lender may furnish information regarding Borrower or the Property to third
parties with an existing or prospective interest in the servicing, enforcement,
evaluation, performance, purchase or securitization of the indebtedness,
including but not limited to trustees, master servicers, special servicers,
rating agencies, investors, and organizations maintaining database on the
underwriting and performance of multifamily mortgage loans. Borrower irrevocably
waives any and all rights it may have under applicable law to prohibit such
disclosure, including but not limited to any right of privacy.

 

S.         Compliance with OFAC

 

Borrower represents and warrants that Borrower, and to the best of Borrower’s
knowledge after having made diligent inquiry, any guarantors or indemnitors in
connection with the Loan, and all persons or entities owning an interest in
Borrower (i) are not currently identified on the United States Office of Foreign
Assets Control (“OFAC”) List, and (ii) are not persons or entities with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States. The OFAC
List currently is accessible through the internet website
http:/lwww.treas.gov/offices/eotffe/ofac/sdn/tl 1sdn.pdf

 

Important information about opening your new account and/or entering into a
business relationship with Wachovia: To help fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify and record information that identifies each person or corporation
who opens an account and/or enters into a business relationship.

 

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EXHIBIT C

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly

 

 

 

 

# of

 

Loan

 

Minimum

 

Maximum

 

Replacement

Property & Address

 

Borrowing Entity

 

Units

 

Amount

 

DSCR

 

LTV

 

Reserve Deposit

704-718 Chelmsford Street,
Lowell, MA

 

Olde English Apts., L.P.

 

84

 

$

2,000,000

 

1.55

 

55

%

TBD

1131-1137 Commonwealth
Ave, Boston, MA

 

Commonwealth 1137, LP

 

35

 

$

2,000,000

 

1.55

 

55

%

TBD

1144-1160 Commonwealth
Ave, Boston, MA

 

Commonwealth 1144, LP

 

262

 

$

12,000,000

 

1.55

 

55

%

TBD

160-170 Concord Street,
Nashua, NH

 

Clovelly Apartments, LP

 

103

 

$

3,000,000

 

1.55

 

55

%

TBD

38-40 Highland Street,
Lowell, MA

 

Highland 38, LP

 

36

 

$

1,000,000

 

1.55

 

55

%

TBD

140-154 North Beacon St.,
Brighton, MA

 

North Beacon 140, LP

 

65

 

$

6,825,000

 

1.55

 

55

%

TBD

3-17 River Drive, Danvers,
MA

 

River Drive, LP

 

72

 

$

2,500,000

 

1.55

 

55

%

TBD

376-384 Sunderland,
Worchester, MA

 

Redwood Hills, LP

 

180

 

$

6,700,000

 

1.55

 

55

%

TBD

545-561 Worcester Road,
Framingham, MA

 

Executive Apartments, LP

 

72

 

$

2,300,000

 

1.55

 

55

%

TBD

1200 Massachusetts Ave,
Boston, MA

 

Arrow Associates, LLC

 

92

 

$

11,750,000

 

1.20

 

65

%

TBD

Westside Colonial- 10-70
Westland St and 985-997
Pleasant St, Brockton, MA

 

WCB Associates, LLC

 

180

 

$

7,000,000

 

1.55

 

55

%

TBD

Hamilton Oaks- 30-50 Oak
Street Extension and 40-60
Reservoir St, Brockton, MA

 

Hamilton Oaks Associates, LLC

 

268

 

$

11,900,000

 

1.55

 

55

%

TBD

1079 Commonwealth Ave,
Boston, MA

 

Atrium on Commonwealth, LP

 

187

 

$

22,000,000

 

1.55

 

55

%

TBD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

90,975,000

 

 

 

 

 

 

 

31

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