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.


 

















 


“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.


 


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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

















 


(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


 


13

















 


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

  



 

















 


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


 

















 


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):


 


A-4

















 


(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


 


A-6

















 


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.


 


A-7