Exhibit 10.8


 


MEZZANINE B LOAN AGREEMENT


 


 


Dated as of October 5, 2007


 


 


Between


 


 


THE ENTITIES IDENTIFIED IN EXHIBIT A ANNEXED
HERETO,

as Borrower


 


 


and


 


 


LEHMAN BROTHERS HOLDINGS INC.,

BANK OF AMERICA, N.A.

AND

BARCLAYS CAPITAL REAL ESTATE FINANCE INC.,

as Lender


 

















 


	
  MEZZANINE B LOAN AGREEMENT

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  I.

  	
          DEFINITIONS;
  PRINCIPLES OF CONSTRUCTION

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1

  	
  Definitions

  	
   

  	
  9

  
	
   

  	
  Section 1.2

  	
  Principles of Construction

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
          GENERAL
  TERMS

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  Loan Commitment; Disbursement
  to Borrower

  	
   

  	
  42

  
	
   

  	
  2.1.1

  	
  Agreement to Lend and Borrow

  	
   

  	
  42

  
	
   

  	
  2.1.2

  	
  Single Disbursement to
  Borrower

  	
   

  	
  42

  
	
   

  	
  2.1.3

  	
  The Note, Pledge Agreement
  and Loan Documents

  	
   

  	
  42

  
	
   

  	
  2.1.4

  	
  Use of Proceeds

  	
   

  	
  42

  
	
   

  	
  Section 2.2

  	
  Interest; Loan Payments; Late
  Payment Charge

  	
   

  	
  42

  
	
   

  	
  2.2.1

  	
  Payments

  	
   

  	
  42

  
	
   

  	
  2.2.2

  	
  Interest Calculation

  	
   

  	
  44

  
	
   

  	
  2.2.3

  	
  Eurodollar Rate
  Unascertainable; Illegality; Increased Costs

  	
   

  	
  44

  
	
   

  	
  2.2.4

  	
  Intentionally Omitted

  	
   

  	
  46

  
	
   

  	
  2.2.5

  	
  Payment on Maturity Date

  	
   

  	
  46

  
	
   

  	
  2.2.6

  	
  Payments after Default

  	
   

  	
  46

  
	
   

  	
  2.2.7

  	
  Late Payment Charge

  	
   

  	
  47

  
	
   

  	
  2.2.8

  	
  Usury Savings

  	
   

  	
  47

  
	
   

  	
  2.2.9

  	
  Foreign Taxes

  	
   

  	
  47

  
	
   

  	
  Section 2.3

  	
  Prepayments

  	
   

  	
  49

  
	
   

  	
  2.3.1

  	
  Voluntary Prepayments

  	
   

  	
  49

  
	
   

  	
  2.3.2

  	
  Liquidation Events

  	
   

  	
  50

  
	
   

  	
  2.3.3

  	
  Prepayments After Default

  	
   

  	
  51

  
	
   

  	
  2.3.4

  	
  Making of Payments

  	
   

  	
  51

  
	
   

  	
  2.3.5

  	
  Application of Principal
  Prepayments

  	
   

  	
  51

  
	
   

  	
  Section 2.4

  	
  Interest Rate Hedging
  Agreement

  	
   

  	
  52

  
	
   

  	
  Section 2.5

  	
  Intentionally Omitted

  	
   

  	
  55

  
	
   

  	
  Section 2.6

  	
  Release of an Individual
  Property

  	
   

  	
  55

  
	
   

  	
  Section 2.7

  	
  Intentionally Omitted

  	
   

  	
  56

  
	
   

  	
  Section 2.8

  	
  Release on Payment in Full

  	
   

  	
  56

  
	
   

  	
  Section 2.9

  	
  Substitution of Properties

  	
   

  	
  56

  
						



 

















 


	
  III.

  	
           MORTGAGE
  BORROWER DISTRIBUTIONS

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1

  	
  Mortgage Borrower
  Distributions

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
           REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Borrower Representations

  	
   

  	
  64

  
	
   

  	
  4.1.1

  	
  Organization

  	
   

  	
  64

  
	
   

  	
  4.1.2

  	
  Proceedings

  	
   

  	
  65

  
	
   

  	
  4.1.3

  	
  No Conflicts

  	
   

  	
  65

  
	
   

  	
  4.1.4

  	
  Litigation

  	
   

  	
  65

  
	
   

  	
  4.1.5

  	
  Agreements

  	
   

  	
  66

  
	
   

  	
  4.1.6

  	
  Solvency

  	
   

  	
  66

  
	
   

  	
  4.1.7

  	
  Full and Accurate Disclosure

  	
   

  	
  67

  
	
   

  	
  4.1.8

  	
  No Plan Assets

  	
   

  	
  67

  
	
   

  	
  4.1.9

  	
  Compliance

  	
   

  	
  67

  
	
   

  	
  4.1.10

  	
  Financial Information

  	
   

  	
  68

  
	
   

  	
  4.1.11

  	
  Condemnation

  	
   

  	
  68

  
	
   

  	
  4.1.12

  	
  Federal Reserve Regulations

  	
   

  	
  68

  
	
   

  	
  4.1.13

  	
  Utilities and Public Access

  	
   

  	
  68

  
	
   

  	
  4.1.14

  	
  Not a Foreign Person

  	
   

  	
  69

  
	
   

  	
  4.1.15

  	
  Separate Lots

  	
   

  	
  69

  
	
   

  	
  4.1.16

  	
  Assessments

  	
   

  	
  69

  
	
   

  	
  4.1.17

  	
  Enforceability

  	
   

  	
  69

  
	
   

  	
  4.1.18

  	
  No Prior Assignment

  	
   

  	
  69

  
	
   

  	
  4.1.19

  	
  Insurance

  	
   

  	
  70

  
	
   

  	
  4.1.20

  	
  Use of Property

  	
   

  	
  70

  
	
   

  	
  4.1.21

  	
  Certificate of Occupancy;
  Licenses

  	
   

  	
  70

  
	
   

  	
  4.1.22

  	
  Flood Zone

  	
   

  	
  70

  
	
   

  	
  4.1.23

  	
  Physical Condition

  	
   

  	
  70

  
	
   

  	
  4.1.24

  	
  Boundaries

  	
   

  	
  71

  
	
   

  	
  4.1.25

  	
  Leases

  	
   

  	
  71

  
	
   

  	
  4.1.26

  	
  Title

  	
   

  	
  72

  
	
   

  	
  4.1.27

  	
  Intentionally Omitted

  	
   

  	
  73

  
	
   

  	
  4.1.28

  	
  Filing and Recording Taxes

  	
   

  	
  73

  
						



 


2

















 


	
  

  	
  4.1.29

  	
  Intentionally Omitted

  	
   

  	
  73

  
	
   

  	
  4.1.30

  	
  Management Agreement

  	
   

  	
  73

  
	
   

  	
  4.1.31

  	
  Illegal Activity

  	
   

  	
  73

  
	
   

  	
  4.1.32

  	
  No Change in Facts or
  Circumstances; Disclosure

  	
   

  	
  74

  
	
   

  	
  4.1.33

  	
  Investment Company Act

  	
   

  	
  74

  
	
   

  	
  4.1.34

  	
  Principal Place of Business;
  State of Organization

  	
   

  	
  74

  
	
   

  	
  4.1.35

  	
  Single Purpose Entity

  	
   

  	
  74

  
	
   

  	
  4.1.36

  	
  Business Purposes

  	
   

  	
  82

  
	
   

  	
  4.1.37

  	
  Taxes

  	
   

  	
  82

  
	
   

  	
  4.1.38

  	
  Forfeiture

  	
   

  	
  82

  
	
   

  	
  4.1.39

  	
  Environmental Representations
  and Warranties

  	
   

  	
  83

  
	
   

  	
  4.1.40

  	
  Taxpayer Identification
  Number

  	
   

  	
  83

  
	
   

  	
  4.1.41

  	
  OFAC

  	
   

  	
  83

  
	
   

  	
  4.1.42

  	
  Ground Lease Representations

  	
   

  	
  83

  
	
   

  	
  4.1.43

  	
  Deposit and Securities
  Accounts

  	
   

  	
  84

  
	
   

  	
  4.1.44

  	
  Embargoed Person

  	
   

  	
  84

  
	
   

  	
  4.1.45

  	
  Affiliates

  	
   

  	
  85

  
	
   

  	
  4.1.46

  	
  Mortgage Borrower and
  Mezzanine A Borrower Representations

  	
   

  	
  85

  
	
   

  	
  4.1.47

  	
  List of Mortgage Loan
  Documents

  	
   

  	
  85

  
	
   

  	
  4.1.48

  	
  Condominium Representations

  	
   

  	
  85

  
	
   

  	
  4.1.49

  	
  List of Mezzanine A Loan
  Documents

  	
   

  	
  85

  
	
   

  	
  4.1.50

  	
  Mortgage Loan Event of
  Default

  	
   

  	
  86

  
	
   

  	
  4.1.51

  	
  Mezzanine A Loan Event of
  Default

  	
   

  	
  86

  
	
   

  	
  Section 4.2

  	
  Survival of Representations

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
           BORROWER
  COVENANTS

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  Affirmative Covenants

  	
   

  	
  86

  
	
   

  	
  5.1.1

  	
  Existence; Compliance with
  Legal Requirements

  	
   

  	
  86

  
	
   

  	
  5.1.2

  	
  Taxes and Other Charges

  	
   

  	
  87

  
	
   

  	
  5.1.3

  	
  Litigation

  	
   

  	
  89

  
	
   

  	
  5.1.4

  	
  Access to the Properties

  	
   

  	
  89

  
	
   

  	
  5.1.5

  	
  Notice of Default

  	
   

  	
  89

  
	
   

  	
  5.1.6

  	
  Cooperate in Legal
  Proceedings

  	
   

  	
  89

  
						



 


3

















 


	
  

  	
  5.1.7

  	
  Award and Insurance Benefits

  	
   

  	
  89

  
	
   

  	
  5.1.8

  	
  Further Assurances

  	
   

  	
  89

  
	
   

  	
  5.1.9

  	
  Mortgage and Intangible Taxes

  	
   

  	
  90

  
	
   

  	
  5.1.10

  	
  Financial Reporting

  	
   

  	
  90

  
	
   

  	
  5.1.11

  	
  Business and Operations

  	
   

  	
  94

  
	
   

  	
  5.1.12

  	
  Costs of Enforcement

  	
   

  	
  94

  
	
   

  	
  5.1.13

  	
  Estoppel Statement

  	
   

  	
  94

  
	
   

  	
  5.1.14

  	
  Loan Proceeds

  	
   

  	
  96

  
	
   

  	
  5.1.15

  	
  Performance by Borrower

  	
   

  	
  96

  
	
   

  	
  5.1.16

  	
  Confirmation of
  Representations

  	
   

  	
  96

  
	
   

  	
  5.1.17

  	
  Leasing Matters

  	
   

  	
  97

  
	
   

  	
  5.1.18

  	
  Management Agreement

  	
   

  	
  100

  
	
   

  	
  5.1.19

  	
  Environmental Covenants

  	
   

  	
  102

  
	
   

  	
  5.1.20

  	
  Alterations

  	
   

  	
  103

  
	
   

  	
  5.1.21

  	
  Intentionally Omitted

  	
   

  	
  105

  
	
   

  	
  5.1.22

  	
  OFAC

  	
   

  	
  105

  
	
   

  	
  5.1.23

  	
  Ground Lease Covenants

  	
   

  	
  105

  
	
   

  	
  5.1.24

  	
  Mortgage Loan Reserve Funds

  	
   

  	
  106

  
	
   

  	
  5.1.25

  	
  Notices

  	
   

  	
  106

  
	
   

  	
  5.1.26

  	
  Special Distributions

  	
   

  	
  106

  
	
   

  	
  5.1.27

  	
  Mortgage Borrower and
  Mezzanine A Borrower Covenants

  	
   

  	
  106

  
	
   

  	
  5.1.28

  	
  Mortgage Loan and Mezzanine A
  Loan Estoppels

  	
   

  	
  107

  
	
   

  	
  5.1.29

  	
  Intentionally Omitted

  	
   

  	
  108

  
	
   

  	
  5.1.30

  	
  Condominium Covenants

  	
   

  	
  108

  
	
   

  	
  Section 5.2

  	
  Negative Covenants

  	
   

  	
  109

  
	
   

  	
  5.2.1

  	
  Liens

  	
   

  	
  109

  
	
   

  	
  5.2.2

  	
  Dissolution

  	
   

  	
  110

  
	
   

  	
  5.2.3

  	
  Change in Business

  	
   

  	
  110

  
	
   

  	
  5.2.4

  	
  Debt Cancellation

  	
   

  	
  110

  
	
   

  	
  5.2.5

  	
  Zoning

  	
   

  	
  111

  
	
   

  	
  5.2.6

  	
  No Joint Assessment

  	
   

  	
  111

  
	
   

  	
  5.2.7

  	
  Name, Identity, Structure, or
  Principal Place of Business

  	
   

  	
  111

  
	
   

  	
  5.2.8

  	
  ERISA

  	
   

  	
  111

  
						



 


4

















 


	
  

  	
  5.2.9

  	
  Affiliate Transactions

  	
   

  	
  112

  
	
   

  	
  5.2.10

  	
  Transfers

  	
   

  	
  113

  
	
   

  	
  5.2.11

  	
  Permitted Transfer

  	
   

  	
  116

  
	
   

  	
  5.2.12

  	
  Limitations on Securities
  Issuances

  	
   

  	
  118

  
	
   

  	
  5.2.13

  	
  Distributions

  	
   

  	
  118

  
	
   

  	
  5.2.14

  	
  Refinancing or Prepayment of
  the Mortgage Loan and Mezzanine A Loan

  	
   

  	
  119

  
	
   

  	
  5.2.15

  	
  Acquisition of the Mortgage Loan
  and Mezzanine A Loan

  	
   

  	
  119

  
	
   

  	
  5.2.16

  	
  Material Agreements

  	
   

  	
  120

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
           INSURANCE;
  CASUALTY AND CONDEMNATION

  	
   

  	
  121

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Insurance

  	
   

  	
  121

  
	
   

  	
  Section 6.2

  	
  Casualty

  	
   

  	
  127

  
	
   

  	
  Section 6.3

  	
  Condemnation

  	
   

  	
  127

  
	
   

  	
  Section 6.4

  	
  Restoration

  	
   

  	
  128

  
	
   

  	
  Section 6.5

  	
  Rights of Lender

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
           RESERVE
  FUNDS

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Repairs

  	
   

  	
  128

  
	
   

  	
  Section 7.2

  	
  Impositions and Imposition
  Deposits

  	
   

  	
  129

  
	
   

  	
  Section 7.3

  	
  Replacement Reserves

  	
   

  	
  129

  
	
   

  	
  Section 7.4

  	
  Debt Service Reserve Funds

  	
   

  	
  129

  
	
   

  	
  Section 7.5

  	
  Mortgage Debt Service Escrows

  	
   

  	
  131

  
	
   

  	
  Section 7.6

  	
  Interest Rate Hedging
  Reserves

  	
   

  	
  131

  
	
   

  	
  Section 7.7

  	
  Other Mortgage Reserves

  	
   

  	
  131

  
	
   

  	
  Section 7.8

  	
  Reserve Funds, Generally

  	
   

  	
  132

  
	
   

  	
  Section 7.9

  	
  Letters of Credit

  	
   

  	
  133

  
	
   

  	
  7.9.1

  	
  Delivery of Letters of Credit

  	
   

  	
  133

  
	
   

  	
  7.9.2

  	
  Provisions Regarding Letters
  of Credit

  	
   

  	
  133

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.
           DEFAULTS

  	
   

  	
  134

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Event of Default

  	
   

  	
  134

  
	
   

  	
  Section 8.2

  	
  Remedies

  	
   

  	
  139

  
	
   

  	
  Section 8.3

  	
  Remedies Cumulative; Waivers

  	
   

  	
  140

  
	
   

  	
  Section 8.4

  	
  Right to Cure Defaults

  	
   

  	
  140

  
	
   

  	
  Section 8.5

  	
  Mortgage Loan Reserve Funds

  	
   

  	
  141

  
						



 


5

















 


	
  

  	
  Section 8.6

  	
  Power of Attorney

  	
   

  	
  141

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
           SPECIAL
  PROVISIONS

  	
   

  	
  141

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
  Sale of Notes and
  Securitization

  	
   

  	
  141

  
	
   

  	
  Section 9.2

  	
  Disclosure Document
  Cooperation

  	
   

  	
  143

  
	
   

  	
  Section 9.3

  	
  Servicer

  	
   

  	
  143

  
	
   

  	
  Section 9.4

  	
  Exculpation

  	
   

  	
  144

  
	
   

  	
  Section 9.5

  	
  Limitation on Borrower’s
  Obligations

  	
   

  	
  147

  
	
   

  	
  Section 9.6

  	
  Reallocation of Loan Amounts

  	
   

  	
  148

  
	
   

  	
  Section 9.7

  	
  Syndication

  	
   

  	
  149

  
	
   

  	
  9.7.1

  	
  Syndication

  	
   

  	
  149

  
	
   

  	
  9.7.2

  	
  Sale of Loan, Co-Lenders,
  Participations and Servicing

  	
   

  	
  149

  
	
   

  	
  9.7.3

  	
  Cooperation in Syndication

  	
   

  	
  152

  
	
   

  	
  9.7.4

  	
  Payment of Agent’s, and
  Co-Lender’s Expenses

  	
   

  	
  154

  
	
   

  	
  9.7.5

  	
  Intentionally Omitted

  	
   

  	
  154

  
	
   

  	
  9.7.6

  	
  No Joint Venture

  	
   

  	
  154

  
	
   

  	
  Section 9.8

  	
  Restructuring of Loan and/or
  Mezzanine A Loan; Creation of New Mezzanine Loan(s)

  	
   

  	
  154

  
	
   

  	
  Section 9.9

  	
  Contributions and Waivers

  	
   

  	
  156

  
	
   

  	
  Section 9.10

  	
  Certain Additional Rights of
  Lender; VCOC

  	
   

  	
  160

  
	
   

  	
  Section 9.11

  	
  Mortgage Loan Defaults

  	
   

  	
  161

  
	
   

  	
  Section 9.12

  	
  Mezzanine A Loan Defaults

  	
   

  	
  162

  
	
   

  	
  Section 9.13

  	
  Intentionally Omitted

  	
   

  	
  163

  
	
   

  	
  Section 9.14

  	
  Intercreditor Agreements

  	
   

  	
  163

  
	
   

  	
  Section 9.15

  	
  Discussions with Mortgage
  Lender and Mezzanine A Lender

  	
   

  	
  164

  
	
   

  	
  Section 9.16

  	
  Independent Approval Rights

  	
   

  	
  164

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
          MISCELLANEOUS

  	
   

  	
  165

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1

  	
  Survival

  	
   

  	
  165

  
	
   

  	
  Section 10.2

  	
  Lender’s Discretion

  	
   

  	
  165

  
	
   

  	
  Section 10.3

  	
  Governing Law

  	
   

  	
  165

  
	
   

  	
  Section 10.4

  	
  Modification, Waiver in
  Writing

  	
   

  	
  166

  
	
   

  	
  Section 10.5

  	
  Delay Not a Waiver

  	
   

  	
  166

  
	
   

  	
  Section 10.6

  	
  Notices

  	
   

  	
  167

  
						



 


6

















 


	
  

  	
  Section 10.7

  	
  Trial by Jury

  	
   

  	
  168

  
	
   

  	
  Section 10.8

  	
  Headings

  	
   

  	
  168

  
	
   

  	
  Section 10.9

  	
  Severability

  	
   

  	
  168

  
	
   

  	
  Section 10.10

  	
  Preferences

  	
   

  	
  169

  
	
   

  	
  Section 10.11

  	
  Waiver of Notice

  	
   

  	
  169

  
	
   

  	
  Section 10.12

  	
  Remedies of Borrower

  	
   

  	
  169

  
	
   

  	
  Section 10.13

  	
  Expenses; Indemnity

  	
   

  	
  169

  
	
   

  	
  Section 10.14

  	
  Schedules and Exhibits
  Incorporated

  	
   

  	
  171

  
	
   

  	
  Section 10.15

  	
  Offsets, Counterclaims and
  Defenses

  	
   

  	
  171

  
	
   

  	
  Section 10.16

  	
  No Joint Venture or
  Partnership; No Third Party Beneficiaries

  	
   

  	
  171

  
	
   

  	
  Section 10.17

  	
  Counterparts

  	
   

  	
  172

  
	
   

  	
  Section 10.18

  	
  Waiver of Marshalling of
  Assets; Cross-Default; Cross Collateralization

  	
   

  	
  172

  
	
   

  	
  Section 10.19

  	
  Waiver of Counterclaim

  	
   

  	
  172

  
	
   

  	
  Section 10.20

  	
  Conflict; Construction of
  Documents; Reliance

  	
   

  	
  172

  
	
   

  	
  Section 10.21

  	
  Brokers and Financial
  Advisors

  	
   

  	
  173

  
	
   

  	
  Section 10.22

  	
  Prior Agreements

  	
   

  	
  173

  
	
   

  	
  Section 10.23

  	
  Joint and Several Liability

  	
   

  	
  173

  
	
   

  	
  Section 10.24

  	
  USA Patriot Act

  	
   

  	
  173

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A
  (Borrower Entities)

  	
   

  	
  177

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B
  (Lender Approved Standard Form of Lease)

  	
   

  	
  178

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C
  (Allocated Loan Amounts)

  	
   

  	
  179

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D
  (Ground Leases)

  	
   

  	
  180

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.1 (Organizational Chart)

  	
   

  	
  181

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.4 (Litigation)

  	
   

  	
  182

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.9 (Exceptions to Compliance with Legal
  Requirements)

  	
   

  	
  183

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.10 (Financial Information Exceptions)

  	
   

  	
  184

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.13 (Utilities and Public Access Exceptions)

  	
   

  	
  185

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.21 (Certificate of Occupancy and Licenses
  Exceptions)

  	
   

  	
  186

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.23 (Physical Condition Exceptions)

  	
   

  	
  187

  



 


7

















 


	
  SCHEDULE 4.1.25
  (Lease Representation Exceptions)

  	
   

  	
  188

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.32 (Changes in Facts or Circumstances)

  	
   

  	
  189

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.47 (List of Mortgage Loan Documents)

  	
   

  	
  190

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.48 (Condominium Properties)

  	
   

  	
  198

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  4.1.49 (List of Mezzanine A Loan Documents)

  	
   

  	
  199

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.1.20 (Capital Improvements)

  	
   

  	
  200

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.2.10(c)(vii) Bank Loan Pledged Interests

  	
   

  	
  201

  



 


8

















 


MEZZANINE B LOAN
AGREEMENT


 


THIS
MEZZANINE B LOAN AGREEMENT, dated as of October 5,
2007 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, this “Agreement”), between 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 Hearst Tower, 214 North Tryon Street, Charlotte, North
Carolina 28255 (“BofA”) and BARCLAYS CAPITAL REAL
ESTATE FINANCE 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”),
and THE ENTITIES IDENTIFIED IN EXHIBIT A ANNEXED
HERETO, each having its principal place of business at c/o
Archstone-Smith Operating Trust, 9200 E. Panorama Circle, Suite 400, Englewood,
Colorado 80112 (each of such entities being referred to, individually, as a “Borrower
Entity”, and all of such entities being referred to, collectively, as the “Borrower
Entities” or “Borrower”).


 


W
I T N E S S E T H:


 


WHEREAS,
Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and


 


WHEREAS,
Lender is willing to make the Loan to Borrower, subject to and in accordance
with the terms of this Agreement and the other Loan Documents (as hereinafter
defined);


 


NOW,
THEREFORE, in consideration of the making of the Loan by Lender and the
covenants, agreements, representations and warranties set forth in this
Agreement, the parties hereto hereby covenant, agree, represent and warrant as
follows:


 


I.              DEFINITIONS;
PRINCIPLES OF CONSTRUCTION


 


Section 1.1             Definitions.


 


For all
purposes of this Agreement, except as otherwise expressly required or unless
the context clearly indicates a contrary intent:


 


“Acceptable
Counterparty” means any Counterparty to the Interest Rate Hedging Agreement
that has and shall maintain, until the expiration of the applicable Interest
Rate Hedging Agreement, a long-term unsecured debt rating of not less than “A+”
by S&P and “A1” by Moody’s.


 


“Accounts”
shall mean, collectively, the escrow or reserve accounts established under the
Mortgage Loan Documents or hereunder if required by the terms and provisions of
Article VII hereof.


 


“Act” shall
have the meaning set forth in Section 4.1.35(d) hereof.


 


9

















 


“Actual Knowledge” shall mean (and shall be
limited to), with respect to Borrower or Principal as of any relevant date, the
actual (as distinguished from implied, imputed or constructive) knowledge of
Caroline Brower, Chaz Mueller and Tom Reif as of such date, without such
individuals having made, or having any obligation to make, an independent
inquiry or investigation with respect to the matter in question.


 


“Additional Interest” shall mean all Swap
Payments and Swap Breakage.


 


“Adjusted Prime Rate” shall mean an interest
rate per annum equal to the Prime Rate in effect from time to time plus the
difference, if a positive number, or minus the difference, if a negative
number, (in each case expressed as a percentage) between (a) the Eurodollar
Rate on the date LIBOR was last applicable to the Loan and (b) the Prime Rate
on the date that LIBOR was last applicable to the Loan.


 


“Affiliate” shall mean, as to any Person, any
other Person that, directly or indirectly, is in control of, is controlled by
or is under common control with such Person or is a director or officer of such
Person or of an Affiliate of such Person. Such term shall include Guarantor unless otherwise specified or if the
context may otherwise require.


 


“Affiliate Agreements” shall have the meaning
set forth in Section 5.2.9(b) hereof.


 


“Affiliated
Manager” shall mean any property manager which is an Affiliate of, or in which
Borrower, Mortgage Borrower, Mezzanine A Borrower, Mezzanine A Principal,
Principal or Guarantor has, directly or indirectly, any legal, beneficial or
economic interest.


 


“Agent” shall
have the meaning set forth in Section 9.7.2(d) hereof.


 


“Agreement
Regarding Management Agreement” shall mean an agreement regarding the
management agreement which subordinates the terms, conditions and fees due
under the Management Agreement to the terms and conditions of the Loan
Documents, executed by and between Lender, Borrower and Manager, and which is
reasonably acceptable to Lender, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.


 


“Allocated
Loan Amount” shall mean, for any Individual Property, the amount set forth
opposite the name of such Individual Property on Exhibit C attached hereto.


 


“ALTA” shall
mean American Land Title Association, or any successor thereto.


 


“Alteration”
shall have the meaning set forth in Section 5.1.20 hereof.


 


“Applicable
Interest Rate” shall mean (A) from and including the date hereof through
October 31, 2007, an interest rate per annum equal to 8.121%; and (B) from and
including November 1, 2007 and for each successive Interest Period through and
including the date on which the Debt is paid in full, an interest rate per
annum equal to


 


10

















 


(I) the Eurodollar Rate or (II) if the Loan begins bearing interest at
the Adjusted Prime Rate in accordance with the provisions of Section 2.2.3
hereof, the Adjusted Prime Rate.


 


“Applicable
Laws” shall mean all existing and future federal, state and local laws, orders,
ordinances, governmental rules and regulations and court orders.


 


“Appraisal”
shall mean an appraisal prepared in accordance with the requirements of FIRREA
and USPAP, prepared by an independent third party appraiser holding an MAI
designation, who is State licensed or State certified if required under the
laws of the State where the applicable Individual Property is located, who
meets the requirements of FIRREA and USPAP and who is otherwise reasonably
satisfactory to Lender.


 


“Approval
Period” shall have the meaning set forth in Section 5.1.17(a) hereof.


 


“Assignment
and Assumption” shall have the meaning set forth in Section 9.7.2 hereof.


 


“Assignment of
Interest Rate Hedging Agreement” shall mean that certain Mezzanine B Collateral
Assignment of Interest Rate Hedging Agreement made by Borrower to Lender as
security for the Loan, consented to by the Counterparty, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Assumed Note
Rate” shall mean an interest rate equal to the sum of (i) 0.50% plus (ii) LIBOR
as determined on the immediately preceding Payment Date plus (iii) the
Eurodollar Rate Margin.


 


“Assumption
Agreement” shall have the meaning set forth in Section 5.2.11(a)(iii) hereof.


 


“Award” shall
mean any compensation paid by any Governmental Authority in connection with a
Condemnation.


 


“Bank Loan”
shall mean those certain extensions of credit made by the Bank Loan Lenders to
Bank Loan Borrower pursuant to the Bank Loan Credit Agreement.


 


“Bank Loan
Agent” shall mean Lehman Commercial Paper, Inc., as Administrative Agent for
the Bank Loan Lenders, together with its successors and assigns.


 


“Bank Loan
Borrower” shall have the meaning ascribed to the term “Borrower” in the Bank
Loan Credit Agreement.


 


“Bank Loan
Credit Agreement” shall mean that certain Credit Agreement, dated as of the
date hereof, between Bank Loan Borrower, the Bank Loan Lenders, the Bank Loan
Agent and the other parties set forth therein, as the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time.


 


11

















 


“Bank Loan
Documents” shall mean, collectively, the “Loan Documents” as defined in the
Bank Loan Credit Agreement.


 


“Bank Loan
Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated
as of the date hereof, between and among Lender, Mezzanine A Lender, Mortgage
Lender and Bank Loan Lender.


 


“Bank Loan
Lenders” shall mean, collectively, the “Lenders” as defined in the Bank Loan
Credit Agreement.


 


“Bankruptcy
Code” shall mean Title 11 U.S.C. § 101, et seq., and the regulations adopted and
promulgated pursuant thereto (as the same may be amended from time to time), or
any successor thereto.


 


“Basic
Carrying Costs” shall mean, with respect to any Individual Property, for any
Fiscal Year or other payment period, the sum of the following costs associated
with such Individual Property for such Fiscal Year or payment period: (i) Taxes
and (ii) Insurance Premiums and (iii) if applicable, Ground Rents.


 


“Borrower”
shall mean, collectively, the entities identified in Exhibit A annexed hereto,
together with their respective successors and assigns.


 


“Borrower
Entity” shall mean each of the entities identified in Exhibit A annexed hereto,
together with their respective successors and assigns.


 


“Boston Common
Individual Property” shall mean, that certain Individual Property commonly
known as Archstone Boston Common, having an address at 660 Washington Street,
Boston, Massachusetts.


 


“Breakage
Costs” shall have the meaning set forth in Section 2.2.3(d) hereof.


 


“Business Day”
shall mean any day other than a Saturday, Sunday or any other day on which
national banks in New York, New York are not open for business.


 


“Business
Party” shall have the meaning set forth in Section 4.1.35(b) hereof.


 


“Capital
Expenditures” shall mean, for any period, the amount expended during such
period with respect to the Properties for items capitalized under GAAP
(including expenditures for building improvements or major repairs, leasing
commissions and tenant improvements).


 


“Cash” shall
mean coin or currency of the United States of America or immediately available
federal funds, including such funds delivered by wire transfer.


 


“Casualty”  shall mean  the occurrence
of any casualty, damage or injury, by fire or otherwise, to any Individual
Property or any part thereof.


 


“Closing Date”
shall mean October 5, 2007, the date of the funding of the Loan.


 


12

















 


“Code” shall
mean the Internal Revenue Code of 1986, as amended, and as it may be further
amended from time to time, and any successor statutes thereto, and all
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.


 


“Co-Lender”
shall have the meaning set forth in Section 9.7.2 hereof.


 


“Co-Lending
Agreement” shall mean the co-lending agreement entered into between Lender,
individually as a Co-Lender and as Agent and the other Co-Lenders in the event
of a Syndication, as the same may be further supplemented modified, amended or
restated.


 


“Collateral”
shall mean (i) the Collateral as defined in the Pledge Agreement and (ii) all
other collateral for the Loan granted in the Loan Documents.


 


“Condemnation”
shall mean a temporary or permanent taking by any Governmental Authority as the
result or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain of all or any part of any Individual Property,
or any interest therein or right accruing thereto, including any right of
access thereto or any change of grade affecting such Individual Property or any
part thereof.


 


“Condemnation
Proceeds” shall mean the net amount of any Award, after deduction of the
reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, in collecting same.


 


“Condominium
Documents” shall mean, collectively, all documents, as required by the
applicable condominium act and otherwise, relating to the submission of the
applicable Individual Property to the provisions of said condominium act or to
the regulation, operation, administration or sale thereof after such
submission, including, but not limited to, a declaration of condominium
(including a condominium map), offering circular, articles of incorporation, if
applicable, by-laws and rules and regulations of a condominium association,
management agreement, and plats.


 


“Condominium
Proxies” shall mean proxies given by Borrower to Lender as reasonably required
by Lender with respect to the right to vote on matters under the Condominium
Documents.


 


“control” (and
the correlative terms “controlled by” and “controlling”) shall mean, with
respect to any entity, the possession, directly or indirectly, of the power to
direct or cause the direction of management and policies of the business and
affairs of such entity by reason of the ownership of beneficial interests, by
contract or otherwise.


 


“Controlling
Interest” means, with respect to any entity, the following:


 


(i)            if such entity is a
limited partnership, any general partnership interest the Transfer of which
results in (A) one or more Lehman Entities and/or Tishman Speyer Control
Persons not having control of such entity or (B) the


 


13

















 


Guarantors not
being owned, directly or indirectly, at least 9.7%, in the aggregate, by one or
more Lehman Entities and/or Tishman Speyer Control Persons;


 


(ii)           if such entity is a
limited liability company or a limited liability partnership, any managing
member interest (or equivalent) the Transfer of which results in (A) one or
more Lehman Entities and/or Tishman Speyer Control Persons not having control
of such entity or (B) the Guarantors not being owned, directly or indirectly,
at least 9.7%, in the aggregate, by one or more Lehman Entities and/or Tishman
Speyer Control Persons; or


 


(iii)          if such entity is a
trust, the removal, appointment or substitution of a trustee of such trust
other than (A) in the case of a land trust, or (B) if the trustee of such trust
after such removal, appointment or substitution is a trustee selected by one or
more Lehman Entities and/or Tishman Speyer Control Persons and such trustee is
subject to removal at the sole discretion of one or more Lehman Entities and/or
Tishman Speyer Control Persons.


 


“Counterparty”
shall mean any Person which is the issuer of the Interest Rate Hedging
Agreement.


 


“Creditors Rights
Laws” shall mean, with respect to any Person, any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to its debts
or debtors.


 


“Debt” shall
mean the outstanding principal amount set forth in, and evidenced by, this
Agreement and the Note, together with all interest accrued and unpaid thereon
and all other sums due to Lender in respect of the Loan under the Note, this
Agreement, the Pledge Agreement or any other Loan Document.


 


“Debt Service”
shall mean, with respect to any period, interest payments and/or principal and
interest payments due under the Note for such period.


 


“Debt Service
Coverage Ratio” shall mean the ratio of (A) the aggregate annual net operating
income from the operations of the Properties at the time of calculation to (B)
the aggregate annual Debt Service, Mortgage Debt Service and Mezzanine A Debt Service
(based upon the outstanding principal balance of the Loan, the Mortgage Loan
and the Mezzanine A Loan at the time of calculation). The annual net operating
income of each property will be as determined by Lender in its reasonable
discretion considering factors such as income in place at the time of
calculation and income during the preceding twelve months, and actual,
historical and anticipated operating expenses.


 


“Debt Service
Shortfall” means as of any Payment Date, the amount, if any, by which the Debt
Service due on such Payment Date in respect of any applicable interest accrual
period exceeds Net Cash Flow for the same period.


 


14

















 


“Default”
shall mean the occurrence of any event hereunder or under any other Loan
Document which, but for the giving of notice or passage of time, or both, would
constitute an Event of Default.


 


“Default Rate”
shall mean a rate per annum equal to the lesser of (a) the Maximum Legal Rate,
and (b) four percent (4%) above the Applicable Interest Rate.


 


“Determination
Date” shall mean the first Payment Date in each January, April, July, and
October, during the term of the Loan.


 


“Disclosure
Document” shall have the meaning set forth in Section 9.2 hereof.


 


“Disclosed
Litigation” shall have the meaning set forth in Section 4.1.4 hereof.


 


“Distributions”
shall have the meaning set forth in Section 5.2.13 hereof.


 


“Eligible
Account” shall mean an identifiable account separate from all other funds held
by the holding institution that is either (a) an account or accounts maintained
with a federal or State chartered depository institution or trust company which
complies with the definition of Eligible Institution or (b) a segregated trust
account or accounts maintained with a federal or State chartered depository
institution or trust company acting in its fiduciary capacity which, in the
case of a State chartered depository institution or trust company, is subject
to regulations substantially similar to 12 C.F.R.§9.10(b), having in either
case a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal and State authority. An Eligible Account
will not be evidenced by a certificate of deposit, passbook or other
instrument.


 


“Eligible
Institution” shall mean a depository institution or trust company, insured by
the Federal Deposit Insurance Corporation, (a) the short term unsecured debt
obligations or commercial paper of which are rated at least A-1+ by S&P,
P-1 by Moody’s and F-1+ by Fitch in the case of accounts in which funds are
held for thirty (30) days or less, or (b) the long term unsecured debt
obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by
Moody’s in the case of accounts in which funds are held for more than thirty
(30) days.


 


“Embargoed
Person” shall have the meaning set forth in Section 4.1.44 hereof.


 


“Environmental
Indemnity” shall mean that certain Mezzanine B Environmental Indemnity
Agreement executed by Borrower  for the
benefit of Lender, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.


 


“Environmental
Law” shall mean any federal, State and local laws, statutes, ordinances, rules,
regulations, standards, policies and other government directives or requirements,
as well as common law, that, at any time, apply to Borrower or any Individual
Property and relate to Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act and the
Resource Conservation and Recovery Act.


 


15

















 


“Environmental
Liens” shall have the meaning set forth in Section 5.1.19(a) hereof.


 


“Environmental
Report” shall have the meaning set forth in Section 4.1.39 hereof.


 


“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended, and as
the same may hereafter be further amended from time to time.


 


“Eurodollar
Rate” shall mean, with respect to any Interest Period, an interest rate per
annum equal to LIBOR plus the Eurodollar Rate Margin.


 


“Eurodollar
Rate Margin” shall mean an interest rate equal to 3% per annum.


 


“Event of
Default” shall have the meaning set forth in Section 8.1(a) hereof.


 


“Exchange Act”
shall have the meaning set forth in Section 9.2 hereof.


 


“Exchange Act
Filing” shall have the meaning set forth in Section 9.2 hereof.


 


“Excluded
Taxes” shall mean (i) any U.S. Taxes imposed solely by reason of the failure by
such Person (or, if such Person is not the beneficial owner of the Loan, such beneficial
owner) to comply with applicable certification, information, documentation or
other reporting requirements concerning the nationality, residence, identity or
connections with the United States of America of such Person (or beneficial
owner, as the case may be) if such compliance is required by statute or
regulation of the United States of America as a precondition to relief or
exemption from such U.S. Taxes; (ii) with respect to any Person who is a
fiduciary or partnership or other than the sole beneficial owner of such
payment, any U.S. Tax imposed with respect to payments made under the Note to a
fiduciary or partnership to the extent that the beneficial owner or member of
the partnership would not have been entitled to the additional amounts if such
beneficial owner or member of the partnership had been the holder of the Note;
or (iii) any taxes on profits, branch profits, franchise taxes and taxes
imposed on or measured by all or part of gross or net income of the recipient
of such payment by the jurisdiction under the laws of which the recipient is
organized, in which it is a citizen, resident or domiciliary, or, in each case,
any political subdivision of any thereof.


 


“Exculpated
Party” shall have the meaning set forth in Section 9.4(a) hereof.


 


“Executive
Order” shall have the meaning ascribed to such term in the definition of
Prohibited Person.


 


“Extended
Maturity Date” shall have the meaning set forth in Section 2.2.1(b) hereof.


 


“Extension Fee”
shall mean one-eighth of one percent (0.125%) of the outstanding principal
amount of the Loan.


 


“Extension
Option” shall have the meaning set forth in Section 2.2.1(b) hereof.


 


16

















 


“Extension
Period” shall have the meaning set forth in Section 2.2.1(b) hereof.


 


“FIRREA” means
the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended, and as the same may hereafter be further amended from time to time.


 


“Fiscal Year”
shall mean each twelve (12) month period commencing on January 1 and ending on
December 31 during the term of the Loan.


 


“Fitch” shall
mean Fitch, Inc.


 


“Foreign Taxes”
shall mean any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any foreign Governmental Authority.


 


“GAAP” shall
mean generally accepted accounting principles in the United States of America.


 


“Governmental
Authority” shall mean any court, board, agency, commission, office, central
bank or other authority of any nature whatsoever for any governmental unit
(federal, State, county, district, municipal, city, country or otherwise) or
quasi-governmental unit whether now or hereafter in existence.


 


“Gross Income
from Operations” shall mean the gross cash receipts derived from the ownership
and operation of the Properties, from whatever source, including, but not
limited to, the Rents, utility charges, escalations, forfeited security
deposits (but only to the extent applied to rent payable under the applicable
Lease, as and when payable), interest on credit accounts, service fees or
charges, license fees, parking fees, rent concessions or credits, other
required pass-throughs and interest on the Reserve Funds (if and to the extent
such interest is actually disbursed to Borrower, Mezzanine A Borrower or
Mortgage Borrower), but excluding sales, use and occupancy or other taxes on
receipts required to be accounted for by Mortgage Borrower to any Governmental
Authority, refunds and uncollectible accounts, sales of furniture, fixtures and
equipment, Insurance Proceeds (other than business interruption or other loss
of income insurance), Awards, unforfeited security deposits, payments received
under the Interest Rate Hedging Agreement (other than in connection with the
determination of any Debt Service Shortfall), utility and other similar
deposits and any disbursements to Borrower, Mezzanine A Borrower or Mortgage
Borrower from the Mortgage Loan Reserve Funds and any extraordinary non-recurring
items of income. Gross income shall not be diminished as a result of the
Security Instruments or the creation of any intervening estate or interest in
an Individual Property or any part thereof.


 


“Ground Lease”
shall mean, individually and collectively, as the context may require, each
ground lease described on Exhibit D attached hereto and made a part hereof.


 


“Ground Rent”
shall mean all rent and any and all other charges which may be due by Mortgage
Borrower under the Ground Lease.


 


17

















 


“Guarantor”
shall mean Archstone-Smith Operating Trust, a Maryland real estate investment
trust.


 


“Guaranty”
shall mean that certain Mezzanine B Guaranty of Recourse Obligations of
Borrower, dated as of the date hereof, from Guarantor to Lender, as the same
may be amended, restated, replaced, supplemented or otherwise modified from
time to time.


 


“Hazardous
Materials” shall mean petroleum and petroleum products and compounds containing
them, including gasoline, diesel fuel and oil; explosives; flammable materials;
radioactive materials; polychlorinated biphenyls (“PCBs”) and compounds
containing them; lead and lead-based paint; asbestos or asbestos-containing
materials in any form that is or could become friable; underground or
above-ground storage tanks, whether empty or containing any substance; toxic
mold; any substance the presence of which on any Individual Property is
prohibited by any federal, State or local authority; any substance that
requires special handling; and any other material or substance now or in the
future defined as a “hazardous substance,” “hazardous material,” “hazardous
waste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” or
other words of similar import within the meaning of any Environmental Law.


 


“Improvements”
shall mean the buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter erected or located on or which constitute a part of the applicable
Individual Property.


 


“Indemnified
Liabilities” shall have the meaning set forth in Section 10.13(b) hereof.


 


“Indemnified
Parties” shall mean Lender, the Servicer, any Person in whose name the security
interest created by the Pledge Agreement is or will have been recorded, Persons
who may hold or acquire or will have held a full or partial interest in the
Loan, the holders of any Securities, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the Loan for
the benefit of third parties, as well as the respective directors, officers,
shareholders, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, Affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including but not limited to (a)
any other Person who holds or acquires or will have held a participation or
other full or partial interest in the Loan or the Properties, whether during
the term of the Loan or as a part of or following a foreclosure of the Loan,
and (b) successors by merger, consolidation or acquisition of all or a
substantial portion of Lender’s assets and business).


 


“Independent
Director” shall have the meaning set forth in Section 4.1.35(b) hereof.


 


“Individual
Property” shall mean each parcel of real property (including, without
limitation, any interest created pursuant to the Ground Lease), the
Improvements thereon


 


18

















 


and all Personal Property owned by the applicable Mortgage Borrower
Entity and encumbered by a Security Instrument, together with all rights
pertaining to such Property and Improvements, as more particularly described in
the granting clause of the Security Instrument and referred to therein as the “Mortgaged
Property”.


 


“Information”
shall have the meaning set forth in Section 9.7.3(b) hereof.


 


“Insolvency
Opinion” shall mean that certain bankruptcy non-consolidation opinion letter
delivered by counsel for Borrower.


 


“Institutional
Investor” shall mean, in connection with any proposed Transfer, any one of the
following entities:  (a) a pension fund,
pension trust or pension account that has total assets of at least
$200,000,000, exclusive of its interest in Borrower, that are managed by an entity
that controls or manages at least $400,000,000 of real estate equity assets,
exclusive of equity interests in Borrower; (b) a pension fund advisor that
controls or manages at least $400,000,000 of real estate equity assets,
exclusive of equity interests in Borrower, immediately prior to such Transfer;
(c) an insurance company that is subject to supervision by the insurance
commission, or a similar official or agency, of a state or territory of the
United States (including the District of Columbia), which has a net worth, as
of a date no more than six (6) months prior to the date of such Transfer, of at
least $400,000,000 and controls real estate equity assets of at least
$400,000,000 immediately prior to such Transfer; (d) a corporation organized
under the banking laws of the United States or any state or territory of the
United States (including the District of Columbia) that has a combined capital
and surplus of at least $200,000,000; (e) any entity (x) with a long-term
unsecured debt rating from the Rating Agencies of at least Investment Grade or
(y) (1) that owns or operates, together with its affiliates, ten (10) or more
first class luxury residential apartment buildings totaling at least 2500
residential units, (2) that has a net worth as of a date no more than six (6)
months prior to the date of such Transfer of at least $200,000,000 and (3) that
controls real estate equity assets of at least $400,000,000 immediately prior
to such Transfer; (f) a limited partnership, limited liability company or similar
entity that shall have been organized for the purpose of facilitating
investment in one or more U.S. real estate opportunities, provided such entity
shall be sponsored, organized and/or controlled by one or more experienced and
reputable syndicators, investment advisors and/or financial institutions and
shall have received contributions or binding commitments for contributions of
not less than $20,000,000 of investment capital; (g) any entity controlled by
one or more entities each of which qualifies under at least one of clauses (a)
through (f) above; (h) any individual, a citizen of and domiciled in the United
States, having a net worth of at least $100,000,000 and satisfying Lender’s
then-current criteria with respect to business character and experience, as
reasonably determined by Lender, and free from any pending or existing
bankruptcy, reorganization or insolvency proceedings in which such party is the
debtor or any criminal charges or proceedings and shall not be, at the time of
such Transfer or in the past, a litigant, plaintiff or defendant in any suit
brought against or by Lender; or (i) a trust for the benefit of one or more
individuals satisfying the criteria of clause (h) above.


 


“Insurance
Premiums” shall mean the premiums due under the Policies.


 


19
















 


“Insurance Proceeds” shall mean the net amount of all insurance
proceeds after deduction of the reasonable costs and expenses (including, but
not limited to, reasonable counsel fees), if any, in collecting same.


 


“Intercreditor Agreements” shall have the meaning set forth in Section 9.14
hereof.


 


“Interest Period” shall mean, in connection with the calculation of
interest accrued with respect to any specified Payment Date, the period from
and including the first (1st) day of a calendar month to and including
the last day of such calendar month; provided, however, that with respect to
the Payment Date occurring in November, 2007, the Interest Period shall be the
period commencing on the Closing Date to and including October 31, 2007. Each
Interest Period, except for the Interest Period ending October 31, 2007,
shall be a full month and shall not be shortened by reason of any payment of
the Loan prior to the expiration of such Interest Period.


 


“Interest Rate Hedging Agreement” shall mean any interest rate cap
agreement or interest rate swap (in each case together with any confirmation
and schedules relating thereto) between an Acceptable Counterparty, and
Borrower (if an interest rate cap) or an Affiliate of Borrower (if an interest
rate swap) in accordance with Section 2.4. The Interest Rate Hedging
Agreement shall be written on the then current standard ISDA documentation,
shall provide for interest periods and calculations consistent with the payment
terms of this Agreement and otherwise be reasonably satisfactory to Lender. After
delivery of a Replacement Interest Rate Hedging Agreement to Lender, the term “Interest
Rate Hedging Agreement” shall be deemed to mean such Replacement Interest Rate
Hedging Agreement.


 


“Interest Shortfall” shall have the meaning set forth in Section 2.3.1(b) hereof.


 


“Investment Grade” shall mean a rating of “BBB-” or its equivalent by
the Rating Agencies.


 


“Investor” shall mean any purchaser, transferee, assignee, participant,
Co-Lender or investor in all or any portion of the Loan or any Securities.


 


“Lease Term Sheet” shall have the meaning set forth in Section 5.1.17(a) hereof.


 


“Lease Termination Payments” shall mean all payments made to Mortgage
Borrower in connection with the termination, cancellation, surrender, sale or
other disposition of any Lease.


 


“Leases” shall have the meaning set forth in the Security Instrument.


 


“Legal Requirements” shall mean all federal, State, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of Governmental Authorities affecting the
Collateral, the Mezzanine A Collateral, Borrower, Mortgage Borrower, Mezzanine
A Borrower, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower Entity, any


 


20

















 


Mezzanine A Principal’s general partner
interest in the related Mezzanine A Borrower Entity or any Individual Property
or any part thereof, or the zoning, construction, use, alteration,
occupancy or operation thereof, or any part thereof, whether now or
hereafter enacted and in force, and all permits, licenses and authorizations
and regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instruments, either of record or as to which
Borrower has Actual Knowledge, at any time in force affecting such Individual
Property or any part thereof, including, without limitation, any such
covenants, agreements, restrictions and encumbrances which may (a) require
repairs, modifications or alterations in or to such Individual Property or any part thereof,
or (b) in any material way limit the use and enjoyment thereof.


 


“Lehman Entities” shall mean, collectively, Lehman Brothers Holdings
Inc., a Delaware corporation, and any Person that, directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with Lehman Brothers Holdings Inc., a Delaware corporation.


 


“Lender” shall mean Lehman Brothers Holdings Inc., a Delaware
corporation, Bank of America, N.A., a national banking association and Barclays
Capital Real Estate Finance Inc., a Delaware corporation, together with their
respective successors and assigns.


 


“Lender’s Approval Extension Period” shall have the meaning set forth
in Section 5.1.17(a) hereof.


 


“Letter of Credit” shall mean a clean, irrevocable, unconditional,
transferable letter of credit payable on sight draft only, with an initial
expiration date of not less than one (1) year and with automatic renewals
for one (1) year periods (unless the obligation being secured by, or
otherwise requiring the delivery of, such letter of credit is required to be
performed at least thirty (30) days prior to the initial expiry date of such
letter of credit), for which Borrower shall have no reimbursement obligation
and which reimbursement obligation is not secured by (x) the Collateral or any
other property pledged to secure the Note (y) the Mezzanine A Collateral or any
other property pledged to secure the Mezzanine A Note or (z) the Property or
any other property that secures the Mortgage Loan, in favor of Lender and
entitling Lender to draw thereon in New York, New York or in such other city as
Lender may reasonably determine, issued by Bank of America, N.A., JPMorgan
Chase Bank or another domestic bank or the U.S. agency or branch of a foreign
bank, provided such other bank (A) has a long-term unsecured debt rating
at the time such letter of credit is delivered and throughout the term of such
letter of credit, of not less than “AA-” or “Aa3”, as applicable, as assigned
by the Rating Agencies or (B) if a Securitization has occurred, has a
long-term debt rating that the applicable Rating Agencies have confirmed in
writing will not, in and of itself, result in a downgrade, withdrawal or
qualification of the initial, or, if higher, the then current ratings assigned
in connection with such Securitization.


 


“LIBOR” shall mean, for the first Interest Period 5.121% per annum. For
each Interest Period thereafter LIBOR shall mean the quoted offered rate for
one-month United States dollar deposits with leading banks in the London
interbank market that


 


21

















 


appears as of 11:00 a.m. (London time)
on the related LIBOR Determination Date on the display page designated as
Reuters Screen LIBOR01 Page or such other page as may replace
such page on that service or such other service as may be nominated
by the British Bankers-Association as the information vendor for the purposes
of displaying British Bankers-Association Interest Settlement Rates for U.S.
dollar deposits (the “Reuters Screen LIBOR01 Page”).


 


If, as of such time on any LIBOR Determination Date, no quotation is
given on Reuters Screen LIBOR01 Page, then Lender shall establish LIBOR on such
LIBOR Determination Date by requesting four Reference Banks meeting the
criteria set forth herein to provide the quotation offered by its principal
London office for making one-month United States dollar deposits with leading
banks in the London interbank market as of 11:00 a.m., London time, on
such LIBOR Determination Date.


 


(i)                                     If
two or more Reference Banks provide such offered quotations, then LIBOR for the
next Interest Period shall be the arithmetic mean of such offered quotations
(rounded if necessary to the nearest whole multiple of 1/1,000%).


 


(ii)                                  If
only one or none of the Reference Banks provides such offered quotations, then
LIBOR for the next Interest Period shall be the Reserve Rate.


 


(iii)                               If
on any LIBOR Determination Date, Lender is required but is unable to determine
the LIBOR in the manner provided in paragraphs (i) and (ii) above,
LIBOR for the next Interest Period shall be LIBOR as determined on the
preceding LIBOR Determination Date.


 


The establishment of LIBOR on each LIBOR Determination Date by the
Lender shall be final and binding, absent manifest error.


 


“LIBOR Business Day”
shall mean a day upon which (i) United States dollar deposits may be
dealt in on the London interbank markets and (ii) commercial banks and
foreign exchange markets are open in London, England and in New York, New York,
USA.


 


“LIBOR Determination Date”
shall mean, with respect to any Interest Period, the date that is the LIBOR
Business Day immediately preceding the start of such Interest Period.


 


“Licenses” shall have the meaning set forth in Section 4.1.21
hereof.


 


“Lien” shall mean any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other encumbrance, charge
or transfer of, on or affecting Collateral, the Mezzanine A Collateral,
Borrower, Mortgage Borrower, Mezzanine A Borrower, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity, any Mezzanine
A Principal’s general partner interest in the related Mezzanine A Borrower Entity
or any Individual Property, any portion thereof or any interest therein,
including, without limitation, any conditional sale or other title


 


22

















 


retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing of any financing statement, and mechanic’s, materialmen’s and other
similar liens and encumbrances.


 


“Liquidation Event” shall have the meaning set forth in Section 2.3.2(a) hereof.


 


“LLC Agreement” shall have the meaning set forth in Section 4.1.35(d) hereof.


 


“Loan” shall mean the loan in the original principal amount of
SIXTY-THREE MILLION FIVE HUNDRED ONE THOUSAND SEVEN HUNDRED TWENTY-NINE AND
16/100 DOLLARS ($63,501,729.16) made by Lender to Borrower pursuant to this
Agreement and the other Loan Documents, as the same may hereafter be
amended or split pursuant to the terms hereof.


 


“Loan Documents” shall mean, collectively, this Agreement, the Note,
the Pledge Agreement the Environmental Indemnity, the Guaranty and all other
documents executed and/or delivered in connection with the Loan.


 


“Loan Party” shall mean, individually and collectively, as the context
requires, each Mortgage Borrower Entity, each Mortgage Principal, each
Mezzanine A Borrower Entity, each Mezzanine A Principal, each Borrower Entity
and each Principal.


 


“Loan to Value Ratio” shall mean, as of the date of its calculation,
the ratio of (i) the sum of the respective outstanding principal amounts
of the Loan, the Mezzanine A Loan and the Mortgage Loan as of the date of such
calculation to (ii) the aggregate appraised value of the Properties
(according to an Appraisal prepared not earlier than one (1) year prior to
such date of calculation).


 


“Losses” shall mean any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement of whatever kind or
nature (including, but not limited to, reasonable out-of-pocket attorneys’ fees
and other costs of defense).


 


“LP Act” shall have the meaning set forth in Section 4.1.35(e) hereof.


 


“LP Agreement” shall have the meaning set forth in Section 4.1.35(e) hereof.


 


“Major Lease” shall mean (i) any Lease relating to commercial
space which, individually or together with all other Leases to the same tenant
and to all Affiliates of such tenant covers more than 5,000 rentable square
feet at any Individual Property, in the aggregate, (ii) any Lease relating
to residential space which, individually or together with all other Leases to
the same tenant and to all Affiliates of such tenant covers more than ten
percent (10%) of the total number of residential units at any Individual
Property, (iii) any Lease for the operation of any parking garage or
facility, or (iv) any Lease which is with an Affiliate of Borrower.


 


23

















 


“Management Agreement” shall mean, with respect to any Individual
Property, a management agreement between the applicable Mortgage Borrower
Entity and a Qualified Manager, pursuant to which such Qualified Manager is to
provide management, leasing and other services with respect to such Individual
Property, which management agreement shall be reasonably acceptable to Lender
in form and substance; provided, however,
if such management agreement shall be entered into after a Securitization, then
Lender, at its option, may condition its approval upon receiving
confirmation from the applicable Rating Agencies that such management agreement
will not result in a downgrade, withdrawal or qualification of the then current
rating of the Securities or any class thereof. Concurrently with the
execution and delivery of any Management Agreement with a Qualified Manager,
Lender shall be provided, at Borrower’s expense, with an Agreement Regarding
Management Agreement.


 


“Manager” shall mean a Qualified Manager who is managing an Individual
Property in accordance with the terms and conditions of this Agreement.


 


“Material Adverse Effect” shall mean a material adverse effect on (i) any
Individual Property, (ii) the Collateral, (iii) the Mezzanine A
Collateral, (iv) any Mortgage Principal’s general partner interest in the
related Mortgage Borrower Entity, (v) any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity, (vi) the
business, profits, prospects, management, operations or condition (financial or
otherwise) of Borrower, Mortgage Borrower, Mezzanine A Borrower, Guarantor, any
Principal, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity, any Mezzanine
A Principal’s general partner interest in the related Mezzanine A Borrower
Entity or any Individual Property, (vii) the enforceability, validity,
perfection or priority of the lien of this Agreement, the Note, the Pledge
Agreement or the other Loan Documents, or (viii) the ability of Borrower
to perform its obligations under this Agreement, the Note, the Pledge
Agreement or the other Loan Documents.


 


“Material Agreement” means all agreements, other than the Management
Agreement and the Leases, entered into by any Loan Party affecting or relating
to the Property, the Collateral, the Mezzanine A Collateral, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower Entity,
any Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity or any other direct or indirect ownership interest of a Loan
Party in the Mortgage Borrower, Mezzanine A Borrower or Borrower requiring the
payment of more than $1,000,000, individually, in
payments or liability in any annual period and which is not cancelable without
penalty or premium on no more than thirty (30) days notice.


 


“Material Alteration” shall have the meaning set forth in Section 5.1.20
hereof.


 


“Material Alteration Security” shall have the meaning set forth in Section 5.1.20
hereof.


 


“Maturity Date” shall mean November 1, 2010, or such other date on
which the final payment of the principal of the Note becomes due and payable as
therein or herein


 


24

















 


provided, whether at such stated maturity
date, by declaration of acceleration, or otherwise.


 


“Maximum Legal Rate” shall mean the maximum non-usurious interest rate,
if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the Note
and as provided for herein or the other Loan Documents, under the laws of such
State or States whose laws are held by any court of competent jurisdiction to
govern the interest rate provisions of the Loan.


 


“Member” shall have the meaning set forth in Section 4.1.35(d) hereof.


 


“Mezzanine A Borrower” shall have the meaning ascribed to the term “Borrower”
in the Mezzanine A Loan Agreement.


 


“Mezzanine A Borrower Entity” shall have the meaning ascribed to the
term “Borrower Entity” in the Mezzanine A Loan Agreement.


 


“Mezzanine A Collateral” shall have the meaning ascribed to the term “Collateral”
set forth in the Mezzanine A Loan Agreement.


 


“Mezzanine A Debt Service” shall mean, with respect to any period,
interest payments due and payable under the Mezzanine A Note for such period.


 


“Mezzanine A Lender” shall mean Lehman Brothers Holdings Inc., a
Delaware corporation, Bank of America, N.A., a national banking association and
Barclays Capital Real Estate Finance Inc., a Delaware corporation, together
with their respective successors and assigns.


 


“Mezzanine A Loan” shall mean that certain loan in the original
principal amount of $71,939,553.23 made by Mezzanine A Lender to Mezzanine A
Borrower on the date hereof pursuant to the Mezzanine A Loan Agreement, as the
same may be amended or split pursuant to the terms of the Mezzanine A Loan
Documents.


 


“Mezzanine A Loan Agreement” shall mean that certain Mezzanine A Loan
Agreement, dated as of the date hereof, between Mezzanine A Borrower and
Mezzanine A Lender, as the same may be amended, restated, supplemented or
otherwise modified from time to time.


 


“Mezzanine A Loan Documents” shall mean, collectively, all documents or
instruments evidencing, securing or guaranteeing the Mezzanine A Loan,
including, without limitation, the Mezzanine A Loan Agreement and the Mezzanine
A Note.


 


“Mezzanine A Loan Event of Default” shall have the meaning ascribed to
the term “Event of Default” in the Mezzanine A Loan Agreement.


 


“Mezzanine A Loan Extension” shall have the meaning ascribed to the
term “Extension Option”  in the
Mezzanine A Loan Agreement.


 


25

















 


“Mezzanine A Note” shall mean that certain Mezzanine A Promissory Note,
dated as of the date hereof, given by Mezzanine A Borrower to Mezzanine A
Lender in the maximum principal amount of $71,939,553.23, as the same may be
amended, restated, supplemented or otherwise modified from time to time.


 


“Mezzanine A Principal” shall have the meaning ascribed to the term “Principal”
in the Mezzanine A Loan Agreement.


 


“Mezzanine Loan Intercreditor Agreement” shall mean that certain
Intercreditor Agreement, dated as of the date hereof, between and among Lender,
Mezzanine A Lender and Mortgage Lender.


 


“Monthly Debt Service Payment Amount” shall mean the amount of
principal and interest due and payable on each Payment Date pursuant to the
Note and Section 2.2 hereof.


 


“Mortgage Borrower” shall have the meaning ascribed to the term “Borrower”
in the Security Instrument.


 


“Mortgage Borrower Entity” shall have the meaning ascribed to the term “Borrower”
in the Security Instrument.


 


“Mortgage Borrower Formation Agreement” shall mean, with respect to
each Mortgage Borrower Entity, the Limited Partnership Agreement, Limited
Liability Company Agreement or other similar entity formation agreement of such
Mortgage Borrower Entity.


 


“Mortgage Cross Collateralization Agreement” shall mean that certain
Cross-Collateralization Agreement and Amendment to Security Instrument, dated
as of the date hereof, between Mortgage Borrower and Mortgage Lender, as
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Mortgage Debt Service Escrow Agreement” shall mean that certain Debt
Service Escrow Agreement, dated as of the date hereof, between Mortgage
Borrower and Mortgage Lender, as amended, restated, replaced, supplemented or
otherwise modified from time to time.


 


“Mortgage Interest Rate Hedge Reserve Agreement” shall mean that
certain Agreement to Hedge Interest Rate, Interest Rate Hedge Assignment and
Security Agreement, dated as of the date hereof, between Mortgage Borrower and
Mortgage Lender, as amended, restated, replaced, supplemented or otherwise
modified from time to time.


 


“Mortgage Lender” shall mean Lehman Brothers Holdings Inc., a Delaware
corporation, Bank of America, N.A., a national banking association and Barclays
Capital Real Estate Inc., a Delaware corporation, together with their
respective successors and assigns.


 


26

















 


“Mortgage Loan” shall mean that certain loan made by Mortgage Lender to
Mortgage Borrower in the original principal amount of $846,907,500.00.


 


“Mortgage Loan Debt Service” shall mean the debt service payments due
under the Mortgage Note.


 


“Mortgage Loan Documents” shall mean, collectively, the Mortgage Note,
the Security Instrument, and any and all other documents defined as “Loan
Documents” in the Security Instrument, as amended, restated, replaced,
supplemented or otherwise modified from time to time.


 


“Mortgage Loan Event of Default” shall have the meaning ascribed to the
term “Event of Default” in the Security Instrument.


 


“Mortgage Loan Reserve Funds” shall mean the escrow or reserve funds
established under the Mortgage Loan Documents.


 


“Mortgage Note” shall have the meaning ascribed to the term “Note” in
the Security Instrument.


 


“Mortgage Principal” shall mean, with respect to each Mortgage Borrower
Entity that is a limited partnership, the general partner of such Mortgage
Borrower Entity.


 


“Mortgage Repair Agreement” shall mean that certain Repair Agreement,
dated as of the date hereof, between Mortgage Borrower and Mortgage Lender, as
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Mortgage Replacement Reserve Agreement” shall mean that certain
Replacement Reserve Agreement, dated as of the date hereof, between Mortgage
Borrower and Mortgage Lender, as amended, restated, replaced, supplemented or
otherwise modified from time to time.


 


“Mortgage Title Insurance Policy” shall mean, with respect to each
Individual Property, an ALTA mortgagee title insurance policy acceptable to
Mortgage Lender (or, if an Individual Property is located in a State which does
not permit the issuance of such ALTA policy, such form as shall be
permitted in such State and acceptable to Mortgage Lender) issued with respect
to such Individual Property and insuring the lien of the Security Instrument
encumbering such Individual Property.


 


“Moody’s” shall mean Moody’s Investors Service, Inc.


 


“Multifamily Guarantor” shall mean Tishman Speyer Archstone-Smith
Multifamily Guarantor, L.P., a Delaware limited partnership.


 


“Multifamily Parallel Guarantor” shall mean Tishman Speyer
Archstone-Smith Multifamily Parallel Guarantor, L.L.C., a Delaware limited
liability company.


 


“Municipal Violations” shall have the meaning set forth in Section 4.1.9
hereof.


 


27

















 


“Net Cash Flow” shall mean, for any period, the amount obtained by
subtracting Operating Expenses and Capital Expenditures for such period from
Gross Income from Operations for such period.


 


“Net Cash Flow After Debt Service” shall mean, for any period, the
amount obtained by subtracting Debt Service, Mortgage Loan Debt Service and
Mezzanine A Debt Service for such period from Net Cash Flow for such period.


 


“Net Liquidation Proceeds After Debt Service” shall mean, with respect
to any Liquidation Event, all amounts paid to or received by or on behalf of
any Mortgage Borrower Entity (or any Mezzanine A Borrower Entity) in connection
with such Liquidation Event, including, without limitation, proceeds of any
sale, refinancing or other disposition or liquidation, less (i) in the
event of a Liquidation Event consisting of a Casualty or Condemnation, Borrower’s,
Mortgage Borrower’s, Mezzanine A Borrower’s, Lender’s, Mezzanine A Lender’s,
and/or Mortgage Lender’s reasonable out-of-pocket costs incurred in connection
with the recovery thereof, (ii) in the event of a Liquidation Event
consisting of a Casualty or Condemnation, the costs incurred by Mortgage
Borrower in connection with a restoration of all or any portion of the
applicable Individual Property made in accordance with the Mortgage Loan
Documents, (iii) in the event of a Liquidation Event consisting of a
Casualty or Condemnation or a Transfer, amounts required or permitted to be
deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to
Mortgage Lender, (iv) in the event of a Liquidation Event consisting of a
Casualty or Condemnation, the excess Insurance Proceeds or Condemnation
Proceeds not used for the Restoration of the applicable Individual Property
which are paid to Mortgage Borrower, (v) in the case of a foreclosure
sale, disposition or transfer of an Individual Property in connection with realization
thereon following a Mortgage Loan Event of Default, reasonable and customary
out-of-pocket costs and expenses of sale or other disposition (including
attorneys’ fees and brokerage commissions), (vi) in the case of a
foreclosure sale, disposition or transfer of the Mezzanine A Collateral in
connection with realization thereon following a Mezzanine A Loan Event of
Default, reasonable and customary out-of-pocket costs and expenses of sale or
other disposition (including attorneys’ fees and brokerage commissions), (vii) intentionally
omitted, (viii) in the case of a foreclosure sale relating to the Mortgage
Loan, such costs and expenses incurred by Mortgage Lender under the Mortgage
Loan Documents as Mortgage Lender shall be entitled to receive reimbursement
for under the terms of the Mortgage Loan Documents, (ix) in the case of a
foreclosure sale relating to the Mezzanine A Loan, such costs and expenses
incurred by Mezzanine A Lender under the Mezzanine A Loan Documents as
Mezzanine A Lender shall be entitled to receive reimbursement for under the
terms of the Mezzanine A Loan Documents, (x) intentionally omitted, (xi) in the
case of a refinancing of the Mortgage Loan, such costs and expenses (including
attorneys’ fees) of such refinancing, (xii) in the case of a refinancing of the
Mezzanine A Loan, such costs and expenses (including attorneys’ fees) of such
refinancing, (xiii) intentionally omitted, (xiv) the amount of any prepayments
required pursuant to the Mortgage Loan Documents, the Mezzanine A Loan Documents
and/or the Loan Documents in connection with such Liquidation Event and (xv)
any sums due to Mezzanine A Lender pursuant to Section 2.3.2 of the
Mezzanine A Loan Agreement.


 


28

















 


“Net Operating Income” shall mean, for any period, the amount obtained
by subtracting Operating Expenses for such period from Gross Income from
Operations for such period.


 


“Net Proceeds” shall mean the Insurance Proceeds or the Condemnation
Proceeds, as applicable.


 


“Note” shall mean that certain Mezzanine B Promissory Note of even date
herewith in the original principal amount of SIXTY-THREE MILLION FIVE HUNDRED
ONE THOUSAND SEVEN HUNDRED TWENTY-NINE AND 16/100 DOLLARS ($63,501,729.16),
made by Borrower in favor of Lender, as the same may be amended, restated,
replaced, extended, renewed, supplemented, severed, split, or otherwise
modified from time to time in accordance with the applicable provisions of this
Agreement.


 


“Obligations” shall mean Borrower’s obligations to pay the Debt and perform its
obligations under the Note, this Agreement and the other Loan Documents.


 


“Officer’s Certificate” shall mean a certificate delivered to Lender by
Borrower which is signed by a Responsible Officer of Borrower, in his or her
capacity as an officer of Borrower and not in his or her individual capacity.


 


“Operating Expenses” shall mean the total of all costs and expenses,
computed in accordance with GAAP, of whatever kind relating to the operation,
maintenance, use and management of the Properties that are incurred on a
regular monthly or other periodic basis, including without limitation,
utilities, ordinary repairs and maintenance, insurance premiums, license fees,
Taxes and Other Charges, advertising expenses, management fees, accounting,
legal and other professional fees (if properly allocated to the Properties and
the operation and management thereof), payroll and related taxes, computer
processing charges, operational equipment or other lease payments, and other
similar costs, but excluding depreciation, Debt Service, Capital Expenditures
and contributions to the Reserve Funds, if applicable, or the Mortgage Loan
Reserve Funds.


 


“Organizational Documents” shall mean (i) with respect to a
corporation, such Person’s certificate of incorporation and by laws, and any
shareholder agreement, voting trust or similar arrangement applicable to any of
such Person’s authorized shares of capital stock or other organizational
document affecting the rights of holders of such stock, (ii) with respect
to a partnership, such Person’s certificate of limited partnership, partnership
agreement, voting trusts or similar arrangements applicable to any of its
partnership interests or other organizational document affecting the rights of
holders of partnership interests, and (iii) with respect to a limited
liability company, such Person’s certificate of formation, limited liability
company agreement or other organizational document affecting the rights of
holders of limited liability company interests. In each case, “Organizational
Documents” shall include any shareholders or other agreement among any of the
owners of the entity in question.


 


29

















 


“Other Charges” shall mean, if and to the extent applicable with respect
to any Individual Property, maintenance charges, impositions other than Taxes,
and any other charges, including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining such Individual
Property, now or hereafter levied or assessed or imposed against such
Individual Property or any part thereof.


 


“Owner’s Title Policy” shall mean that certain ALTA extended coverage
owner’s policy of title insurance issued in connection with the closing of the
Mortgage Loan insuring the Mortgage Borrower as the owner of the Property.


 


“Ownership Interest” means with respect to any Person, any ownership
interest in such Person, direct or indirect, contingent or fixed, at any level
or any tier, of any nature whatsoever, whether in the form of a
partnership interest, stock interest, membership interest, equitable interest,
beneficial interests, profit interest, loss interest, voting rights, control
rights, management rights or otherwise.


 


“Participant” shall have the meaning set forth in Section 9.7.2(i) hereof.


 


“Partner” shall have the meaning set forth in Section 4.1.35(e) hereof.


 


“Payment Date” shall mean the first (1st) day of each
calendar month during the term of the Loan or, if such day is not a Business
Day, the immediately succeeding Business Day.


 


“Permitted Debt” shall have the meaning set forth in Section 4.1.35(a)(vii) hereof.


 


“Permitted Encumbrances” shall mean, collectively, (a) the Liens
and security interests created by the Loan Documents, the Mortgage Loan
Documents and the Mezzanine A Loan Documents, (b) all Liens, encumbrances
and other matters disclosed in the Mortgage Title Insurance Policy relating to
any Individual Property or any part thereof, (c) Liens, if any, for
Taxes imposed by any Governmental Authority not yet delinquent or being
contested in good faith and by appropriate proceedings in accordance with the
applicable provisions of the Loan Documents, the Mortgage Loan Documents or the
Mezzanine A Loan Documents, (d) other Liens that are being contested in
good faith and by appropriate proceedings in accordance with the applicable
provisions of the Loan Documents, the Mortgage Loan Documents or the Mezzanine
A Loan Documents, (e) the rights of the lessors or secured parties under
any equipment lease agreements permitted under the Mortgage Loan Documents, and
any financing statements filed as evidence of such lessors’ or secured parties’
rights, (f) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case, which are
necessary for the operation of the Property and do not or would not have a
Material Adverse Effect, and (g) such other title and survey exceptions as
Mortgage Lender has approved or may approve in writing in Mortgage Lender’s
sole discretion.


 


“Permitted Investments” shall mean any one or more of the following
obligations or securities (including those issued by Servicer, the trustee
under any Securitization or any of their respective Affiliates) acquired at a
purchase price of not greater than par, and payable on demand or having a
maturity date not later than the Business Day


 


30

















 


immediately prior to the date upon which such
funds are required to be drawn and meeting one of the appropriate standards set
forth below:


 


(i)                                     obligations
of, or obligations fully guaranteed as to payment of principal and interest by,
the United States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the United States of
America including, without limitation, obligations of: the U.S. Treasury (all
direct or fully guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services Administration
(participation certificates), the U.S. Maritime Administration (guaranteed
Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds); provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not
have an “r” highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to
liquidation prior to their maturity;


 


(ii)                                  Federal
Housing Administration debentures;


 


(iii)                               obligations
of the following United States government sponsored agencies: Federal Home Loan
Mortgage Corp. (debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations), the Federal National Mortgage Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;


 


(iv)                              federal
funds, unsecured certificates of deposit, time deposits, bankers’ acceptances
and repurchase agreements with maturities of not more than 365 days of any
bank, the short term obligations of which at all times are rated in the highest
short term rating category by each Rating Agency (or, if not rated by all
Rating Agencies, rated by at least one Rating Agency in the highest short term
rating category and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Securities); provided, however,
that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and


 


31

















 


must move proportionately with that index,
and (D) such investments must not be subject to liquidation prior to their
maturity;


 


(v)                                 fully
Federal Deposit Insurance Corporation insured demand and time deposits in, or
certificates of deposit of, or bankers’ acceptances with maturities of not more
than 365 days and issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency (or,
if not rated by all Rating Agencies, rated by at least one Rating Agency in the
highest short term rating category and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investment would not, in and
of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to the Securities); provided,
however, that the investments described in this clause must (A) have
a predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;


 


(vi)                              debt
obligations with maturities of not more than 365 days and at all times rated by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Securities) in its highest long term unsecured rating category;
provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if rated by
S&P, must not have an “r” highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied
to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be
subject to liquidation prior to their maturity;


 


(vii)                           commercial
paper (including both non interest bearing discount obligations and
interest-bearing obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) with maturities of not more
than 365 days and that at all times is rated by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the Securities) in its
highest short term unsecured debt rating; provided, however,
that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an “r” highlighter affixed
to their rating, (C) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate index plus a fixed
spread (if any) and must move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their maturity;


 


32

















 


(viii)                        units
of taxable money market funds, with maturities of not more than 365 days and
which funds are regulated investment companies, seek to maintain a constant net
asset value per share and invest solely in obligations backed by the full faith
and credit of the United States, which funds have the highest rating available
from each Rating Agency (or, if not rated by all Rating Agencies, rated by at
least one Rating Agency and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Securities) for money market funds; and


 


(ix)                                any
other security, obligation or investment which has been approved as a Permitted
Investment in writing by (a) Lender and (b) each Rating Agency, as
evidenced by a written confirmation that the designation of such security,
obligation or investment as a Permitted Investment will not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Securities by such Rating Agency;


 


provided, however, that no obligation or
security shall be a Permitted Investment if (A) such obligation or
security evidences a right to receive only interest payments or (B) the
right to receive principal and interest payments on such obligation or security
are derived from an underlying investment that provides a yield to maturity in
excess of 120% of the yield to maturity at par of such underlying investment.


 


“Permitted Transferee” shall have the meaning provided in Section 5.2.11(a)(ii) hereof.


 


“Person” shall mean any individual, corporation, partnership, joint
venture, limited liability company, estate, trust, unincorporated association,
any federal, State, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of
the foregoing.


 


“Personal Property” shall mean the machinery, equipment, fixtures
(including, but not limited to, the heating, air conditioning, plumbing,
lighting, communications and elevator fixtures, inventory and goods) and other
property of every kind and nature whatsoever owned by Mortgage Borrower, or in
which Mortgage Borrower has or shall have an interest, now or hereafter located
upon the applicable Individual Property, or appurtenant thereto, and usable in
connection with the present or future operation and occupancy of the applicable
Individual Property, and the building equipment, materials and supplies of any
nature whatsoever owned by Mortgage Borrower, or in which Mortgage Borrower has
or shall have an interest, now or hereafter located upon the applicable
Individual Property, or appurtenant thereto, or usable in connection with the
present or future operation and occupancy of the applicable Individual
Property.


 


“Plan” shall mean an employee benefit plan (as defined in section 3(3) of
ERISA) whether or not subject to ERISA or a plan or other arrangement within
the meaning of Section 4975 of the Code.


 


33

















 


“Plan Assets” shall mean assets of a Plan within the meaning of section 29
C.F.R., Section 2510.3-101 or similar law.


 


“Pledge” shall mean, with respect to any Restricted Party, a voluntary
or involuntary pledge of a direct or indirect legal or beneficial interest in
such Restricted Party.


 


“Pledge Agreement” shall mean that certain Mezzanine B Pledge and
Security Agreement dated as of the Closing Date, executed and delivered by
Borrower to Lender as security for the Loan, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


“Policies” shall have the meaning set forth in Section 6.1(b) hereof.


 


“Prepayment Date” shall have the meaning set forth in Section 2.3.1(b) hereof.


 


“Present Value Factor” means:


 


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


 


Where n = the nth Payment Date; for example, if the Loan is prepaid on
the first Payment Date, the Spread Maintenance Payment would be the Spread
Payment times the Present Value Factor for each of the remaining Payment Dates
in the Spread Maintenance Period beginning with n =2.


 


“Prime Rate” shall mean, on a particular date, a rate per annum equal
to the rate of interest published in The Wall Street Journal as the “prime rate”,
as in effect on such day, with any change in the prime rate resulting from a
change in said prime rate to be effective as of the date of the relevant change
in said prime rate; provided, however, that if more than one prime rate is
published in The Wall Street Journal for a day, the average of the prime rates
shall be used; provided, further, however, that the Prime Rate (or the average
of the prime rates) will be rounded to the nearest 1/1000 of 1% or, if there is
no nearest 1/1000 of 1%, to the next higher 1/1000 of 1%. In the event that The
Wall Street Journal should cease or temporarily interrupt publication, then the
Prime Rate shall mean the daily average prime rate published in another
business newspaper, or business section of a newspaper, of national
standing chosen by Lender. If The Wall Street Journal resumes publication, the
substitute index will immediately be replaced by the prime rate published in
The Wall Street Journal. In the event that a prime rate is no longer generally
published or is limited, regulated or administered by a governmental or
quasi-governmental body, then Lender shall select a reasonably comparable
interest rate index which is readily available to Borrower and verifiable by
Borrower but is beyond the control of Lender. Lender shall give Borrower prompt
written notice of its choice of a substitute index and when the change became
effective. Such substitute index will also be rounded to the nearest 1/1000 of
1% or, if there is no nearest 1/1000 of 1%, to the next higher 1/1000 of 1%. The
determination of the Prime Rate by Lender shall be conclusive and binding
absent manifest error.


 


34

















 


“Principal” shall mean, with respect to any Borrower Entity, the
general partner of such Borrower Entity, if such Borrower Entity is a
partnership, or the managing member of such Borrower Entity, if such Borrower
Entity is a limited liability company that does not comply with the provisions
of Sections 4.1.35(b), (c) and (d) hereof, together with its
successors and assigns.


 


“Prohibited Person” shall mean any Person:


 


(a)                                  listed
in the Annex to, or otherwise subject to the provisions of, the Executive Order
No. 13224 on Terrorist Financing, effective September 24, 2001, and
relating to Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);


 


(b)                                 that
is owned or controlled by, or acting for or on behalf of, any person or entity
that is listed to the Annex to, or is otherwise subject to the provisions of,
the Executive Order;


 


(c)                                  with
whom Lender is prohibited from dealing or otherwise engaging in any transaction
by the Executive Order;


 


(d)                                 who
has been identified by any U.S. Governmental Authority having jurisdiction with
respect to such matters as a Person who commits, threatens or conspires to
commit or supports “terrorism” as defined in the Executive Order;


 


(e)                                  that
is named as a “specially designated national and blocked person” on the most
current list published by the U.S. Treasury Department Office of Foreign Assets
Control at its official website, http://www.treas.gov.ofac/t11sdn.pdf or at any
replacement website or other replacement official publication of such list; or


 


(f)                                    who
is an Affiliate of a Person listed above.


 


“Projections” shall have the meaning set forth in Section 9.7.3(b) hereof.


 


“Properties” shall mean, collectively, the Individual Properties which
are subject to the terms of the Mortgage Loan Documents, in each case if and to
the extent that the same is encumbered by a Security Instrument and has not
been released therefrom pursuant to the terms hereof.


 


“Property” shall mean, as the context may require, the Properties
or an Individual Property.


 


“Provided Information” shall have the meaning set forth in Section 9.1(a) hereof.


 


“Qualified Manager” shall mean (a) TSP or an Affiliate thereof, (b) Archstone
Property Management LLC, a Delaware limited liability company, (c) Archstone
Property Management (California) Incorporated, a Delaware corporation, (d) a
reputable and experienced professional management organization which manages,
together with its Affiliates, no fewer than ten (10) first class luxury
residential apartment buildings of a


 


35

















 


type and size similar to the Properties,
totaling in the aggregate no less than 2500 residential units; provided, however, that the employment of such organization
described in this clause (b) as manager of the Properties shall be
conditional, (i) if it shall occur prior to the occurrence of a
Securitization, upon approval of such employment by Lender, such approval not
to be unreasonably withheld, and (ii) if it shall occur after the
occurrence of a Securitization, upon Lender having received written
confirmation from the Rating Agencies that the employment of such manager will
not result in a downgrade, withdrawal or qualification of the initial, or if
higher, then current ratings of the Securities.


 


“Rating Agency” shall mean each of S&P, Moody’s, and Fitch, and any
other nationally recognized statistical rating agency which has been selected
by Lender and, in each case, has rated the Securities.


 


“Rating Agency Confirmation” means each of the Rating Agencies shall
have confirmed in writing that the occurrence of the event with respect to
which such Rating Agency Confirmation is sought shall not result in a
downgrade, qualification or withdrawal of the initial, or, if higher, the then
current ratings assigned to the Securities in connection with a Securitization.
In the event that no Securities are outstanding or the Loan is not part of
a Securitization, any action that would otherwise require a Rating Agency
Confirmation shall require the consent of the Lender, which consent shall not
be unreasonably withheld or delayed.


 


“Recourse Events” shall have the meaning set forth in Section 9.4(b) hereof.


 


“Reference Bank” shall mean a
leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market that has an established place of business in
London. If any such Reference Bank should be removed from the Reuters Screen
LIBOR01 Page or in any other way fail to meet the qualifications of a
Reference Bank, Lender may designate alternative Reference Banks meeting
the criteria specified above.


 


“Register” shall have the meaning set forth in Section 9.7.2(h) hereof.


 


“Regulatory Change” shall mean any change after the date of this
Agreement (or with respect to any assignee hereunder, after the date such
assignee becomes a Lender) in federal, state or foreign laws or regulations or
the adoption or the making, after such date, of any interpretations, directives
or requests applying to a class of banks or companies controlling banks,
including such Lender or any company controlling such Lender, of or under any
federal, state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.


 


“Release” of any Hazardous Materials shall mean any release, deposit,
discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Materials.


 


“Release Price” shall mean:


 


36

















 


(i)                                     (A) in
the event that Mortgage Borrower does not pay the “Release Price” as defined in
the Mortgage Cross Collateralization Agreement, an amount equal to the
Allocated Loan Amount for the applicable Individual Property being released; or
(B) in the event that Mortgage Borrower does pay the “Release Price” as
defined in the Mortgage Cross Collateralization Agreement, an amount equal to
110% times the Allocated Loan Amount for the applicable Individual Property
being released;


 


plus


 


(ii)                                  if
after giving effect to (A) the anticipated payment of the release price
under the Mortgage Loan, (B) the anticipated payment of the portion of the
release price as set forth in clause (i) of the definition of “Release
Price” in the Mezzanine A Loan Agreement and (C) the anticipated payment
of the portion of the Release Price as set forth in clause (i) of this
definition, the Debt Service Coverage Ratio for the Properties then remaining
subject to the Liens of the Security Instruments is not at least equal to or
greater than the Debt Service Coverage Ratio for all of the Properties
(including the Individual Property to be released) immediately preceding the
release of such Individual Property (the “Required DSCR Ratio”) or the
Loan to Value Ratio for the Properties then remaining subject to the Liens of
the Security Instruments is not at least equal to or less than the Loan to
Value Ratio for all of the Properties (including the Individual Property to be
released) immediately preceding the release of such Individual Property (the “Required
LTV Ratio”), an amount equal to (x) the quotient obtained by dividing (A) the
outstanding principal balance of the Loan by (B) the outstanding principal
balance of the Loan and the Mezzanine A Loan, multiplied by (y) the minimum
amount reasonably determined by Lender which would be necessary to be applied
to the reduction of the outstanding principal balances of the Loan and the
Mezzanine A Loan in order to satisfy the Required DSCR Ratio and the Required
LTV Ratio.


 


“Release Property” shall have the meaning set forth in Section 2.9
hereof.


 


“Released Individual Property” shall have the meaning set forth in Section 2.6(j)
hereof.


 


“Renewal Lease” shall have the meaning set forth in Section 5.1.17(a) hereof.


 


“Rents” shall mean the rents, additional rents, payments in connection
with any termination, cancellation or surrender of any Lease, revenues, issues
and profits (including the oil and gas or other mineral royalties and bonuses)
from the applicable Individual Property whether paid or accruing before or
after the filing by or against Mortgage Borrower of any petition for relief
under the Bankruptcy Code and the proceeds from the sale or other disposition
of the Leases.


 


“Reorganization Proceeding” shall have the meaning set forth in Section 9.4
hereof.


 


“Replacement Interest Rate Hedging Agreement” means an interest rate
hedging agreement from an Acceptable Counterparty with terms in all material
respects identical to the Interest Rate Hedging Agreement.


 


37

















 


“Reserve Funds” shall mean, collectively, the escrow or reserve funds
established pursuant to this Agreement or any of the other Loan Documents.


 


“Reserve Rate” shall mean the rate per annum which Lender determines to
be either (i) the arithmetic mean (rounded if necessary to the nearest
whole multiple of 1/1,000%) of the one-month United States dollar lending rates
that at least three major New York City banks selected by Lender are quoting,
at 11:00 a.m. (New York time) on the relevant LIBOR Determination Date, to
the principal London offices of at least two of the Reference Banks, or (ii) in
the event that at least two such rates are not obtained, the lowest one-month
United States dollar lending rate which New York City banks reasonably selected
by Lender are quoting as of 11:00 a.m. (New York time) on such LIBOR
Determination Date to leading European banks.


 


“Responsible Officer” means with respect to any Person, the chairman of
the board, president, chief operating officer, chief financial officer,
treasurer or vice president-finance of such Person.


 


“Restoration” shall mean  the repair and
restoration of an Individual Property after a Casualty or Condemnation as
nearly as possible to the condition the Individual Property was in immediately
prior to such Casualty or Condemnation, with such alterations as may be
approved by Lender to the extent required hereunder.


 


“Restricted Party” shall mean each Guarantor, each Borrower Entity,
each Principal, each Mortgage Borrower Entity, each Mortgage Principal, each
Mezzanine A Borrower Entity, each Mezzanine A Principal or any Affiliated
Manager or any direct or indirect shareholder, partner, member or non member
manager of any Guarantor, any Principal, any Mortgage Borrower, any Mortgage
Principal, any Mezzanine A Borrower or any Mezzanine A Principal.


 


“S&P” shall mean Standard & Poor’s Ratings Services, a
division of McGraw-Hill, Inc.


 


“Sale” shall mean, with respect to any Restricted Party, a voluntary or
involuntary sale, conveyance or transfer of a direct or indirect legal or
beneficial interest in such Restricted Party.


 


“Securities” shall have the meaning set forth in the first paragraph of
Section 9.1 hereof.


 


“Securities Act” shall have the meaning set forth in Section 9.2
hereof.


 


“Securitization” shall have the meaning set forth in the first
paragraph of Section 9.1 hereof.


 


“Security Deposits” shall have the meaning set forth in Section 5.1.17(e) hereof.


 


“Security Instrument” shall mean, with respect to any Individual
Property, that certain first priority Multifamily Mortgage, Deed of Trust or
Deed to Secure Debt,


 


38

















 


Assignment of Leases and Rents and Security
Agreement or other similar security instrument, dated as of the date hereof,
executed and delivered by the applicable Mortgage Borrower Entity as security
for the Mortgage Loan and encumbering such Individual Property, as the same may hereafter
be amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


“Servicer” shall have the meaning set forth in Section 9.3 hereof.


 


“Servicing Agreement” shall have the meaning set forth in Section 9.3
hereof.


 


“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c) hereof.


 


“Special Limited Partner” shall have the meaning set forth in Section 4.1.35(e) hereof.


 


“Special Member” shall have the meaning set forth in Section 4.1.35(d) hereof.


 


“Spread Maintenance Payment” shall mean, with respect to any repayment
of the outstanding principal amount of the Loan prior to the end of the Spread
Maintenance Period, a payment to Lender in an amount equal to the Spread
Payment multiplied by the Present Value Factor for each of the remaining
Payment Dates in the Spread Maintenance Period. Notwithstanding the foregoing,
no Spread Maintenance Payment shall be due in connection with a release of an
Individual Property pursuant to Section 2.6 hereof in the event that (i) the
aggregate Allocated Loan Amounts for the Individual Property being released and
all of the Properties previously released in accordance with Section 2.6
hereof equals an amount less than or equal to 10% of the original principal
balance of the Loan and (ii) such release occurs on or after May 1,
2008.


 


“Spread Maintenance Period” shall mean the period commencing on the
Closing Date to and including October 31, 2008.


 


“Spread Payment” shall mean the amount of principal being prepaid times
the Eurodollar Rate Margin divided by 12.


 


“State” shall mean, with respect to an Individual Property, the State
or Commonwealth in which such Individual Property or any part thereof is
located, or the District of Columbia with respect to an Individual Property
located therein.


 


“Strike Rate” shall mean (i) a rate per annum equal to 5.75% from
the Closing Date through and including November 1, 2010 and (ii) during
each Extension Period, a rate per annum, which, when added to the weighted
average of the Eurodollar Rate Margin and the applicable interest rate spreads
under the Mortgage Loan and the Mezzanine A Loan, would produce a Debt Service
Coverage Ratio (assuming a Eurodollar Rate Margin equal to 3.75% per annum) of
no less than (x) if only a Cap is obtained, 0.85:1.00 or (y) if only a Swap or
a Swap and a Cap are obtained, 0.95:1.00, each as determined by Borrower and
approved by Lender, such approval not to be unreasonably withheld.


 


39






 












 


“Substitute Allocated Loan Amount” shall have the meaning set forth in Section 2.9
hereof.


 


“Substitute Property” shall have the meaning set forth in Section 2.9
hereof.


 


“Substitute Properties” shall have the meaning set forth in Section 2.9
hereof.


 


“Survey” shall have the meaning set forth in Section 4.1.13
hereof.


 


“Swap” shall have the meaning provided in Section 2.4(b) hereof.


 


“Swap Breakage” shall mean all actual losses (including, without
limitation, loss of bargain), costs (including, without limitation, cost of
funding), breakage and expenses that Counterparty may incur as a result of
any default in the performance of, or the termination of, the obligations of
the Affiliate of Borrower (as purchaser of the Swap) pursuant to such Swap.


 


“Swap Payments” shall mean all scheduled monthly net payments required
to be made under the Swap to Counterparty in accordance with the terms of such
Swap.


 


“Syndication” shall have the meaning set forth in Section 9.7.2(a) hereof.


 


“Taxes” shall mean all real estate and personal property taxes,
assessments, water rates or sewer rents, now or hereafter levied or assessed or
imposed against any Individual Property or part thereof.


 


“Tenant” shall mean the tenant under any Lease.


 


“Threshold Amount” shall have the meaning set forth in Section 5.1.20
hereof.


 


“Tishman Speyer Control Persons” shall mean, as of any applicable
determination date, (i) any of Robert V. Tishman and/or Jerry I. Speyer
and/or Robert J. Speyer, their spouses, descendants, heirs, legatees or devisees;
(ii) the Managing Directors of the general partner of Multifamily
Guarantor or Multifamily Parallel Guarantor on such determination date who were
either serving as such on the date hereof or have been employed by the general
partner of Multifamily Guarantor or Multifamily Parallel Guarantor for at least
five (5) years prior to such determination date; (iii) the Managing
Directors of TSP on such determination date who were either serving as such on
the date hereof or have been employed by TSP for at least five (5) years
prior to such determination date; or (iv) any Person directly or
indirectly controlled by one or more of the persons described in clauses (i) through
(iii) above.


 


“Trade Payables” shall mean  trade payables
incurred by Mortgage Borrower in the ordinary course of its business of owning
and operating the Properties.


 


“Transfer” shall have the meaning set forth in Section 5.2.10(a) hereof.


 


40

















 


“TSP” shall mean Tishman Speyer Properties, L.P., a New York limited
partnership.


 


“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial
Code as in effect in the State in which an Individual Property is located.


 


“UCC Financing Statements” shall mean the UCC financing statements
delivered in connection with the Pledge Agreement and the other Loan Documents
and filed in the applicable filing offices.


 


“UCC Title Insurance Policy” shall mean, with respect to the
Collateral, a UCC title insurance policy in form acceptable to Lender
issued with respect to the Collateral and insuring the lien of the Pledge
Agreement upon the Collateral.


 


“U.S. Obligations” shall mean direct non-callable obligations of the
United States of America or other obligations which are “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of
1940.


 


“USPAP” shall mean the Uniform Standard of Professional Appraisal
Practice.


 


“U.S. Tax” means any present or future tax, assessment or other charge
or levy imposed by or on behalf of the United States of America or any taxing
authority thereof.


 


Section 1.2                                      Principles
of Construction.


 


All references to “Sections” and “Schedules” are to Sections and
Schedules in or to this Agreement unless otherwise specified. All uses of the
word “including” shall mean “including, without limitation” unless the context
shall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally applicable to both the singular and plural forms of the
terms so defined. All covenants, representations, terms and conditions
contained in this Agreement applicable to “Borrower” shall be deemed to apply
to each Borrower Entity individually. It shall constitute an Event of Default
if any covenant, representation, term or condition contained in this Agreement
is breached (beyond any applicable notice and cure periods) with respect to any
individual Borrower Entity. With respect to terms defined by cross-reference to
the Mortgage Loan Documents, such defined terms shall have the respective
definitions set forth for such terms in the Mortgage Loan Documents as of the
date hereof, and no modifications to the Mortgage Loan Documents shall have the
effect of changing such definitions for the purpose of this Agreement unless
Lender expressly agrees that such definitions as used in this Agreement have
been revised or Lender consents to the modification documents. With respect to
any provisions incorporated by reference herein from the Mortgage Loan
Documents, such provisions shall be deemed a part of this Agreement notwithstanding
the fact that the Mortgage Loan shall no longer be effective for any reason. The
phrase “Borrower shall cause Mortgage Borrower to” or “Borrower shall not cause
or permit Mortgage Borrower to” (or phrases of similar meaning), as used herein,
shall mean 


 


41

















 


Borrower shall cause Mezzanine A Borrower to
cause Mortgage Borrower to so act or not to so act, as applicable (or that
Borrower shall permit Mezzanine A Borrower to permit Mortgage Borrower to so
act or not to so act, as applicable).


 


II.                                     GENERAL
TERMS


 


Section 2.1                                      Loan
Commitment; Disbursement to Borrower.


 


2.1.1                        Agreement
to Lend and Borrow.


 


Subject to and upon the terms and conditions set forth herein, Lender
hereby agrees to make and Borrower hereby agrees to accept the Loan on the
Closing Date.


 


2.1.2                        Single
Disbursement to Borrower.


 


Borrower may request and receive only one borrowing hereunder in
respect of the Loan and any amount borrowed and repaid hereunder in respect of
the Loan may not be reborrowed.


 


2.1.3                        The
Note, Pledge Agreement and Loan Documents.


 


The Loan shall be evidenced by the Note and secured by the Pledge
Agreement and the other Loan Documents.


 


2.1.4                        Use of
Proceeds.


 


Borrower shall use the proceeds of the Loan to (a) pay costs and
expenses incurred in connection with the closing of the Loan, (b) make a
capital contribution to Mezzanine A Borrower in order for Mezzanine A Borrower (i) to
use such proceeds to pay costs and expenses incurred in connection with the closing
of the Mezzanine A Loan and (ii) to make a capital contribution to
Mortgage Borrower in order for Mortgage Borrower to (1) repay and
discharge any existing loans relating to the Properties, (2) pay all past
due Basic Carrying Costs, if any, with respect to the Properties, (3) make
deposits into the Mortgage Loan Reserve Funds on the Closing Date in the
amounts provided in the Mortgage Loan Documents, (4) pay costs and
expenses incurred in connection with the closing of the Mortgage Loan, or (5) fund
any working capital requirements of the Properties and/or working capital
reserves of Mortgage Borrower or (c) fund any working capital reserves of
Borrower. The balance, if any, shall be distributed by Borrower to the Persons
owning the ownership interests in Borrower.


 


Section 2.2                                      Interest;
Loan Payments; Late Payment Charge.


 


2.2.1                        Payments.


 


(a)                                  Interest. Interest
on the outstanding principal balance of the Note shall accrue from the Closing
Date to but excluding the Maturity Date at the Applicable Interest Rate. Monthly
installments of interest only shall be paid on each Payment Date commencing on December 1,
2007 and on each subsequent Payment Date thereafter up to 


 


42

















 


and including the Maturity Date for the Interest Period in which such
Payment Date or Maturity Date occurs. The outstanding principal balance of the
Loan together with all accrued and unpaid interest thereon shall be due and
payable on the Maturity Date.


 


(b)                                 Extension of the
Maturity Date. Borrower shall have the option to extend the term of the
Loan beyond the initial Maturity Date for two (2) successive terms (each,
an “Extension Option”) of one (1) year each (each, an “Extension
Period”) to (x) November 1, 2011 and (y) November 1, 2012 (each
such date, the “Extended Maturity Date”), respectively, and, as to each
Extension Option, upon satisfaction of the following terms and conditions:


 


(i)                                     no
Event of Default shall have occurred and be continuing at the time the
applicable Extension Option is exercised and on the date that the applicable
Extension Period is commenced;


 


(ii)                                  Borrower
shall notify Lender of its election to extend the Maturity Date as aforesaid
not earlier than one hundred twenty (120) days and no later than thirty (30)
days prior to the then applicable Maturity Date; provided, however, Borrower
shall be permitted to rescind and revoke its notice of extension given in
accordance with the terms hereof, provided that (i) written notice of such
rescission and revocation is received by Lender no sooner than three (3) Business
Days prior to the applicable Maturity Date and (ii) Borrower pays Lender’s
reasonable out-of-pocket costs and expenses incurred as a result of Lender’s
receipt of such notice of extension;


 


(iii)                               Borrower
shall obtain and deliver to Lender on or prior to the commencement of the
applicable Extension Period, one or more Replacement Interest Rate Hedging
Agreements, which Replacement Interest Rate Hedging Agreements shall be
effective commencing on the first day of such Extension Option and shall have a
maturity date not earlier than the next succeeding Extended Maturity Date and
shall have a Strike Rate equal to the then applicable Strike Rate;


 


(iv)                              Borrower
shall have paid to Lender on or prior to the commencement of each Extension
Period, the Extension Fee;


 


(v)                                 all
conditions to the Mezzanine A Loan Extension corresponding to the applicable
Extension Period shall have been satisfied in accordance with the terms of the
Mezzanine A Loan Documents; and


 


(vi)                              Borrower
shall have delivered a certificate of Bank Loan Borrower satisfying the
requirements of Section 7.4 hereof (and relating to Debt Service
Shortfalls as projected by Lender through the end of the applicable Extension
Period) or shall have deposited with Lender, cash or delivered to Lender, a
Letter of Credit, satisfying the requirements of Section 7.4 hereof (and
in an amount sufficient to cover Debt Service Shortfalls as projected by Lender
through the end of the applicable Extension Period).


 


43

















 


(c)                                  All references in
this Agreement and in the other Loan Documents to the Maturity Date shall mean
the applicable Extended Maturity Date in the event the applicable Extension
Option is exercised.


 


(d)                                 All payments and other
amounts due under the Note, this Agreement and the other Loan Documents shall
be made without any setoff, defense or irrespective of, and without deduction
for, counterclaims.


 


2.2.2                        Interest
Calculation.


 


Interest on the outstanding principal balance of the Note shall be
calculated by multiplying (a) the actual number of days elapsed in the
period for which the calculation is being made by (b) a daily rate equal
to the Applicable Interest Rate divided by three hundred sixty (360) by (c) the
outstanding principal balance of the Note.


 


2.2.3                        Eurodollar
Rate Unascertainable; Illegality; Increased Costs.


 


(a)                                  (i)  In the
event that Lender shall have reasonably determined (which determination shall
be conclusive and binding upon Borrower absent manifest error) that by reason
of circumstances affecting the interbank eurodollar market, adequate and
reasonable means do not exist for ascertaining LIBOR, then Lender shall
forthwith give notice by telephone of such determination, to Borrower at least
one (1) Business Day prior to the last day of the related Interest Period,
with a written confirmation of such determination promptly thereafter. If such
notice is given, the Loan shall bear interest at the Adjusted Prime Rate
beginning on the first day of the next succeeding Interest Period. (ii) If,
pursuant to the terms of this Section 2.2.3(a), the Loan is bearing
interest at the Adjusted Prime Rate and Lender shall reasonably determine
(which determination shall be conclusive and binding upon Borrower absent
manifest error) that the event(s) or circumstance(s) which resulted in such
conversion shall no longer be applicable, Lender shall give notice thereof to
Borrower by telephone of such determination, confirmed in writing, to Borrower
as soon as reasonably practical, but in no event later than one (1) Business
Day prior to the last day of the then current Interest Period. If such notice
is given, the Loan shall bear interest at the Eurodollar Rate beginning on the
first day of the next succeeding Interest Period. Notwithstanding any provision
of this Agreement to the contrary, in no event shall Borrower have the right to
elect to have the Loan bear interest at the Adjusted Prime Rate; it being
understood that the Loan shall bear interest at all times at the Eurodollar
Rate except to the extent expressly provided in this Section 2.2.3.


 


(b)                                 If any Regulatory
Change shall hereafter make it unlawful for Lender or any Co-Lender in good
faith to make or maintain the portion of the Loan bearing interest at the Eurodollar
Rate, Lender or such Co-Lender, as applicable, shall give notice thereof to
Borrower, and without the need for Borrower’s consent, (I) the obligation of
Lender or such Co-Lender hereunder to make the Loan bearing interest at the
Eurodollar Rate may be canceled forthwith and (II) the Loan shall
automatically bear interest at the Adjusted Prime Rate at the expiration of the
then current Interest Period or within such earlier period as required by
Applicable Law. Upon written demand from Borrower, Lender or the applicable
Co-Lender shall demonstrate in reasonable detail the circumstances giving 


 


44

















 


rise to Lender’s or such Co-Lender’s determination and the calculation
substantiating the Adjusted Prime Rate by Lender or such Co-Lender in making
the conversion. In the event that such Regulatory Change shall no longer exist
or be effective, Lender or such Co-Lender, as applicable, shall give notice
thereof to Borrower, and without the need for Borrower’s consent, the Loan
shall bear interest at the Eurodollar Rate commencing with the first day of the
next succeeding Interest Period.


 


(c)                                  If, as a result of
any Regulatory Change, any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with,
Lender or any Co-Lender is imposed, modified or deemed applicable and the
result is to increase the actual cost to Lender or such Co-Lender of making the
Loan bearing interest at the Eurodollar Rate, or to reduce the amount
receivable by Lender hereunder in respect of any portion of the Loan bearing
interest at the Eurodollar Rate by an amount reasonably deemed by such Lender
to be material (such increases in cost and reductions in amounts receivable, “Increased
Costs”), then Borrower agrees that it will pay to Lender or such Co-Lender
(as applicable) upon Lender’s or such Co-Lender’s (as applicable) request such
additional amount or amounts (based upon a reasonable allocation thereof by
Lender or such Co-Lender (as applicable) to Eurodollar Rate loans made by
Lender or such Co-Lender (as applicable)) as will compensate Lender of such
Co-Lender (as applicable) for such Increased Costs to the extent that such
Increased Costs are reasonably allocable to the Loan. Lender or any Co-Lender
(as applicable) will notify Borrower in writing of any event occurring after
the Closing Date which will entitle Lender or such Co-Lender (as applicable) to
compensation pursuant to this Section 2.2.3(c) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of Lender of such Co-Lender (as applicable), be
otherwise materially disadvantageous to Lender or such Co-Lender (as
applicable). If Lender or such Co-Lender (as applicable) shall fail to notify
Borrower of any such event within ninety (90) days following the date such
event occurred, then Borrower’s liability for any amounts described in this Section 2.2.3(c) incurred
by Lender or such Co-Lender (as applicable) as a result of such event shall be
limited to those attributable to the period occurring subsequent to the 90th
day prior to the date upon which Lender or such Lender (as applicable) actually
notified Borrower of the occurrence of such event. Notwithstanding the
foregoing, in no event shall Borrower be required to compensate Lender or any
Co-Lender for any portion of Excluded Taxes of Lender or such Co-Lender (as
applicable), whether or not attributable to payments made by Borrower. If
Lender or any Co-Lender requests compensation under this Section 2.2.3(c),
Borrower may, by notice to Lender or such Co-Lender (as applicable), require
that Lender or such Co-Lender (as applicable) furnish to Borrower a statement
setting forth in reasonable detail the basis for requesting such compensation
and the method for determining the amount thereof, which such statement
submitted by Lender or such Co-Lender to Borrower shall be conclusive absent
manifest error. Lender or such Co-Lender (as applicable) shall only charge
Borrower amounts hereunder if Lender or such Co-Lender (as applicable) is
generally charging such amounts to all similarly situated Eurodollar Rate-based
borrowers. This provision shall survive payment of the Note and the
satisfaction of all other obligations of Borrower under the Note, this
Agreement and the 


 


45

















 


other Loan Documents. The provisions of this Section 2.2.3(c) shall
not apply if a Securitization has occurred.


 


(d)                                 Borrower agrees to
indemnify Lender and the Co-Lenders and to hold Lender and the Co-Lenders
harmless from any actual loss or expense which Lender or any Co-Lender sustains
or incurs as a consequence of (I) any default by Borrower in payment of the
principal of or interest on the Loan while bearing interest at the Eurodollar
Rate, (II) if the Loan is then bearing interest at the Eurodollar Rate, any
prepayment (whether voluntary or mandatory) of the Loan on a day that is not
the last day of an Interest Period with respect thereto, (III) the conversion
of the Applicable Interest Rate from the Eurodollar Rate to the Adjusted Prime
Rate with respect to any portion of the outstanding principal amount of the
Loan then bearing interest at the Eurodollar Rate on a date other than the last
day of an Interest Period in accordance with this Agreement and (IV) the
failure of Borrower in making any prepayment after Borrower has given a notice
thereof in accordance with the provisions of Section 2.3.1 hereof, which
such notice was not otherwise rescinded or postponed in accordance therewith
(the amounts referred to in clauses (I), (II), (III) and (IV) are herein
referred to collectively as the “Breakage Costs”). This provision shall
survive payment of the Note and the satisfaction of all other obligations of
Borrower under this Agreement and the other Loan Documents.


 


2.2.4                        Intentionally
Omitted.


 


2.2.5                        Payment
on Maturity Date.


 


Borrower shall pay to Lender on the Maturity Date the outstanding
principal balance, all accrued and unpaid interest and all other amounts due
hereunder and under the Note, the Pledge Agreement and the other Loan
Documents.


 


2.2.6                        Payments
after Default.


 


Upon the occurrence and during the continuance of an Event of Default, (a) interest
on the outstanding principal balance of the Loan and, to the extent permitted
by Applicable Law, overdue interest and other amounts due in respect of the
Loan, shall accrue at the Default Rate, calculated from the date such payment
was due without regard to any grace or cure periods contained herein and (b) Lender
shall be entitled to receive and Borrower shall pay to Lender on each Payment
Date during such period an amount equal to the Net Cash Flow After Debt Service
for the prior month, such amount to be applied by Lender to the payment of the
Debt in such order as Lender shall determine in its sole discretion, including
alternating applications thereof between interest and principal. Interest at
the Default Rate and Net Cash Flow After Debt Service shall both be computed
from the occurrence of the Event of Default until the actual receipt and
collection of the Debt (or that portion thereof that is then due). To the
extent permitted by Applicable Law, interest at the Default Rate shall be added
to the Debt, shall itself accrue interest at the same rate as the Loan and
shall be secured by the Pledge Agreement. This Section 2.2.6 shall not be
construed as an agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy 


 


46

















 


accruing to Lender by reason of the
occurrence of any Event of Default; the acceptance of any payment of Net Cash
Flow After Debt Service shall not be deemed to cure or constitute a waiver of
any Event of Default; and Lender shall retain its rights under the Note to
accelerate and to continue to demand payment of the Debt upon the happening of
any Event of Default, despite any payment of Net Cash Flow After Debt Service.


 


2.2.7                        Late
Payment Charge.


 


If any principal, interest or any other sums due under the Loan
Documents (other than the principal sum due on the Maturity Date or on any
accelerated maturity of the Note) is not paid by Borrower on the date on which
it is due (notwithstanding any grace period hereunder, under the Note or the
other Loan Documents), Borrower shall pay to Lender within five (5) days
after Lender’s demand therefor an amount equal to the lesser of two percent
(2%) of such unpaid sum or the maximum amount permitted by Applicable Law in
order to defray the expense incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such amount shall be secured by the Pledge Agreement
and the other Loan Documents to the extent permitted by Applicable Law.


 


2.2.8                        Usury
Savings.


 


This Agreement and the Note are subject to the express condition that
at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower
is at any time required or obligated to pay interest on the principal balance
due hereunder at a rate in excess of the Maximum Legal Rate, the Applicable
Interest Rate or the Default Rate, as applicable, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in
excess of the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by Applicable
Law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest
on account of the Loan does not exceed the Maximum Legal Rate of interest from
time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.


 


2.2.9                        Foreign
Taxes.


 


The provisions of this Section 2.2.9 shall only apply so long as a
Securitization has not occurred. All payments made by Borrower hereunder shall
be made free and clear of, and without reduction for or on account of, Foreign
Taxes or U.S. Taxes, excluding, in the case of Lender or any Co-Lender, Foreign
Taxes or U.S. Taxes measured by its net income, receipts, capital, net worth
and franchise taxes imposed on it, by the jurisdiction under the laws of which
Lender or any Co-Lender is resident or organized, or any political subdivision
thereof and, in the case of Lender or any 


 


47

















 


Co-Lender, taxes measured by its overall net
income, receipts, capital, net worth and franchise taxes imposed on it, by the
jurisdiction of Lender’s or such Co-Lender’s applicable lending office or any
political subdivision thereof or in which Lender or such Co-Lender is resident
or engaged in business. If any non excluded Foreign Taxes or U.S. Taxes are
required to be withheld from any amounts payable to Lender or any Co-Lender
hereunder, the amounts so payable to Lender or such Co-Lender shall be
increased to the extent necessary to yield to Lender or such Co-Lender (after
payment of all non excluded Foreign Taxes or U.S. Taxes) interest or any such
other amounts payable hereunder at the rate or in the amounts specified
hereunder. Whenever any non excluded Foreign Tax or U.S. Tax is payable
pursuant to Applicable Law by Borrower, Borrower shall send to Lender or the
applicable Co-Lender, within thirty (30) days after such payment, an original
official receipt showing payment of such non excluded Foreign Tax or U.S. Tax
or other evidence of payment reasonably satisfactory to Lender or the
applicable Co-Lender. Borrower hereby indemnifies Lender and each Co-Lender for
any incremental taxes, interest or penalties that may become payable by
Lender or any Co-Lender which may result from any failure or delay by
Borrower to pay any such non excluded Foreign Tax or U.S. Tax when due to the
appropriate taxing authority or any failure or delay by Borrower to remit to
Lender or any Co-Lender the required receipts or other reasonable evidence of
such payment, provided, however, that
notwithstanding anything to the contrary contained herein (a) the
obligation to pay such additional amounts required under this Section 2.2.9
shall not apply to any Foreign Taxes which otherwise constitute Excluded Taxes
and (b) in the event that Lender or any Co-Lender or any successor and/or
assign of Lender or any Co-Lender is not incorporated under the laws of the
United States of America or a state thereof, Lender and any such Co-Lender
agrees that, prior to the first date on which any payment is due such entity
hereunder, it will deliver to Borrower (i) two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI or successor
applicable form, as the case may be, certifying in each case that such
entity is entitled to receive payments under the Note, without deduction or
withholding of any United States federal income taxes, or (ii) an Internal
Revenue Service Form W-9 or successor applicable form, as the case may be,
to establish an exemption from United States backup withholding tax on all
interest payments hereunder. Each entity required to deliver to Borrower a Form W-8BEN
or W-8ECI or Form W-9 pursuant to the preceding sentence further
undertakes to deliver to Borrower two (2) further copies of such letter
and W-8BEN or W-8ECI or Form W-9, or successor applicable forms, or other
manner of certification, as the case may be, on or before the date that
any such letter or form expires (which, in the case of the Form W-8ECI,
is the last day of each U.S. taxable year of the non U.S. entity) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to Borrower, and such
other extensions or renewals thereof as may reasonably be requested by
Borrower, certifying in the case of a Form W-8BEN or W-8ECI that such entity
is entitled to receive payments under the Note without deduction or withholding
of any United States federal income taxes, unless in any such case any change
in treaty, law or regulation has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such entity from duly completing and delivering any such
letter or form with respect to it and such entity advises Borrower that it
is not capable of receiving 


 


48

















 


payments without any deduction or withholding
of United States federal income tax, and in the case of a Form W-9,
establishing an exemption from United States backup withholding tax. Notwithstanding
the foregoing, if such entity fails to provide a duly completed Form W-8BEN
or W-8ECI or other applicable form and, under Applicable Law, in order to
avoid liability for Foreign Taxes or U.S. Taxes, Borrower is required to
withhold on payments made to such entity that has failed to provide the
applicable form, Borrower shall be entitled to withhold the appropriate amount
of Foreign Taxes or U.S. Taxes and Borrower shall have no obligation to pay any
additional amounts to such entity under this Section 2.2.9. In such event,
Borrower shall promptly provide to such entity evidence of payment of such
Foreign Taxes or U.S. Taxes to the appropriate taxing authority and shall
promptly forward to such entity any official tax receipts or other
documentation with respect to the payment of the Foreign Taxes or U.S. Taxes as
may be issued by the taxing authority.


 


Section 2.3                                      Prepayments.


 


2.3.1                        Voluntary
Prepayments.


 


Borrower may, at its option, prepay the Loan in whole or in part, upon
satisfaction of the following conditions:


 


(a)                                  Borrower shall
provide prior written notice to Lender (which notice shall be irrevocable)
specifying the date upon which the prepayment is to be made, which notice shall
be delivered to Lender not less than thirty (30) days prior to such payment;
provided, however, Borrower shall be permitted the right to rescind and revoke
or postpone its notice of prepayment given in accordance with this Section 2.3.1(a),
provided that (i) a written notice of such rescission and revocation or
postponement is received by Lender no sooner than three (3) Business Days
prior to the date of prepayment indicated by Borrower and (ii) Borrower
pays Lender’s reasonable out-of-pocket costs and expenses incurred as a result
of Lender’s receipt of such notice of prepayment;


 


(b)                                 Borrower shall pay to
Lender, simultaneously with such prepayment, (i) all accrued and unpaid
interest calculated at the Applicable Interest Rate on the amount of principal
being prepaid through and including the date upon which the prepayment is made
(the “Prepayment Date”); (ii) if such prepayment is not made on a
Payment Date, all interest on the principal amount being prepaid which would
have accrued from the date of prepayment through and including the end of the
Interest Period in which such prepayment occurs, calculated at (1) the
Applicable Interest Rate if such prepayment occurs on or after the LIBOR
Determination Date for the Interest Period in which such prepayment occurs or (2) the
Assumed Note Rate if such prepayment occurs before the LIBOR Determination Date
for the Interest Period in which the prepayment occurs (the “Interest
Shortfall”); (iii) Breakage Costs, if any, without duplication of any
sums paid pursuant to the preceding clause (ii); (iv) the applicable
Spread Maintenance Payment (if any); and (v) all other sums then due under
this Agreement, the Note or the other Loan Documents;


 


49

















 


(c)                                  If the Interest
Shortfall was calculated based upon the Assumed Note Rate, upon determination
of LIBOR on the LIBOR Determination Date for the Interest Period in which the
Prepayment Date occurred, (i) if the Applicable Interest Rate for such
Interest Period is less than the Assumed Note Rate, Lender shall promptly
refund to Borrower the amount of the Interest Shortfall paid, calculated at a
rate equal to the difference between the Assumed Note Rate and the Applicable
Interest Rate, or (ii) if the Applicable Interest Rate is greater than the
Assumed Note Rate, Borrower shall promptly (and in no event later than the next
occurring Payment Date) pay Lender the amount of such additional Interest
Shortfall calculated at a rate equal to the excess of the Applicable Interest
Rate over the Assumed Note Rate; and


 


(d)                                 Mezzanine A Borrower
shall have simultaneously with such prepayment made a pro rata prepayment of
the Mezzanine A Loan pursuant to and in accordance with the Mezzanine A Loan
Agreement.; provided, however, Borrower may repay the Loan in full on the
Maturity Date and it shall not be a requirement to such repayment that
Mezzanine A Borrower also repay the Mezzanine A Loan in full on the Maturity
Date.


 


If a notice of prepayment is given by Borrower to Lender pursuant to
this Section 2.3.1, the amount designated for prepayment and all other
sums required under this Section 2.3.1 shall be due and payable on the
Prepayment Date, subject to Borrower’s right to rescind, revoke or postpone in Section 2.3.1(a) hereof.


 


This Section 2.3.1 shall not apply to prepayments made in
accordance with the provisions of Section 2.3.2 hereof.


 


2.3.2                        Liquidation
Events.


 


(a)                                  In the event of (i) any
Casualty affecting all or any portion of any Individual Property, (ii) any
Condemnation of all or any portion of any Individual Property, (iii) a
Transfer of any Individual Property in connection with realization thereon by
the Mortgage Lender following a Mortgage Loan Event of Default, including
without limitation a foreclosure sale, (iv) a Transfer of the Mezzanine A
Collateral in connection with realization thereon by the Mezzanine A Lender
following a Mezzanine A Loan Event of Default, including without limitation a
foreclosure sale, (v) intentionally omitted or (vi) any refinancing
of the Properties, the Mortgage Loan or the Mezzanine A Loan (each, a “Liquidation
Event”), Borrower shall cause the related Net Liquidation Proceeds After
Debt Service (if any) to be deposited with Lender and to be applied in
accordance with the applicable provisions of this Section 2.3.2(a). On
each date on which Lender actually receives a distribution of Net Liquidation
Proceeds After Debt Service, if such date is a Payment Date, such Net
Liquidation Proceeds After Debt Service shall be applied to the outstanding
principal balance of the Note and all other sums then due hereunder or under
the Loan Documents and any remaining Net Liquidation Proceeds After Debt
Service shall be disbursed to Borrower. In the event Lender receives a
distribution of Net Liquidation Proceeds After Debt Service on a date other
than a Payment Date, such amounts shall be held by Lender as collateral
security for the Loan in an interest bearing account, with such interest
accruing to the benefit of Borrower, and shall be applied by Lender in
accordance with the immediately preceding 


 


50

















 


sentence on the next Payment Date. No prepayment consideration or any
other prepayment premium or penalty shall be due in connection with any
prepayment made as a result of any of the events described in clauses (i) or
(ii) of this Section 2.3.2(a).


 


(b)                                 Borrower shall
promptly notify Lender of any Liquidation Event once Borrower has knowledge of
such event. Borrower shall be deemed to have knowledge of (i) a sale
(other than a foreclosure sale) of an Individual Property on the date on which
a contract of sale for such sale is entered into, and a foreclosure sale, on
the date notice of such foreclosure sale is given to Borrower or Mortgage
Borrower, and (ii) a refinancing of an Individual Property, the Mortgage
Loan or the Mezzanine A Loan, on the date on which a commitment for such
refinancing is entered into. The provisions of this Section 2.3.2 shall
not be construed to contravene in any manner the restrictions and other
provisions regarding refinancing of the Mortgage Loan or the Mezzanine A Loan
or Transfer of any Individual Property set forth in this Agreement, and the
other Loan Documents, the Mortgage Loan Documents or the Mezzanine A Loan
Documents.


 


2.3.3                        Prepayments
After Default. 


 


If, following the occurrence of an Event of Default and acceleration of
the Maturity Date, payment of all or any part of the Debt is tendered by
Borrower or otherwise recovered by Lender (including, without limitation,
through application of any Net Liquidation Proceeds After Debt Service, other
than Net Liquidation Proceeds After Debt Service received in connection with a
Casualty or Condemnation of all or a portion of any Individual Property), such
tender or recovery shall be deemed a voluntary prepayment by Borrower and
Borrower shall pay, in addition to the Debt, (i) an amount equal to the
Spread Maintenance Payment, if any; (ii) all accrued and unpaid interest
calculated at the Applicable Interest Rate on the amount of principal being
prepaid through and including the Prepayment Date; (iii) if such
Prepayment Date is a date other than a Payment Date, the Interest Shortfall; (iv) Breakage
Costs, if any, without duplication of any sums paid pursuant to the preceding
clause (iii); and (v) all other sums due under this Agreement, the Note or
the other Loan Documents in connection with a partial or total prepayment.


 


2.3.4                        Making
of Payments.


 


Each payment by Borrower hereunder or under the Note shall be made in
funds settled through the New York Clearing House Interbank Payments System or
other funds immediately available to Lender by 2:00 p.m., New York City
time, on or prior to the date such payment is due, to Lender by deposit to such
account as Lender may designate by written notice to Borrower. Whenever
any payment hereunder or under the Note shall be stated to be due on a date
which is not a Business Day, such payment shall be made on the first Business
Day succeeding such scheduled due date.


 


2.3.5                        Application
of Principal Prepayments.


 


All prepayments received pursuant to this Section 2.3 and Section 2.6
shall be applied, first, to interest on the portion of the outstanding
principal balance being prepaid 


 


51

















 


that accrued through and including the
Prepayment Date, second, to the Interest Shortfall as the same may be adjusted
pursuant to the last paragraph of Section 2.3.1(c) hereof, if
applicable, with respect to the amount prepaid and third, to all other amounts
then due to Lender under this Agreement or any of the other Loan Documents and
then to the payment of principal due under the Loan.


 


Section 2.4                                      Interest
Rate Hedging Agreement.


 


(a)                                  Borrower shall obtain
or cause to be obtained, and shall thereafter maintain in effect, an Interest
Rate Hedging Agreement with an Acceptable Counterparty, which shall (i) be
coterminous with the Loan, (ii) have a notional amount which shall not at
any time be less than the sum of the outstanding principal balance of the Loan,
and (iii) at all times have a strike rate equal to the then applicable
Strike Rate. The Counterparty shall be obligated under the Interest Rate
Hedging Agreement to make monthly payments equal to the excess of one (1) month
LIBOR over the Strike Rate, calculated on the notional amount. The notional
amount of the Interest Rate Hedging Agreement may be reduced from time to
time in amounts equal to any prepayment of the principal of the Loan in
accordance with Section 2.3 and Section 2.6 hereof. Notwithstanding
the foregoing, in the event that (i) Mortgage Lender waives the
requirements of the Mortgage Loan Documents to maintain an interest rate
hedging agreement with respect to the Mortgage Loan or Mortgage Borrower is in
violation of its obligations relating thereto and (ii) Mezzanine A Lender
waives the requirements of the Mezzanine A Loan Documents to maintain an
interest rate hedging agreement with respect to the Mezzanine A Loan or
Mezzanine A Borrower is in violation of its obligations relating thereto,
Lender may require Borrower to obtain, or cause to be obtained, and to
thereafter maintain in effect, an Interest Rate Hedging Agreement in accordance
with the terms of this Section 2.4, which shall have a notional amount
which shall not at any time be less than the outstanding principal balance of
the Loan, the Mezzanine A Loan and the Mortgage Loan and which shall at all
times have a strike rate equal to the Strike Rate (which shall be calculated
taking into consideration the Mortgage Debt Service, the Mezzanine A Debt
Service and the Debt Service and the weighted average interest rate spread of
the Mortgage Loan, the Mezzanine A Loan and the Loan).


 


(b)                                 If any Interest Rate
Hedging Agreement is an interest rate exchange agreement (a “Swap”),
Borrower shall not be a party to such Swap and all obligations of the Affiliate
of Borrower (which is the purchaser of such Swap), including, without
limitation, Additional Interest shall not be secured by the Lien of the
Collateral, any Individual Property or any Mezzanine A Collateral. The
Affiliate of Borrower that has entered into the Swap and its creditworthiness
shall be reasonably satisfactory to Lender. If any Interest Rate Hedging
Agreement is an interest rate cap (a “Cap”), neither Borrower nor any
Affiliate of Borrower, as applicable, shall have any obligations under such Cap
other than the payment of a one time, single installment payment made at the
time of the purchase of such Cap.


 


(c)                                  Borrower shall
collaterally assign to Lender pursuant to an Assignment of Interest Rate
Hedging Agreement substantially in the form as the Assignment of Interest
Rate Hedging Agreement delivered on the date hereof, all of its right, title
and interest to 


 


52

















 


receive any and all payments under the Interest Rate Hedging Agreement
(and any related guarantee, if any) and shall deliver to Lender an executed
counterpart of such Interest Rate Hedging Agreement and notify the
Counterparty of such collateral assignment (either in such Interest Rate
Hedging Agreement or by separate instrument). The Interest Rate Hedging
Agreement and any Replacement Interest Rate Hedging Agreement shall be further
assignable to any party to which the Loan may be assigned without the
Counterparty’s consent. The Counterparty shall agree in writing to make all
payments it is required to make under the Interest Rate Hedging Agreement into
an account designated by Lender. At such time as the Loan is repaid in full,
all of Lender’s right, title and interest in the Interest Rate Hedging
Agreement shall terminate and Lender shall promptly execute and deliver at
Borrower’s sole cost and expense, such documents as may be required to
evidence Lender’s release of the Interest Rate Hedging Agreement and to notify
the Counterparty of such release.


 


(d)                                 Borrower shall comply
with all of its obligations under the terms and provisions of the Interest Rate
Hedging Agreement, and shall cause its Affiliate (as purchaser of the Swap) to (1) pay
all Swap Payments and Swap Breakage in accordance with the terms of the
Interest Rate Hedging Agreement and (2) perform all of such Affiliate’s
other obligations under the Swap. All amounts paid by the Counterparty under
the Interest Rate Hedging Agreement shall be deposited immediately into an
account designated by Lender. Borrower shall take all actions reasonably
requested by Lender to enforce Lender’s rights under the Interest Rate Hedging
Agreement in the event of a default by the Counterparty and shall not waive,
amend or otherwise modify any of its rights thereunder.


 


(e)                                  In the event of any
downgrade, withdrawal or qualification of the rating of the Counterparty below “A+”
(or the equivalent) by the Rating Agencies, and the Counterparty fails to
comply with the requirement of clause (f) below, Borrower shall replace
the Interest Rate Hedging Agreement with a Replacement Interest Rate Hedging
Agreement with an Acceptable Counterparty not later than ten (10) Business
Days following receipt of notice from Lender or Servicer of such downgrade,
withdrawal or qualification.


 


(f)                                    In the event that
Borrower fails to purchase and deliver to Lender the Interest Rate Hedging
Agreement or any Replacement Interest Rate Hedging Agreement as and when
required hereunder, Lender may purchase such Interest Rate Hedging
Agreement and the cost incurred by Lender in purchasing such Interest Rate
Hedging Agreement shall be paid by Borrower to Lender with interest thereon at
the Default Rate from the date such cost was incurred by Lender until such cost
is paid by Borrower to Lender.


 


(g)                                 Each Interest Rate
Hedging Agreement shall contain the following language or its equivalent: “In
the event of any downgrade, withdrawal or qualification of the rating of the
Counterparty below “A+” (or the equivalent) by the Rating Agencies, the
Counterparty must, within 30 days, either (x) post collateral on terms
acceptable to each Rating Agency or (y) find a replacement Acceptable
Counterparty, at the Counterparty’s sole cost and expense, acceptable to each
Rating Agency (notwithstanding the foregoing, 


 


53

















 


if the Counterparty’s rating is downgraded to “A” or lower, only the
option described in clause (y) will be acceptable); provided that,
notwithstanding such a downgrade, withdrawal or qualification, unless and until
the Counterparty transfers the Interest Rate Hedging Agreement to a replacement
Acceptable Counterparty pursuant to the foregoing clause (y), the Counterparty
will continue to perform its obligations under the Interest Rate Hedging
Agreement. Failure to satisfy the foregoing shall constitute an Additional
Termination Event as defined by Section 5(b)(v) of the ISDA Master
Agreement, with the Counterparty as the Affected Party.”


 


(h)                                 In connection with an
Interest Rate Hedging Agreement, Borrower shall obtain and deliver to Lender an
opinion of counsel from counsel for the Counterparty (upon which Lender and its
successors and assigns may rely) which shall provide, in relevant part,
that:


 


(i)                                     the
Counterparty is duly organized, validly existing, and in good standing under
the laws of its jurisdiction of incorporation and has the organizational power
and authority to execute and deliver, and to perform its obligations
under, the Interest Rate Hedging Agreement;


 


(ii)                                  the
execution and delivery of the Interest Rate Hedging Agreement by the
Counterparty, and any other agreement which the Counterparty has executed and
delivered pursuant thereto, and the performance of its obligations thereunder
have been and remain duly authorized by all necessary action and do not
contravene any provision of its certificate of incorporation or by-laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;


 


(iii)                               all
consents, authorizations and approvals required for the execution and delivery
by the Counterparty of the Interest Rate Hedging Agreement, and any other
agreement which the Counterparty has executed and delivered pursuant thereto,
and the performance of its obligations thereunder have been obtained and remain
in full force and effect, all conditions thereof have been duly complied with,
and no other action by, and no notice to or filing with any governmental
authority or regulatory body is required for such execution, delivery or
performance; and


 


(iv)                              the
Interest Rate Hedging Agreement, and any other agreement which the Counterparty
has executed and delivered pursuant thereto, has been duly executed and
delivered by the Counterparty and constitutes the legal, valid and binding
obligation of the Counterparty, enforceable against the Counterparty in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).


 


54

















 


Section 2.5                                      Intentionally
Omitted. 


 


Section 2.6                                      Release
of an Individual Property. 


 


If Mortgage Borrower has elected to release an Individual Property from
the Lien of the Security Instrument thereon and the requirements of this Section 2.6
have been satisfied, and provided that no Event of Default shall then exist,
Borrower shall be entitled to (x) permit Mortgage Borrower to obtain the
release of an Individual Property from the Lien of the Security Instrument
thereon (and related Mortgage Loan Documents), (y) permit Mezzanine A Borrower
to obtain the release of the Mezzanine A Collateral corresponding to the
release of such Individual Property and (z) the release of the applicable Borrower
Entity’s obligations under the Loan Documents (other than those expressly
stated to survive), upon the satisfaction of each of the following conditions:


 


(a)                                  (i) All
conditions to the release of such Individual Property from the Lien of the
Security Instrument thereon shall have been satisfied in accordance with the
terms of the Mortgage Loan Documents (as independently determined by Lender in
its reasonable discretion) and (ii) all conditions to the release of such
Individual Property shall have been satisfied in accordance with the terms of Section 2.6
of the Mezzanine A Loan Agreement with respect to such release;


 


(b)                                 Borrower shall provide
Lender with at least thirty (30) days’ but no more than ninety (90) days’ prior
written notice of the release of any Individual Property permitted under this Section 2.6;


 


(c)                                  On or prior to the
release of the applicable Individual Property, Lender shall have received a
wire transfer of immediately available federal funds in an amount equal to the
Release Price for such Individual Property, together with (i) all accrued
and unpaid interest calculated at the Applicable Interest Rate on the amount of
principal being prepaid through and including the date of the release, (ii) if
such date is a date other than a Payment Date, the Interest Shortfall, (iii) Breakage
Costs, if any, without duplication of any sums paid pursuant to the preceding
clause (ii); (iv) the applicable Spread Maintenance Payment (if any); and (v) all
other sums due under this Agreement, the Note or the other Loan Documents in
connection with a prepayment;


 


(d)                                 Borrower shall submit
to Lender, not later than ten (10) days prior to the release of the
applicable Individual Property, an amendment to the Pledge Agreement and UCC-3
Financing Statements each amending Pledge Agreements and the UCC Financing
Statements to reflect the release of the applicable Borrower Entity. In
addition, Borrower shall provide all other customary documentation Lender
reasonably requires to be delivered by Borrower in connection with such
release, together with an Officer’s Certificate certifying that such
documentation (i) is in compliance with all applicable Legal Requirements,
(ii) will, following execution by Lender and recordation thereof, effect
such releases in accordance with the terms of this Agreement, and (iii) will
not impair or otherwise adversely affect the Liens, security interests and
other rights of Lender under the Loan Documents not being released (or as to
the parties to the Loan Documents not being released);


 


55

















 


(e)                                  Intentionally
Omitted;


 


(f)                                    Intentionally
Omitted;


 


(g)                                 Intentionally Omitted;


 


(h)                                 Lender shall have
received payment of all of Lender’s reasonable costs and expenses, including
due diligence review costs and reasonable counsel fees and disbursements
incurred in connection with the release of the Individual Property from the
lien of the related Security Instrument and the review and approval of the
documents and information required to be delivered in connection therewith;


 


(i)                                     Intentionally
Omitted; and


 


(j)                                     Immediately
following such release, the Allocated Loan Amount for the Individual Property
released (the “Released Individual Property”) shall be reduced to zero,
and the Allocated Loan Amount for each of the Individual Properties remaining
subject to the Lien of the Security Instruments immediately following such
release shall be reduced by such Individual Property’s pro rata
share of the difference between the Release Price of the Released Individual
Property and the original Allocated Loan Amount for the Released Individual
Property. For purposes of the immediately preceding sentence, an Individual
Property’s “pro rata share” shall mean a fraction,
the numerator of which is the Allocated Loan Amount for such Individual
Property prior to giving effect to any reduction pursuant to this Section 2.6(j),
and the denominator of which is the sum of the Allocated Loan Amounts, prior to
giving effect to any reduction pursuant to this Section 2.6(j), for all of
the Individual Properties other than the Released Individual Property.


 


Section 2.7                                      Intentionally
Omitted.


 


Section 2.8                                      Release
on Payment in Full.


 


Lender shall, upon the written request and at the expense of Borrower,
upon payment in full of all principal of and interest on the Loan and all other
amounts due and payable under the Loan Documents in accordance with the terms
and conditions of the Note and this Agreement, release the Lien of the Pledge
Agreement and remit any remaining Reserve Funds to Borrower.


 


Section 2.9                                      Substitution
of Properties.


 


Subject to the
terms of this Section 2.9, Borrower may cause Mortgage Borrower to
obtain, from time to time, a release of one or more Individual Properties
(each, a “Release Property”) by substituting therefor one or more luxury
residential apartment building properties of like kind and quality located in
the United States of America acquired by Mortgage Borrower or an Affiliate of
Mortgage Borrower (provided, however,
that if the Substitute Property shall be owned by an Affiliate of Mortgage
Borrower, such Affiliate (i) shall be wholly owned, directly or
indirectly, by a Borrower Entity, (ii) shall assume all the obligations of
Mortgage Borrower under the Security 


 


56

















 


Instrument, the Mortgage Note
and the other Mortgage Loan Documents (subject, however, to the exculpatory
provisions of Section 9.4 hereof) and (iii) shall become a party to
the Mortgage Note and the other Mortgage Loan Documents and shall be bound by
the terms and provisions thereof as if it had executed the Mortgage Note and
the other Mortgage Loan Documents and shall have the rights and obligations of
Mortgage Borrower thereunder) (individually, a “Substitute Property” and
collectively, the “Substitute Properties”), provided that the following
conditions precedent are satisfied or, in Lender’s sole discretion, waived:


 


(a)                                  Lender shall have
received at least thirty (30) days’ prior written notice requesting the
substitution and identifying the Substitute Property and the Release Property.


 


(b)                                 (i) All
conditions to the release of such Individual Property and substitution of such
Substitute Property shall have been satisfied in accordance with the terms of
the Mortgage Loan Documents (as independently determined by Lender in its
reasonable discretion) and (ii) all conditions to the release of such
Individual Property and substitution of such Substitute Property shall have
been satisfied in accordance with the terms of Section 2.9 of the
Mezzanine A Loan Agreement with respect to such release and substitution.


 


(c)                                  If the Mortgage
Borrower Entity that owns the Release Property will continue to own an
Individual Property subject to the Lien of a Security Instrument, Lender shall
have received (i) a copy of a deed conveying all of such Mortgage Borrower
Entity’s right, title and interest in and to the Release Property to a Person
other than Mortgage Borrower or Mortgage Principal and (ii) a letter from
Mortgage Borrower countersigned by a title insurance company acknowledging
receipt of such deed and agreeing to record such deed in the real estate
records for the county in which the Release Property is located.


 


(d)                                 Lender shall have
received a current Appraisal of the Substitute Property prepared not earlier
than one (1) year prior to the release and substitution showing an
appraised value for the Substitute Property equal to or greater than the
appraised value of the Release Property as of the Closing Date.


 


(e)                                  Intentionally
Omitted.


 


(f)                                    If the Loan is part of
a Securitization, Lender shall have received confirmation in writing from the
Rating Agencies to the effect that such release and substitution will not
result in a withdrawal, qualification or downgrade of the respective ratings in
effect immediately prior to such release and substitution for the Securities
issued in connection with the Securitization that are then outstanding. If the
Loan is not part of a Securitization, Lender shall have consented in
writing to such release and substitution, which consent shall be given in
Lender’s reasonable discretion applying the requirements of a prudent
institutional mortgage loan lender with respect to real estate collateral of a
size, scope and value substantially similar to that of the Substitute Property.


 


57






 












 


(g)                                 No Event of Default
shall have occurred and be continuing, and Borrower shall be in compliance in
all material respects with all terms and conditions set forth in this Agreement
and in each other Loan Document on Borrower’s part to be observed or performed.
Lender shall have received a certificate from Borrower confirming the
foregoing, stating that the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date of the release and substitution
with respect to Borrower, the Properties and the Substitute Property and
containing any other representations and warranties with respect to Borrower,
the Properties, the Substitute Property or the Loan as (i) Lender
(applying the requirements of a prudent institutional mortgage loan lender), if
a Securitization has not occurred, or (ii) the Rating Agencies, if a
Securitization has occurred, may require, unless such certificate would be
inaccurate, such certificate to be in form and substance satisfactory to
Lender (applying the requirements of a prudent institutional mortgage loan
lender) or the Rating Agencies, as applicable.


 


(h)                                 If the Substitute
Property shall be owned by an Affiliate of Mortgage Borrower: (i) Borrower
shall execute and deliver a pledge agreement in substantially the same form as
the Pledge Agreement in respect of the ownership interests of Mezzanine A
Borrower in the new property owner/mortgage borrower (such interests shall
otherwise comply with the requirements of the Loan Documents and be
substantially identical in structure, form and substance as the Collateral
delivered at closing of the Loan); (ii) Borrower shall authorize Lender to
file such UCC Financing Statements required by Lender with respect to the
substitute Collateral; (iii) Borrower shall deliver, at its sole cost and
expense, a UCC Insurance Policy insuring the new pledge agreement as a valid
first lien on the ownership interests pledged thereunder and substantially
identical to the UCC Insurance Policy delivered at the closing of the Loan; and
(iv) Borrower shall enter into such modifications to the other Loan
Documents as Lender may reasonably request in order to reflect the
substitution of the applicable Individual Property and the new property
owner/mortgage borrower. The amount of the Loan allocated to the Substitute
Property (such amount being hereinafter referred to as the “Substitute
Allocated Loan Amount”) shall equal the Allocated Loan Amount of the
related Release Property; provided, however,
that in the event the number of Release Properties with respect to any
substitution effected pursuant to this Section 2.9 does not equal the
number of Substitute Properties, the Substitute Allocated Loan Amount for each
of such Substitute Properties shall be reasonably determined by Lender
(provided, however, that the aggregate Substitute Allocated Loan Amount for
such Substitute Properties shall not exceed the aggregate Allocated Loan Amount
for such Released Properties).


 


(i)                                     Intentionally
Omitted.


 


(j)                                     Lender shall have
received a current Survey for each Substitute Property, certified to the title
company and Lender and its successors and assigns, in the same form and
having the same content as the certification of the Survey of the Release
Property, prepared by a professional land surveyor licensed in the State in
which the Substitute Property is located and acceptable to the Rating Agencies
in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys. Such Survey shall reflect the same legal description
contained in the Mortgage Title Insurance


 


58

















Policy relating to such Substitute Property and shall include, among
other things, a metes and bounds description of the real property constituting part of
such Substitute Property (unless such real property has been satisfactorily
designated by lot number on a recorded plat). The surveyor’s seal shall be
affixed to each Survey and each Survey shall certify whether or not the
surveyed property is located in a “one-hundred-year flood hazard area.”


 


(k)                                  Lender shall have
received (i) valid certificates of insurance indicating that the
requirements for the policies of insurance required for an Individual Property
hereunder have been satisfied with respect to the Substitute Property and (ii) evidence
of the payment of all Insurance Premiums payable for the existing policy
period.


 


(l)                                     Lender shall have
received a Phase I environmental report dated not more than one hundred eighty
(180) days prior to the proposed date of substitution and otherwise in form and
scope reasonably acceptable to a prudent institutional mortgage loan lender
and, if recommended under the Phase I environmental report, a Phase II environmental
report that would be in form and scope reasonably acceptable to a prudent
institutional mortgage loan lender, which conclude that the Substitute Property
does not contain any Hazardous Materials in contravention of any applicable
Legal Requirements in any material respect and is not subject to any
significant risk of contamination from any off site Hazardous Materials in
contravention of any applicable Legal Requirements in any material respect. If
any such report discloses the presence of any Hazardous Substance in
contravention of any applicable Legal Requirement in any material respect, or
the material risk of contamination from any off site Hazardous Substance in
contravention of any applicable Legal Requirement in any material respect, the
proposed substitution shall not be allowed without Lender’s prior written
consent at any time prior to a Securitization of the Loan. If, subsequent to a
Securitization of the Loan, any such report discloses the presence of any
Hazardous Substance in contravention of any applicable Legal Requirement in any
material respect, or the risk of contamination from any off site Hazardous
Substance in contravention of any applicable Legal Requirement in any material
respect, the proposed substitution shall not be allowed unless (i) such
report shall include an estimate of the cost of any related remediation
required to be undertaken by an environmental consultant reasonably selected by
Lender, (ii) the estimated cost of remediation does not exceed ten percent
(10%) of the Allocated Loan Amount for such Substitute Property, and (iii) Borrower
shall have caused Mortgage Borrower or Mezzanine A Lender to deposit with
Mortgage Lender or Mezzanine A Lender, as applicable (A) cash, (B) a
Letter of Credit, or (C) an indemnity by a reasonably acceptable
indemnitor, in either event in an amount equal to one hundred twenty five
percent (125%) of such estimated cost, which deposit shall constitute
additional security for the Mortgage Loan or the Mezzanine A Loan, as
applicable, and shall be released to Mortgage Borrower or Mezzanine A Borrower,
as applicable, upon the delivery to Mortgage Lender or Mezzanine A Lender, as
applicable, of (1) an update to such report indicating that there is no
longer any Hazardous Substance on the Substitute Property that has not been
remediated or contained in accordance with applicable Legal Requirements in all
material respects or any material danger of contamination from any off site
Hazardous Substance in contravention of any applicable Legal Requirement, and (2) a
certificate from Mortgage Borrower or Mezzanine A


 


59

















Borrower, as applicable, stating that all such remediation work has
been paid in full or will be paid for out of the amounts reserved with Mortgage
Lender or Mezzanine A Lender, as applicable. In the event that neither Mortgage
Lender nor Mezzanine A Lender elects to require such deposit, Borrower shall
deliver such deposit to Lender.


 


(m)                               Borrower shall deliver
or cause to be delivered to Lender (A) updates or, if the Substitute
Property is to be owned by an Affiliate of Borrower, originals, in either case
certified by Borrower or such Affiliate, as applicable, of all organizational
documentation related to Borrower or such Affiliate, as applicable, and/or the
formation, structure, existence, good standing and/or qualification to do
business delivered to Lender on the Closing Date; (B) good standing
certificates, certificates of qualification to do business in the jurisdiction
in which the Substitute Property is located (if required in such jurisdiction);
and (C) resolutions of Borrower or such Affiliate, as applicable,
authorizing the substitution and any actions taken in connection with such
substitution.


 


(n)                                 Lender shall have
received the following opinions of Borrower’s counsel: (A) an opinion or
opinions of counsel stating that the Loan Documents delivered with respect to
the Substitute Property pursuant to clause (h) above are valid and
enforceable in accordance with their terms, subject to the laws applicable to
creditors’ rights and equitable principles; (B) an opinion of counsel
acceptable to the Rating Agencies, if the Loan is part of a
Securitization, or reasonably acceptable to a prudent institutional mortgage
loan lender, if the Loan is not part of a Securitization, stating that the
Loan Documents delivered with respect to the Substitute Property pursuant to
this Section are duly authorized, executed and delivered by Borrower and
that the execution and delivery of such Loan Documents and the performance by
Borrower of its obligations thereunder will not cause a breach of, or a default
under, any agreement, document or instrument to which Borrower is a party or by
which it or its properties are bound; and (C) an update of the Insolvency
Opinion indicating that the substitution does not affect the opinions set forth
therein.


 


(o)                                 Borrower shall have
caused Mortgage Borrower to (i) have paid, (ii) have escrowed with
Mortgage Lender or (iii) be contesting in accordance with the terms
hereof, all Basic Carrying Costs relating to each of the Properties and the
Substitute Property, including without limitation, (A) accrued but unpaid
Insurance Premiums relating to each of the Properties and the Substitute
Property, and (B) currently due and payable Taxes (including any in
arrears) relating to each of the Properties and the Substitute Property and (C) currently
due and payable Other Charges relating to each of the Properties and Substitute
Property.


 


(p)                                 Borrower shall have
paid or reimbursed Lender for all reasonable out-of-pocket costs and expenses
actually incurred by Lender (including, without limitation, reasonable
attorneys’ fees and disbursements of outside counsel) in connection with the
release and substitution, and Borrower shall have paid all recording charges,
filing fees, taxes or other expenses (including, without limitation, mortgage
and intangibles taxes and documentary stamp taxes) payable in connection with
the substitution. Borrower shall have paid all costs and expenses of the Rating
Agencies incurred in connection with the substitution.


 


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(q)                                 Lender shall have
received annual operating statements and occupancy statements for the
Substitute Property for the most current completed fiscal year and a current
operating statement for the Release Property, each certified by Borrower to
Lender as being true and correct in all material respects, and a certificate
from Borrower certifying that there has been no material adverse change in the
financial condition of the Substitute Property since the date of such operating
statements.


 


(r)                                    Borrower shall have
delivered to Lender estoppel certificates from all tenants under Major Leases
at the Substitute Property. All such estoppel certificates shall be in the form or
containing those statements required under such Major Lease or substantially in
the form approved by Lender in connection with the origination of the Loan
and shall indicate that (1) the subject Major Lease is a valid and binding
obligation of the tenant thereunder, (2) to the tenant’s knowledge, there
are no defaults under such Major Lease on the part of the landlord or
tenant thereunder, (3) the tenant thereunder has no knowledge of any
defense or offset to the payment of rent under such Lease, (4) no rent
under such Lease has been paid more than one (1) month in advance, (5) the
tenant thereunder has no option under such Lease to purchase all or any portion
of the Substitute Property, and (6) all tenant improvement work required
under such Lease has been substantially completed and the tenant under such
Lease is in actual occupancy of its leased premises. If an estoppel certificate
indicates that all tenant improvement work required under the subject Lease has
not yet been completed, Borrower shall deliver to Lender financial statements
indicating that Borrower has adequate funds to pay all costs related to such
tenant improvement work as required under such Lease.


 


(s)                                  Lender shall have
received copies of all Major Leases demising space at the Substitute Property
certified by Borrower as being true and correct.


 


(t)                                    Intentionally
Omitted.


 


(u)                                 Intentionally Omitted.


 


(v)                                 Lender shall have
received a Physical Conditions Report with respect to the Substitute Property
stating that the Substitute Property and its use comply in all material
respects with all applicable Legal Requirements (including, without limitation,
zoning, subdivision and building laws) and that the Substitute Property is in
good condition and repair and free of damage or waste in all material respects.
If compliance with applicable Legal Requirements is not addressed by the
Physical Conditions Report, such compliance shall be confirmed by delivery to
Lender of a letter from the municipality in which such Property is located, or
a certificate of a surveyor that is licensed in the state in which the
Substitute Property is located (with respect to zoning and subdivision laws, if
offered in the jurisdiction in which the Substitute Property is located), or an
ALTA 3.1 zoning endorsement to the applicable Title Insurance Policy (with
respect to zoning laws) or a subdivision endorsement to the applicable Title
Insurance Policy (with respect to subdivision laws). If the Physical Conditions
Report recommends that any immediate repairs be made with respect to the
Substitute Property, a substitution shall not be allowed without Lender’s prior
written consent (not to be unreasonably withheld or delayed) with respect to
such proposed Substitute Property at


 


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any time prior to a Securitization of the Loan. If, subsequent to a
Securitization of the Loan, any such Physical Conditions Report recommends that
any immediate repairs be made with respect to the Substitute Property, the proposed
substitution shall not be allowed unless (i) such report shall include an
estimate of the cost of such recommended repairs, (ii) the estimated cost
of such recommended repairs does not exceed ten percent (10%) of the Allocated
Loan Amount for such Substitute Property, and (iii) Borrower shall cause
Mortgage Borrower or Mezzanine A Borrower, as applicable, to deposit with
Mortgage Lender or Mezzanine A Lender, as applicable, (A) cash, (B) a
Letter of Credit, or (C) an indemnity by a reasonably acceptable
indemnitor, in each such event in an amount equal to one hundred twenty five
percent (125%) of such estimated cost, which deposit shall constitute
additional security for the Loan and shall be released to Mortgage Borrower or
Mezzanine A Borrower, as applicable, upon the delivery to Lender of (1) an
update to such Physical Conditions Report or a letter from the engineer that
prepared such Physical Conditions Report, indicating that the recommended
repairs were completed in a good and workmanlike manner, and (2) a
certificate from Mortgage Borrower or Mezzanine A Borrower, as applicable,
indicating that the costs of all such repairs have been paid. In the event that
neither Mortgage Lender nor Mezzanine A Lender elects to require such deposit,
Borrower shall deliver such deposit to Lender.


 


(w)                               Lender shall have
received evidence which would be satisfactory to a prudent institutional
mortgage loan lender to the effect that all material building and operating
licenses and permits necessary for the use and occupancy of the Substitute
Property as a luxury residential apartment building  including, but not limited to, current certificates of
occupancy, have been obtained and are in full force and effect in all material
respects.


 


(x)                                   In the event the
Release Property is subject to a Management Agreement along with one or more
additional Properties, Lender shall have received a certified copy of an
amendment to the Management Agreement reflecting the deletion of the Release
Property and the addition of the Substitute Property as a property managed
pursuant thereto, and Manager shall have executed and delivered to Lender an
amendment to the Agreement Regarding Management Agreement reflecting such
amendment to the Management Agreement. In the event that the Release Property
is subject to a Management Agreement relating only to such Release Property,
Lender shall have received a certified copy of a new Management Agreement for
the Substitute Property, which new Management Agreement shall be reasonably
acceptable to a prudent institutional mortgage loan lender, and the Manager
thereunder shall have executed and delivered to Lender an Agreement Regarding
Management Agreement with respect to such new Management Agreement on
substantially the same terms as used in connection with the Release Property or
such other terms as would be acceptable to a prudent institutional mortgage
loan lender.


 


(y)                                 Lender shall have
received such other approvals, opinions, documents and information in
connection with the substitution as requested by the Rating Agencies, if the
Loan is part of a Securitization, or by Lender (applying the requirements
of a prudent institutional mortgage loan lender), if the Loan is not part of
a Securitization.


 


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(z)                                   Lender shall have
received copies of all contracts and agreements relating to the leasing and
operation of the Substitute Property (other than the Management Agreement),
each of which shall be in such form and substance as would be satisfactory
to a prudent institutional mortgage loan lender.


 


(aa)                            Lender shall have received
certified copies of all material consents, licenses and approvals of relevant
Governmental Authorities, if any, required to be obtained by Mortgage Borrower
in connection with the substitution of a Substitute Property, and evidence that
such consents, licenses and approvals are in full force and effect.


 


(bb)                          Intentionally Omitted.


 


(cc)                            Intentionally Omitted.


 


(dd)                          Intentionally Omitted.


 


(ee)                            If Mortgage Borrower owns a
leasehold estate in the Substitute Property, Lender shall have received, (i) a
certified copy of the ground lease for the Substitute Property, together with
all amendments and modifications thereto and a recorded memorandum thereof,
which ground lease would be reasonably satisfactory in all respects to a
prudent institutional mortgage loan lender and which contains customary
leasehold mortgagee provisions and protections, and which shall provide, among
other things, (A) for a remaining term of no less than 20 years from the
Maturity Date, (B) that the ground lease shall not be terminated until
Mortgage Lender has received notice of a default thereunder and has had a
reasonable opportunity to cure or complete foreclosure, and fails to do so in a
diligent manner, (C) for a new lease on the same terms to Mortgage Lender
as tenant if the ground lease is terminated for any reason, (D) the
non-merger of fee and leasehold interests, and (E) that insurance proceeds
and condemnation awards will be applied pursuant to the terms of this
Agreement, and (ii) a ground lease estoppel, executed by the fee owner and
ground lessor of the Substitute Property, in form and substance reasonably
acceptable to a prudent institutional mortgage loan lender.


 


(ff)                                Intentionally Omitted.


 


(gg)                          Upon the satisfaction of the
foregoing conditions precedent, Borrower will be entitled to cause Mortgage
Borrower to obtain the release of the Lien of the Mortgage Loan Documents from
the Release Property and the Substitute Property shall be deemed to be an Individual
Property for purposes of this Agreement, and (except as otherwise provided in
the proviso to the last sentence of Section 2.9(h) hereof) the
Substitute Allocated Loan Amount with respect to such Substitute Property shall
be deemed to be the Allocated Loan Amount with respect to such Substitute
Property for all purposes hereunder.


 


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III.                                 MORTGAGE
BORROWER DISTRIBUTIONS


 


Section 3.1                                      Mortgage
Borrower Distributions.


 


All transfers of Mortgage Borrower’s funds to or for the benefit of
Mezzanine A Lender, Mezzanine A Borrower, Lender or Borrower, pursuant to this
Agreement, the Mortgage Loan Documents, the Mezzanine A Loan Documents or any
of the other Loan Documents, are intended by Borrower, Mortgage Borrower and
Mezzanine A Borrower to constitute and shall constitute distributions from
Mortgage Borrower to Mezzanine A Borrower and from Mezzanine A Borrower to
Borrower, as applicable, and, in each case, must comply with the requirements
as to distributions of the Delaware Revised Uniform Limited Partnership
Act or the Delaware Limited Liability Company Act, as applicable. No provision
of the Loan Documents shall create a debtor-creditor relationship between
Borrower and any of Mezzanine A Lender or Mortgage Lender.


 


IV.                                REPRESENTATIONS
AND WARRANTIES


 


Section 4.1                                      Borrower
Representations.


 


Borrower represents and warrants as of the Closing Date that:


 


4.1.1                        Organization.


 


(a)                                  Each Borrower Entity
is duly organized and is validly existing and in good standing in the
jurisdiction in which it is organized, with requisite power and authority to
own the assets owned by such Borrower Entity and to transact the businesses in
which it is now engaged. Each Borrower Entity is duly qualified to do business
and is in good standing in the State of Delaware. Borrower possesses all
rights, licenses, permits and authorizations, governmental or otherwise,
necessary to entitle it to own its assets and to transact the businesses in
which it is now engaged. Attached hereto as Schedule 4.1.1
is an organizational chart of Borrower. Each Borrower Entity has delivered to
Lender true and correct copies of the applicable Mortgage Borrower Formation
Agreement and all other Organizational Documents for the applicable Mortgage
Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal,
Borrower and Principal, all of which are in full force and effect as of the
date hereof.


 


(b)                                 Each Borrower Entity
has the power and authority and the requisite Ownership Interest to control the
actions of Mezzanine A Borrower, and upon the realization on the Collateral
under the Pledge Agreement, Lender or any other party succeeding to the
Borrower’s interest in the Collateral described in the Pledge Agreement would
have such control. Without limiting the foregoing, Borrower has sufficient
control over Mezzanine A Borrower to cause Mortgage Borrower to (i) take
any action on Mortgage Borrower’s part required by the Loan Documents and
the Mortgage Loan Documents and (ii) refrain from taking any action
prohibited by the Loan Documents and the Mortgage Loan Documents.


 


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4.1.2                        Proceedings.


 


Borrower has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents. This
Agreement and the other Loan Documents have been duly executed and delivered by
or on behalf of Borrower and constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective
terms, subject only to applicable bankruptcy, insolvency and similar laws
affecting rights of creditors generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).


 


4.1.3                        No
Conflicts.


 


The execution, delivery and performance of this Agreement and the other
Loan Documents by Borrower will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a material default under, or
result in the creation or imposition of any Lien, charge or encumbrance (other
than pursuant to the Loan Documents) upon any of the property or assets of
Borrower pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, partnership agreement, management agreement, or other agreement or
instrument to which Borrower is a party or by which any of Borrower’s property
or assets is subject, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Borrower or any of
Borrower’s assets, or any license or other approval required to own and manage
its property. Any consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority required for the execution,
delivery and performance by Borrower of this Agreement or any other Loan
Documents has been obtained and is in full force and effect.


 


4.1.4                        Litigation.


 


Except as otherwise disclosed on Schedule 4.1.4,
there are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or, to Borrower’s Actual
Knowledge, threatened against or affecting Borrower or, to Borrower’s Actual
Knowledge, Mortgage Borrower, Mezzanine A Borrower, the Collateral, the
Mezzanine A Collateral, any Mortgage Principal’s general partner interest in
the related Mortgage Borrower Entity, any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity or any Individual
Property, which actions, suits or proceedings, if determined adversely to
Borrower or, to Borrower’s Actual Knowledge, Mortgage Borrower, Mezzanine A
Borrower, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity, any Mezzanine
A Principal’s general partner interest in the related Mezzanine A Borrower
Entity or any Individual Property would, individually or in the aggregate cause
a Material Adverse Effect. Lender acknowledges the existence of the litigation
listed in Schedule 4.1.4 hereof (the “Disclosed
Litigation”) and Borrower further represents and warrants to Lender that,
notwithstanding the 


 


65

















 


Disclosed Litigation, the
representation by Borrower contained in the preceding sentence shall continue
to be true and correct.


 


4.1.5                        Agreements.


 


Borrower is not a party to any agreement or instrument or subject to
any restriction which might have a Material Adverse Effect. None of Borrower,
Mortgage Borrower or Mezzanine A Borrower is in default in any material respect
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which Borrower or, to Borrower’s Actual Knowledge, Mortgage
Borrower, Mezzanine A Borrower, the Collateral, the Mezzanine A Collateral, any
Mortgage Principal’s general partner interest in the related Mortgage Borrower
Entity, any Mezzanine A Principal’s general partner interest in the related
Mezzanine A Borrower Entity or any Individual Property is bound. None of
Borrower, Mortgage Borrower or Mezzanine A Borrower has material financial obligations
under any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which Borrower, Mortgage Borrower or Mezzanine A Borrower is a
party or by which Borrower or, to Borrower’s Actual Knowledge, Mortgage
Borrower, Mezzanine A Borrower, the Collateral, the Mezzanine A Collateral, any
Mortgage Principal’s general partner interest in the related Mortgage Borrower
Entity, any Mezzanine A Principal’s general partner interest in the related
Mezzanine A Borrower Entity or any Individual Property is otherwise bound,
other than (a) obligations incurred in the ordinary course of the business
relating to each Borrower Entity’s ownership and operation of the Collateral, (b) obligations
incurred in the ordinary course of business relating to each Mezzanine A
Borrower Entity’s ownership and operation of the Mezzanine A Collateral, (c) obligations
incurred in the ordinary course of business relating to each Mortgage Borrower
Entity’s ownership and operating of such Individual Property and (d) obligations
under or permitted by the Loan Documents, the Mortgage Loan Documents and the
Mezzanine A Loan Documents.


 


4.1.6                        Solvency.


 


Borrower (a) has not entered into the transaction or executed the
Note, this Agreement or any other Loan Documents with the actual intent to
hinder, delay or defraud any creditor and (b) has received reasonably
equivalent value in exchange for its obligations under the Loan Documents. Giving
effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will,
immediately following the making of the Loan, exceed Borrower’s total
liabilities, including, without limitation, subordinated, unliquidated,
disputed and contingent liabilities. The fair saleable value of Borrower’s
assets is and will, immediately following the making of the Loan, be greater
than Borrower’s probable liabilities, including the maximum amount of its
contingent liabilities on its debts as such debts become absolute and matured. Borrower’s
assets do not and, immediately following the making of the Loan will not,
constitute an insufficient amount of capital to carry out its business as
conducted or as proposed to be conducted. Borrower does not intend to incur
debt and liabilities (including contingent liabilities and other commitments)
beyond its ability to pay such debt and liabilities as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the


 


66

















 


amounts to be payable on or in
respect of obligations of Borrower). Except as expressly disclosed to Lender in
writing, no petition under the Bankruptcy Code or similar state bankruptcy or
insolvency law has been filed against Borrower, Principal, Mortgage Borrower,
Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP
or any of their respective partners or members in the last seven (7) years,
and neither Borrower, Principal, Mortgage Borrower, Mortgage Principal,
Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP nor any of their
respective partners or members in the last seven (7) years has ever made
an assignment for the benefit of creditors or taken advantage of any insolvency
act for the benefit of debtors. None of Borrower, Principal, Mortgage Borrower,
Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP
nor any of their respective partners or members is contemplating either the
filing of a petition by it under the Bankruptcy Code or similar state
bankruptcy or insolvency law or the liquidation of all or a major portion of
Borrower’s, Mortgage Borrower’s or Mezzanine A Borrower’s assets or property,
and Borrower has no Actual Knowledge of any Person contemplating the filing of
any such petition against Borrower, Principal, Mortgage Borrower, Mortgage
Principal, Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP or any
of their respective partners or members.


 


4.1.7                        Full
and Accurate Disclosure.


 


To Borrower’s Actual Knowledge, no statement of fact made by Borrower
in this Agreement or in any of the other Loan Documents contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading in any material
respect.


 


4.1.8                        No Plan
Assets


 


No Loan Party is a Plan, and none of the assets of any Loan Party
constitute or will constitute “Plan Assets” of one or more Plans. In addition, (a) no
Loan Party is a “governmental plan” within the meaning of Section 3(32) of
ERISA and (b) transactions by or with any Loan Party are not subject to
State statutes regulating investment of, and fiduciary obligations with respect
to, governmental plans similar to the provisions of Section 406 of ERISA
or Section 4975 of the Code currently in effect, which prohibit or
otherwise restrict the transactions contemplated by this Agreement.


 


4.1.9                        Compliance.


 


Except as otherwise disclosed in Schedule 4.1.9
annexed hereto, Borrower, Mortgage Borrower, Mezzanine A Borrower and the
Properties and the use thereof comply in all material respects with all
applicable Legal Requirements, including, without limitation, all Environmental
Laws, building and zoning ordinances and codes. Except as otherwise disclosed
in Schedule 4.1.9 annexed hereto,
none of Borrower, Mortgage Borrower or Mezzanine A Borrower has received
written notice from any Governmental Authority asserting that Borrower,
Mortgage Borrower, Mezzanine A Borrower or any Individual Property is in
default or violation in any material respect of any order, writ, injunction,
decree or demand of such Governmental Authority. Lender


 


67

















 


acknowledges the existence of
those certain municipal violations disclosed in Schedule 4.1.9 hereof (the
“Municipal Violations”), and Borrower further represents and warrants to
Lender that the Municipal Violations do not have a Material Adverse Effect.


 


4.1.10                  Financial
Information. 


 


To Borrower’s Actual Knowledge, all financial data, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Properties (i) are true,
complete and correct in all material respects, (ii) accurately represent
in all material respects the financial condition of the Properties as of the
date of such reports, and (iii) to the extent applicable, have been
prepared in accordance with GAAP throughout the periods covered, except as
disclosed therein. Except for Permitted Encumbrances, to Borrower’s Actual
Knowledge, Borrower does not have any contingent liabilities, liabilities for
taxes, unusual forward or long term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Borrower and
reasonably likely to have a materially adverse effect on the Collateral, the
Mezzanine A Collateral, any Mortgage Principal’s general partner interest in
the related Mortgage Borrower Entity, any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity or any Individual
Property or the operation thereof as a luxury residential apartment building,
except as referred to or reflected in such financial statements or in Schedule 4.1.10 annexed hereto. To Borrower’s Actual
Knowledge, since the date of such financial statements, there has been no
materially adverse change in the financial condition or operations of the
Properties from that set forth in such financial statements.


 


4.1.11                  Condemnation.


 


No Condemnation or other similar proceeding has been commenced or, to
Borrower’s Actual Knowledge, is threatened or contemplated with respect to all
or any portion of any Individual Property or for the relocation of roadways
providing access to any Individual Property.


 


4.1.12                  Federal
Reserve Regulations.


 


No part of the proceeds of the Loan will be used for the purpose
of purchasing or acquiring any “margin stock” within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System or for any other
purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements or by the terms and conditions of this Agreement or the other Loan
Documents.


 


4.1.13                  Utilities and
Public Access.


 


Each Individual Property has rights of access to public ways and is
served by public water, sewer, sanitary sewer and storm drain facilities
adequate to service such Individual Property for its intended use. Except as
otherwise shown on the survey with respect to any Individual Property reviewed
by Lender prior to the date hereof (the “Survey”) or disclosed in Schedule 4.1.13 annexed hereto with respect to such
Individual


 


68

















 


Property, all public utilities
necessary or convenient to the full use and enjoyment of such Individual
Property are located either in the public right of way abutting such Individual
Property (which are connected so as to serve such Individual Property without
passing over other property) or in recorded easements serving such Individual
Property and such easements are set forth in and insured by the Owner’s Title
Policy. All public roads and streets necessary for the use of each Individual
Property for its current purpose have been completed, are physically open and
are dedicated to public use and have been accepted by all Governmental
Authorities.


 


4.1.14                  Not a Foreign
Person.


 


Borrower is not a “foreign person” within the meaning of §1445(f)(3) of
the Code.


 


4.1.15                  Separate
Lots.


 


Each Individual Property is assessed for real estate tax purposes as one
or more wholly independent tax lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot or lots, and no other
land or improvements is assessed and taxed together with such Individual
Property or any portion thereof.


 


4.1.16                  Assessments.


 


Except as disclosed in the Owner’s Title Policy, to Borrower’s Actual
Knowledge, there are no pending or proposed special or other assessments for
public improvements or otherwise affecting any Individual Property, nor are
there any contemplated improvements to any Individual Property that, to
Borrower’s Actual Knowledge, may result in such special or other
assessments.


 


4.1.17                  Enforceability.


 


The Loan Documents are not subject to any right of rescission, set-off,
counterclaim or defense by Borrower, including the defense of usury, and
Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto.


 


4.1.18                  No Prior
Assignment.


 


Other than under the Mortgage Loan Documents, there are no prior
assignments of the Leases or any portion of the Rents due and payable or to
become due and payable which are presently outstanding. There are no prior
assignments of the Collateral, the Mezzanine A Collateral, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower Entity or
any Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity which are presently outstanding except in accordance with the
Loan Documents and the Mezzanine A Loan Documents.


 


69

















 


4.1.19                  Insurance.


 


Mortgage Borrower has obtained and Borrower has delivered to Lender
certified copies of all insurance policies, or certificates of insurance,
reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement. Neither Borrower nor, to Borrower’s Actual Knowledge, any other
Person, has done, by act or omission, anything which would impair the coverage
of any such policy.


 


4.1.20                  Use of
Property.


 


Each Individual Property is used exclusively for (a) luxury
residential apartment purposes (including ancillary retail space), (b) other
uses expressly permitted under the certificate of occupancy issued for the
Improvements or the zoning ordinances and codes applicable to the Properties
(or any variances for the Properties) or (c) other appurtenant and related
uses.


 


4.1.21                  Certificate
of Occupancy; Licenses.


 


Except as otherwise disclosed in Schedule 4.1.21
annexed hereto, to Borrower’s Actual Knowledge, all certifications, permits,
licenses and approvals, including without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of each Individual Property by Mortgage Borrower as a luxury
residential apartment building (including ancillary retail space)
(collectively, the “Licenses”), have been obtained and are in full force
and effect and are not subject to revocation, suspension or forfeiture. The use
being made of each Individual Property is in conformity in all material
respects with the certificate of occupancy issued for the Improvements.


 


4.1.22                  Flood Zone.


 


Except as otherwise shown on the Survey with respect to any Individual
Property, none of the Improvements on such Individual Property are located in an
area identified by the Federal Emergency Management Agency as an area having
special flood hazards or, if any portion of the Improvements on such Individual
Property is located within such an area, the flood insurance required pursuant
to the Mortgage Loan Documents is in full force and effect.


 


4.1.23                  Physical
Condition.


 


Except as otherwise disclosed in Schedule 4.1.23
annexed hereto, neither Borrower nor Mortgage Borrower has received written
notice from any insurance company or bonding company of any material defects or
inadequacies in any Individual Property, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. Except as otherwise disclosed
in Schedule 4.1.23 annexed hereto, to
Borrower’s Actual Knowledge, each Individual Property is free from damage
caused by fire or other casualty. To Borrower’s Actual Knowledge, all liquid and
solid waste disposal, septic and sewer systems located


 


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on each Individual Property are
in a good and safe condition and repair and in compliance in all material
respects with all Legal Requirements applicable to such Individual Property.


 


4.1.24                  Boundaries.


 


Except as otherwise shown on the Survey with respect to any Individual
Property, all of the Improvements on such Individual Property which were
included in determining the appraised value of such Individual Property lie
wholly within the boundaries and building restriction lines of such Individual
Property, and no improvements on adjoining properties encroach upon such
Individual Property, and no easements or other encumbrances upon such Individual
Property encroach upon any of the Improvements on such Individual Property.


 


4.1.25                  Leases.


 


To Borrower’s Actual Knowledge. the Properties are not subject to any
Leases other than the Leases described in Schedule 4.1.25
attached hereto and made a part hereof. Except as disclosed in the rent
roll and arrearages report for each Individual Property delivered to and
approved by Lender, in the tenant estoppel letters delivered to Lender on or
prior to the Closing Date, or in Schedule 4.1.25
annexed hereto, as of the date hereof, (i) Mortgage Borrower is the sole
owner of the entire lessor’s interest in the Leases; (ii) to Borrower’s
Actual Knowledge, the Leases are valid and enforceable and in full force and
effect; (iii) to Borrower’s Actual Knowledge, all of the Leases are
arms-length agreements with bona fide, independent third parties; (iv) to
Borrower’s Actual Knowledge, no party under any Lease is in default in the
performance of any of such party’s material obligations under such Lease beyond
the expiration of any applicable grace or cure period; (v) to Borrower’s
Actual Knowledge, all Rents due under any of the Leases have been paid in full;
(vi) to Borrower’s Actual Knowledge, Borrower has delivered or made
available to Lender true and correct copies of all Major Leases including all
amendments and modifications thereto; (vii) none of the Rents reserved in
the Leases have been assigned or otherwise pledged or hypothecated by Mortgage
Borrower in favor of any party other than Mortgage Lender; (viii) none of
the Rents have been collected by Mortgage Borrower or Manager for more than one
(1) month in advance (except that a security deposit or prepayment of
first month’s and last month’s rent shall not be deemed rent collected in
advance); (ix) to Borrower’s Actual Knowledge, the premises demised under
the Leases have been completed (other than with respect to tenant improvements
that remain outstanding and for which Mortgage Lender has reserved funds under
the Mortgage Loan Documents) and the tenants under the Leases have accepted the
same and have taken possession of the same on a rent-paying basis; (x) no
tenant under any of the Leases has asserted in writing to Borrower, Mortgage
Borrower or Manager any offset or defense to the payment of any portion of the Rents;
(xi) neither Borrower nor Mortgage Borrower has received written notice from
any tenant challenging the validity or enforceability of any Lease; (xii) to
Borrower’s Actual Knowledge, there are no agreements with the tenants under the
Leases other than as expressly set forth in each Lease; (xiii) to Borrower’s
Actual Knowledge, the Leases are valid and enforceable against Mortgage
Borrower and the tenants thereunder, subject


 


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to applicable bankruptcy,
insolvency, reorganization and other laws affecting creditor’s rights
generally, to moratorium laws from time to time in effect and to general
principles of equity (regardless of whether such enforceability is considered
in an action or proceeding in equity or at law); (xiv) to Borrower’s Actual
Knowledge, no Lease contains an option to purchase, right of first refusal to
purchase, or any other similar provision; (xv) to Borrower’s Actual Knowledge,
no person or entity has any possessory interest in, or right to occupy, any
Individual Property except under and pursuant to a Lease; (xvi) Borrower does
not have Actual Knowledge of any currently effective unrecorded non-disturbance
agreement in favor of any Tenant under a Major Lease that would be considered unacceptable
to prudent institutional lenders; (xvii) all security deposits relating to the
Leases reflected on the certified rent roll delivered to Lender by Borrower are
being held by Mortgage Borrower; and (xviii) to Borrower’s Actual Knowledge, no
brokerage commissions or finders fees are due and payable regarding any Lease
(other than those for which Mortgage Lender has reserved funds under the
Mortgage Loan Documents).


 


4.1.26                  Title.


 


(a)                                  Each Loan Party
purporting to grant a Lien on any Collateral is the record and beneficial owner
of, and has good title to, such Collateral, free and clear of all Liens
whatsoever, other than Permitted Encumbrances. The Pledge Agreement, together
with the UCC Financing Statements relating to the Collateral when properly
filed in the appropriate records, will create a valid, perfected first priority
security interests in and to such Collateral, all in accordance with the terms
thereof for which a Lien can be perfected by filing a UCC Financing Statement. For
so long as the Lien of the Pledge Agreement is outstanding with respect to any
Collateral, Borrower shall forever warrant, defend and preserve such title and
the validity and priority of the Lien of the Pledge Agreement with respect to
such Collateral and shall forever warrant and defend such title, validity and
priority to Lender against the claims of all persons whomsoever.


 


(b)                                 Each Mortgage Borrower
Entity has good title to the applicable Individual Property and possesses a fee
simple absolute estate in such Individual Property and it owns such Individual
Property free and clear of all liens, encumbrances and charges whatsoever
except for the Permitted Encumbrances. To Borrower’s Actual Knowledge, the
Permitted Encumbrances disclosed in the Mortgage Title Insurance Policy do not
and will not materially adversely affect or interfere with the value, or
materially adversely affect or interfere with the current use or operation, of
the Properties or the ability of Borrower to repay the Note or any other amount
owing under the Note, the Pledge Agreement, the Loan Agreement, or the other
Loan Documents or to perform its obligations thereunder in accordance with
the terms of the Loan Agreement, the Note, the Pledge Agreement or the other
Loan Documents. Other than Mortgage Lender, no Person other than Mortgage
Borrower owns any interest in any payments due under the Leases. Each Borrower
Entity shall cause the applicable Mortgage Borrower Entity to forever warrant,
defend and preserve the title to the applicable Individual Property and to
forever warrant and defend the same to Lender against the claims of all persons
whomsoever.


 


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(c)                                  Each Mortgage
Principal has good title to its ownership interests in the applicable Mortgage Borrower
Entity free and clear of all liens, encumbrances and charges whatsoever except
for the Permitted Encumbrances. Borrower shall cause each Mortgage Principal to
forever warrant, defend and preserve the title to such ownership interests in
the applicable Mortgage Borrower Entity and to forever warrant and defend the
same to Lender against the claims of all persons whomsoever.


 


(d)                                 Each Mezzanine A
Borrower Entity has good title to its ownership interests in the applicable
Mortgage Borrower Entity and Mortgage Principal free and clear of all liens,
encumbrances and charges whatsoever except for the Permitted Encumbrances. Borrower
shall cause each Mezzanine A Borrower Entity to forever warrant, defend and
preserve the title to such ownership interests and to forever warrant and
defend the same to Lender against the claims of all persons whomsoever.


 


(e)                                  Each Mezzanine A
Principal has good title to its ownership interests in the applicable Mezzanine
A Borrower Entity free and clear of all liens, encumbrances and charges
whatsoever except for the Permitted Encumbrances. Borrower shall cause each
Mezzanine A Principal to forever warrant, defend and preserve the title to such
ownership interests in the applicable Mezzanine A Borrower Entity and to
forever warrant and defend the same to Lender against the claims of all persons
whomsoever.


 


4.1.27                  Intentionally
Omitted.  


 


4.1.28                  Filing and
Recording Taxes.


 


All transfer taxes, deed stamps, intangible taxes or other amounts in
the nature of transfer taxes required to be paid by Borrower or, to Borrower’s
Actual Knowledge, any other Person under applicable Legal Requirements
currently in effect in connection with the transfer of the Properties to
Mortgage Borrower, the Collateral, the making of the Mortgage Loan, the
Mezzanine A Loan, the Loan or the other transactions contemplated by this
Agreement have been paid. All mortgage, recording, stamp, intangible or other
similar tax required to be paid by any Person under applicable Legal
Requirements currently in effect in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement of any of the Loan
Documents, including, without limitation, the Pledge Agreement, have been paid.


 


4.1.29                  Intentionally
Omitted.  


 


4.1.30                  Management Agreement.


 


The Management Agreement is in full force and effect and there is no
material default thereunder by either party thereto and no event has occurred
that, with the passage of time and/or the giving of notice would constitute a
material default thereunder.


 


4.1.31                  Illegal
Activity.


 


No portion of any Individual Property, the Collateral, the Mezzanine A
Collateral, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower


 


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Entity or any Mezzanine A
Principal’s general partner interest in the related Mezzanine A Borrower Entity
is being or will be purchased with proceeds of any illegal activity and, to
Borrower’s Actual Knowledge, there are no illegal activities or activities
relating to any controlled substances at any Individual Property.


 


4.1.32                  No Change in
Facts or Circumstances; Disclosure.


 


To Borrower’s Actual Knowledge, all information submitted by Borrower
to Lender and in all financial statements, rent rolls, reports, certificates
and other documents submitted in connection with the Loan or in satisfaction of
the terms thereof and all statements of fact made by Borrower or Principal in
this Agreement or in any other Loan Document, are accurate, complete and
correct in all material respects. To Borrower’s Actual Knowledge, except as
otherwise disclosed in Schedule 4.1.32
annexed hereto, there has been no material adverse change in any condition,
fact, circumstance or event that would make any such information inaccurate,
incomplete or otherwise misleading in any material respect or that otherwise
has a Material Adverse Effect. To Borrower’s Actual Knowledge, Borrower has
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any Provided Information or any representation
or warranty made herein to be materially misleading.


 


4.1.33                  Investment
Company Act.


 


No Borrower Entity is (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; or (b) subject to any other federal or State law or
regulation which purports to restrict or regulate its ability to borrow money.


 


4.1.34                  Principal
Place of Business; State of Organization.


 


Each Borrower Entity’s principal place of business as of the date
hereof is the address set forth in the introductory paragraph of this Agreement.
Each Borrower Entity is organized under the laws of the State of Delaware
pursuant to a Certificate of Limited Partnership or Certification of Formation
filed with the Secretary of State of the State of Delaware, and the
organizational identification number of each Borrower Entity is set forth
opposite the name of such Borrower Entity on Exhibit A annexed hereto.


 


4.1.35                  Single
Purpose Entity.


 


(a)                                  Borrower represents
and warrants that it has not, and that no Principal has, since its date of
formation, and covenants and agrees that its organizational documents shall
provide that it shall not, and that the organizational documents of each
Principal shall provide that such Principal shall not:


 


(i)                                     with
respect to Borrower, engage in any business or activity other than acquiring,
owning, holding, managing, operating, financing, refinancing, encumbering,
selling, exchanging and otherwise dealing with and disposing of all or any
portion of the Collateral, and entering into the Loan, and activities
incidental thereto, and with respect to any Principal, engage in any business
or


 


74

















 


activity other
than the ownership of its interest in the related Borrower Entity, and
activities incidental thereto;


 


(ii)                                  with
respect to Borrower, acquire or own any material assets other than (i) the
Collateral, and (ii) such Personal Property as may be necessary for,
or incidental to, the ownership of the Collateral, and with respect to any
Principal, acquire or own any material asset other than its interest in the
related Borrower Entity;


 


(iii)                               merge
into or consolidate with any Person or dissolve, terminate or liquidate in
whole or in part, transfer or otherwise dispose of all or substantially all of
its assets or change its legal structure, other than pursuant to the terms of
the Loan Documents;


 


(iv)                              with
respect to any Borrower Entity, (i) fail to observe its organizational
formalities or preserve its existence as an entity duly organized, validly
existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization or formation, or (ii) without the prior
written consent of Lender, amend, modify, terminate or fail to comply in any
material respects with the provisions of such Borrower Entity’s Limited
Partnership Agreement, Certificate of Limited Partnership, Limited Liability
Company Agreement, Certificate of Formation or similar organizational
documents, as the case may be, or of the related Principal’s Limited
Liability Company Agreement, Certificate of Formation or similar organizational
documents, as the case may be, whichever is applicable;


 


(v)                                 other
than any Principal’s ownership interest in the related Borrower Entity, own any
subsidiary or make any investment in any Person without the prior written
consent of Lender;


 


(vi)                              commingle
its assets with the assets of any of its members, general partners, Affiliates,
Principals or of any other Person, participate in a cash management system with
any other Person (other than each other Borrower Entity, so long as the assets
of each Borrower Entity are able to be easily segregated) or fail to use its
own separate stationery, telephone number, invoices and checks;


 


(vii)                           with
respect to Borrower, incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Debt, except for
liabilities incurred in the ordinary course of its business relating to the
ownership of the Collateral and the routine administration of Mezzanine A
Borrower, in amounts not to exceed $100,000 and which liabilities are not more
than ninety (90) days past due and are not evidenced by a note, and with
respect to any Principal, incur any debt secured or unsecured, direct or
contingent (including guaranteeing any obligations) except for liabilities
incurred in the ordinary course of its business relating to the ownership of
the Collateral and the routine administration of Borrower, in amounts not to
exceed $100,000 and which


 


75

















 


liabilities
are not more than ninety (90) days past due and are not evidenced by a note
(the “Permitted Debt”);


 


(viii)                        become insolvent
and fail to pay its debts and liabilities (including, as applicable, shared
personnel and overhead expenses) as the same shall become due; provided, however, the foregoing shall not
require any partner in a Borrower Entity to make any capital contributions to
such Borrower Entity;


 


(ix)                                (A) fail
to maintain its records (including financial statements), books of account and
bank accounts separate and apart from those of the members, general
partners, principals and Affiliates of any Borrower Entity or of any Principal,
as the case may be, the Affiliates of a member, general partner or
principal of any Borrower Entity or of any Principal, as the case may be,
and any other Person, (B) permit its assets or liabilities to be listed as
assets or liabilities on the financial statement of any other Person (except
where consolidated financial statements are permitted or required by Applicable
Law or GAAP, provided that such consolidated statements shall reflect that such
entities are separate legal entities and indicate that the Borrower’s assets
and liabilities are not available to satisfy the debts and other obligations of
such Affiliate or any other Person, other than as expressly provided in the
Loan Documents) or (C) include the assets or liabilities of any other
Person on its financial statements (except where consolidated financial
statements are permitted or required by Applicable Law or GAAP, provided that
such consolidated statements shall reflect that such entities are separate
legal entities and indicate that the Borrower’s assets and liabilities are not
available to satisfy the debts and other obligations of such Affiliate or any
other Person, other than as expressly provided in the Loan Documents);


 


(x)                                   enter
into any contract or agreement with any member, general partner, principal or
Affiliate of any Borrower Entity or of any Principal, as the case may be,
Guarantor, or any member, general partner, principal or Affiliate thereof,
except upon terms and conditions that are commercially reasonable, intrinsically
fair and substantially similar to those that would be available on an arm’s-length
basis (taking into account the relative standards of quality and reputation of
the party rendering the service) with third parties other than any member,
general partner, principal or Affiliate of any Borrower Entity or of any
Principal, as the case may be, Guarantor, or any member, general partner,
principal or Affiliate thereof; provided,
however, that the foregoing prohibition shall not apply to any
Management Agreement with TSP or an Affiliate of TSP so long as such Management
Agreement is on market terms and negotiated on an arm’s length basis (i.e., in
this context, negotiated with a non-Affiliate representing the interests of the
property owner);


 


(xi)                                to
the fullest extent permitted by law, seek the dissolution or winding up in
whole, or in part, of any Borrower Entity or of any Principal, as the case may be;


 


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(xii)                             fail
to correct any known misunderstandings regarding the separate identity of any
Borrower Entity, or of any Principal, as the case may be, or any member,
general partner, principal or Affiliate thereof or any other Person;


 


(xiii)                          guarantee
or become obligated for the debts of any other Person or hold itself out to be
responsible for the debts of another Person;


 


(xiv)                         make any
loans or advances to any third party, including any member, general partner,
principal or Affiliate of any Borrower Entity or of any Principal, as the case may be,
or any member, general partner, principal or Affiliate thereof, and shall not
acquire obligations or securities of any member, general partner, principal or
Affiliate of any Borrower Entity or any Principal, as the case may be, or
any member, general partner, or Affiliate thereof;


 


(xv)                            fail
to file its own tax returns or be included on the tax returns of any other
Person except as required or permitted by Applicable Law;


 


(xvi)                         fail
either to hold itself out to the public as a legal entity separate and distinct
from any other Person or to conduct its business solely in its own name or a
name franchised or licensed to it by an entity other than an Affiliate of
Borrower or of any Principal, as the case may be, and not as a division or
part of any other entity in order not (A) to mislead others as to the
identity with which such other party is transacting business, or (B) to
suggest that Borrower or any Principal, as the case may be, is responsible
for the debts of any third party (including any member, general partner,
principal or Affiliate of any Borrower Entity, or of any Principal, as the case
may be, or any member, general partner, principal or Affiliate thereof);


 


(xvii)                      fail to
endeavor to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations; provided,
however, the foregoing shall not require any partner in a Borrower
Entity to make any capital contributions to such Borrower Entity;


 


(xviii)                   share any
common logo with or hold itself out as or be considered as a department or
division of (A) any general partner, principal, member or Affiliate of any
Borrower Entity or of any Principal, as the case may be, (B) any
Affiliate of a general partner, principal or member of any Borrower Entity or
of any Principal, as the case may be, or (C) any other Person;


 


(xix)                           fail to
allocate fairly and reasonably any overhead expenses that are shared with an
Affiliate, including paying for office space and services performed by any
employee of an Affiliate;


 


(xx)                              pledge
its assets for the benefit of any other Person, and with respect to Borrower,
other than with respect to the Loan;


 


(xxi)                           [intentionally
omitted];


 


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(xxii)                        fail to
provide in its (i) Limited Liability Company Agreement, if it is a limited
liability company, (ii) Limited Partnership Agreement, if it is a limited
partnership or (iii) Certificate of Incorporation, if it is a corporation,
that for so long as the Loan is outstanding pursuant to the Note, this
Agreement and the other Loan Documents, it shall not file or consent to the
filing of any petition, either voluntary or involuntary, to take advantage of
any applicable insolvency, bankruptcy, liquidation or reorganization statute,
or make an assignment for the benefit of creditors without the affirmative vote
of the Independent Director and of all other general partners/managing
members/directors;


 


(xxiii)                     fail to hold
its assets in its own name;


 


(xxiv)                    if any
Borrower Entity or Principal is a corporation, fail to consider the interests
of such corporation’s creditors in connection with all corporate actions to the
extent permitted by Applicable Law;


 


(xxv)                       have any of
its obligations guaranteed by an Affiliate, except in connection with the Loan;
and


 


(xxvi)                    violate or
cause to be violated the assumptions made with respect to the Borrower Entities
and their respective Principals in the Insolvency Opinion.


 


(b)                                 Borrower covenants and
agrees that, if any Borrower Entity is a single member limited liability
company that complies with the requirements of Section 4.1.35(d) below,
its organizational documents shall provide that such Borrower Entity shall not,
and if any Borrower Entity is not a single member limited liability company
that complies with the requirements of Section 4.1.35(d) below, the
organizational documents of such Borrower Entity’s Principal shall provide that
such Principal shall not, fail at any time to have at least one independent
manager or director (the “Independent Director”) that is not and has not
been for at least five (5) years:  (i) a
stockholder, director, officer, employee, partner, member, attorney or counsel
of such Borrower Entity or of such Borrower Entity’s Principal or any Affiliate
of either of them (other than his or her service as an independent director of
such Borrower Entity or any of its Affiliates); (ii) a customer, supplier
or other Person who derives its purchases or revenues (other than any fee paid
to such director as compensation for such director to serve as an Independent
Director) from its activities with such Borrower Entity, such Principal or any
Affiliate of either of them (a “Business Party”); (iii) a Person
controlling or under common control with any such stockholder, partner, member,
director, officer, attorney, counsel or Business Party; or (iv) a member
of the immediate family of any such stockholder, director, officer, employee,
partner, member, attorney, counsel or Business Party; provided,
however, that a Person shall not be deemed to be a director of an
Affiliate solely by reason of such Person being a director of an affiliated
single-purpose entity (other than Mezzanine A Borrower or Mortgage Borrower). Notwithstanding
the foregoing, no Independent Director shall also serve as (w) an Independent
Director (as such term is defined in the Mezzanine A Loan Agreement) for
Mezzanine A Borrower or Principal (as such term is defined in the Mezzanine A
Loan Agreement) of Mezzanine A


 


78

















 


Borrower or (x) an Independent Director (as such term is defined in the
Security Instrument) for Mortgage Borrower or Mortgage Principal.


 


(c)                                  Borrower covenants
and agrees that, if any Borrower Entity is a single member limited liability
company that complies with the requirements of Section 4.1.35(d) below,
its organizational documents shall provide that such Borrower Entity shall not,
and if any Borrower Entity is not a single member limited liability company
that complies with the requirements of Section 4.1.35(d) below, the
organizational documents of such Borrower Entity’s Principal shall provide that
such Principal shall not, permit its board of directors to take, without the
vote of the Independent Director, any action which, under the terms of any
certificate of incorporation, by-laws, voting trust agreement with respect to
any common stock or other applicable organizational documents, requires the
unanimous vote of one hundred percent (100%) of the members of the board.


 


(d)                                 Borrower covenants and
agrees that, in the event that any Borrower Entity or its Principal is a
Delaware limited liability company that does not have a managing member which
complies with the foregoing requirements of this Section 4.1.35, the limited
liability company agreement of such Borrower Entity or such Principal, as
applicable (an “LLC Agreement”), shall provide that (A) upon the
occurrence of any event that causes the last remaining member of such Borrower
Entity or such Principal, as applicable, (“Member”) to cease to be the
member of such Borrower Entity or such Principal, as applicable, (other than (1) upon
an assignment by Member of all of its limited liability company interest in
such Borrower Entity or such Principal, as applicable, and the admission of the
transferee in accordance with the Loan Documents and the applicable LLC
Agreement, or (2) the resignation of Member and the admission of an
additional member of such Borrower Entity or such Principal, as applicable, in
accordance with the terms of the Loan Documents and the applicable LLC
Agreement), any person acting as Independent Director of such Borrower Entity
or such Principal, as applicable, shall, without any action of any other Person
and simultaneously with the Member ceasing to be the member of such Borrower
Entity or such Principal, as applicable, automatically be admitted to such
Borrower Entity or such Principal, as applicable, (“Special Member”) and
shall continue such Borrower Entity or such Principal, as applicable, without
dissolution and (B) Special Member may not resign from such Borrower
Entity or such Principal, as applicable, or transfer its rights as Special
Member unless (1) a successor Special Member has been admitted to such
Borrower Entity or such Principal, as applicable, as Special Member in
accordance with the applicable LLC Agreement and (2) such successor
Special Member has also accepted its appointment as an Independent Director. Each
LLC Agreement shall further provide that (v) Special Member shall automatically
cease to be a member of such Borrower Entity or Principal, as applicable, upon
the admission to such Borrower Entity or such Principal, as applicable, of a
substitute Member, (w) Special Member shall be a member of such Borrower Entity
or such Principal, as applicable, that has no interest in the profits, losses
and capital of such Borrower Entity or such Principal, as applicable, and has
no right to receive any distributions of such Borrower Entity or Principal, as
applicable, assets, (x) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the “Act”), Special Member shall not be required to make
any capital contributions to such Borrower


 


79

















 


or such Principal, as applicable, and shall not receive a limited
liability company interest in such Borrower Entity or such Principal, as
applicable, (y) Special Member, in its capacity as Special Member, may not
bind such Borrower Entity or such Principal, as applicable, and (z) except as required
by any mandatory provision of the Act, Special Member, in its capacity as
Special Member, shall have no right to vote on, approve or otherwise consent to
any action by, or matter relating to, such Borrower Entity or such Principal,
as applicable, including, without limitation, the merger, consolidation or
conversion of such Borrower Entity or such Principal, as applicable; provided, however, such prohibition shall not limit the
obligations of Special Member, in its capacity as Independent Director, to vote
on such matters as may be expressly required by the applicable LLC
Agreement. In order to implement the admission to any Borrower Entity or any
Principal, as applicable, of Special Member, Special Member shall execute a
counterpart of the applicable LLC Agreement. Prior to its admission to any
Borrower Entity or any Principal, as applicable, as Special Member, no Person
acting as Independent Director shall be a member of such Borrower Entity or
such Principal, as applicable.


 


Upon the occurrence of any event that causes the Member to cease to be
a member of any Borrower Entity or any Principal, as applicable, (other than (1) upon
an assignment by Member of all of its limited liability company interest in
such Borrower Entity or such Principal, as applicable, and the admission of the
transferee in accordance with the Loan Documents and the applicable LLC
Agreement, or (2) the resignation of Member and the admission of an
additional member of such Borrower Entity or such Principal, as applicable, in
accordance with the terms of the Loan Documents and the applicable LLC
Agreement), to the fullest extent permitted by law, the personal representative
of Member shall, within ninety (90) days after the occurrence of the event that
terminated the continued membership of Member in such Borrower Entity or such
Principal, as applicable, agree in writing (A) to continue such Borrower
Entity or such Principal, as applicable, and (B) to the admission of the
personal representative or its nominee or designee, as the case may be, as
a substitute member of such Borrower Entity or such Principal, as applicable,
effective as of the occurrence of the event that terminated the continued
membership of Member of such Borrower Entity or such Principal, as applicable. Any
action initiated by or brought against Member or Special Member under any
Creditors Rights Laws shall not cause Member or Special Member to cease to be a
member of any Borrower Entity or any Principal, as applicable, and upon the
occurrence of such an event, the business of such Borrower Entity or such
Principal, as applicable, shall continue without dissolution. Each LLC
Agreement shall provide that each of Member and Special Member waives any right
it may have to agree in writing to dissolve any Borrower Entity or any
Principal, as applicable, upon the occurrence of any action initiated by or
brought against Member or Special Member under any Creditors Rights Laws, or
the occurrence of an event that causes Member or Special Member to cease to be
a member of such Borrower or such Principal, as applicable.


 


(e)                                  Borrower covenants
and agrees that, in the event any Borrower Entity is a Delaware limited
partnership that has a general partner which directly owns a zero percent (0%)
economic interest in Borrower Entity, the limited partnership agreement of such
Borrower Entity (an “LP Agreement”), shall provide that (A) upon
the occurrence of


 


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any event that causes the last remaining limited partner of such
Borrower Entity (“Partner”) to cease to be the limited partner of such
Borrower Entity (other than (1) upon an assignment by Partner of all of
its partnership interest in such Borrower Entity and the admission of the
transferee in accordance with the Loan Documents and the LP Agreement, or (2) the
resignation of Partner and the admission of an additional limited partner of
such Borrower Entity in accordance with the terms of the Loan Documents and
such LP Agreement), any person acting as or any person that meets the definition
of Independent Director of such Borrower Entity shall, without any action of
any other Person and simultaneously with the Partner ceasing to be the Partner
of such Borrower Entity, automatically be admitted to Borrower (“Special
Limited Partner”) and shall continue such Borrower Entity without
dissolution and (B) Special Limited Partner may not resign from such
Borrower Entity or transfer its rights as Special Limited Partner unless a
successor Special Limited Partner has been admitted to such Borrower Entity as
Special Limited Partner in accordance with the applicable LP Agreement. Each LP
Agreement shall further provide that (v) Special Limited Partner shall
automatically cease to be a limited partner of the applicable Borrower Entity
upon the admission to such Borrower Entity of a substitute Partner, (w) Special
Limited Partner shall be a Partner of such Borrower Entity that has no interest
in the profits, losses and capital of Borrower Entity and has no right to
receive any distributions or assets of such Borrower Entity (x) pursuant to the
Delaware Revised Uniform Limited Partnership Act (the “LP Act”),
Special Limited Partner shall not be required to make any capital contributions
to such Borrower Entity and shall not receive a limited partnership interest in
such Borrower Entity, (y) Special Limited Partner, in its capacity as Special
Limited Partner, may not bind such Borrower Entity, and (z) except as
required by any mandatory provision of the LP Act, Special Limited Partner, in
its capacity as Special Limited Partner, shall have no right to vote on,
approve or otherwise consent to any action by, or matter relating to, such
Borrower Entity including, without limitation, the merger, consolidation or
conversion of Borrower. In order to implement the admission to such Borrower
Entity of Special Limited Partner, Special Limited Partner shall execute a
counterpart of the applicable LP Agreement.


 


Upon the occurrence of any event that causes Partner to cease to be a
limited partner in any Borrower Entity, (other than (1) upon an assignment
by Partner of all of its partnership interest in such Borrower Entity and the
admission of the transferee in accordance with the Loan Documents and the LP
Agreement, or (2) the resignation of Partner and the admission of an
additional limited partner of such Borrower Entity in accordance with the terms
of the Loan Documents and such LP Agreement), to the fullest extent permitted
by law, the personal representative of Partner shall, within ninety (90) days
after the occurrence of the event that terminated the continued limited
partnership of Partner in such Borrower Entity, agree in writing (A) to
continue such Borrower Entity and (B) to the admission of the personal
representative or its nominee or designee, as the case may be, as a
substitute limited partner of such Borrower Entity, effective as of the
occurrence of the event that terminated the continued limited partnership of
Partner of such Borrower Entity. Any action initiated by or brought against
Partner or Special Limited Partner under any Creditors Rights Laws shall not
cause Partner or Special Limited Partner to cease to be a limited partner of
any Borrower Entity, and upon the occurrence of such an event, the business of
such Borrower Entity shall continue without


 


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dissolution. Each LP Agreement
shall provide that each of Partner and Special Limited Partner waives any right
it may have to agree in writing to dissolve the applicable Borrower Entity
upon the occurrence of any action initiated by or brought against Partner or
Special Limited Partner under any Creditors Rights Laws, or the occurrence of
an event that causes Partner or Special Limited Partner to cease to be a
limited partner in such Borrower Entity.


 


Mortgage Borrower is in compliance with, and Borrower shall cause
Mortgage Borrower and Mortgage Principal to continue to comply with, the
provisions of the Mortgage Loan Documents which relate to the special purpose /
single purpose nature of Mortgage Borrower and Mortgage Principal.


 


Mortgage Borrower is in compliance with, and Borrower shall cause
Mortgage Borrower and Mortgage Principal to continue to comply with, the
provisions of the Mortgage Loan Documents which relate to the special purpose /
single purpose nature of Mortgage Borrower and Mortgage Principal. Mezzanine A
Borrower is in compliance with, and Borrower shall cause Mezzanine A Borrower
and Mezzanine A Principal to continue to comply with, the provisions of Section 4.1.35
of the Mezzanine A Loan Agreement.


 


4.1.36                  Business
Purposes.


 


The Loan is solely for the business purpose of Borrower, and is not for
personal, family, household, or agricultural purposes.


 


4.1.37                  Taxes.


 


Borrower has filed all federal, State, county, municipal, and city
income and other tax returns required to have been filed by it and has paid all
taxes and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by it. Borrower does not have Actual
Knowledge of any basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.


 


4.1.38                  Forfeiture.


 


Neither Borrower nor any Affiliate of Borrower in occupancy of or
involved with the operation or use of the Properties has committed any act or
omission affording the federal government or any State or local government the
right of forfeiture as against any of the Collateral, the Mezzanine A
Collateral, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower Entity, any Mezzanine A Principal’s general partner interest
in the related Mezzanine A Borrower Entity or any Individual Property or any
material part thereof or any monies paid in performance of Borrower’s
obligations under the Note, this Agreement or the other Loan Documents. Borrower
hereby covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture.


 


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4.1.39                  Environmental
Representations and Warranties.


 


Borrower represents and warrants that, to Borrower’s Actual Knowledge,
based solely upon an environmental site assessment of the Properties, a copy of
which has been furnished to Lender (the “Environmental Report”), except
as otherwise disclosed or described in the Environmental Report: (a) there
are no Hazardous Materials or underground storage tanks in, on, or under any
Individual Property, except those that are in compliance with Environmental
Laws and with permits issued pursuant thereto (if such permits are required); (b) there
are no past, present or threatened Releases of Hazardous Materials in violation
of any Environmental Law and which would require remediation by a Governmental
Authority in, on, under or from any Individual Property; (c) there is no
threat of any Release of Hazardous Materials migrating to any Individual
Property; (d) there is no past or present non-compliance with current
Environmental Laws, or with permits issued pursuant thereto, in connection with
any Individual Property; (e) Borrower does not know of, and neither
Borrower nor Mortgage Borrower has received, any written or oral notice or
other communication from any Person (including but not limited to a
Governmental Authority) relating to Hazardous Materials in, on, under or from
any Individual Property; and (f) Borrower has truthfully and fully
provided to Lender, in writing, any and all material information relating to
environmental conditions in, on, under or from any Individual Property known to
Borrower or Mortgage Borrower or contained in Borrower’s or Mortgage Borrower’s
files and records, including but not limited to any reports relating to
Hazardous Materials in, on, under or migrating to or from any Individual
Property and/or to the environmental condition of the Properties.


 


4.1.40                  Taxpayer
Identification Number.


 


Each Borrower Entity’s United States taxpayer identification number is
set forth opposite the name of such Borrower Entity on Exhibit A annexed
hereto.


 


4.1.41                  OFAC.


 


None of Borrower, Mortgage Borrower, Mezzanine A Borrower, Guarantor or
any of their respective Affiliates is a Prohibited Person, and Borrower,
Mortgage Borrower, Mezzanine A Borrower, Guarantor and, to Borrower’s Actual
Knowledge, their respective Affiliates are in full compliance with all
applicable orders, rules and regulations of The Office of Foreign Assets
Control of the U.S. Department of the Treasury.


 


4.1.42                  Ground Lease
Representations.


 


(a)                                  (i) Each Ground
Lease is in full force and effect and has not been modified or amended in any
manner whatsoever, (ii) there are no defaults under any Ground Lease by
Mortgage Borrower, or, to the best of Borrower’s knowledge, landlord
thereunder, and, to the best of Borrower’s knowledge, no event has occurred
which but for the passage of time, or notice, or both would constitute a
default under such Ground Lease, (iii) all rents, additional rents and
other sums due and payable under each Ground Lease have been paid in full, and (iv) neither
Mortgage Borrower nor the landlord under each


 


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Ground Lease has commenced any action or given or received any notice
for the purpose of terminating such Ground Lease.


 


(b)                                 The Ground Leases or a
memorandum thereof have been duly recorded, and there has not been any change
in the terms of the Ground Leases since their recordation;


 


(c)                                  The Ground Leases
have a term which extends not less than the earlier to occur of (i) twenty
(20) years beyond the Maturity Date or (ii) ten (10) years beyond the
amortization term for the Loan;


 


(d)                                 Under the terms of
each Ground Lease and the applicable Loan Documents, taken together, any Net
Proceeds will be applied either to the Restoration of all or part of the
Properties, with Mortgage Lender or a trustee appointed by Mortgage Lender
having the right to hold and disburse such Net Proceeds as the Restoration
progresses, or to the payment of the outstanding principal balance of the Loan
together with any accrued interest thereon; and


 


(e)                                  The Ground Leases do
not impose restrictions on subletting.


 


4.1.43                  Deposit and
Securities Accounts.


 


(a)                                  Intentionally
Omitted;


 


(b)                                 Each of the Accounts
constitutes a “securities account” or a “deposit account” within the meaning of
the UCC;


 


(c)                                  Mortgage Borrower
owns and has good title to the Accounts, free and clear of any Lien or claim of
any Person, other than Mortgage Lender;


 


(d)                                 Intentionally Omitted;


 


(e)                                  Other than the
security interest granted to Mortgage Lender pursuant to the Mortgage Loan
Documents and the Security Instruments, Mortgage Borrower has not pledged,
assigned, or sold, granted a security interest in, or otherwise conveyed the
Accounts; and


 


(f)                                    None of the
Accounts is in the name of any Person other than Mortgage Lender.


 


4.1.44                  Embargoed
Person.


 


To Borrower’s Actual Knowledge, as of the date hereof and at all times
throughout the term of the Loan, including after giving effect to any Transfers
permitted pursuant to the Loan Documents, (a) none of the funds or other
assets of Borrower or Principal, constitute property of, or are beneficially
owned, directly or indirectly, by any person, entity or government subject to
trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq.,


 


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The Trading with the Enemy Act,
50 U.S.C. App. 1, et seq., and any Executive Orders or regulations promulgated
thereunder with the result that the investment in Borrower or Principal, as
applicable (whether directly or indirectly), is prohibited by law or that the
Loan is in violation of law (“Embargoed Person”); (b) no Embargoed
Person has any interest of any nature whatsoever in Borrower or Principal, as
applicable, with the result that the investment in Borrower or Principal, as
applicable (whether directly or indirectly), is prohibited by law or that the
Loan is in violation of law; and (c) none of the funds of Borrower or
Principal, as applicable, have been derived from any unlawful activity with the
result that the investment in Borrower or Principal, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law.


 


4.1.45                  Affiliates.


 


Borrower does not own any equity interests in any other Person other
than the Collateral.


 


4.1.46                  Mortgage
Borrower and Mezzanine A Borrower Representations.


 


Borrower has reviewed the representations and warranties made by, and
covenants of, Mortgage Borrower to and for the benefit of Mortgage Lender
contained in the Mortgage Loan Documents and, to Borrower’s Actual Knowledge,
such representations and warranties are true, correct and complete. Borrower
has reviewed the representations and warranties made by, and covenants of,
Mezzanine A Borrower to and for the benefit of Mezzanine A Lender contained in
the Mezzanine A Loan Documents and, to Borrower’s Actual Knowledge, such
representations and warranties are true, correct and complete.


 


4.1.47                  List of
Mortgage Loan Documents.


 


There are no Mortgage Loan Documents other than those set forth on Schedule 4.1.47 annexed hereto. Borrower has, or has
caused to be, delivered to Lender true, complete and correct copies of all
Mortgage Loan Documents, and none of the Mortgage Loan Documents has been
amended or modified as of the date thereof.


 


4.1.48                  Condominium
Representations.


 


The Properties described on Schedule 4.1.48
annexed hereto are subject to a condominium regime.


 


4.1.49                  List of
Mezzanine A Loan Documents.


 


There are no Mezzanine A Loan Documents other than those set forth on Schedule 4.1.49 annexed hereto. Borrower has, or has
caused to be, delivered to Lender true, complete and correct copies of all
Mezzanine A Loan Documents, and none of the Mezzanine A Loan Documents has been
amended or modified as of the date thereof.


 


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4.1.50                  Mortgage Loan
Event of Default.


 


No Mortgage Loan Event of Default exists as of the date hereof.


 


4.1.51                  Mezzanine A
Loan Event of Default.


 


No Mezzanine A Loan Event of Default exists as of the date hereof.


 


Section 4.2                                      Survival
of Representations.


 


Borrower agrees that all of the representations and warranties of
Borrower set forth in Section 4.1 and elsewhere in this Agreement and in
the other Loan Documents shall survive for so long as any amount remains owing
to Lender under this Agreement or any of the other Loan Documents by Borrower. All
representations, warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied
upon by Lender notwithstanding any investigation heretofore or hereafter made
by Lender or on its behalf.


 


V.                                    BORROWER
COVENANTS


 


Section 5.1                                      Affirmative
Covenants.


 


From the date hereof and until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien encumbering the Collateral (and all related obligations) in accordance
with the terms of this Agreement and the other Loan Documents, Borrower hereby
covenants and agrees with Lender that:


 


5.1.1                        Existence;
Compliance with Legal Requirements.


 


(a)                                  Borrower shall do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its existence, rights, licenses, permits and franchises, and shall
comply, or cause Mortgage Borrower and Mezzanine A Borrower, as applicable to
comply in all material respects, with all Legal Requirements applicable to it,
the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage Borrower Entity, any Mezzanine A
Principal’s general partner interest in the related Mezzanine A Borrower Entity
and the Properties. There shall never be committed by Borrower, and Borrower
shall not permit or cause Mortgage Borrower to permit any other Person in
occupancy of or involved with the operation or use of the Properties any act or
omission affording the federal government or any State or local government the
right of forfeiture against any Individual Property or any part thereof or
any monies paid in performance of Borrower’s obligations under any of the Loan
Documents. Borrower hereby covenants and agrees not to permit or cause Mortgage
Borrower to commit, permit or suffer to exist any act or omission affording
such right of forfeiture. Borrower shall at all times cause Mortgage Borrower
to maintain, preserve and protect all material franchises and trade names and
preserve all the remainder of its property used or useful in the conduct of its
business and shall keep the Properties in good working order and repair, and
from time to time make, or cause to be made, all repairs, renewals,
replacements, betterments and improvements thereto


 


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reasonably necessary to maintain each Individual Property as a first class luxury
residential apartment building and in a condition similar to other first class luxury
residential apartment buildings of a type and size similar to such Individual
Property, all as more fully provided in this Agreement.


 


(b)                                 After prior written
notice to Lender, Borrower, at no expense to Lender, may, or may cause
Mortgage Borrower to, contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the validity or
applicability of any Legal Requirements to Mortgage Borrower, Mortgage Borrower
or any Individual Property, or the assertion or claim by any Governmental
Authority or other Person that Borrower, Mortgage Borrower or any Individual
Property is in violation of such Legal Requirement, provided (i) no Event
of Default shall have occurred and be continuing under the Note, this Agreement
or any of the other Loan Documents; (ii) such proceeding shall not violate
the provisions of any other mortgage, deed of trust or deed to secure debt
affecting such Individual Property; (iii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower, Mortgage Borrower or such Individual Property is
subject and shall not constitute a default thereunder; (iv) none of the
Collateral, the Mezzanine A Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage Borrower Entity, any Mezzanine A
Principal’s general partner interest in the related Mezzanine A Borrower Entity
or any Individual Property, nor any part thereof or interest therein, nor
any of the tenants or occupants thereof, or Borrower, Mortgage Borrower, any
Mortgage Principal, Mezzanine A Borrower or any Mezzanine A Principal shall be
affected in any material adverse way as a result of such proceeding; (v) non-compliance
with such Legal Requirement during the pendency of such proceeding shall not
impose civil or criminal liability on Borrower, Mortgage Borrower, Mezzanine A
Borrower or Lender; and (vi) Borrower shall have furnished or caused
Mortgage Borrower to have furnished such security as may be required in
the proceeding, or as may be reasonably required by Lender, to ensure
compliance by Borrower or Mortgage Borrower with such Legal Requirement.


 


5.1.2                        Taxes
and Other Charges.


 


Subject to the provisions of the last sentence of this Section 5.1.2,
Borrower shall cause Mortgage Borrower to promptly pay all Taxes, Other Charges
and utility service charges, in each case prior to the date on which such
Taxes, Other Charges or utility service charges, as the case may be, would
otherwise become delinquent. Borrower will deliver, or cause Mortgage Borrower
to deliver, to Lender, promptly upon Lender’s request, evidence reasonably
satisfactory to Lender that the Taxes, Other Charges and utility service
charges have been so paid or are not then delinquent (provided,
however, that Borrower shall not be required to furnish such
receipts for payment of Taxes or Other Charges in the event that such Taxes or
Other Charges have been or are required to be paid by Mortgage Lender pursuant
to the Mortgage Loan Documents). Subject to the provisions of the last sentence
of this Section 5.1.2, Borrower shall not suffer, and shall not permit
Mortgage Borrower to suffer, and shall cause Mortgage Borrower to pay and
discharge any lien or charge whatsoever which may be or become a Lien
against any Individual Property, other than Permitted Encumbrances and liens in
favor of Lender or


 


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Mortgage Lender, as promptly as
practicable and in any event no later than sixty (60) days after Borrower or
Mortgage Borrower receives written notice from any source whatsoever or
otherwise has Actual Knowledge of the existence of such lien or charge. Except
to the extent sums sufficient to pay all Taxes have been deposited with
Mortgage Lender in accordance with the terms of the Mortgage Loan Documents (or
with Mezzanine A Lender pursuant to a similar arrangement as set forth in the
Mezzanine A Loan Documents), Borrower shall furnish, or cause Mortgage Borrower
to furnish, to Lender paid receipts for the payment of the Taxes and Other
Charges or other reasonably satisfactory evidence of the payment of such Taxes
and Other Charges prior to the date the same shall become delinquent. Borrower
may, at its own expense, or may cause Mortgage Borrower, at its expense,
to, contest (after prior written notice to Lender, if the taxes being contested
are not paid in full prior to such contest) by appropriate legal proceedings,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any of the Taxes,
Other Charges or utility service charges, provided (i) no Event of Default
has occurred and is continuing under the Note, this Agreement or any of the
other Loan Documents, (ii) such proceeding shall not violate the
provisions of any other mortgage, deed of trust or deed to secure debt
affecting any Individual Property, (iii) such proceeding shall suspend the
collection of the Taxes, Other Charges or utility service charges, as
applicable, from Mortgage Borrower and from any Individual Property or Borrower
or Mortgage Borrower shall have paid all of the Taxes, Other Charges or utility
service charges, as applicable, under protest, (iv) such proceeding shall
be permitted under and be conducted in accordance with the provisions of any
other instrument to which Borrower or Mortgage Borrower is subject and shall
not constitute a default thereunder, (v) none of the Collateral, the
Mezzanine A Collateral, any Mortgage Principal’s general partner interest in
the related Mortgage Borrower Entity, any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity or any Individual
Property nor any part thereof or interest therein will be in danger of
being sold, forfeited, terminated, cancelled or lost as a result of such
proceeding, (vi) Borrower shall have, or shall have caused Mortgage
Borrower to, deposit with Lender adequate reserves for the payment of the
Taxes, Other Charges or utility service charges, as applicable, together with
all interest and penalties thereon, unless Borrower, Mortgage Borrower or
Mezzanine A Borrower has paid all of the Taxes, Other Charges or utility
service charges, as applicable, under protest (provided,
however, that with respect to Taxes, Borrower shall not be required
to deposit such reserves with Lender, or to furnish the security required under
clause (vii) below, in the event that funds sufficient to pay such Taxes
shall theretofore have been deposited with or collected by Mortgage Lender
pursuant to the Mortgage Loan Documents (or with Mezzanine A Lender pursuant to
a similar arrangement as set forth in the Mezzanine A Loan Documents) except as
may be required in such proceeding as set forth under clause (vii) below),
and (vii) Borrower shall have furnished, or shall have caused Mortgage
Borrower to have furnished, the security as may be required in such
proceeding, or as may be reasonably requested by Lender to insure the
payment of any contested Taxes, Other Charges or utility service charges, as
applicable, together with all interest and penalties thereon.


 


88

















 


5.1.3                        Litigation.


 


Borrower shall give prompt written notice to Lender of any litigation
or governmental proceedings pending or threatened against any Loan Party which
would, if determined adversely to such Loan Party, materially adversely affect
such Loan Party’s condition (financial or otherwise) or business or the
Properties.


 


5.1.4                        Access
to the Properties.


 


Borrower shall cause Mortgage Borrower to permit agents,
representatives and employees of Lender to inspect the Properties or any part thereof
at reasonable hours upon reasonable advance notice (and subject to the rights
of tenants under Leases).


 


5.1.5                        Notice
of Default. 


 


Borrower shall promptly advise Lender of any material adverse change in
any Loan Party’s condition, financial or otherwise, or of the occurrence of any
Default or Event of Default of which Borrower has Actual Knowledge.


 


5.1.6                        Cooperate
in Legal Proceedings.


 


Borrower shall, and shall cause Mortgage Borrower to, cooperate in all
reasonable respects with Lender with respect to any proceedings before any
court, board or other Governmental Authority which may in any way
adversely affect the rights of Lender hereunder or any rights obtained by
Lender under any of the other Loan Documents and, in connection therewith,
Borrower shall, and shall cause Mortgage Borrower to, permit Lender, at its
election, to participate in any such proceedings.


 


5.1.7                        Award
and Insurance Benefits.


 


Borrower shall cooperate in all reasonable respects with Lender in
obtaining for Lender the benefits of any Awards or Insurance Proceeds lawfully
or equitably payable in connection with any Individual Property, and Lender
shall be reimbursed for any expenses reasonably incurred in connection
therewith (including reasonable out-of-pocket attorneys’ fees and
disbursements, and the payment by Borrower of the expense of an appraisal on
behalf of Lender in case of Casualty or Condemnation affecting any Individual
Property or any part thereof) out of such Award or Insurance Proceeds; provided, however, that in no event shall Borrower be
obligated to pay for more than one (1) appraisal in connection with any
single Casualty or Condemnation.


 


5.1.8                        Further
Assurances.


 


Borrower shall, at Borrower’s sole cost and expense:


 


(a)                                  furnish to Lender all
instruments, documents, boundary surveys, footing or foundation surveys, certificates,
plans and specifications, appraisals, title and other insurance reports and
agreements relating to the Collateral, the Mezzanine A Collateral, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower


 


89

















 


Entity, any Mezzanine A Principal’s general partner interest in the
related Mezzanine A Borrower Entity, any Individual Property, and each and
every other document, certificate, agreement and instrument required to be
furnished by Borrower pursuant to the terms of the Loan Documents;


 


(b)                                 execute and deliver to
Lender such customary documents, instruments, certificates, assignments and
other writings, and do such other customary acts necessary or desirable, to
evidence, preserve and/or protect the collateral at any time securing or
intended to secure the obligations of Borrower under the Loan Documents, as
Lender may reasonably require, including, without limitation, the
authorization of Lender to file any UCC financing statements and delivery of
Condominium Proxies; and


 


(c)                                  do and execute all
and such further lawful, customary and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and
purposes of this Agreement and the other Loan Documents, as Lender shall
reasonably require from time to time.


 


5.1.9                        Mortgage
and Intangible Taxes.


 


Borrower shall pay all State, county and municipal recording,
intangible, and all other taxes (other than income, inheritance or franchise
taxes) imposed upon the execution of the Pledge Agreement and the filing of the
UCC Financing Statements and/or upon the execution and delivery of the Note.


 


5.1.10                  Financial
Reporting.


 


(a)                                  Borrower will keep
and maintain on a Fiscal Year basis, in accordance with GAAP or on a federal
income tax basis, to the extent applicable, or in accordance with other methods
acceptable to Lender in its reasonable discretion, consistently applied, proper
and accurate books, records and accounts reflecting all of the financial
affairs of Borrower and all items of income and expense with respect to the
Collateral.


 


(b)                                 Borrower shall cause
Mortgage Borrower to keep adequate books and records of account in accordance
with GAAP or on a federal income tax basis, to the extent applicable, or in
accordance with other methods acceptable to Lender in its reasonable
discretion, consistently applied. Borrower shall be deemed to have complied
with the requirements of this Section 5.1.10(b) with respect to any
period if it shall have caused Mortgage Borrower to maintain the books and
records required under Section 14 of the Security Instrument to be
maintained by Mortgage Borrower.


 


(c)                                  Borrower will
furnish, and cause to be furnished, to Lender, within ninety (90) days after
the close of each Fiscal Year, the audited combined balance sheet of the
Guarantors as of the end of such Fiscal Year, the audited combined statement of
operations and the audited combined statement of cash flows of each Guarantor
for such Fiscal Year, all in reasonable detail and, commencing in the second
Fiscal Year during the term of the Loan, stating in comparative form (solely
to the extent such previous year ended after the Closing Date) the respective
figures for the corresponding date and period in the prior Fiscal Year,
prepared in accordance with GAAP consistently applied and


 


90

















 


accompanied by an independent auditor’s report stating that the
referenced financial statements present fairly, in all material respects, the
combined financial position, results of operations and cash flows as of and for
the applicable periods in conformity with GAAP, with such certification to be
free of exceptions and qualifications as to the scope of the audit as to the
going concern nature of the business. Such combined audited financial
statements will be accompanied by an audited combined supplemental schedule of
real estate by Individual Property as of the end of the Fiscal Year and a
combined supplemental schedule of rental revenues and rental expenses by
Individual Property. The combined totals of these supplemental schedules will
reconcile to the audited balance sheet and statement of operations for the
Fiscal Year, respectively.


 


(d)                                 Borrower will furnish,
and cause to be furnished, to Lender, within sixty (60) days after each of the
first three fiscal quarters of each Fiscal Year, the unaudited combined balance
sheet of the Guarantors as of the end of such fiscal quarter, the unaudited
statement of operations and the unaudited statements of cash flows of each
Guarantor for the portion of the Fiscal Year ended with the last day of such
quarter, all prepared in accordance with GAAP and in reasonable detail and,
commencing in the second Fiscal Year during the term of the Loan, stating in
comparative form (solely to the extent such previous year ended after the
Closing Date) the respective figures for the corresponding date and period in
the previous fiscal year, accompanied by a certificate of an authorized
representative of the Guarantor, stating that the referenced financial
statements present fairly, in all material respects and subject to year-end
adjustments, the financial position, results of operations and cash flows for
the applicable periods in conformity with GAAP.


 


(e)                                  Borrower will
furnish, and cause to be furnished, to Lender, within sixty (60) days after
each of the first three calendar quarters, a statement of income and expenses
of each Individual Property prepared in accordance with GAAP and accompanied by
a certificate of an authorized representative of each Mortgage Borrower Entity
and each Guarantor reasonably acceptable to Lender to the effect that each such
statement of income and expenses fairly, accurately and completely presents, in
all material respects and subject to year-end adjustments, the operations of
each such Individual Property for the period indicated.


 


(f)                                    Borrower will
furnish, and cause to be furnished, to Lender annually, within ninety (90) days
after the close of each Fiscal Year, an annual statement of income and expenses
of each Individual Property prepared in accordance with GAAP and accompanied by
a certificate of an authorized representative of each Mortgage Borrower Entity
and each Guarantor reasonably acceptable to Lender to the effect that each such
statement of income and expenses fairly, accurately and completely presents the
operations of each such Individual Property for the period indicated.


 


(g)                                 Borrower shall, or
cause Mortgage Borrower to, furnish to Lender a copy of the financial statements
and all other materials Mortgage Borrower is required to provide Mortgage
Lender under Section 14 of the Security Instrument within the time periods
required under such Section. Borrower shall, or cause Mezzanine A Borrower to,
furnish to Lender a copy of the financial statements and all other materials
Mezzanine A


 


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Borrower is required to provide Mezzanine A Lender under Section 5.1.10
of the Mezzanine A Loan Agreement within the time periods required under such
Section.


 


(h)                                 Borrower shall cause
Mortgage Borrower to submit to Lender the annual operating budget required to
be delivered under the Mortgage Loan Documents.


 


(i)                                     Any reports,
statements or other information required to be delivered under this Agreement
shall be delivered to Lender in paper form. If requested by Lender, Borrower
shall also endeavor to deliver, and shall cause Mortgage Borrower to endeavor
to deliver, such reports, statements or other information in electronic form.


 


(j)                                     Borrower agrees
that Lender may forward to each Investor or any Rating Agency rating any
participations in the Loan and/or Securities and each prospective Investor, and
any organization maintaining databases on the underwriting and performance of
commercial mezzanine loans, all documents and information which Lender now has
or may hereafter acquire relating to the Debt and to Borrower, Guarantor
(subject to the last sentence of this Section 5.1.10(j)), Mortgage
Borrower, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity, any Mezzanine
A Principal’s general partner interest in the related Mezzanine A Borrower
Entity and the Properties, whether furnished by Borrower, Mortgage Borrower,
Mezzanine A Borrower, Guarantor or otherwise, as Lender reasonably determines
necessary or desirable (the “Furnished Information”). Borrower
irrevocably waives any and all rights it may have under any Applicable
Laws to prohibit such disclosure, including but not limited to any right of
privacy. Notwithstanding the foregoing, Lender agrees that if Borrower requests
in writing that certain of the Furnished Information be kept confidential, (i) Lender
agrees that it shall keep such Furnished Information confidential unless such
Furnished Information is required to be disclosed by Applicable Law and (ii) if
in connection with a Securitization or Syndication of the Loan, Lender
furnishes such Furnished Information to any Investor, any Rating Agency rating
such participations and/or Securities, any prospective Investor, or any
organization maintaining databases on the underwriting and performance of
commercial mortgage or mezzanine loans, Lender shall inform any such
Investor, Rating Agency, prospective Investor, or organization that directly
receives such Furnished Information from Lender about the confidential nature
of such Furnished Information. Notwithstanding the foregoing, Lender agrees
that it shall not, unless required by Applicable Law, disclose any financial
information with respect to the Guarantor except (i) Guarantor’s net worth
or (ii) summary financial information with respect to the Guarantor, in
each case, to a Rating Agency or Investor that requests such net worth or
summary financial information, provided that such Rating Agency or Investor
agrees in writing to keep such net worth or summary financial information
confidential.


 


(k)                                  Within a reasonable
time after Lender’s request, Borrower shall, and shall cause Mortgage Borrower
to, furnish Lender with such other additional financial or management
information as may, from time to time, be reasonably required by Lender in form and
substance reasonably satisfactory to Lender, subject, however, to the
confidentiality requirements set forth in Section 5.1.10(j) hereof.


 


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(l)                                     Borrower shall,
and shall cause Mortgage Borrower to, furnish to Lender and its agents
convenient facilities for the examination and audit of any of the books and
records described in Sections 5.1.10(a), 5.1.10(b), 5.1.10(c), 5.1.10(d),
5.1.10(e) and 5.1.10(f) hereof.


 


(m)                               All financial statements
provided by Borrower hereunder pursuant to Section 5.1.10(n) hereof shall
be prepared in accordance with GAAP or on a federal income tax basis, and shall
meet the requirements of Regulation S-K or Regulation S-X, as applicable,
Regulation AB and other applicable legal requirements. All financial statements
(audited or unaudited) provided by Borrower under this Section 5.1.10
shall be certified by Borrower, which certification shall (A) be executed
on behalf of Borrower by its the chief financial officer or administrative
member, and (B) state that such financial statements meet the requirements
set forth in the first sentence of this Section 5.1.10(m).


 


(n)                                 If requested by Lender
and reasonably required in connection with a Securitization, Borrower shall
provide Lender, promptly upon request (but subject to the last sentence of Section 5.1.10(j)
hereof), with any other or additional financial statements, or financial,
statistical or operating information, as Lender shall reasonably determine to
be required pursuant to Regulation S-K or Regulation S-X, as applicable,
Regulation AB or any amendment, modification or replacement thereto or other
legal requirements in connection with any Disclosure Document or any Exchange
Act filing in connection with or relating to a Securitization or as shall
otherwise be reasonably requested by the Lender.


 


(o)                                 In the event Lender
reasonably determines, in connection with a Securitization, that the financial
statements required in order to comply with Regulation S-K or Regulation S-X,
as applicable, Regulation AB or other legal requirements are other than as
provided herein, then notwithstanding the provisions of Sections 5.1.10(m) and
5.1.10(n) hereof (but subject to the last sentence of Section 5.1.10(j)
hereof), Lender may request, and Borrower shall promptly provide, such
other financial statements as Lender determines to be necessary or appropriate for
such compliance.


 


(p)                                 Lender shall have the
right from time to time at all times during normal business hours upon
reasonable advance written notice to examine such books, records and accounts
at the office of Borrower, Mortgage Borrower or any other Person maintaining
such books, records and accounts and to make such copies or extracts thereof as
Lender shall reasonably require. After the occurrence and during the
continuance of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower’s accounting records with respect to the
Collateral, the Mezzanine A Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage Borrower Entity, any Mezzanine A
Principal’s general partner interest in the related Mezzanine A Borrower Entity
and the Properties or any Loan Party, as Lender shall reasonably determine to
be necessary or appropriate in the protection of Lender’s interest.


 


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5.1.11                  Business and
Operations.


 


Borrower will cause Mortgage Borrower to continue to engage in the
businesses presently conducted by it as and to the extent the same are
necessary for the ownership, maintenance, management and operation of the
Properties. Each Borrower Entity shall cause the applicable Mortgage Borrower
Entity to remain in good standing under the laws of the State in which the
Individual Property owned by such Mortgage Borrower Entity is located, to the
extent required for the ownership, maintenance, management and operation of
such Individual Property.


 


5.1.12                  Costs of
Enforcement.


 


In the event (a) that Lender exercises any of its rights or
remedies under the Pledge Agreement or any other Loan Document as and when
permitted thereby or (b) of the bankruptcy, insolvency, rehabilitation or
other similar proceeding in respect of Borrower or any of its constituent
Persons or an assignment by Borrower or any of its constituent Persons for the
benefit of its creditors, Borrower, its successors or assigns, shall be
chargeable with and agrees to pay all costs of collection and defense,
including reasonable out-of-pocket attorneys’ fees and costs, incurred by
Lender or Borrower in connection therewith and in connection with any appellate
proceeding or post-judgment action involved therein, together with all required
service or use taxes.


 


5.1.13                  Estoppel
Statement.


 


(a)                                  After request by
Lender, Borrower, within ten (10) Business Days, shall furnish Lender or
any proposed assignee with a statement, duly acknowledged and certified,
setting forth (i) the amount of the original principal amount of the Note,
(ii) the unpaid principal amount of the Note, (iii) the Applicable
Interest Rate, (iv) the Maturity Date, (v) the date installments of
interest and/or principal were last paid, (vi) that, except as provided in
such statement, to Borrower’s Actual Knowledge, there are no defaults or events
which with the passage of time or the giving of notice or both, would
constitute an Event of Default, (vii) that this Agreement, the Note, the
Pledge Agreement and the other Loan Documents are valid, legal and binding
obligations of Borrower and have not been modified or, if modified, giving
particulars of such modification, (viii) whether, to Borrower’s Actual
Knowledge, any offsets or defenses exist against the obligations secured by the
Pledge Agreement and, if any are alleged to exist, a detailed description
thereof, (ix) to Borrower’s Actual Knowledge after due inquiry of the
Manager, all Leases are in full force and effect and have not been modified (or
if modified, setting forth all modifications), (x) the date to which the Rents
thereunder have been paid pursuant to the Leases, (xi) whether or not, to
Borrower’s Actual Knowledge after due inquiry of the Manager, any of the
lessees under the Leases are in default under the Leases, and, if any of the
lessees are in default, setting forth the specific nature of all such defaults,
(xii) the amount of security deposits held by Mortgage Borrower under each
Lease and that such amounts are consistent with the amounts required under each
Lease, and (xiii) as to any other matters reasonably requested by Lender and
reasonably related to the Obligations, the Properties, this Agreement, the
Collateral, the Mezzanine A Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage


 


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Borrower Entity or any Mezzanine A Principal’s general partner interest
in the related Mezzanine A Borrower Entity. With respect to clauses (ix), (x),
(xi) and (xii) above, such certifications shall only be included in such
statement if requested by the Rating Agencies or the Investors and such
certifications may only be requested by Lender once in any calendar year.


 


(b)                                 Upon written request
by Borrower to Lender, Lender shall provide an estoppel certificate to Borrower
which states (A) the current principal balance of the Note and the date to
which interest has been paid, (B) the Applicable Interest Rate, (C) the
date installments of interest and/or principal were last received by Lender, (D) the
Maturity Date, and (E) that, except as provided in such estoppel
certificate, to Lender’s knowledge, no default on the part of Borrower
under the Note, this Agreement, the Pledge Agreement or the other Loan
Documents has occurred and is continuing. Lender shall not be required to
deliver such an estoppel certificate more than one (1) time in any
twelve-month period.


 


(c)                                  Borrower shall use,
and shall cause Mortgage Borrower to use, commercially reasonable efforts (and
best efforts in connection with a Securitization or Syndication, excluding
litigation or the payment of any required purchase price or other compensation
for same to tenants) to obtain and deliver to Lender, promptly upon Lender’s
request (to be made no more frequently by Lender, Mortgage Lender or Mezzanine
A Lender than once in any twelve-month period, unless such request is made in
connection with a Securitization or Syndication), duly executed estoppel
certificates from the lessees under one or more Major Leases, as required by
Lender, attesting to such facts regarding such Major Leases as Lender may reasonably
require, including but not limited to attestations that each Major Lease
covered thereby is in full force and effect with no defaults thereunder on the part of
any party, that none of the Rents payable under such Major Lease have been paid
more than one month in advance, and that the lessee claims no defense or offset
against the full and timely performance of its obligations under such Major
Lease.


 


(d)                                 Borrower shall use,
and shall cause Mortgage Borrower to use, commercially reasonable efforts (and
best efforts in connection with a Securitization or Syndication, excluding
litigation or the payment of any required purchase price or other compensation
for same to the condominium board) to obtain and deliver to Lender, promptly
upon Lender’s request (to be made no more frequently by Lender or Mortgage
Lender than once in any twelve-month period, unless such request is made in
connection with a Securitization or Syndication), a duly executed estoppel
certificate from the applicable condominium board or the applicable Individual
Property that is subject to a condominium regime which shall include, without
limitation, (i) the amount of the unpaid common charges and other amounts,
if any, accrued against such Individual Property, (ii) that the applicable
Condominium Documents have not been modified or amended, or, if they have, a
description of the modifications or amendments, (iii) that all payments
due and payable by Mortgage Borrower under the applicable Condominium Documents
have been paid in full, and (iv) that Mortgage Borrower is not in default
under the Condominium Documents or, if it is in default, a detailed description
of such default.


 


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5.1.14                  Loan
Proceeds.


 


Borrower shall use the proceeds of the Loan received by it on the
Closing Date only for the purposes set forth in Section 2.1.4 hereof.


 


5.1.15                  Performance
by Borrower.


 


(a)                                  Borrower shall in a
timely manner observe, perform and fulfill each and every covenant, term
and provision of each Loan Document executed and delivered by, or applicable
to, Borrower, and shall not enter into or otherwise suffer or permit any
amendment, waiver, supplement, termination or other modification of any Loan
Document executed and delivered by, or applicable to, Borrower without the
prior written consent of Lender.


 


(b)                                 Borrower shall not
cause or permit Mortgage Borrower to enter into or otherwise suffer or permit
any amendment, waiver, supplement, termination or other modification of any
Mortgage Loan Document executed and delivered by, or applicable to, Mortgage
Borrower as of the date hereof in any material respect without the prior
written consent of Lender. Borrower shall cause Mortgage Borrower to provide
Lender with a copy of any amendment, waiver, supplement, termination or other
modification to the Mortgage Loan Documents within five (5) days after the
execution thereof. Borrower shall not, and shall not permit any Loan Party to,
amend or modify the Organizational Documents of any Loan Party in any material
respect without Lender’s prior written consent.


 


(c)                                  Borrower shall not
cause or permit Mezzanine A Borrower to enter into or otherwise suffer or
permit any amendment, waiver, supplement, termination or other modification of
any Mezzanine A Loan Document executed and delivered by, or applicable to,
Mezzanine A Borrower as of the date hereof in any material respect without the
prior written consent of Lender. Borrower shall cause Mezzanine A Borrower to
provide Lender with a copy of any amendment, waiver, supplement, termination or
other modification to the Mezzanine A Loan Documents within five (5) days
after the execution thereof.


 


5.1.16                  Confirmation
of Representations.


 


Borrower shall deliver, in connection with any Securitization or
Syndication effected by Lender in accordance with the applicable provisions of Article IX
hereof, (a) one or more Officer’s Certificates certifying as to the
accuracy in all material respects of all representations made by Borrower in
the Loan Documents as of the date of the closing of such Securitization or
Syndication (or, to the extent any of such representations shall no longer be
accurate in all material respects as of the date of such closing, disclosing
any material inaccuracy in such representations), and (b) certificates of
the relevant Governmental Authorities in all relevant jurisdictions indicating
the good standing and qualification of each Borrower Entity and each Principal
as of the date of the closing of such Securitization or Syndication.


 


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5.1.17                  Leasing
Matters.


 


(a)                                  Borrower may cause
or permit Mortgage Borrower enter into a proposed Lease (including the renewal
or extension of an existing Lease (a “Renewal Lease”)) without the prior
written consent of Lender, provided such proposed Lease or Renewal Lease (i) provides
for rental rates and terms comparable or superior to existing local market
rates and terms (taking into account the type and quality of the tenant and the
location and quality of the space to be leased) as of the date such Lease is
executed by Mortgage Borrower (unless, in the case of a Renewal Lease or a
Lease covering expansion space, the rent payable during such renewal or with respect
to such expansion space, as the case may be, or a formula or other method
to compute such rent, is provided for in the original Lease), (ii) is an
arms-length transaction with a bona fide, independent third party tenant, (iii) does
not have a materially adverse effect on the value or quality of the applicable
Individual Property, (iv) [intentionally omitted], (v) is written on
the standard form of residential lease approved by Lender (such approval
not to be unreasonably withheld, delayed or conditioned) (which such standard form of
lease currently approved by Lender is attached hereto as Exhibit B),
unless Mortgage Borrower determines in good faith that deviations from the
approved Lease form do not materially and adversely affect Mortgage
Borrower’s interests under the Lease or Renewal Lease, and (vi) is not a
Major Lease. All proposed Leases which do not satisfy the requirements set
forth in this Section 5.1.17 shall be subject to the prior approval of
Lender (such approval not to be unreasonably withheld, delayed or conditioned),
at Borrower’s expense. At Lender’s request, Borrower shall cause Mortgage
Borrower to promptly deliver to Lender copies of all Leases which are entered
into pursuant to this Section 5.1.17(a), together with Borrower’s certification
that it has satisfied or caused Mortgage Borrower to satisfy all of the
conditions of this Section 5.1.17(a) (other than conditions waived in
writing by Lender) applicable to such Leases. Any Lease submitted to Lender for
Lender’s approval shall be deemed approved if Lender shall not have notified
Borrower in writing of its approval or disapproval (together with a statement
of the grounds of such disapproval, if applicable) within ten (10) Business
Days (the “Approval Period”) after Lender has received such submission; provided, however, that upon notice to Borrower, Lender
shall be entitled to a five (5) Business Day extension of the Approval
Period (“Lender’s Approval Extension Period”). Notwithstanding the
leasing approval procedure set forth above, to facilitate Mortgage Borrower’s
leasing process, Borrower may present prospective leasing transactions to
Lender for its approval prior to the negotiation of a final Lease. Such
presentation shall include a summary term sheet of all material terms of the
proposed lease or a draft of the Lease, either as supplemented by any
additional information concerning such lease or the tenant thereunder as may be
reasonably requested by Lender (the “Lease Term Sheet”). Lender shall
approve or disapprove the Lease Term Sheet within ten (10) Business Days
of its receipt, provided Lender shall be entitled to Lender’s Approval
Extension Period and such request to Lender complies with the requirements of Section 5.1.17(g) hereof,
and if Lender fails to so approve or disapprove of the Lease Term Sheet within
such Approval Period and Lender’s Approval Extension Period, if applicable, the
Lease Term Sheet shall be deemed approved by Lender. If Lender approves or is
deemed to have approved the Lease Term Sheet, Lender’s prior approval shall not
be required for the final Lease, except to the extent such final Lease (i) deviates
in any material respect from the terms


 


97

















 


set forth on the Lease Term Sheet or contains any material terms not
set forth in the Lease Term Sheet, and Borrower determines in good faith that
such deviation shall materially and adversely affect either (A) Mortgage
Borrower’s interest under the Lease or (B) Lender’s interest in the Pledge
Agreement or the other Loan Documents, (ii) [intentionally omitted] or (iii) is
not fully executed within one hundred twenty (120) days after the Lease Term
Sheet is received by Lender; provided, however,
that (x) nothing contained in this sentence shall be construed to require
Lender’s approval of any Lease for which approval is not required by the other
provisions of this Section 5.1.17, (y) Borrower shall cause Mortgage
Borrower to deliver to Lender copies of the following:  (1) the fully-executed Lease entered
into by Mortgage Borrower in accordance with this Section 5.1.17 and (2) the
final Lease Term Sheet, if any (to the extent that such final Lease Term Sheet
contains revisions or changes that were not contained in the Lease Term Sheet
initially reviewed and approved or deemed approved by Lender in accordance with
this Section 5.1.17(a)), and (z) Mortgage Borrower’s delivery of the
documents referred to in (y) above shall be deemed to be Borrower’s
certification that the terms and conditions of this Section 5.1.17 have been
satisfied.


 


(b)                                 Borrower shall cause
Mortgage Borrower to (i) observe and perform all the obligations
imposed upon the lessor under the Leases in all material respects and shall not
do or permit to be done anything to impair the value of any of the Leases as
security for the Debt; (ii) promptly send copies to Lender of all notices
of default which Mortgage Borrower shall send or receive thereunder; (iii) enforce
in a commercially reasonable manner all of the material terms, covenants and
conditions contained in the Leases upon the part of the tenant thereunder
to be observed or performed (except for termination of a Major Lease which,
except as otherwise provided in Section 5.1.17(d) hereof, shall
require Lender’s prior approval, such approval not to be unreasonably withheld,
delayed or conditioned); (iv) not collect any of the Rents more than one (1) month
in advance except security deposits and prepayments of first month’s and last
month’s rent shall not be deemed Rents collected in advance; (v) deposit
or cause to be deposited all Lease Termination Payments relating to commercial
leases, if any, into an account designated by Lender, if required by Lender,
not later than the first Business Day after Mortgage Borrower’s receipt
thereof; (vi) not execute any other assignment of the lessor’s interest in
any of the Leases or the Rents (except as contemplated by the Mortgage Loan
Documents); and (vii) not consent to any assignment of or subletting under
any Major Leases relating to commercial space not in accordance with their
terms, without the prior written consent of Lender (such approval not to be
unreasonably withheld, delayed or conditioned and to be deemed granted if
Lender shall not have disapproved such assignment or subletting in writing
within ten (10) Business Days after Borrower’s request for Lender’s
approval, provided Lender is entitled to Lender’s Approval Extension Period and
such request for approval complies with Section 5.1.17(g) hereof).


 


(c)                                  Borrower may, without
the consent of Lender, cause or permit Mortgage Borrower to amend, modify or
waive the provisions of any Lease or terminate, reduce rents under, accept a
surrender of space under, or shorten the term of, any Lease (including any
guaranty, letter of credit or other credit support with respect thereto)
provided such Lease is not a Major Lease and such action (taking into account,
in the case of a termination, reduction in rent, surrender of space or
shortening of term, the


 


98

















 


planned alternative use of the affected space) does not have a
materially adverse effect on the value of the applicable Individual Property
taken as a whole, and provided such Lease, as amended, modified or waived, is
otherwise in compliance with the requirements of this Agreement. A termination
of a Lease (other than a Major Lease) with a tenant who is in default beyond
applicable notice and grace periods shall not be considered an action which has
a materially adverse effect on the value of the applicable Individual Property
taken as a whole. Any amendment, modification, waiver, termination, rent
reduction, space surrender or term shortening which does not satisfy the
requirements set forth in this Subsection shall be subject to the prior
approval of Lender (such approval not to be unreasonably withheld, delayed or
conditioned and to be deemed granted if Lender shall not have disapproved such
amendment, modification, waiver, termination, rent reduction, space surrender
or term shortening, as the case may be, in writing within ten (10) Business
Days after Borrower’s request for Lender’s approval (fifteen (15) Business Days
for any termination, rent reduction, space surrender or term shortening
request), provided that Lender is entitled to Lender’s Approval Extension Period
and such request for approval complies with the requirements of Section 5.1.17(g) hereof),
at Borrower’s expense. Borrower shall cause Mortgage Borrower to promptly
deliver to Lender copies of all Leases, amendments, modifications and waivers
which are entered into pursuant to this Section 5.1.17(c), together with
Borrower’s certification that it has satisfied or caused to be satisfied all of
the conditions of this Section 5.1.17(c) applicable to such Leases,
amendments, modifications and waivers.


 


(d)                                 Notwithstanding
anything contained herein to the contrary, Borrower shall not cause or permit
Mortgage Borrower, without the prior written consent of Lender (which consent
shall not be unreasonably withheld, delayed or conditioned) enter into, renew,
extend, amend, modify, waive any provisions of, terminate, reduce rents under,
accept a surrender of space under, or shorten the term of, any Major Lease or
any instrument guaranteeing or providing credit support for any Major Lease; provided, however, that the procedures set forth in Section 5.1.17(a) regarding
Lender’s approval or deemed approval of leasing transactions as well as
Borrower’s rights to deliver Lease Term Sheets shall also apply to Major Lease
approvals pursuant to this Section 5.1.17(d).


 


(e)                                  Upon the occurrence
and during the continuance of an Event of Default, to the extent permitted by
law and subject to the rights of (i) Mortgage Lender pursuant to the terms
of the Mortgage Loan Documents and (ii) Mezzanine A Lender pursuant to the
terms of the Mezzanine A Loan Documents, Borrower shall promptly deposit with
Lender any and all monies then held by Borrower representing security deposits
under the Leases (collectively, the “Security Deposits”). Borrower and
not Lender shall be liable for the delivery of security deposits to tenants
under Leases which are not delivered to and held by Lender pursuant to this Section 5.1.17(e).
Lender shall hold the Security Deposits in accordance with the terms of the
respective Leases, and shall only release the Security Deposits in order to
return a tenant’s Security Deposit to such tenant if such tenant is entitled to
the return of the Security Deposit under the terms of the Lease and is not
otherwise in default under the Lease beyond the expiration of any applicable
grace or cure period. To the extent required by Applicable Laws, Lender shall
hold the Security Deposits in an interest bearing account selected by Lender in
its sole discretion. In the event Lender is not permitted by law to hold the
Security Deposits, Borrower shall


 


99

















 


deposit the Security Deposits into an interest-bearing account with a
federally insured institution reasonably approved by Lender.


 


(f)                                    Intentionally
Omitted.


 


(g)                                 Notwithstanding anything
to the contrary contained in this Section 5.1.17, to the extent Lender’s
prior written approval is required pursuant to the provisions of this Section 5.1.17,
Lender shall, with respect to such proposed Leases, Lease Term Sheets and/or
renewals, modifications, amendments or terminations of, or waivers with respect
to, existing Leases, have ten (10) Business Days (fifteen (15) Business
Days for any termination, rent reduction, space surrender or term shortening
request) from receipt of such written request in which to approve or disapprove
such Lease or other documentation, provided such written request to Lender for
approval is marked in bold lettering with the following language:  “LENDER’S RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS
DAYS (FIFTEEN (15) BUSINESS DAYS FOR ANY TERMINATION, RENT REDUCTION, SPACE
SURRENDER OR TERM SHORTENING REQUEST) OF RECEIPT OF THIS NOTICE (THE “APPROVAL
PERIOD”) PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND
LENDER; PROVIDED, HOWEVER, THAT LENDER SHALL HAVE THE RIGHT TO A FIVE (5) DAY
EXTENSION OF THE APPROVAL PERIOD UPON NOTICE TO BORROWER” and the envelope
containing the request must be marked “PRIORITY”. In the event Lender fails to
respond to the proposed Lease, Lease Term Sheet and/or renewal, modification,
amendment or termination of, or waiver with respect to, an existing Lease
within such time, Lender’s approval shall be deemed given. The reasonable
out-of-pocket attorneys’ fees incurred by Lender in connection with any such
proposed Lease, Lease Term Sheet and/or renewal, modification, amendment or
termination of, or waiver with respect to, an existing Lease shall be payable
by Borrower to Lender within ten (10) Business Days after Lender’s written
request therefor.


 


5.1.18                  Management
Agreement.


 


(a)                                  The Properties are
currently self-managed by Mortgage Borrower. In the event that the Improvements
on each Individual Property are operated under the terms and conditions of a
Management Agreement, the provisions of this Section 5.1.18 shall apply. Borrower
shall not permit any Mortgage Borrower Entity to retain a manager to manage any
Individual Property unless such manager is a Qualified Manager and has entered
into a Management Agreement and an Agreement Regarding Management Agreement,
each in form and substance, reasonably acceptable to Lender. All
management fees payable pursuant to the Management Agreements shall be market
fees similar to those payable to managers of properties of a similar type and
quality pursuant to arm’s-length management agreements, taking into account
differences in the quality or level of service provided; provided,
however, that if TSP or an Affiliate of TSP is employed as Manager
of the Properties, such fees payable to TSP or such Affiliate, as the case may be,
shall be deemed to be market and arm’s-length. Borrower shall cause Mortgage
Borrower to (i) diligently perform and observe all of the material
terms, covenants and conditions of the Management Agreements on the part of
Mortgage


 


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Borrower to be performed and observed to the end that all things shall
be done which are necessary to keep unimpaired the rights of Mortgage Borrower
under the Management Agreements and (ii) promptly notify Lender of the
giving of any notice to Mortgage Borrower of any default by Mortgage Borrower
in the performance or observance of any of the terms, covenants or conditions
of any Management Agreement on the part of Mortgage Borrower to be
performed and observed and deliver to Lender a true copy of each such notice. Borrower
shall not cause or permit Mortgage Borrower to surrender any Management
Agreement, consent to the assignment by Manager of its interest under any
Management Agreement, or terminate or cancel any Management Agreement or, in
any respect that would have a Material Adverse Effect, modify, change,
supplement, alter or amend any Management Agreement, either orally or in
writing. Notwithstanding the foregoing, Borrower shall be entitled to cause or
permit Mortgage Borrower to enforce and terminate any Management Agreement in
accordance with the terms thereof; provided, however, that if the Management
Agreement for any Individual Property is terminated, Borrower shall cause the
applicable Mortgage Borrower Entity to simultaneously enter into a replacement
Management Agreement for such Individual Property. Subject to (x) the rights of
Mortgage Lender pursuant to the terms and conditions of the Mortgage Loan
Documents and (y) the rights of Mezzanine A Lender pursuant to the terms and
conditions of the Mezzanine A Loan Documents, if Mortgage Borrower shall
default in the performance or observance of any material term, covenant or
condition of any Management Agreement on the part of Mortgage Borrower to
be performed or observed, and such default shall continue beyond the expiration
of any applicable grace or cure period, then, without limiting the generality
of the other provisions of this Agreement, and without waiving or releasing
Borrower from any of its obligations hereunder, Lender shall have the right,
but shall be under no obligation, to pay any sums and to perform any act
or take any action as may be appropriate to cause all the terms, covenants
and conditions of such Management Agreement on the part of Mortgage
Borrower to be performed or observed to be promptly performed or observed on
behalf of Mortgage Borrower, to the end that the rights of Mortgage Borrower
in, to and under such Management Agreement shall be kept unimpaired and free
from default. Lender and any person designated by Lender shall have, and are
hereby granted, the right to enter upon any Individual Property at any time and
from time to time while an uncured Event of Default exists for the purpose of
taking any such action. If the Manager under any Management Agreement shall
deliver to Lender a copy of any notice sent to Borrower or Mortgage Borrower of
default under such Management Agreement, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender in
good faith, in reliance thereon. Borrower shall notify Lender if the Manager
sub-contracts to a third party any or all of its management responsibilities
under any Management Agreement. Borrower shall, from time to time, use its best
efforts (or commercially reasonable efforts, at any time when the Manager under
any Management Agreement is not an Affiliate of Borrower, Mortgage Borrower,
any Principal, Guarantor or TSP) to obtain from the Manager under such
Management Agreement such certificates of estoppel with respect to compliance
by Mortgage Borrower and Manager with the terms of such Management Agreement as
may be reasonably requested by Lender. Borrower shall cause Mortgage
Borrower to exercise each individual option, if any, to extend or renew the
term of each Management Agreement upon demand by Lender made


 


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at any time within one (1) year of the last day upon which any
such option may be exercised. Any sums expended by Lender pursuant to this
Section 5.1.18(a) shall bear interest at the Default Rate from the
date which is ten (10) Business Days after the date Lender first makes
written demand upon Borrower for reimbursement of such cost to the date of
payment to Lender, shall be deemed to constitute a portion of the Debt, shall
be secured by the lien of the Pledge Agreement and the other Loan Documents and
shall be due and payable promptly upon demand by Lender therefor.


 


(b)                                 Without limitation of
the foregoing, Borrower, upon the request of Lender, shall cause Mortgage
Borrower to terminate any Management Agreement and replace the Manager (so long
as such termination and/or replacement is not prohibited under the Mortgage
Loan Documents or the Mezzanine A Loan Documents), without penalty or fee, if
at any time during the Loan: (i) there exists an uncured Event of Default,
(ii) there exists a default by Manager (other than TSP or any other
Affiliated Manager) under such Management Agreement, which default shall have
continued beyond the expiration of any applicable grace or cure period, (iii) the
Manager shall become insolvent or a debtor in any bankruptcy or insolvency
proceeding, or (iv) the Maturity Date occurs and the Loan is not paid in
full. At such time as the Manager is removed as the Manager with respect to any
Individual Property, a Qualified Manager shall assume management of such
Individual Property pursuant to a replacement Management Agreement, and shall
receive a property management fee not to exceed then current market rates for
managers of properties of a similar type and quality pursuant to arm’s length
management agreements and taking into account differences in the quality or
level of service provided; provided, however, that (A) if a Securitization
has occurred, Lender shall receive written confirmation from the Rating
Agencies that management of such Individual Property by such Qualified Manager
will not result in a downgrade, withdrawal or qualification of the initial, or,
if higher, the then current ratings issued in connection with such Securitization,
and (B) if a Securitization has not occurred, such Qualified Manager shall
be subject to the approval of Lender, such approval not to be unreasonably
withheld, delayed or conditioned.


 


5.1.19                  Environmental
Covenants.


 


(a)                                  Borrower covenants
and agrees that so long as the Loan is outstanding (i) all uses and
operations on or of each Individual Property, whether by Mortgage Borrower or
any other Person, shall be in compliance in all material respects with all
applicable Environmental Laws and permits issued pursuant thereto; (ii) there
shall be no Releases of Hazardous Materials in, on, under or from any of the
Properties in violation of any Environmental Law; (iii) there shall be no
Hazardous Materials in, on, or under any Individual Property, except those that
are in compliance with all applicable Environmental Laws and with permits
issued pursuant thereto, if and to the extent required; (iv) Borrower
shall cause Mortgage Borrower to keep each Individual Property free and clear
of all liens and other encumbrances imposed pursuant to any Environmental Law
applicable to such Individual Property, whether due to any act or omission of
Mortgage Borrower or any other Person (the “Environmental Liens”); (v) Borrower
shall, at its sole cost and expense, cause Mortgage Borrower to fully and
expeditiously cooperate in all activities pursuant to Section 5.1.19(b) below,
including 


 


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but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (vi) Borrower shall, at
its sole cost and expense, cause Mortgage Borrower to perform any
environmental site assessment or other investigation of environmental
conditions in connection with any Individual Property, pursuant to any
reasonable written request of Lender, upon Lender’s reasonable belief that such
Individual Property is not in compliance in all material respects with all
applicable Environmental Laws, and share with Lender the reports and other
results thereof, and Lender and other Indemnified Parties shall be entitled to
rely on such reports and other results thereof; (vii) Borrower shall, at
its sole cost and expense, cause Mortgage Borrower to comply with all
reasonable written requests of Lender to (A) reasonably effectuate
remediation of any Hazardous Materials in, on, under or from such Individual
Property; and (B) comply with any Environmental Law applicable to such
Individual Property; (viii) Borrower shall not knowingly cause or permit
Mortgage Borrower to allow any tenant or other user of any Individual Property
to violate any Environmental Law applicable to such Individual Property; and (ix) Borrower
shall immediately notify Lender in writing after it has become aware of (A) any
presence or Release or threatened Releases of Hazardous Materials in, on,
under, from or migrating towards any Individual Property in violation of any
Environmental Law; (B) any material non-compliance with any Environmental
Laws related in any way to any Individual Property; (C) any actual or
potential Environmental Lien; (D) any required or proposed remediation of
environmental conditions relating to any Individual Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a Governmental
Authority) relating in any way to Hazardous Materials in, on, under, from or
migrating towards any Individual Property.


 


(b)                                 In the event that
Lender shall reasonably believe that any Individual Property is not in
compliance in all material respects with all Environmental Laws applicable to
such Individual Property, Lender and any other Person designated by Lender,
including but not limited to any environmental consultant, and any receiver
appointed by any court of competent jurisdiction, shall have the right, but not
the obligation, to enter upon such Individual Property at all reasonable times
and after reasonable prior written notice (and subject to the rights of tenants
under their respective Leases), to assess any and all aspects of the
environmental condition of such Individual Property and its use, including but
not limited to conducting any environmental assessment or audit (the scope of
which shall be determined by Lender in the exercise of its good faith business
judgment) and taking samples of soil, groundwater or other water, air, or
building materials, and conducting other invasive testing. Borrower shall cause
Mortgage Borrower to cooperate in all reasonable respects with and provide access
to Lender and any such Person designated by Lender at all reasonable times and
after reasonable prior written notice (and subject to the rights of tenants
under their respective Leases).


 


5.1.20                  Alterations.


 


Borrower shall obtain Lender’s prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, to any alterations
to the Improvements that may have a material adverse effect on Borrower’s
or Mortgage Borrower’s financial


 


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condition, the use, operation
or value of any Individual Property, the Collateral, the Mezzanine A
Collateral, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower Entity, any Mezzanine A Principal’s general partner interest
in the related Mezzanine A Borrower Entity or the net operating income of any
Individual Property or the Collateral (an “Alteration”), other than (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof, or of any Lease executed subsequent to the date hereof
if Lender shall have approved (or shall be deemed to have approved) such Lease
pursuant to Section 5.1.17 hereof, (b) tenant improvement work
performed pursuant to the terms and conditions of a Lease and not adversely
affecting any structural component of any Improvements, any utility or HVAC
system contained in any Improvements or (except in the case of customary tenant
signage) the exterior of any building constituting a part of any Improvements,
(c) alterations performed in connection with the restoration of an
Individual Property after the occurrence of a casualty in accordance with the
terms and conditions of this Agreement and the Mortgage Loan Documents or (d) the
capital improvements identified in Schedule 5.1.20
annexed hereto. Any approval by Lender of the plans, specifications or working
drawings for Alterations of any Individual Property shall not create
responsibility or liability on behalf of Lender for their completeness, design,
sufficiency or their compliance with Applicable Laws. Lender may condition
any such approval upon receipt of a certificate of compliance with Applicable
Laws from an independent architect, engineer, or other person reasonably
acceptable to Lender. If the total unpaid amounts due and payable with respect
to an Alteration to the Improvements of any Individual Property (other than
such amounts to be paid or reimbursed by tenants under the Leases or
Alterations not requiring approval under clauses (a) through (d) above)
shall at any time exceed an amount equal to the lesser of (x) five percent (5%)
of the Allocated Loan Amount for such Individual Property and (y) $2,500,000
(the “Threshold Amount”; and any such Alteration a “Material
Alteration”), Borrower shall promptly deliver or cause to be delivered to
Lender, (i) as security for the payment of such amounts and as additional
security for Borrower’s obligations under the Loan Documents, any of the
following:  (1) cash, (2) U.S.
Obligations, (3) other securities having a rating reasonably acceptable to
Lender or, if a Securitization has occurred, the applicable Rating Agencies
have confirmed in writing that such securities delivered will not, in and of
themselves, result in a downgrade, withdrawal or qualification of the initial,
or if higher, the then current ratings assigned in connection with such
Securitization, (4) a completion bond and performance bond or (5) a
Letter of Credit (the security described in clauses (1) through (5) above
being sometimes referred to hereinafter, collectively, as the “Material
Alteration Security”), and (ii) if a Securitization has occurred,
written confirmation from the applicable Rating Agencies that any such Material
Alteration shall not result in the downgrade, withdrawal or qualification of
the initial, or, if higher, the current ratings assigned to the Securities in
connection with a Securitization. The Material Alteration Security shall be in
an amount equal to the excess of (x) the total unpaid amounts with respect to
Material Alterations to the Improvements (other than such amounts to be paid or
reimbursed by Tenants under Leases or to be paid from Reserve Funds or
Alterations not requiring approval under clauses (a) through (d) above)
over (y) the Threshold Amount. Upon Borrower’s request therefor, Lender shall
disburse any Material Alteration Security that is cash to Borrower to pay for
Material Alterations or permit


 


104

















 


Borrower to partially reduce
any non-cash Material Alteration Security for work completed and paid for with
respect to Material Alterations from time to time, subject to the same
conditions to the release and disbursement of Required Repair Funds. Provided
that no Event of Default then exists, upon completion of the Material
Alteration, as determined by Lender in its reasonable discretion, Lender shall
cancel the Material Alteration Security or disburse or return to Borrower the
Material Alteration Security, as applicable. Notwithstanding
the foregoing, Borrower shall be relieved of its obligation to deposit the
security for certain alterations described above if either (A) Mortgage
Borrower is required to and does deliver such security to Mortgage Lender in
accordance with the Mortgage Loan Documents or (B) Mezzanine A Borrower is
required to and does deliver such security to Mezzanine A Lender in accordance
with the Mezzanine A Loan Documents, and in any such case Lender has received
evidence reasonably acceptable to Lender of the delivery of such security.


 


5.1.21                  Intentionally
Omitted.


 


5.1.22                  OFAC.


 


At all times
throughout the term of the Loan, Borrower, Mortgage Borrower, Guarantor and
their respective Affiliates shall be in compliance in all material respects
with all applicable orders, rules, regulations and recommendations of The
Office of Foreign Assets Control of the U.S. Department of the Treasury.


 


5.1.23                  Ground Lease
Covenants.


 


(a)                                  With respect to each
Ground Lease, (a) Borrower shall cause each Mortgage Borrower that is the
holder of the leasehold interest under such Ground Lease to (i) pay all
rents, additional rents and other sums required to be paid by such Mortgage
Borrower, as tenant under and pursuant to the provisions of such Ground Lease, (ii) diligently
perform and observe in all material respects all of the terms, covenants
and conditions of such Ground Lease on the part of such Mortgage Borrower,
as tenant thereunder, (iii) promptly notify Lender of the giving of any
notice by the landlord under such Ground Lease to such Mortgage Borrower of any
default by such Mortgage Borrower, as tenant thereunder, and deliver to Lender
a true copy of each such notice within five (5) Business Days of receipt
and (iv) promptly notify Lender of any bankruptcy, reorganization or
insolvency of the landlord under such Ground Lease or of any notice thereof,
and deliver to Lender a true copy of such notice within five (5) Business
Days of Borrower’s receipt. Borrower shall not, without the prior consent of
Lender, cause such Mortgage Borrower to surrender the leasehold estate created
by such Ground Lease or terminate or cancel such Ground Lease or modify,
change, supplement, alter or amend such Ground Lease in any material respect,
either orally or in writing, and if such Mortgage Borrower shall default in the
performance or observance of any term, covenant or condition of such Ground
Lease on the part of such Mortgage Borrower, as tenant thereunder, and
shall fail to cure the same prior to the expiration of any applicable cure
period provided thereunder, Borrower shall permit Lender to have the right to
pay any sums and to perform any act or take any action as may be
appropriate to cause all of the terms, covenants and conditions of such Ground
Lease on the part of such Mortgage


 


105

















 


Borrower to be performed or observed on behalf of Borrower, to the end
that the rights of such Mortgage Borrower in, to and under such Ground Lease
shall be kept unimpaired and free from default; provided, however, that Lender
shall have no such obligation to perform any such actions. If the landlord
under such Ground Lease shall deliver to Lender a copy of any notice of default
under such Ground Lease, such notice shall constitute full protection to Lender
for any action taken or omitted to be taken by Lender, in good faith, in
reliance thereon. Borrower shall cause such Mortgage Borrower to exercise each
individual option, if any, to extend or renew the term of such Ground Lease
upon written demand by Lender made at any time within one (1) year prior
to the last day upon which any such option may be exercised.


 


(b)                                 Subleases. Notwithstanding
anything contained in any Ground Lease to the contrary, Borrower shall cause
each Mortgage Borrower that is the holder of the leasehold interest under a
Ground Lease to not further sublet any portion of the related Individual
Property (other than as permitted pursuant to Section 5.1.17 hereof)
without prior written consent of Lender, which consent shall not be
unreasonably withheld, conditioned or delayed.


 


5.1.24                  Mortgage Loan
Reserve Funds.


 


Borrower shall
cause Mortgage Borrower to deposit and maintain each of the Mortgage Loan
Reserve Funds as more particularly set forth in the Mortgage Loan Documents and
to perform and comply with all of the terms and provisions relating
thereto.


 


5.1.25                  Notices.


 


Borrower shall
give notice, or cause notice to be given, to Lender promptly upon the
occurrence of any Mortgage Loan Event of Default or Mezzanine A Loan Event of
Default.


 


5.1.26                  Special
Distributions.


 


On each date,
if any, on which amounts are required to be disbursed to Lender pursuant to the
Mortgage Loan Documents, Borrower shall exercise its rights under the
Organizational Documents of Mezzanine A Borrower to cause Mortgage Borrower to
make a distribution to Mezzanine A Borrower and then Mezzanine A Borrower to
make a distribution to Borrower, in each case in an aggregate amount such that
Lender shall receive the amount required to be disbursed pursuant to the
Mortgage Loan Documents.


 


5.1.27                  Mortgage
Borrower and Mezzanine A Borrower Covenants.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all obligations under the Mortgage Loan
Documents (including, without limitation, the affirmative and negative
covenants set forth in the Mortgage Loan Documents) with which Mortgage
Borrower has expressly covenanted in the Mortgage Loan Documents to comply,
whether the Mortgage Loan has been repaid or the related Mortgage Loan Document
has been otherwise terminated (to the extent that such covenants are
cross-referenced herein),


 


106

















 


unless otherwise consented to in writing by Lender. Borrower shall
cause Mortgage Borrower to promptly notify Lender of all material notices
received by Mortgage Borrower under or in connection with the Mortgage Loan,
including, without limitation, any notice by the Mortgage Lender to Mortgage
Borrower of any default by Mortgage Borrower in the performance or observance
of any of the terms, covenants or conditions of the Mortgage Loan Documents on
the part of Mortgage Borrower to be performed or observed, and shall
deliver to Lender a true copy of each such notice, together with any other
material consents, notices, requests or other written correspondence between
Mortgage Borrower and Mortgage Lender.


 


(b)                                 Borrower shall cause
Mezzanine A Borrower to comply with all obligations under the Mezzanine A Loan
Agreement and all other Mezzanine A Loan Documents (including, without
limitation, the affirmative and negative covenants set forth in the Mezzanine A
Loan Agreement) with which Mezzanine A Borrower has expressly covenanted in the
Mezzanine A Loan Agreement to comply, whether the Mezzanine A Loan has been
repaid or the related Mezzanine A Loan Document has been otherwise terminated
(to the extent that such covenants are cross-referenced herein), unless
otherwise consented to in writing by Lender. Borrower shall cause Mezzanine A
Borrower to promptly notify Lender of all material notices received by
Mezzanine A Borrower under or in connection with the Mezzanine A Loan,
including, without limitation, any notice by the Mezzanine A Lender to
Mezzanine A Borrower of any default by Mezzanine A Borrower in the performance
or observance of any of the terms, covenants or conditions of the Mezzanine A
Loan Documents on the part of Mezzanine A Borrower to be performed or
observed, and shall deliver to Lender a true copy of each such notice, together
with any other material consents, notices, requests or other written
correspondence between Mezzanine A Borrower and Mezzanine A Lender.


 


5.1.28                  Mortgage Loan
and Mezzanine A Loan Estoppels.


 


(a)                                  Borrower shall, or
shall cause Mortgage Borrower to, use commercially reasonable efforts from time
to time, to obtain from the Mortgage Lender such certificates of estoppel with
respect to compliance by Mortgage Borrower with the terms of the Mortgage Loan
Documents as may be reasonably requested by Lender. In the event or to the
extent that Mortgage Lender is not legally obligated to deliver such certificates
of estoppel and is unwilling to deliver the same, or is legally obligated to
deliver such certificates of estoppel but breaches such obligation, then
Borrower shall not be in breach of this provision so long as Borrower furnishes
to Lender an estoppel certificate executed by Borrower, in which Borrower shall
expressly represent to Lender such information as may be reasonably
requested by Lender regarding compliance by Mortgage Borrower with the terms of
the Mortgage Loan Documents.


 


(b)                                 Borrower shall, or
shall cause Mezzanine A Borrower to, use commercially reasonable efforts from
time to time, to obtain from the Mezzanine A Lender such certificates of
estoppel with respect to compliance by Mezzanine A Borrower with the terms of
the Mezzanine A Loan Documents as may be reasonably requested by Lender. In
the event or to the extent that Mezzanine A Lender is not legally obligated to
deliver such certificates of estoppel and is unwilling to deliver the same, or
is


 


107

















 


legally obligated to deliver such certificates of estoppel but breaches
such obligation, then Borrower shall not be in breach of this provision so long
as Borrower furnishes to Lender an estoppel certificate executed by Borrower,
in which Borrower shall expressly represent to Lender such information as may be
reasonably requested by Lender regarding compliance by Mezzanine A Borrower
with the terms of the Mezzanine A Loan Documents.


 


5.1.29                  Intentionally
Omitted.


 


5.1.30                  Condominium
Covenants.


 


(a)                                  Borrower shall cause
each Mortgage Borrower that owns an Individual Property subject to a
condominium regime to observe and perform each and every material term to
be observed or performed by such Mortgage Borrower pursuant to the applicable
Condominium Documents in all material respects. Borrower shall cause such
Mortgage Borrower to comply in all material respects with all obligations under
the applicable Security Instrument relating to the Condominium Documents and/or
the condominium regime to which such Individual Property is subject to. Borrower
shall obtain the approval of Lender for each matter requiring the approval of
Mortgage Lender under the provisions of such Security Instrument. Borrower
shall cause such Mortgage Borrower to deliver to Lender copies of all notices
required to be delivered by such Mortgage Borrower to Mortgage Lender under
such Security Instrument.


 


(b)                                 Borrower shall cause
each Mortgage Borrower that owns an Individual Property subject to a
condominium regime to promptly deliver to Lender a true and full copy of all
written notices of default received by such Mortgage Borrower with respect to
any obligation or duty of such Mortgage Borrower under the applicable
Condominium Documents.


 


(c)                                  Borrower shall not
permit any Mortgage Borrower that owns an Individual Property subject to a
condominium regime to, except with the prior written consent of Lender, which
consent shall not be unreasonably withheld, conditioned or delayed, (a) institute
any action or proceeding for partition of such Individual Property; (b) vote
for or consent to any material modification of, or amendment to or material
relaxation in the enforcement of the applicable Condominium Documents or the
termination of any condominium regime; and (c) in the event of damage to
or destruction of such Individual Property, vote not to repair, restore or
rebuild such Individual Property if Mortgage Borrower shall have such a voting
right.


 


(d)                                 Borrower shall not
permit any Mortgage Borrower that owns an Individual Property subject to a
condominium regime to revoke any proxy delivered to Lender in connection with
the Loan and relating to any voting rights such Mortgage Borrower may have
as a unit owner in any condominium regime.


 


(e)                                  To the extent that
any approval rights, consent rights or other rights or privileges granted to a
lender in the applicable Condominium Documents are conditioned upon such
approval rights, consent rights or other rights or privileges being required or


 


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contained in any mortgage, then such approval rights, consent rights or
other rights or privileges shall be deemed to be required by this Agreement.


 


(f)                                    With respect to the
Boston Common Individual Property, Borrower may permit Mortgage Borrower
to convert the Boston Common Individual Property to a condominium form of
ownership in accordance with the terms and provisions of Section 54 of the
Security Instrument relating to the Boston Common Individual Property so long
as:


 


(i)                                     (A) Mortgage
Borrower complies with all of such terms and provisions to the satisfaction of
Lender (such compliance as independently determined by Lender in its reasonable
discretion), (B) Borrower obtains the approval of Lender for each matter
requiring the approval of Mortgage Lender under the provisions of such Section 54
of the Security Instrument, and (C) Borrower causes such Mortgage Borrower
to deliver to Lender copies of all notices, instruments and documents required
to be delivered by such Mortgage Borrower to Mortgage Lender under such Section 54
of the Security Instrument;


 


(ii)                                  Borrower
complies with such additional requirements of Lender which are reasonably
required by Lender to insure that the conversion of the Boston Common
Individual Property will not impair or otherwise adversely affect the Liens,
security interests and other rights of Lender under the Loan Documents
(including, without limitation, delivery of such documents as shall reasonably
be required by Lender, including opinions of counsel, UCC and title insurance,
all in form and substance reasonably satisfactory to Lender); and


 


(iii)                               Lender
shall have received payment of all of Lender’s reasonable costs and expenses,
including due diligence review costs and reasonable counsel fees and
disbursements incurred in connection with the conversion of the Boston Common
Individual Property and the review and approval of the documents and
information required to be delivered in connection therewith.


 


Section 5.2                                      Negative
Covenants.


 


From the date hereof until payment and performance in full of all
obligations of Borrower under the Loan Documents or the earlier release of the
Lien on the Collateral in accordance with the terms of this Agreement and the
other Loan Documents, Borrower covenants and agrees with Lender that it will
not do, directly or indirectly, any of the following:


 


5.2.1                        Liens.


 


Borrower shall not permit or cause Mortgage Borrower to create, incur,
assume or suffer to exist any Lien on any portion of the Property or permit any
such action to be taken, except (i) Permitted Encumbrances; (ii) Liens
created by or permitted pursuant to the Mortgage Loan Documents, the Mezzanine
A Loan Documents or the Loan Documents, and (iii) Liens for Taxes or Other
Charges not yet due. Borrower shall not create, incur, assume or suffer to
exist any Lien on any portion of the Collateral, the


 


109

















 


Mezzanine A Collateral, any
Mortgage Principal’s general partner interest in the related Mortgage Borrower
Entity or any Mezzanine A Principal’s general partner interest in the related
Mezzanine A Borrower Entity, or permit any such action to be taken, other than
Permitted Encumbrances. Nothing contained in this Section 5.2.1 shall
affect Mortgage Borrower’s right to contest Liens as provided in the Mortgage
Loan Documents.


 


5.2.2                        Dissolution.


 


No Borrower Entity shall (a) engage in any dissolution,
liquidation or consolidation or merger with or into any other business entity, (b) transfer,
lease or sell, in one transaction or any combination of transactions, all or
substantially all of the properties or assets of such Borrower Entity except to
the extent expressly permitted under the Loan Documents, (c) except as
expressly permitted under the Loan Documents, modify, amend, waive or terminate
its Organizational Documents or its qualification and good standing in any
jurisdiction or (d) cause its Principal or the applicable Mortgage
Borrower Entity to (i) dissolve, wind up or liquidate or take any action,
or omit to take an action, as a result of which such Principal or Mortgage
Borrower Entity would be dissolved, wound up or liquidated in whole or in part,
or (ii) except as expressly permitted under the Loan Documents, amend,
modify, waive or terminate the Organizational Documents of such Principal or
Mortgage Borrower Entity, in each case, without obtaining the prior written
consent of Lender. Nothing contained in this Section 5.2.2 is intended to
expand, modify or decrease the rights of Borrower contained in Section 5.2.10
hereof.


 


5.2.3                        Change
in Business.


 


(a)                                  Borrower shall not
enter into any line of business other than those permitted under Section 4.1.35(a) hereof,
or make any material change in the scope or nature of its business objectives,
purposes or operations or undertake or participate in activities other than the
continuance of its present business.


 


(b)                                 Borrower shall not
cause Mortgage Borrower to enter into any line of business other than those
permitted under the Mortgage Loan Documents, or make any material change in the
scope or nature of its business objectives, purposes or operations or undertake
or participate in activities other than the continuance of its present
business.


 


(c)                                  Borrower shall not
cause Mezzanine A Borrower to enter into any line of business other than those
permitted under Section 4.1.35
of the Mezzanine A Loan Agreement, or make any material change in the scope
or nature of its business objectives, purposes or operations or undertake or
participate in activities other than the continuance of its present business.


 


5.2.4                        Debt
Cancellation.


 


Borrower shall not cancel or otherwise forgive or release any material
claim or debt (other than termination of Leases in accordance herewith) owed to
Borrower by any Person, except for adequate consideration and in the ordinary
course of Borrower’s business. In addition, Borrower shall not permit or cause
Mortgage Borrower to cancel


 


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or otherwise forgive or release
any material claim or debt (other than termination of Leases in accordance with
the Mortgage Loan Documents) owed to Mortgage Borrower by any Person, except
for adequate consideration and in the ordinary course of Mortgage Borrower’s
business.


 


5.2.5                        Zoning.


 


Borrower shall not cause Mortgage Borrower to initiate or consent to
any zoning reclassification of any portion of any Individual Property or seek
any variance under any existing zoning ordinance or use or permit the use of
any portion of any Individual Property in any manner that could result in such
use becoming a nonconforming use under any zoning ordinance or any other
Applicable Law without the prior written consent of Lender.


 


5.2.6                        No
Joint Assessment.


 


Borrower shall not cause or permit Mortgage Borrower to suffer, permit
or initiate the joint assessment of any Individual Property with (a) any
other real property constituting a tax lot separate from such Individual
Property, or (b) any portion of such Individual Property which may be
deemed to constitute personal property, or any other procedure whereby the Lien
of any taxes which may be levied against such personal property shall be
assessed or levied or charged to such Individual Property.


 


5.2.7                        Name,
Identity, Structure, or Principal Place of Business.


 


No Borrower Entity shall change its name (including its trade name or
names) without first giving Lender fifteen (15) days’ prior written notice. Except
as otherwise expressly permitted under Section 5.2.10 hereof, no Borrower
Entity shall change its limited liability company, partnership or other
structure, or the place of its organization as set forth in Section 4.1.34,
without, in each case, the consent of Lender. Upon Lender’s request, Borrower
shall execute and deliver additional financing statements, security agreements
and other instruments which may be necessary to effectively evidence or
perfect Lender’s security interest in the Collateral as a result of such change
of principal place of business or place of organization.


 


5.2.8                        ERISA.


 


(a)                                  During the term of
the Loan or of any obligation, or right hereunder, no Loan Party shall be a
Plan and none of the assets of any Loan Party shall constitute Plan Assets.


 


(b)                                 Borrower further
covenants and agrees to deliver to Lender such certifications or other evidence
from time to time throughout the term of the Loan as may be requested by
Lender, and represents and covenants that (A) no Loan Party is an “employee
benefit plan” as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32)
of ERISA; (B) no Loan Party is subject to State statutes regulating
investments and fiduciary obligations


 


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with respect to governmental plans; and (C) one or more of the
following circumstances is true:


 


(i)                                     Equity
interests such Loan Party are publicly offered securities, within the meaning
of 29 C.F.R. §2510.3-101(b)(2);


 


(ii)                                  Less
than twenty five percent (25%) of each outstanding class of equity
interests such Loan Party are held by “benefit plan investors” within the
meaning of 29 C.F.R. §2510.3-101(f)(2); or


 


(iii)                               Such
Loan Party qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e).


 


5.2.9                        Affiliate
Transactions.


 


(a)                                  Borrower shall not
enter into, or be a party to, any transaction with an Affiliate of Borrower,
Principal or any of the partners of Borrower or Principal except in the
ordinary course of business and on terms which are fully disclosed to Lender in
advance and are substantially similar to those that would be obtained in a
comparable arm’s-length transaction (taking into account the relative standards
for quality and reputation of the party rendering the service) with an
unrelated third party. Lender acknowledges that it has approved the Management
Agreement.


 


(b)                                 Any contracts or
agreements relating to the Property, the Collateral, the Mezzanine A
Collateral, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower Entity or any Mezzanine A Principal’s general partner
interest in the related Mezzanine A Borrower Entity in any manner between or
among any Loan Parties or their Affiliates, including the Management Agreement
and any other agreement specifically related to the Property, the Collateral,
the Mezzanine A Collateral, any Mortgage Principal’s general partner interest
in the related Mortgage Borrower Entity, any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity, or any Loan Party (collectively,
the “Affiliate Agreements”) shall be made on an arm’s-length basis
(taking into account differences in the quality or standards of goods or
services provided); and the parties to each Affiliate Agreement shall
acknowledge and agree that, to the extent not prohibited under the Mortgage
Loan Documents and the Mezzanine A Loan Documents, any such agreement (other
than the Management Agreement, as to which the provisions of the Agreement
Regarding Management Agreement and Section 5.1.18 hereof shall be
applicable) shall be terminable by Mortgage Borrower or Lender within ten (10) days
after notice, without the payment of any fee, penalty, premium or liability for
future liabilities or obligations, if an Event of Default shall have occurred
and be continuing. To the extent not prohibited under the Mortgage Loan
Documents and the Mezzanine A Loan Documents, upon the occurrence and during
the continuation of an Event of Default, if requested by Lender in writing,
Borrower shall, or shall cause the applicable Loan Party or any Affiliate
thereof to, terminate any existing Affiliate Agreement specified by Lender
within ten (10) days after delivery of Lender’s request without payment of
any penalty, premium or termination fee.


 


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5.2.10                  Transfers.


 


(a)                                  Except as otherwise
permitted under Section 5.2.10(c) or 5.2.11 hereof, Borrower shall
not sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant
options with respect to, or otherwise transfer or dispose of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) any Individual Property, the
Collateral, the Mezzanine A Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage Borrower Entity, any Mezzanine A
Principal’s general partner interest in the related Mezzanine A Borrower
Entity, or any part thereof or any legal or beneficial interest therein or
permit a Sale or Pledge of any interest in any Restricted Party (collectively,
a “Transfer”), without the prior written consent of Lender, other than (i) pursuant
to Leases of space in the Improvements to tenants in accordance with the
provisions of Section 5.1.17 hereof, (ii) Permitted Encumbrances, and
(iii) the transfer of obsolete or worn out Personal Property and fixtures
that are contemporaneously replaced by items of equal or better function and
quality, which are free of liens, encumbrances and security interests other
than those created by the Loan Documents or consented to by Lender. The
replacement requirement in clause (iii) of the preceding sentence shall
not apply to sales or dispositions of Personal Property in any fiscal year
valued at less than $50,000 in the aggregate, provided that Borrower shall, or
shall cause Mortgage Borrower to, upon Lender’s written request, provide an
annual written certification to Lender as to the value of Personal Property
sold in the prior year.


 


(b)                                 A Transfer shall
include, but shall not be limited to, (i) an installment sales agreement
wherein (A) Mortgage Borrower agrees to sell one or more of the Properties
or any part thereof or (B) Borrower agrees to sell the Collateral or
any part thereof, for a price to be paid in installments; (ii) an agreement
by Mortgage Borrower to lease all or substantially all of any Individual
Property for other than actual occupancy by a space tenant thereunder or a
sale, assignment or other transfer of, or the grant of a security interest in,
Mortgage Borrower’s right, title and interest in and to any Leases or any
Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Pledge of such corporation’s stock or the creation or
issuance of new stock; (iv) if a Restricted Party is a limited or general
partnership or joint venture, any merger or consolidation or the change,
removal, resignation or addition of a managing general partner or the Sale or
Pledge of the partnership interest of any managing general partner or any
profits or proceeds relating to such partnership interest, or the Sale or
Pledge of limited partner interests or any profits or proceeds relating to such
limited partner interests or the creation or issuance of new limited partner
interests; (v) if a Restricted Party is a limited liability company, any
merger or consolidation or the change, removal, resignation or addition of a
managing member or non-member manager (or if no managing member, any member) or
the Sale or Pledge of the membership interest of a managing member (or if no
managing member, any member) or any profits or proceeds relating to such
membership interest, or the Sale or Pledge of non-managing membership interests
or the creation or issuance of new non-managing membership interests; (vi) if
a Restricted Party is a trust or nominee trust, any merger, consolidation or
the Sale or Pledge of the legal or beneficial interest in a Restricted Party or
the creation or issuance of new legal or beneficial interests; (vii) the
removal or the resignation of the Manager


 


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(including, without limitation, an Affiliated Manager) other than in
accordance with the Mortgage Loan Documents, the Mezzanine A Loan Agreement and
Section 5.1.18 hereof; (viii) any deed-in-lieu or consensual
foreclosure relating to any Individual Property with or for the benefit of
Mortgage Lender or any Affiliate thereof; (ix) any transaction, event or series of
transactions or events that result in (A) Borrower holding less than 100%
of the direct limited partnership interests or limited liability company
interests, as applicable, in Mezzanine A Borrower, or less than 100% of the
membership interests in Mezzanine A Principal or (B) Mezzanine A Borrower
holding less than 100% of the direct limited partnership interests or limited
liability company interests, as applicable, in Mortgage Borrower, or less than
100% of the membership interests in Mortgage Principal; or (x) any transaction,
event or series of transaction or events that results in a change in
Control of Borrower.


 


(c)                                  Notwithstanding the
provisions of Sections 5.2.10(a) and 5.2.10(b) hereof, none of the
following transfers shall be deemed to be a Transfer:


 


(i)                                     a
transfer by devise or descent or by operation of law upon the death of a member,
partner or shareholder of a Restricted Party (other than Mortgage Borrower,
Mortgage Principal, Mezzanine A Borrower or Mezzanine A Principal);


 


(ii)                                  intentionally
omitted;


 


(iii)                               intentionally
omitted;


 


(iv)                              the
Pledge to Mezzanine A Lender of (A) the limited partnership or limited
liability company interest in any Mortgage Borrower Entity, as applicable, held
by the related Mezzanine A Borrower Entity, and (B) the membership
interest in any Mortgage Principal held by the related Mezzanine A Borrower Entity,
in each case as collateral security for the Mezzanine A Loan (or any
restructuring thereof in accordance with Section 9.8 hereof), or any
registration of such Pledge or the exercise of any rights or remedies Mezzanine
A Lender may have under the Mezzanine A Loan Documents with respect to
such Pledge in accordance with the terms of the Intercreditor Agreements;


 


(v)                                 Intentionally
Omitted;


 


(vi)                              Intentionally
Omitted;


 


(vii)                           the
Pledge to Bank Loan Agent for the benefit of the Bank Loan Lenders of (A) the
limited partnership or limited liability company interest in any Borrower
Entity, as applicable, held by the related Bank Loan Borrower, (B) the
membership interest in any Principal held by the related Bank Loan Borrower and
(C) 100% of the equity interests in each of the entities set forth on Schedule 5.2.10(c)(vii) annexed
hereto, in each case as collateral security for the Bank Loan, or any
registration of such Pledge or the exercise of any rights or remedies Bank Loan
Lender may have under the Bank Loan Documents with respect to


 


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such Pledge in
accordance with the terms of the Bank Loan Intercreditor Agreement;


 


(viii)                        Intentionally
Omitted;


 


(ix)                                Intentionally
Omitted;


 


(x)                                   Intentionally
Omitted; or


 


(xi)                                the
Sale or Pledge, in one or a series of transactions, of any direct or
indirect legal or beneficial interest in any Restricted Party other than a
direct interest in any Mortgage Borrower Entity, any Mortgage Principal, any
Mezzanine A Borrower Entity, any Mezzanine A Principal, any Borrower Entity or
any Principal (or as otherwise specifically set forth in Sections 5.2.10(c)(i),
5.2.10(c)(ii) or 5.2.10(c)(iii) above).


 


Borrower shall deliver written notice to
Lender of any transfer made pursuant to clause (i) above within thirty
(30) days after the occurrence of such transfer. With respect to the transfers
referenced in (iv) through (vii) above, Lender shall receive no less
than thirty (30) days’ prior written notice of such proposed transfer. With
respect to transfers referenced in (xi) above, Borrower shall, upon request,
deliver an Officer’s Certificate to Lender certifying that no transfers in
violation of such clause (xi) have occurred.


 


Notwithstanding the foregoing, at all times
during the term of the Loan, one or more Tishman Speyer Control Persons and/or
Lehman Entities shall maintain a Controlling Interest.


 


(d)                                 Lender shall not be
required to demonstrate any actual impairment of its security or any increased
risk of default hereunder in order to declare the Debt immediately due and
payable upon a Transfer in violation of this Section 5.2.10. This
provision shall apply to every Transfer regardless of whether voluntary or not,
or whether or not Lender has consented to any previous Transfer. Notwithstanding
anything to the contrary contained in this Section 5.2.10, (a) no
transfer (whether or not such transfer shall constitute a Transfer) shall be
made to any Prohibited Person; (b) Borrower shall provide to Lender, no
later than ten (10) Business Days after written request, the name and
identity of each Person and its Affiliates which own, directly or indirectly,
more than twenty percent (20%) of the legal or beneficial interest in Borrower
or Principal (excluding ownership interests in any fund or other entity which (i) is
controlled by one or more Tishman Speyer Control Persons and/or Lehman
Entities, (ii) owns an indirect interest in Borrower or Principal and (iii) owns,
directly or indirectly, real property assets other than the Properties), together
with the names of their controlling principals, and Lender, except as may be
required by Applicable Law, agrees to keep such information confidential;
notwithstanding the foregoing, Lender may disclose such information to a
Rating Agency, Investor or prospective Investor that requests such information,
provided that such Rating Agency, Investor or prospective Investor agrees in
writing to keep such information confidential and (c) in the event any
transfer (whether or not such transfer


 


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shall constitute a Transfer) results in any Person that as of the date
hereof owns less than forty-nine percent (49%) of the beneficial ownership
interest in Mortgage Borrower, Mezzanine A Borrower and Borrower owning in
excess of forty-nine percent (49%) of the beneficial ownership interest in
Mortgage Borrower, Mezzanine A Borrower and Borrower and a Securitization has
occurred, Borrower shall, prior to such transfer, deliver an updated Insolvency
Opinion to Lender, which opinion shall be in form, scope and substance
reasonably satisfactory to Lender and the Rating Agencies.


 


5.2.11                  Permitted
Transfer.


 


(a)                                  Without limiting the
provisions of Section 5.2.10 hereof, in the event that Mortgage Borrower
is permitted to transfer all of the Properties pursuant to Section 21 of
the Security Instrument, Lender shall not unreasonably withhold its consent to
a one-time sale, assignment, or other transfer of all of the Properties to a
Permitted Transferee (defined below), provided that (w) Lender receives sixty
(60) days’ prior written notice of such transfer, (x) Borrower or such
Permitted Transferee shall pay, concurrently with the closing of such sale,
assignment or transfer, a non-refundable transfer fee in an amount equal to
one-quarter of one percent (0.25%) of the then outstanding principal balance of
the Note, (y) no Event of Default has occurred and is continuing under this
Agreement, the Pledge Agreement, the Note or the other Loan Documents and (z)
upon the satisfaction (in the reasonable determination of Lender) of such
conditions as may be reasonably imposed by Lender, which may include,
but shall not be limited to, the following matters:


 


(i)                                     Borrower
or such Permitted Transferee shall pay any and all reasonable out-of-pocket
costs incurred in connection with the transfer (including, without limitation,
Lender’s reasonable counsel fees and disbursements and all recording fees,
title insurance premiums and mortgage and intangible taxes);


 


(ii)                                  Borrower
shall cause the transferee to comply with all of the requirements of Section 4.1.35
hereof and to be wholly owned and controlled by one or more Institutional
Investors or shall itself be an Institutional Investor, and, in addition, Lender shall be reasonably
satisfied that each such Institutional Investor (1) is generally
creditworthy and reputable, (2) is free from any pending or existing
bankruptcy, reorganization or insolvency proceedings in which such party is the
debtor, (3) is not, at the time of transfer or in the past, a litigant,
plaintiff or defendant in any suit brought against or by Lender, (4) has
not been found by a court of competent jurisdiction to have committed a crime,
fraud or similar malfeasance, (5) has not been indicted for any crime, and
(6) has experience and a track record in owning and operating facilities
similar to the Properties, in the case of each of clauses (1) through (5) above,
as reasonably determined by Lender based on a Lexis/Nexis or similar background
search of each such Person and its Affiliates (the “Permitted Transferee”);


 


(iii)                               Borrower
shall cause the transferee to assume all of the obligations of Borrower arising
from and after the transfer of this Agreement, the Note and the other Loan
Documents and a replacement guarantor acceptable to Lender in all


 


116

















 


respects shall
assume all of the obligations of Guarantor, accruing from and after the date of
such transfer, under the Guaranty, in each case, in a manner reasonably
satisfactory to Lender in all respects, including, without limitation, by
entering into an assumption agreement (the “Assumption Agreement”) in form and
substance reasonably satisfactory to Lender and delivering such legal opinions
as Lender may reasonably require;


 


(iv)                              Borrower
shall cause Mortgage Borrower to satisfy the conditions set forth in Section 21
of the Security Instrument (it being agreed that Lender shall have the same
rights to approve such transfer as the Mortgage Lender has);


 


(v)                                 Borrower
shall cause Mezzanine A Borrower to satisfy the conditions set forth in Section 5.2.11
of the Mezzanine A Loan Agreement (it being agreed that Lender shall have the
same rights to approve such transfer as the Mezzanine A Lender has);


 


(vi)                              the
Individual Property, at the time of the proposed Transfer, meets all Lender’s
standards as to its physical condition, occupancy, net operating income and the
collection of reserves that are customarily applied by Lender at the time of
the proposed Transfer to the approval of properties in connection with the
origination or purchase of similar mortgages on multifamily properties;


 


(vii)                           Borrower
shall cause the transferee to execute and deliver a pledge agreement in
substantially the same form as the Pledge Agreement in respect of the
ownership interests in the new property owner(s)/mortgage borrower(s). The
Ownership Interests described in this subsection (vii) shall
otherwise comply with the requirements of the Loan Documents and be
substantially identical in structure, form and substance to the Collateral
delivered at closing of the Loan;


 


(viii)                        Borrower
shall cause the transferee to authorize Lender to file such UCC Financing
Statements required by Lender with respect to the substitute Collateral;


 


(ix)                                Borrower
shall deliver, at its sole cost and expense, a UCC Insurance Policy insuring
the new pledge agreement as a valid first lien on the Ownership Interests
pledged thereunder and substantially identical to the UCC Insurance Policy
delivered at the closing of the Loan;


 


(x)                                   Borrower
shall cause the transferee to provide opinion letters in substantially the same
form and substance as such opinion letters delivered at the closing of the
Loan (including enforcement and perfection opinions and a substantive
non-consolidation opinion of the transferee and its constituent entities, which
and opinions shall be reasonably satisfactory to Lender;


 


(xi)                                The
transferee shall receive an Owner’s Title Policy reasonably acceptable to
Lender; and


 


(xii)                             Borrower
shall cause the transferee to execute and deliver such other replacement loan
and closing documents in substantially the same forms as the


 


 


117

















Loan Documents
and such other closing documents as reasonably requested by Lender.


 


(b)                                 Intentionally omitted.


 


Provided the Permitted Transferee has assumed
all of Borrower’s obligations and liabilities (including, without limitation,
those pursuant to the Environmental Indemnity) and a replacement guarantor
acceptable to Lender in all respects has assumed all of Guarantor’s obligations
and liabilities (including, without limitation, those pursuant to the Guaranty)
in a manner reasonably acceptable to Lender and all the conditions set forth in
this Section 5.2.11 have been satisfied, Lender shall (i) release
Borrower from its obligations under the Loan Documents (other than those
obligations expressly stated to survive) from and after the date of sale,
assignment, or other transfer of the Properties to such Permitted Transferee; (ii) release
Guarantor from its obligations under the Guaranty (other than those obligations
expressly stated to survive) from and after the date of sale, assignment, or
other transfer of the Properties to such Permitted Transferee; and (iii) promptly
after Borrower’s written request, deliver a written confirmation of such
release to Borrower; provided, however,
that such written confirmation shall not be required to effectuate such
release.


 


5.2.12                  Limitations
on Securities Issuances.


 


Borrower shall not permit any Mezzanine A
Borrower Entity or any Mezzanine A Principal to issue any equity
or ownership interests or other
securities other than those that have been issued as of the Closing Date.


 


5.2.13                  Distributions.


 


(a)                                  Any and all
dividends, including capital dividends, stock or liquidating dividends,
distributions of property, redemptions or other distributions made by Mezzanine
A Borrower or Mezzanine A Principal on or in respect of any interests in
Mezzanine A Borrower, and any and all cash and other property received in payment
of the principal of or in redemption of or in exchange for any such interests
(collectively, the “Distributions”), shall become part of the
Collateral. Notwithstanding the foregoing, Lender expressly agrees that Borrower
shall be permitted to distribute to its equity owners, free and clear of the
Lien of the Pledge Agreement or any other Loan Document, any Distributions Borrower
receives, but only upon the express condition that no Event of Default has
occurred and is continuing under this Agreement.


 


(b)                                 If any Distributions
shall be received by Borrower or any Affiliate of Borrower after the occurrence
and during the continuance of an Event of Default, Borrower shall hold, or
shall cause the same to be held, in trust for the benefit of Lender. Any and
all revenue derived from the Property paid directly by tenants, subtenants or
occupants of the Property shall be held and applied in accordance with the
terms and provisions of the Mortgage Loan Documents.


 


 


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5.2.14                  Refinancing
or Prepayment of the Mortgage Loan and Mezzanine A Loan.


 


(a)                                  Neither Borrower nor
Mortgage Borrower shall be required to obtain the consent of Lender to
refinance the Mortgage Loan, provided that the Loan shall have been (or shall
simultaneously be) paid in full in accordance with the terms of this Agreement
(including any prepayment premiums and other amounts due and payable to Lender
under the Loan Documents). Borrower shall cause Mortgage Borrower to obtain the
prior written consent of Lender to enter into any other refinancing of the
Mortgage Loan.


 


(b)                                 Neither Borrower nor
Mezzanine A Borrower shall be required to obtain the consent of Lender to
refinance the Mezzanine A Loan, provided that the Loan shall have been (or
shall simultaneously be) paid in full in accordance with the terms of this
Agreement (including any amounts due and payable to Lender under the Loan
Documents). Borrower shall cause Mezzanine A Borrower to obtain the prior
written consent of Lender to enter into any other refinancing of the Mezzanine
A Loan.


 


5.2.15                  Acquisition
of the Mortgage Loan and Mezzanine A Loan.


 


(a)                                  No Loan Party or any
Affiliate of any of them or any Person acting at any such Person’s request or
direction, shall acquire or agree to acquire the lender’s interest in the
Mortgage Loan, or any portion thereof or any interest therein, or any direct or
indirect ownership interest in the holder of the Mortgage Loan, by way of
purchase, transfer, exchange or otherwise, and any breach or attempted breach
of this provision shall constitute an Event of Default hereunder. If, solely by
operation of applicable subrogation law, Borrower shall have failed to comply
with the foregoing, then Borrower: (i) shall promptly notify Lender of
such failure; (ii) shall cause any and all such prohibited parties
acquiring any interest in the Mortgage Loan Documents: (A) not to enforce
the Mortgage Loan Documents; and (B) upon the request of Lender, to the
extent any of such prohibited parties has or have the power or authority to do
so, to promptly: (1) cancel the promissory note evidencing the Mortgage
Loan, (2) re-convey and release the Lien securing the Mortgage Loan and
any other collateral under the Mortgage Loan Documents, and (3) discontinue
and terminate any enforcement proceeding(s) under the Mortgage Loan Documents.


 


(b)                                 Lender shall have the
right at any time to acquire all or any portion of the Mortgage Loan or any
interest in any holder of, or participant in, the Mortgage Loan without notice
or consent of Borrower or any other Loan Party, in which event Lender shall
have and may exercise all rights of Mortgage Lender thereunder (to the
extent of its interest), including the right, if and when permitted under the
Mortgage Loan Documents, (i) to declare that the Mortgage Loan is in
default and (ii) to accelerate the Mortgage Loan indebtedness, in
accordance with the terms thereof and (iii) to pursue all remedies against
any obligor under the Mortgage Loan Documents. In addition, Borrower hereby
expressly agrees that any claims, counterclaims, defenses, offsets, deductions
or reductions of any kind which Mortgage Borrower or any other Person may have
against Mortgage Lender relating to or arising out of the Mortgage Loan shall
be the personal obligation of Mortgage Lender, and in no event shall Mortgage
Borrower be entitled to


 


119

















 


bring, pursue or raise any such claims, counterclaims, defenses,
offsets, deductions or reductions against Lender or any Affiliate of Lender or
any other Person as the successor holder of the Mortgage Loan or any interest
therein; provided, however, that Mortgage Borrower may seek specific
performance of its contractual rights and Lender’s contractual obligations
under the Mortgage Loan Documents.


 


(c)                                  No Loan Party or any
Affiliate of any of them or any Person acting at any such Person’s request or
direction, shall acquire or agree to acquire the lender’s interest in the
Mezzanine A Loan, or any portion thereof or any interest therein, or any direct
or indirect ownership interest in the holder of the Mezzanine A Loan, by way of
purchase, transfer, exchange or otherwise, and any breach or attempted breach
of this provision shall constitute an Event of Default hereunder. If, solely by
operation of applicable subrogation law, Borrower shall have failed to comply
with the foregoing, then Borrower: (i) shall promptly notify Lender of
such failure; (ii) shall cause any and all such prohibited parties
acquiring any interest in the Mezzanine A Loan Documents: (A) not to
enforce the Mezzanine A Loan Documents; and (B) upon the request of
Lender, to the extent any of such prohibited parties has or have the power or
authority to do so, to promptly: (1) cancel the promissory note evidencing
the Mezzanine A Loan, (2) re-convey and release the Lien securing the
Mezzanine A Loan and any other collateral under the Mezzanine A Loan Documents,
and (3) discontinue and terminate any enforcement proceeding(s) under the
Mezzanine A Loan Documents.


 


(d)                                 Lender shall have the
right at any time to acquire all or any portion of the Mezzanine A Loan or any
interest in any holder of, or participant in, the Mezzanine A Loan without
notice or consent of Borrower or any other Loan Party, in which event Lender
shall have and may exercise all rights of Mezzanine A Lender thereunder
(to the extent of its interest), including the right, if and when permitted
under the Mezzanine A Loan Documents, (i) to declare that the Mezzanine A
Loan is in default and (ii) to accelerate the Mezzanine A Loan
indebtedness, in accordance with the terms thereof and (iii) to pursue all
remedies against any obligor under the Mezzanine A Loan Documents. In addition,
Borrower hereby expressly agrees that any claims, counterclaims, defenses,
offsets, deductions or reductions of any kind which Mezzanine A Borrower or any
other Person may have against Mezzanine A Lender relating to or arising
out of the Mezzanine A Loan shall be the personal obligation of Mezzanine A
Lender, and in no event shall Mezzanine A Borrower be entitled to bring, pursue
or raise any such claims, counterclaims, defenses, offsets, deductions or
reductions against Lender or any Affiliate of Lender or any other Person as the
successor holder of the Mezzanine A Loan or any interest therein, provided that
Mezzanine A Borrower may seek specific performance of its contractual
rights and Lender’s contractual obligations under the Mezzanine A Loan
Documents.


 


5.2.16                  Material
Agreements.


 


(a)                                  Borrower shall not,
and shall not permit any Loan Party to, enter into any Material Agreement
without the consent of Lender, not to be unreasonably withheld or delayed. Lender
may condition its consent upon Mortgage Borrower also obtaining the
consent of Mortgage Lender, if such consent shall be required under the
Mortgage Loan


 


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Documents, and Mezzanine A Borrower also obtaining the consent of
Mezzanine A Lender, if such consent shall be required under the Mezzanine A
Loan Documents. Each such Material Agreement shall be in form and
substance reasonably acceptable to Lender in all respects, including the amount
of the costs and fees thereunder.


 


(b)                                 Except as specifically
set forth herein, Borrower will not, and will not permit or cause any Loan
Party or any Affiliate thereof to, amend, modify, supplement, rescind or
terminate any Material Agreement, without Lender’s approval, not to be
unreasonably withheld or delayed.


 


(c)                                  Borrower shall and
shall cause each Loan Party to observe and perform each and every term to
be observed or performed by such Loan Party under the Material Agreements the
non-performance of which would cause a Material Adverse Effect.


 


(d)                                 Lender’s approval of
any Material Agreement shall be subject to the same deemed approval provisions
contained in Section 5.1.17 hereof applicable to Leases.


 


VI.                                INSURANCE;
CASUALTY AND CONDEMNATION


 


Section 6.1                                      Insurance.


 


(a)                                  Borrower shall obtain
and maintain, or cause Mortgage Borrower to maintain, Policies providing at
least the following coverages:


 


(i)                                     comprehensive
all risk insurance, including the peril of wind (named storms) on the
Improvements and the Personal Property, in each case (A) having a 100% “Replacement
Cost Valuation” clause or endorsement, which for purposes of this Agreement shall
mean actual replacement value of each Individual Property (exclusive of costs
of excavations, foundations, underground utilities and footings), with a waiver
of depreciation, (B) containing an agreed amount endorsement with respect
to the Improvements and Personal Property waiving all co-insurance provisions; (C) providing
for no deductible in excess of 
$1,000,000 (other than with respect to wind storm coverage, which
deductible will not exceed 5% of the total insurable value of the Individual
Property where the physical loss or damage occurred); and (D) providing
coverage for contingent liability from Operation of Building Laws, Demolition
Costs and Increased Cost of Construction Endorsements together with an “Ordinance
or Law Coverage” or “Enforcement” endorsement if any of the Improvements or the
use of any Individual Property shall at any time constitute legal
non-conforming structures or uses;


 


(ii)                                  business
interruption/loss of rents insurance (A) with loss payable to Lender,
Mezzanine A Lender and/or Mortgage Lender, as their interests may appear; (B) covering
all risks required to be covered by the insurance provided for in Section 6.1(a)(i) above;
(C) in an amount equal to the greater of (1) the estimated gross
income from the operation of each Individual Property, or (2) the
projected operating expenses (including Debt Service, Mezzanine A Debt Service
and Mortgage Loan Debt Service) for the maintenance and operation of each


 


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Individual
Property, in each case for the period of restoration on an actual loss
sustained basis for limit purchased not less than the succeeding 18 month
period; the amount of such insurance shall be increased from time to time, at
Lender’s request but in no event more frequently than once every calendar year,
as and when the Rents increase or the estimate of (or the actual) gross income
increases; and (D) containing an extended period of indemnity endorsement
which provides that after the physical loss to the Improvements and the
Personal Property has been repaired, the continued loss of income will be
insured until either such income returns to the same level it was at prior to
the loss, or the date which is 365 days after the date that the applicable
Individual Property is repaired or replaced and operations are resumed,
whichever first occurs, in each case notwithstanding that the policy may expire
prior to the end of such period. All insurance proceeds payable to Lender,
Mezzanine A Lender and/or Mortgage Lender, as their interests may appear,
pursuant to the insurance coverage required under this Section 6.1(a)(ii) which
(x) are for losses in the month in which such proceeds are received or for
losses prior to the date of receipt, and (y) are for projected or future losses
shall be applied to the obligations of Borrower, Mortgage Borrower and
Mezzanine A Borrower, as the case may be, from time to time due and
payable under the Loan, the Mortgage Loan and the Mezzanine A Loan, as the case
may be, for each period as and when incurred; provided, however,
that nothing herein contained shall be deemed to relieve Borrower, Mortgage
Borrower or Mezzanine A Borrower of its respective obligations to pay the
amounts due under the Loan, the Mortgage Loan and the Mezzanine A Loan, as the
case may be, on the respective dates of payment provided for under the
Loan, the Mortgage Loan and the Mezzanine A Loan, as the case may be,
except to the extent such amounts are actually paid out of the proceeds of such
business interruption/loss of rents insurance.


 


(iii)                               commercial
general liability insurance against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Properties, such
insurance (A) to be on the so called “occurrence” form and containing
minimum limits per occurrence of $1,000,000 with a $2,000,000 general aggregate
for any policy year; (B) to continue at not less than the aforesaid limit
until reasonably required to be changed by Lender in writing by reason of
changed economic conditions making such protection inadequate; and (C) to
cover at least the following hazards:  (1) premises
and operations; (2) products and completed operations on an “if any”
basis; (3) independent contractors; (4) blanket contractual liability
for all written and oral contracts; and (5) contractual liability covering
the indemnities contained in the Security Instruments to the extent the same is
available;


 


(iv)                              if
and to the extent not covered by the insurance required to be maintained
pursuant to Section 6.1(a)(i) and Section 6.1(a)(iii) hereof,
at all times during which structural construction, repairs or alterations are
being made with respect to the Improvements (A) owner’s contingent
liability insurance or its equivalent covering claims not covered by or under
the terms or provisions of the commercial general liability insurance provided
for in Section 6.1(a)(iii) hereof; 


 


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and (B) the
insurance provided for in Section 6.1(a)(i) hereof shall be written
in a so called builder’s risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to Section 6.1(a)(i) hereof,
(3) shall include permission to occupy the applicable Individual Property,
and (4) shall contain an agreed amount endorsement waiving co insurance
provisions;


 


(v)                                 workers’
compensation, subject to the statutory limits of the State(s) in which each
Individual Property is located, and employer’s liability insurance with a limit
of at least $2,000,000 per accident and per disease per employee, and
$2,000,000 for disease in the aggregate in respect of any work or operations on
or about any Individual Property, or in connection with such Individual
Property or its operation (if applicable);


 


(vi)                              comprehensive
boiler and machinery insurance, if applicable, in such amounts as shall be
reasonably required by Lender (provided such insurance in such amounts
is generally available at commercially reasonable premiums and is generally
required by institutional lenders for properties comparable to the Properties),
on terms consistent with the commercial property insurance policy required
under Section 6.1(a)(i) hereof;


 


(vii)                           if
any portion of the Improvements on any Individual Property is at any time
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to
the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of
1973 or the National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law (the “Flood Insurance Acts”), flood hazard
insurance of the following types and in the following amounts: (A) coverage
under Policies issued pursuant to the Flood Insurance Acts (the “Flood Insurance
Policies”) in an amount equal to the maximum limit of coverage available
for such Individual Property under the Flood Insurance Acts, subject only to
customary deductibles under such Policies and (B) coverage under
supplemental private Policies in an amount, which when added to the coverage
provided under the Flood Insurance Policies with respect to such Individual
Property, is not less the aggregate amount of the Loan, the Mortgage Loan and
the Mezzanine A Loan (provided such private flood hazard insurance is
generally available at reasonable premiums and is generally required by
institutional lenders for similar properties);


 


(viii)                        earthquake
insurance, for properties in a high seismic area (A) in an amount equal to
one (1x) times the probable maximum loss of such Individual Property, as
indicated in the applicable engineering report, with a deductible reasonably
approved by Lender, (B) having a deductible reasonably approved by Lender
and subject to Rating Agency Confirmation (but in any event earthquake
insurance for such Individual Property shall not be in excess of 5% of the full
replacement cost of such Individual Property) and (C) if such Individual
Property is legally nonconforming under applicable zoning ordinances and codes,
containing ordinance of law coverage;


 


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(ix)                                umbrella
liability insurance in an amount not less than $200,000,000 per occurrence on
terms consistent with the commercial general liability insurance policy
required under Section 6.1(a) hereof;


 


(x)                                   insurance
against terrorism, terrorist acts or similar acts of sabotage, but excluding
acts of war (“Terrorism Insurance”) with coverage amounts of not less
than an amount equal to the full insurable value of the Improvements and the
Personal Property (the “Terrorism Insurance Required Amount”). The business
interruption/rent loss insurance Policy required pursuant to Section 6.1(a)(ii) hereof
shall not contain an exclusion from coverage under such Policy for loss
incurred as a result of an act of terrorism (but may contain an exclusion
for acts of war). If TRIA or similar statue is not in effect, then Borrower
shall be required to, or Borrower shall cause Mortgage Borrower to, carry
Terrorism Insurance throughout the term of the Loan, as required by the
preceding sentence, but in such event neither Borrower nor Mortgage Borrower
shall be required to spend on terrorism insurance coverage more than two times
the amount of the insurance premium that is payable at such time in respect of
the all-risk insurance, excluding the cost of earthquake, flood and terrorism
coverage (and in such event such terrorism coverage shall be from such
insurers, and with such coverage, as shall be acceptable to Lender in its
reasonable discretion) (the “Terrorism Insurance Cap”) and if the cost
of the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap,
Borrower shall, or shall cause Mortgage Borrower to, purchase the maximum
amount of Terrorism Insurance obtainable for a premium equal in amount to the
Terrorism Insurance Cap; and


 


(xi)                                such
other insurance and in such amounts as Lender from time to time may reasonably
request against such other insurable hazards which at the time are commonly
insured against for property similar to the Properties located in the region in
which the Properties are located.


 


(b)                                 All insurance provided
for in Section 6.1(a) hereof shall be obtained under valid and
enforceable policies (collectively, the “Policies” or in the singular,
the “Policy”), in such forms and, from time to time after the date
hereof, subject to the terms of Section 6.1(a) hereof, in such
amounts as may be reasonably satisfactory to Lender. The Policies shall be
issued by financially sound and responsible insurance companies authorized to
do business in the State in which the Individual Property is located and having
a claims paying ability/ rating of “A” or better (and the equivalent thereof)
by at least two of the Rating Agencies rating the Securities (one of which
shall be S&P, if S&P is rating the Securities, and one of which shall
be Moody’s, if Moody’s is rating the Securities), or if only one Rating Agency
is rating the Securities, then only by such Rating Agency; provided, however,
that if the insurance coverage is provided by a syndicate of insurers, then (i) if
such syndicate consists of five or more members, (A) at least 40% of the
insurance coverage (and, subject to the remaining provisions of this Section 6.1(b),
100% of the first layer of such coverage) shall be provided by insurance
companies having a claims paying ability rating of “A” or better by S&P and
20% shall be provided by insurance companies having a claims paying ability
rating of “A-” or better by S&P, and (B) the remaining 40% of the
coverage shall be provided by insurance


 


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companies having a claims paying ability rating of “BBB” or better by
S&P. Not less than ten days prior to the expiration dates of the Policies
theretofore furnished to Lender, binders or certificates of insurance
evidencing the Policies accompanied by evidence reasonably satisfactory to
Lender of payment of the Insurance Premiums shall be delivered by Borrower to
Lender. Notwithstanding the foregoing, Lender will allow 10% of the property
program to be underwritten by a carrier with an A.M. Best rating of A-X or
better, assuming these carriers are not part of the primary layer.


 


(c)                                  The insurance
coverage required under Section 6.1(a) hereof may be effected
under a blanket Policy or Policies covering one or more Individual Properties
and other property and assets not constituting a part of the Properties;
provided, however, that the certificates of insurance evidencing the coverage
required herein shall specify any sublimits in such blanket Policy applicable
to each Individual Property insured by such Policy, which amounts shall not be
less than the amounts required pursuant to Section 6.1(a), and which shall
in any case comply in all other applicable respects with the requirements of
this Section 6.1.


 


(d)                                 All Policies provided
for or contemplated by Section 6.1(a) hereof, except for the Policy
referenced in Section 6.1(a)(v) hereof, shall name Borrower, Mortgage
Borrower and Mezzanine A Borrower, as the case may be, as the insured and
Lender, Mortgage Lender and Mezzanine A Lender, as the additional insured, as their
interests may appear, and in the case of property damage, boiler and
machinery, flood and earthquake insurance, shall contain a so called New York
standard non-contributing mortgagee clause in favor of Lender, Mortgage Lender
and Mezzanine A Lender, providing that the loss thereunder shall be payable
directly to Lender, Mortgage Lender and Mezzanine A Lender, or Lender, Mortgage
Lender and Mezzanine A Lender, and Borrower, Mortgage Borrower and Mezzanine A
Borrower, as the case may be, by joint check; provided, however,
that Borrower hereby grants to Lender an irrevocable power of attorney to
endorse the joint check on Borrower’s behalf.


 


(e)                                  All Policies shall
contain clauses or endorsements to the effect that:


 


(i)                                     no
act or negligence of Borrower, Mortgage Borrower or Mezzanine A Borrower, or
anyone acting for Borrower, Mortgage Borrower or Mezzanine A Borrower, or any
tenant or other occupant, or failure to comply with the provisions of any
Policy, which might otherwise result in a forfeiture of the insurance or any part thereof,
except for the willful misconduct of Lender, Mortgage Lender or Mezzanine A
Lender, in violation of the conditions of such Policy, shall in any way affect
the validity or enforceability of the insurance insofar as Lender, Mortgage
Lender or Mezzanine A Lender is concerned;


 


(ii)                                  the
Policy shall not be cancelled without at least 15 days’ written notice (or ten
days’ written notice, in the case of non-payment of premium) to Lender,
Mortgage Lender and Mezzanine A Lender and any other party named therein as an
additional insured;


 


(iii)                               intentionally
omitted; and


 


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(iv)                              neither
Lender, Mortgage Lender or Mezzanine A Lender shall be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.


 


(f)                                    Borrower shall give
written notice to Lender if the Policy has not been renewed 10 days prior to
the expiration. If at any time Lender is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Lender shall
have the right, without notice to Borrower, but subject to the terms of the
Mortgage Loan Documents and the rights of Mezzanine A Lender, to take such
action as Lender deems necessary to protect its interest in the Properties,
including, without limitation, the obtaining of such insurance coverage as
Lender in its sole discretion deems appropriate after three (3) Business
Days’ notice to Borrower if prior to the date upon which any such coverage will
lapse or at any time Lender deems necessary (regardless of prior notice to
Borrower) to avoid the lapse of any such coverage. All premiums incurred by
Lender in connection with such action or in obtaining such insurance and
keeping it in effect shall be paid by Borrower to Lender upon demand and, until
paid, shall be secured by the Collateral and shall bear interest at the Default
Rate. Lender shall use commercially reasonable efforts to give Borrower
simultaneous notice of any action taken by Lender pursuant to this Section 6.1(f);
provided, however, that if Lender fails to deliver such notice, its rights and
remedies under this Agreement and the Pledge Agreement shall not be impaired.


 


(g)                                 Notwithstanding
anything to the contrary set forth in Section 6.1, the Policies required
pursuant to Sections 6.1(a)(iii), (v), (vii), and (ix) may be issued
by a captive insurance company, provided that, Borrower shall have the ability
to procure a portion of the insurance coverage required hereunder (including
the so called catastrophe perils) through a “captive” insurance arrangement
with a provider that is Affiliated with TSP, provided that (i) Lender and
any relevant investors with respect to the Loan are reasonably satisfied with
the formation/structure of the captive provider and the coverage provided, and (ii) Lender
has received a Rating Agency Confirmation and a written confirmation from each
of the investors of any portion of the Loan that the use of such captive
insurance arrangement shall not result in any adverse ratings effect upon any
applicable certificates. Lender shall cooperate with and permit Borrower to
participate in the presentation to the Rating Agencies or investors with
respect to any such captive insurance program. Except for the aforementioned
condition, such “captive” insurance company shall not be subject to any of the
above rating requirements or conditions in Section 6.1(b).


 


(h)                                 For purposes of this
Agreement, Lender shall have the same approval rights over the insurance
referred to in the Mortgage Loan Documents (including, without limitation, the
insurers, deductibles and coverages thereunder, as well as the right to require
other reasonable insurance pursuant to the Mortgage Loan Documents) as are
provided in favor of the Mortgage Lender in the Mortgage Loan Documents. All
liability insurance provided for in the Mortgage Loan Documents shall provide
insurance with respect to the liabilities of Mortgage Borrower, Mezzanine A
Borrower and Borrower. The insurance policies delivered pursuant to the
Mortgage Loan Documents shall include


 


126

















 


endorsements of the type described thereof, but pursuant to which
Lender shall have the same protections as the Mortgage Lender as referred to
therein.


 


(i)                                     In the event that
the Mortgage Loan and the Mezzanine A Loan have been paid in full, except upon
the occurrence and continuance of an Event of Default, Borrower shall permit
Mortgage Borrower to settle any insurance or condemnation claims with respect
to Insurance Proceeds or Awards which in the aggregate are less than or equal
to the Threshold Amount. Lender shall have the right to participate in and
reasonably approve any settlement for insurance or condemnation claims with
respect to the Insurance Proceeds or Awards which in the aggregate are equal to
or greater than the Threshold Amount. If an Event of Default shall have
occurred and be continuing but subject to the rights of Mezzanine A Lender,
Borrower hereby irrevocably empowers Lender, in the name of Mortgage Borrower
as its true and lawful attorney-in-fact, to file and prosecute such claim and
to collect and to make receipt for any such payment.


 


Section 6.2                                      Casualty.


 


If an Individual Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty (a “Casualty”), Borrower shall cause
Mortgage Borrower to give prompt notice of such damage to Lender and shall,
promptly commence and diligently prosecute the completion of the Restoration of
such Individual Property as nearly as possible to the condition such Individual
Property was in immediately prior to such Casualty, provided applicable zoning
laws in effect at the time permit such rebuilding, with such alterations as may be
reasonably approved by Lender (which approval shall not be unreasonably withheld,
conditioned or delayed) and otherwise in accordance with the Mortgage Loan
Documents.


 


Section 6.3                                      Condemnation.


 


Borrower shall cause Mortgage Borrower to promptly give Lender notice
of the actual or threatened commencement of any proceeding for the Condemnation
of all or any part of any Individual Property and shall cause Mortgage
Borrower to deliver to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such proceedings, and
Borrower shall from time to time cause Mortgage Borrower to deliver to Lender
all instruments reasonably requested by Lender to permit such participation. Borrower
shall cause Mortgage Borrower, at its expense, to diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in all reasonable respects in the carrying on or defense of
any such proceedings. Notwithstanding any Condemnation by any public or quasi
public authority through eminent domain or otherwise (including, but not
limited to, any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Agreement.


 


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Section 6.4                                      Restoration.


 


(a)                                  Borrower shall, or
shall cause Mortgage Borrower to, deliver to Lender all reports, plans,
specifications, documents and other materials that are delivered to Mortgage
Lender under  the Mortgage Loan
Documents in connection with a restoration of the applicable Individual
Property after a Casualty or Condemnation. If any Insurance Proceeds or Awards
are to be disbursed by Mortgage Lender for restoration, Borrower shall deliver
or cause to be delivered to Lender copies of all material written
correspondence delivered to and received from Mortgage Lender that relates to
the restoration and release of the Insurance Proceeds or Awards.


 


(b)                                 Notwithstanding any
provision in this Agreement to the contrary, all Insurance Proceeds or Awards
will be made available to Mortgage Borrower in accordance with the Mortgage
Loan Documents. In the event the Mortgage Loan and the Mezzanine A Loan have
been paid in full and Lender receives any Insurance Proceeds or Awards, Lender
shall either apply such proceeds to the Debt or to the restoration of the
applicable Individual Property in accordance with the same terms and conditions
contained in the Mortgage Loan Documents.


 


Section 6.5                                      Rights
of Lender.


 


For purposes of this Article VI, Borrower shall obtain the
approval of Lender for each matter requiring the approval of Mortgage Lender
under the provisions of the Mortgage Loan Documents relating to a Casualty or
Condemnation. If the Mortgage Lender does not require the deposit by Mortgage
Borrower of any deficiency in the net insurance proceeds pursuant to the
Mortgage Loan Documents (and Mezzanine A Lender does not require such deposit
pursuant to the Mezzanine A Loan Documents), Lender shall have the right to
demand that Borrower make a deposit of such deficiency in accordance with the
terms of the Mortgage Loan Documents (as if each reference therein to “Borrower”
and “Lender” referred to Borrower and Lender, respectively).


 


VII.                            RESERVE
FUNDS


 


Section 7.1                                      Repairs


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
the Mortgage Repair Agreement.


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to maintain the escrow
required to be maintained under the Mortgage Repair Agreement and Mezzanine A
Lender waives the requirements of Section 7.1 of the Mezzanine A Loan
Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan have been
repaid in full, Lender shall have the right to require Borrower to establish
and maintain an escrow that will operate in substantially the same way as the
escrow required to be maintained under the Mortgage Repair Agreement, but this
sentence shall not be deemed to require Borrower to maintain the escrow
required to be maintained under the Mortgage Repair Agreement (or the
applicable portion thereof) after Mortgage Borrower


 


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is no longer obligated to maintain same under the express provisions of
the Mortgage Repair Agreement.


 


Section 7.2                                      Impositions
and Imposition Deposits.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in Section 7(a) of
each Security Instrument.


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to make the Impositions and
Imposition Deposits (each as defined in the Security Instrument) pursuant to
the terms of Section 7(a) of each Security Instrument and Mezzanine A
Lender waives the requirements of Section 7.2 of the Mezzanine A Loan
Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan have been
repaid in full, Lender shall have the right to require Borrower to establish
and maintain an escrow that will operate in substantially the same way as the
escrow funds to which such Impositions and Imposition Deposits relate as
described in Section 7(a) of each Security Instrument.


 


Section 7.3                                      Replacement
Reserves.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
the Mortgage Replacement Reserve Agreement.


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to maintain the escrow
required to be maintained under the Mortgage Replacement Reserve Agreement and
Mezzanine A Lender waives the requirements of Section 7.3 of the Mezzanine
A Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan have
been repaid in full, Lender shall have the right to require Borrower to
establish and maintain an escrow that will operate in substantially the same
way as the escrow required to be maintained under the Mortgage Replacement
Reserve Agreement, but this sentence shall not be deemed to require Borrower to
maintain the escrow required to be maintained under the Mortgage Replacement
Reserve Agreement (or the applicable portion thereof) after Mortgage Borrower
is no longer obligated to maintain same under the express provisions of the
Mortgage Replacement Reserve Agreement.


 


Section 7.4                                      Debt
Service Reserve Funds. 


 


(a)                                  On the Closing Date,
Borrower shall deposit with Lender an amount equal to $11,797,746.00 (the “Debt
Service Reserve Deposit”), which is the amount of Debt Service Shortfalls
projected by Lender through the end of calendar year 2009 and which shall be
held and disbursed by Lender in accordance with the applicable provisions of
this Section 7.4. Amounts so deposited hereunder shall hereinafter be
referred to as the “Debt Service Reserve Funds”.


 


(b)                                 In lieu of making the
Debt Service Reserve Deposit, Borrower may either (i) deliver to
Lender a Letter of Credit in an amount equal to the Debt Service Reserve
Deposit (the “LC Option”) or (ii) deliver to Lender a certificate
of Bank Loan Borrower


 


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certifying to Lender that (a) there are sufficient funds available
to Bank Loan Borrower under the Bank Loan for the purpose of paying Debt
Service Shortfalls as projected by Lender through the end of calendar year
2009, (b) Bank Loan Borrower will, in the event of any such Debt Service
Shortfalls, borrow such funds pursuant to the Bank Loan and will contribute
such funds to Borrower and (c) Borrower will use such funds to pay for any
such Debt Service Shortfalls (the “Certificate Option”).


 


(c)                                  In the event Borrower
elects to deliver cash under this Section 7.4, Borrower shall have the
right, on any Determination Date, to receive a disbursement of amounts in
excess of the amount of the Debt Service Shortfalls then projected by Lender
through the end of calendar year 2009.


 


(d)                                 In the event Borrower
elects to deliver a Letter of Credit under this Section 7.4 or elects the
LC Option on the date hereof, Borrower shall have the right, on any
Determination Date, to replace the Letter of Credit previously delivered to
Lender with a Letter of Credit in an amount equal to the Debt Service
Shortfalls then projected by Lender through the end of calendar year 2009.


 


(e)                                  On or prior to each
Determination Date, Borrower shall deliver to Lender a certificate of Bank Loan
Borrower certifying to Lender that (a) there are sufficient funds
available to Bank Loan Borrower under the Bank Loan for the purpose of paying
for Debt Service Shortfalls as projected by Lender through the end of calendar
year 2009, (b) Bank Loan Borrower will, in the event of any such Debt
Service Shortfalls, borrow such funds pursuant to the Bank Loan and will
contribute such funds to Borrower and (c) Borrower will use such funds to
pay for any such Debt Service Shortfalls. In the event that Borrower fails to
comply with the provisions of the foregoing sentence, Borrower shall, within
five (5) Business Days following the applicable Determination Date,
deposit with Lender cash or deliver to Lender a Letter of Credit in an amount
equal to the Debt Service Shortfalls as projected by Lender through the end of
the calendar year 2009.


 


(f)                                    Provided no Event
of Default shall have occurred and be continuing, Lender shall make
disbursements of Debt Service Reserve Funds, upon and subject to the terms and
conditions set forth in this Section 7.4, to pay for Debt Service
Shortfalls. Borrower may, on written request received by Lender at least five (5) Business
Days prior to any Payment Date, request that Lender withdraw sums held as Debt
Service Reserve Funds and apply such sums toward the Debt Service due on such
Payment Date, provided Borrower delivers evidence acceptable to Lender in all
respects that there is a Debt Service Shortfall. The amount permitted by Lender
to be withdrawn from the Debt Service Reserve Funds and applied to the Debt
Service due on such Payment Date shall not exceed the amount of such Debt
Service Shortfall. In the event that on any subsequent Determination Date
following the deposit of cash or delivery of a Letter of Credit as required
hereunder, Borrower delivers to Lender a certificate of Bank Loan Borrower that
satisfies the requirements of Section 7.4(e) above, Lender shall
return to Borrower the Debt Service Reserve Funds remaining on deposit with
Lender or such Letter of Credit, as applicable.


 


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Section 7.5                                      Mortgage
Debt Service Escrows.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
the Mortgage Debt Service Escrow Agreement.


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to maintain the escrow
required to be maintained under the Mortgage Debt Service Escrow Agreement and
Mezzanine A Lender waives the requirements of Section 7.5 of the Mezzanine
A Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan have
been repaid in full, Lender shall have the right to require Borrower to
establish and maintain an escrow that will operate in substantially the same
way as the escrow required to be maintained under the Mortgage Debt Service
Escrow Agreement, but this sentence shall not be deemed to require Borrower to
maintain the escrow required to be maintained under the Mortgage Debt Service
Escrow Agreement (or the applicable portion thereof) after Mortgage Borrower is
no longer obligated to maintain same under the express provisions of the
Mortgage Debt Service Escrow Agreement.


 


Section 7.6                                      Interest
Rate Hedging Reserves.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
the Mortgage Interest Rate Hedge Reserve Agreement.


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to maintain the escrow
required to be maintained under the Mortgage Interest Rate Hedge Reserve
Agreement and Mezzanine A Lender waives the requirements of Section 7.6 of
the Mezzanine A Loan Agreement or (ii) the Mortgage Loan and the Mezzanine
A Loan have been repaid in full, Lender shall have the right to require
Borrower to establish and maintain an escrow that will operate in substantially
the same way as the escrow required to be maintained under the Mortgage
Interest Rate Hedge Reserve Agreement, but this sentence shall not be deemed to
require Borrower to maintain the escrow required to be maintained under the Mortgage
Interest Rate Hedge Reserve Agreement (or the applicable portion thereof) after
Mortgage Borrower is no longer obligated to maintain same under the express
provisions of the Mortgage Interest Rate Hedge Reserve Agreement.


 


Section 7.7                                      Other
Mortgage Reserves.


 


(a)                                  Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
the Mortgage Loan Documents with respect to any reserves or escrows established
thereunder that are not specifically referenced in any other section of
this Article VII (the “Other Mortgage Reserves”).


 


(b)                                 In the event (i) Mortgage
Lender waives the requirement of Mortgage Borrower to maintain any Other
Mortgage Reserves pursuant to the terms of the Mortgage Loan Documents and
Mezzanine A Lender waives the requirements of Section 7.7 of the Mezzanine
A Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan have
been repaid in full, Lender shall have the right to require Borrower to
establish


 


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and maintain an escrow that will operate in substantially the same way
as the applicable Other Mortgage Reserves.


 


Section 7.8                                      Reserve
Funds, Generally.


 


(a)                                  Borrower grants to
Lender a first priority perfected security interest in each of the Reserve
Funds and the related Accounts established hereunder, if any, and any and all
monies now or hereafter deposited in such Reserve Fund and each such related
Account as additional security for payment of the Debt. Until expended or
applied in accordance herewith, the Reserve Funds and the related Accounts
established hereunder, if any, shall constitute additional security for the
Debt.


 


(b)                                 Upon the occurrence
and during the continuation of an Event of Default, Lender may, in addition to
any and all other rights and remedies available to Lender, apply any sums then
held in any or all of the Reserve Funds established hereunder, if any, to the
payment of the Debt in any order in its sole discretion.


 


(c)                                  Any Reserve Funds
established hereunder shall not constitute trust funds and may be
commingled with other monies held by Lender.


 


(d)                                 Any Reserve Funds
established hereunder shall be held in interest-bearing accounts and all
earnings or interest on a Reserve Fund shall be added to and become a part of
such Reserve Fund and shall be disbursed in the same manner as other monies
deposited in such Reserve Fund.


 


(e)                                  Borrower shall not,
without obtaining the prior written consent of Lender, further pledge, assign
or grant any security interest in any Reserve Fund or related Account
established hereunder, if any, or the monies deposited therein or permit any
lien or encumbrance to attach thereto, or any levy to be made thereon, or any
UCC-1 Financing Statements, except those naming Lender as the secured party, to
be filed with respect thereto.


 


(f)                                    Borrower shall
indemnify Lender and hold Lender harmless from and against any and all actions,
suits, claims, demands, liabilities, losses, damages, obligations and costs and
expenses (including litigation costs and reasonable attorneys’ fees and
expenses) arising from or in any way connected with the Reserve Funds or the
related Accounts established hereunder, if any, or the performance of the
obligations for which the Reserve Funds or the related Accounts were established,
except to the extent arising from the gross negligence or willful misconduct of
Lender, its agents or employees (including willful breach of this Agreement). Borrower
shall assign to Lender all rights and claims Borrower may have against all
Persons supplying labor, materials or other services which are to be paid from
or secured by such Reserve Funds or the related Accounts; provided,
however, that Lender may not pursue any such right or claim
unless an Event of Default has occurred and remains uncured.


 


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Section 7.9                                      Letters
of Credit.


 


7.9.1                        Delivery
of Letters of Credit.


 


(a)                                  The aggregate amount
of any Letter of Credit and cash on deposit with respect to the Debt Service
Reserve Funds at any time during the term of the Loan shall at all times be at
least equal to the amount which Borrower would otherwise be required to have on
deposit pursuant to Section 7.4 hereof if Borrower did not elect to
deliver a Letter of Credit in lieu thereof. In the event that a Letter of
Credit is delivered in lieu of any portion of the Debt Service Reserve Funds,
Borrower shall be responsible for the direct payment of any Debt Service
Shortfalls that would otherwise have been payable from such portion of the Debt
Service Reserve Funds. Lender shall not draw on any Letter of Credit delivered
in lieu of any portion of the Debt Service Reserve Funds unless (i) Borrower
fails to pay any Debt Service Shortfall or (ii) an Event of Default has
occurred and is continuing.


 


(b)                                 Borrower shall give
Lender not less than five (5) Business Days prior written notice of
Borrower’s election to deliver a Letter of Credit and Borrower shall pay to
Lender all of Lender’s reasonable out-of-pocket costs and expenses in
connection therewith. Lender shall be the beneficiary of any Letter of Credit
and Borrower shall not be entitled to draw down any such Letter of Credit for
any reason whatsoever. Upon not less than five (5) Business Days prior
written notice to Lender, Borrower may replace a Letter of Credit with a
cash deposit to the Debt Service Reserve Fund. Prior to the return of a Letter
of Credit, Borrower shall deposit with Lender cash in an amount that satisfies
the Debt Service Reserve Fund deposit requirement.


 


7.9.2                        Provisions
Regarding Letters of Credit.


 


(a)                                  Each Letter of Credit
delivered under this Agreement shall be additional security for the payment of
the Debt. Upon the occurrence and during the continuation of an Event of
Default, Lender shall have the right, at its option, to draw on any Letter of
Credit and to apply all or any part thereof to the payment of the items
for which such Letter of Credit was established or to apply such Letter of
Credit to payment of the Debt in such order, proportion or priority as Lender may determine.
Any such application to the Debt shall be subject to the Spread Maintenance
Payment and any Interest Shortfall, if applicable. On the Maturity Date, if the
Debt is not paid in full, any such Letter of Credit may be applied to
reduce the Debt.


 


(b)                                 In addition to any
other right Lender may have to draw upon a Letter of Credit pursuant to
the terms and conditions of this Agreement, Lender shall have the additional
rights to draw in full on any Letter of Credit:


 


(i)                                     if
Lender has received a notice from the issuing bank that such Letter of Credit
will not be renewed and either (y) a substitute Letter of Credit or (z) cash in
the amount of the Letter of Credit is not provided at least ten (10) Business
Days prior to the date on which the outstanding Letter of Credit is scheduled
to expire;


 


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(ii)                                  upon
receipt of notice from the issuing bank that the Letter of Credit will be
terminated (except if the termination of such Letter of Credit is permitted
pursuant to the terms and conditions of this Agreement), and Borrower has
failed to deliver to Lender either (y) a substitute Letter of Credit or (z)
cash in the amount of the Letter of Credit; or


 


(iii)                               if
Lender has received notice that the bank issuing the Letter of Credit shall
cease to be an Eligible Institution and Borrower has failed to deliver to
Lender either (y) a substitute Letter of Credit or (z) cash in the amount of
the Letter of Credit.


 


Notwithstanding anything to the contrary contained in the above, Lender
shall not be obligated to draw down on any Letter of Credit upon the happening
of an event specified in clause (i), (ii) or (iii) above and shall
not be liable for any losses sustained by Borrower due to the insolvency of the
bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit,
and in the event of the insolvency of the bank issuing the Letter of Credit or
if the bank issuing the Letter of Credit ceases to be an Eligible Institution,
Borrower shall promptly provide to Lender either (y) a substitute Letter of
Credit or (z) cash in the amount of the Letter of Credit.


 


(c)                                  If any Letter of
Credit or Letters of Credit delivered pursuant to Section 7.4 of this
Agreement, in the aggregate, are in an amount greater than ten percent (10%) of
the then outstanding principal balance of the Loan, Borrower shall deliver to
Lender, together with such Letter of Credit, a new substantive
non-consolidation opinion substantially similar to the Insolvency Opinion
delivered on the date hereof in connection with the Loan, which new opinion
shall be in form and substance reasonably acceptable to Lender, and, if a
Securitization has occurred, to the Rating Agencies.


 


VIII.                        DEFAULTS


 


Section 8.1                                      Event
of Default. 


 


(a)                                  Each of the following
events shall constitute an event of default hereunder (an “Event of Default”):


 


(i)                                     if
(i) Borrower shall fail to make any payment of interest or principal or
default interest required hereunder or the monthly escrow or reserve deposits
required hereunder or under the other Loan Documents, and such failure shall
continue for more than five (5) days from the date such payment was due, (ii) the
late charges required under Section 2.2.7 hereof are not paid when due or (iii) any
portion of the Debt is not paid on the Maturity Date;


 


(ii)                                  if
any of the Taxes or Other Charges are not paid on or before the date that they
shall become delinquent, subject to Borrower’s or Mortgage Borrower’s right to
contest Taxes in accordance with Section 5.1.2 hereof, except to the
extent sums sufficient to pay such Taxes and Other Charges have been deposited
with Mortgage Lender in accordance with the terms of the Mortgage Loan
Documents or with Lender in accordance with Section 7.2 hereof;


 


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(iii)                               if (A) the
Policies are not kept in full force and effect, or (B) certified copies of
the Policies or other evidence of coverage under the Policies in accordance
with Section 6.1(b) hereof are not delivered to Lender within ten (10) days
after written request therefor from Lender;


 


(iv)                              if
Borrower transfers or encumbers any Individual Property (or any portion
thereof), the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity or any
Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity in violation of the provisions of Section 5.2.10 hereof or
the Pledge Agreement (excluding the removal or resignation of Manager, provided
the replacement manager is a Qualified Manager and Borrower employs such
manager in accordance with Section 5.1.18 hereof);


 


(v)                                 if
any representation or warranty made by Borrower, Principal or Guarantor herein
or in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to Lender in
connection with the Loan shall have been false or misleading in any material
respect as of the date such representation or warranty was made; provided, however, that as to any such
false or misleading representation, warranty, acknowledgement or statement
which was unintentionally submitted to Lender and which can be made true and
correct by action of Borrower, Borrower shall have a period of thirty (30) days
following written notice thereof to Borrower to undertake and complete all
action necessary to make such representation, warranty, acknowledgement or
statement true and correct in all material respects;


 


(vi)                              if
any Loan Party or Guarantor shall make an assignment for the benefit of
creditors generally;


 


(vii)                           if a
receiver, liquidator or trustee shall be appointed for any Loan Party or
Guarantor, or if any Loan Party or Guarantor shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to the Bankruptcy Code, or any similar federal or State law, shall be
filed by or against, consented to, or acquiesced in by, a Loan Party or
Guarantor, or if any proceeding for the dissolution or liquidation of a Loan Party
or Guarantor shall be instituted; provided,
however, that if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by such Loan Party or
Guarantor, no Event of Default shall exist unless the same is not discharged,
stayed or dismissed within sixty (60) days;


 


(viii)                        if
Borrower attempts to assign its rights under this Agreement or any of the other
Loan Documents or any interest herein or therein in contravention of the Loan
Documents;


 


(ix)                                if
Borrower breaches any of the negative covenants contained in Section 5.2.2,
5.2.3, 5.2.4, 5.2.5, 5.2.6, 5.2.7, 5.2.8, 5.2.13, 5.2.14 or 5.2.15 hereof;


 


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(x)                                   intentionally
omitted;


 


(xi)                                if
a default by Mortgage Borrower has occurred and continues beyond any applicable
notice or cure period under the Management Agreement (or any replacement
Management Agreement) and such default permits the manager thereunder to
terminate or cancel the Management Agreement (or any replacement Management
Agreement), unless such default is waived by such manager in writing;


 


(xii)                             if
Borrower or Principal violates or does not comply with any of the provisions of
Section 4.1.35 hereof in any material respect;


 


(xiii)                          if any
Individual Property becomes subject to any mechanic’s, materialman’s or other
Lien (other than a Lien for local real estate taxes and assessments not then
due and payable) and, subject to Section 5.2.1 hereof, such Lien shall
remain undischarged of record (by payment, bonding or otherwise) for a period
of sixty (60) days after Borrower or Mortgage Borrower shall have received
written notice of such Lien;


 


(xiv)                         if any
federal tax Lien or state or local income tax Lien is filed against any Loan
Party, Guarantor, the Collateral, the Mezzanine A Collateral, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower Entity,
any Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity or any Individual Property and, subject to Section 5.1.2
hereof, the same is not discharged of record within sixty (60) days after same
is filed;


 


(xv)                            (A) Borrower
fails to timely provide Lender with the written certification and evidence
referred to in Section 5.2.8 hereof, or (B) Borrower consummates a
transaction which would cause the Loan or Lender’s exercise of its rights under
the Pledge Agreement, the Note, this Agreement or the other Loan Documents to
constitute a nonexempt prohibited transaction under ERISA or result in a
violation of a State statute regulating governmental plans, subjecting Lender
to liability for a violation of ERISA, the Code or a State statute, unless
Borrower shall successfully cure such violation (by rescinding such transaction
or otherwise) within sixty (60) days after obtaining Actual Knowledge of such
violation or such shorter cure period as may be prescribed under ERISA,
the Code or such state statute, as applicable;


 


(xvi)                         if
Borrower shall fail to deliver to Lender, within thirty (30) days after request
by Lender, the estoppel certificates required pursuant to the terms of Section 5.1.13(a) hereof;


 


(xvii)                      intentionally
omitted;


 


(xviii)                   if Borrower
shall be in default beyond applicable notice and grace periods under any other
pledge agreement or other security agreement covering any of the Collateral (or
any portion thereof), whether it be superior or junior in lien to the Pledge
Agreement;


 


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(xix)                           with
respect to any term, covenant or provision set forth herein which specifically
contains a notice requirement or grace period, if Borrower shall be in default
under such term, covenant or condition after the giving of such notice or the
expiration of such grace period;


 


(xx)                              if
any of the assumptions contained in the Insolvency Opinion, including, but not
limited to, any exhibits attached thereto, were not true and correct in any
material respect as of the date of such Insolvency Opinion or thereafter became
untrue or incorrect in any material respect;


 


(xxi)                           if,
without the prior written consent of Lender, Mortgage Borrower votes for, or
permits any modification or amendment to any of the terms or provisions of the
applicable Condominium Documents so as to result in a Material Adverse Effect;


 


(xxii)                        if,
without the prior written consent of Lender, Mortgage Borrower fails to comply
in any material respect with any terms of the applicable Condominium Documents
and the applicable condominium act and such default continues for thirty (30)
days after receipt of written notice from Lender or such earlier time as
required for compliance under the applicable Condominium Documents or the
applicable condominium act;


 


(xxiii)                     if any
Individual Property that is subject to a condominium regime is partitioned
pursuant to any action for partition by Mortgage Borrower;


 


(xxiv)                    if the
condominium regime to which an Individual Property is subject to is terminated
without Lender’s written consent;


 


(xxv)                       if Borrower
shall cause Mortgage Borrower to fail to pay the Ground Rent or any additional
rent or other charge mentioned in or made payable by any Ground Lease when said
rent or other charge is due and payable;


 


(xxvi)                    if there shall
occur any default by Mortgage Borrower, as tenant under any Ground Lease, in
the observance or performance of any term, covenant or condition of such Ground
Lease on the part of Mortgage Borrower to be observed or performed and
said default is not cured following the expiration of any applicable grace and
notice periods therein provided, or if the leasehold estate created by such
Ground Lease shall be surrendered or if such Ground Lease shall cease to be in
full force and effect or such Ground Lease shall be terminated or canceled
without Lender’s consent, or if any of the terms, covenants or conditions of
such Ground Lease shall in any manner be modified, changed, supplemented,
altered, or amended in any material respect without the consent of Lender;


 


(xxvii)                 if Borrower shall
continue to be in Default under any of the other terms, covenants or conditions
of this Agreement not specified in subsections (i) through (xxvi) above,
for ten (10) days after notice to Borrower from Lender, in the case of any
Default which can be cured by the payment of a sum of money, or for thirty (30)
days after notice from Lender in the case of any other Default;


 


137

















 


provided, however, that if such non monetary
Default is susceptible of cure but cannot reasonably be cured within such
thirty (30) day period, but Borrower shall have commenced to cure such Default
within such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) day period shall be extended for
such time as is reasonably necessary for Borrower in the exercise of due diligence
to cure such Default, such additional period not to exceed one hundred eighty
(180) days;


 


(xxviii)              if there shall be a
default under the Pledge Agreement or any of the other Loan Documents beyond
any applicable notice and cure periods contained in such documents, whether as
to Borrower, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity, any Mezzanine
A Principal’s general partner interest in the related Mezzanine A Borrower
Entity or any Individual Property (provided, however, that if no notice or cure
period is specified, then the provisions of Section 8.1(a)(xxii) hereof
shall apply to such default), or if any other such event shall occur or
condition shall exist, if the effect of such event or condition is to
accelerate the maturity of any portion of the Debt or to permit Lender to
accelerate the maturity of all or any portion of the Debt;


 


(xxix)                      a Mortgage
Loan Event of Default shall occur, and shall not have been waived or settled by
Mortgage Lender or cured by Mortgage Borrower, or if Mortgage Borrower enters
into or otherwise suffers or permits any material amendment, waiver,
supplement, termination, extension, renewal, replacement or other modification
of any Mortgage Loan Document without the prior written consent of Lender, to
the extent that such consent is required to be obtained hereunder; or


 


(xxx)                         a
Mezzanine A Loan Event of Default shall occur, and shall not have been waived
or settled by Mezzanine A Lender or cured by Mezzanine A Borrower, or if
Mezzanine A Borrower enters into or otherwise suffers or permits any amendment,
waiver, supplement, termination, extension, renewal, replacement or other
modification of any Mezzanine A Loan Document without the prior written consent
of Lender, to the extent that such consent is required to be obtained
hereunder.


 


(b)                                 Upon the occurrence of
an Event of Default (other than an Event of Default described in clause (vi) or
(vii) of Section 8.1(a) hereof) and at any time thereafter, in
addition to any other rights or remedies available to it pursuant to this
Agreement and the other Loan Documents or at law or in equity, Lender may take
such action, without notice or demand (except for such notice or demand as may be
expressly required under the Note, this Agreement, the Pledge Agreement or the
other Loan Documents), that Lender deems advisable to protect and enforce its
rights against Borrower and in and to the Collateral, including, without
limitation, declaring the Debt to be immediately due and payable, and Lender may enforce
or avail itself of any or all rights or remedies provided in the Loan Documents
against Borrower and/or the Collateral and may exercise all the rights and
remedies of a secured party under the


 


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Uniform Commercial Code against Borrower and the Collateral,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in clause (vi) or (vii) of
Section 8.1(a) hereof, the Debt and all other obligations of Borrower
hereunder and under the other Loan Documents shall immediately and
automatically become due and payable, without notice or demand, and Borrower
hereby expressly waives any such notice or demand, anything contained herein or
in any other Loan Document to the contrary notwithstanding.


 


Section 8.2                                      Remedies.


 


(a)                                  Upon the occurrence
of an Event of Default, all or any one or more of the rights, powers,
privileges and other remedies available to Lender against Borrower under this
Agreement or any of the other Loan Documents executed and delivered by, or
applicable to, Borrower or at law or in equity may be exercised by Lender
at any time and from time to time, whether or not all or any of the Debt shall
be declared due and payable, and whether or not Lender shall have commenced any
foreclosure proceeding or other action for the enforcement of its rights and
remedies under any of the Loan Documents with respect to all or any part of
the Collateral. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singly, successively,
together or otherwise, at such time and in such order as Lender may determine
in its sole discretion, to the fullest extent permitted by Applicable Law,
without impairing or otherwise affecting the other rights and remedies of
Lender permitted by Applicable Law, equity or contract or as set forth herein
or in the other Loan Documents. Without limiting the generality of the
foregoing, Borrower agrees that if an Event of Default is continuing all Liens
and other rights, remedies or privileges provided to Lender with respect to the
Collateral shall remain in full force and effect until Lender has exhausted all
of its remedies against the Collateral, and the Pledge Agreement has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt, or
the Debt has been paid in full.


 


(b)                                 With respect to
Borrower and the Collateral, nothing contained herein or in any other Loan
Document shall be construed as requiring Lender to resort to any specific
portion of the Collateral for the satisfaction of any of the Debt in preference
or priority to any other Collateral, and Lender may seek satisfaction out
of the Collateral or any part thereof, in its absolute discretion in
respect of the Debt. In addition, Lender shall have the right from time to time
to partially foreclose upon the Collateral in any manner and for any amounts
secured by the Pledge Agreement then due and payable as determined by Lender in
its sole discretion, including, without limitation, the following
circumstances:  (i) in the event
Borrower defaults beyond any applicable grace period in the payment of one (1) or
more scheduled payments of principal and interest, Lender may foreclose
upon any portion of the Collateral to recover such delinquent payments, or (ii) in
the event Lender elects to accelerate less than the entire outstanding
principal balance of the Loan, Lender may foreclose upon the Collateral to
recover so much of the principal balance of the Loan as Lender may accelerate
and such other sums secured by the Pledge Agreement as Lender may elect. Notwithstanding
one or more partial foreclosures, the Collateral not foreclosed upon shall
remain subject to the Pledge Agreement to secure payment of sums secured by the
Pledge Agreement and not previously recovered.


 


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(c)                                  Lender shall have the
right, from time to time, to sever the Note, the Pledge Agreement and the other
Loan Documents into one or more separate notes, pledges and other security
documents (the “Severed Loan Documents”) in such denominations as Lender
shall determine in its sole discretion for purposes of evidencing and enforcing
its rights and remedies provided hereunder. Borrower shall execute and deliver
to Lender from time to time, promptly after the written request of Lender, a
severance agreement and such other documents as Lender shall reasonably request
in order to effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. The Severed Loan Documents shall
not (x) contain any representations, warranties or covenants not contained in
the Loan Documents (and any such representations and warranties contained in
the Severed Loan Documents will be given by Borrower only as of the Closing
Date) or (y) change the Applicable Interest Rate or the Maturity Date, or (z)
otherwise amend or modify any other material term of the Note, this Agreement,
the Pledge Agreement or the other Loan Documents.


 


(d)                                 Any amounts recovered
from the Collateral after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any
other amounts due under the Loan Documents in such order, priority and
proportions as Lender in its sole discretion shall determine.


 


Section 8.3                                      Remedies
Cumulative; Waivers.


 


The rights, powers and remedies of Lender under this Agreement shall be
cumulative and not exclusive of any other right, power or remedy which Lender may have
against Borrower pursuant to this Agreement or the other Loan Documents, or
existing at law or in equity or otherwise. No delay or omission to exercise any
remedy, right or power accruing upon an Event of Default shall impair any such
remedy, right or power or shall be construed as a waiver thereof, but any such
remedy, right or power may be exercised from time to time and as often as may be
deemed expedient. A waiver of one or more Defaults or Events of Default with
respect to Borrower shall not be construed to be a waiver of any subsequent
Default or Event of Default by Borrower or to impair any remedy, right or power
consequent thereon.


 


Section 8.4                                      Right
to Cure Defaults.


 


Upon the occurrence and during the continuance of any Event of Default,
Lender may, but without any obligation to do so and without notice to or demand
on Borrower (other than such notice as may otherwise be expressly required
hereunder) and without releasing Borrower from any obligation hereunder, make
any payment or do any act required of Borrower hereunder in such manner and to
such extent as Lender may deem necessary to protect the security hereof. Lender
is authorized to enter upon the Properties for such purposes, or appear in,
defend, or bring any action or proceeding to protect its interest in the
Properties for such purposes, and the cost and expense thereof (including
reasonable attorneys’ fees to the extent permitted by law), with interest as
provided in this Section 8.4, shall constitute a portion of the Debt and
shall be due and payable to Lender upon demand. All such costs and expenses
incurred by Lender in remedying such 


 


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Event of Default or such failed payment or
act or in appearing in, defending, or bringing any action or proceeding shall
bear interest, at the Default Rate, for the period after notice from Lender
that such cost or expense was incurred to the date of payment to Lender. All
such costs and expenses incurred by Lender, together with interest thereon
calculated at the Default Rate, shall be deemed to constitute a portion of the
Debt and to be secured by the liens, claims and security interests provided to
Lender under the Loan Documents and shall be immediately due and payable upon
demand by Lender therefor.


 


Section 8.5                                      Mortgage
Loan Reserve Funds.


 


Any Mortgage Loan Reserve Funds that Mortgage Lender disburses to
Lender during the continuance of an Event of Default shall be held and applied
by Lender to the payment of the Debt in such order and priority determined by
Lender in its sole discretion.


 


Section 8.6                                      Power
of Attorney.


 


Upon the occurrence and during the continuation of an Event of Default,
for the purpose of carrying out the provisions and exercising the rights,
powers and privileges granted in this Article VIII, Borrower hereby
irrevocably appoints the Lender as its true and lawful attorney-in-fact to
execute, acknowledge and deliver any instruments and do and perform any
acts such as are referred to in this subsection in the name and on behalf
of Borrower. This power of attorney is a power coupled with an interest and
cannot be revoked.


 


IX.                                SPECIAL
PROVISIONS


 


Section 9.1                                      Sale
of Notes and Securitization


 


Lender may, at any time, sell, transfer, pledge or assign the Note,
this Agreement, the Pledge Agreement and the other Loan Documents, and any or
all servicing rights with respect thereto, or grant participations therein or
issue either (i) mortgage pass-through certificates or other securities
evidencing a beneficial interest in the Loan or (ii) collateralized debt
obligations secured by the Loan (collectively, “Securities”), in either
case in a rated or unrated public offering or private placement of such
Securities (a “Securitization”). At the request of Lender, Borrower and
Principal shall cooperate in all reasonable respects with Lender in connection
with a Securitization or the sale of the Note or the participations therein or
the Securities, including, without limitation, to:


 


(a)                                  (i) provide such
financial and other information with respect to the Properties, the Collateral,
the Mezzanine A Collateral, Borrower, Mortgage Borrower, Mezzanine A Borrower,
Principal, Mortgage Principal, Mezzanine A Principal, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity and any
Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity as may be required to be delivered pursuant to Section 5.1.10
hereof (subject to the provisions of Section 5.1.10(g) hereof), (ii) cause
Mortgage Borrower to provide (A) the information set forth on Schedule 9.1 annexed hereto and (B) the
annual operating budgets relating to the Properties in accordance with the
requirements of the 


 


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Mortgage Loan Documents, and (iii) perform or permit or cause
to be performed or permitted such site inspection, appraisals, market studies,
environmental reviews and reports (Phase I’s and, if appropriate, Phase II’s),
engineering reports and other due diligence investigations of the Properties,
as may be reasonably requested by the holder of the Note or the Rating
Agencies or as may be necessary or appropriate in connection with the
Securitization in accordance with the terms and conditions of this Agreement
(collectively, the “Provided Information”), together with, if customary,
appropriate verification and/or consents with respect to the Provided
Information reasonably acceptable to Lender and the Rating Agencies;


 


(b)                                 if required by the
Rating Agencies, deliver (i) an Insolvency Opinion reasonably satisfactory
to Lender and the Rating Agencies, (ii) revised opinions of counsel,
reasonably satisfactory to Lender and the Rating Agencies, as to due execution
and enforceability with respect to the Loan Documents, the Collateral, any
Borrower Entity and any Principal, and (iii) amendments, reasonably
satisfactory to Lender and the Rating Agencies, to the Organizational Documents
for any Borrower Entity or any Principal or any other Loan Party, provided such
amendments shall relate exclusively to the single purpose bankruptcy remote
nature of such Borrower Entity or such Principal or such other Loan Party, as
the case may be;


 


(c)                                  if required by the
Rating Agencies, use commercially reasonable efforts to obtain and deliver such
additional tenant estoppel letters, subordination agreements or other
agreements from parties to agreements that affect the Properties as may be
required under Section 5.1.13(c) hereof, which estoppel letters,
subordination agreements or other agreements shall be reasonably satisfactory
to Lender and the Rating Agencies;


 


(d)                                 subject in all cases
to the applicable provisions of Section 9.5 hereof, execute such
amendments to the Loan Documents as may be reasonably requested by the
holder of the Note or the Rating Agencies or otherwise to effect the
Securitization;


 


(e)                                  if Lender elects, in
its sole discretion, prior to or upon a Securitization, to split the Loan into
two or more parts, or any Note into multiple component notes or tranches, or
reallocate the principal amounts of the Notes, which parts, components,
tranches or Notes may have different interest rate spreads, principal
amounts and maturities, Borrower agrees to cooperate with Lender in connection
with the foregoing and, subject in all cases to the applicable provisions of Section 9.5
hereof, to execute the required modifications and amendments to the Note, this
Agreement and the Loan Documents and to provide opinions necessary to
effectuate the same. Such Notes or components may be assigned different
interest rate spreads, so long as the weighted average of such interest rate
spreads does not exceed the Eurodollar Rate Margin (except for any deviation
attributable to the imposition of any rate of interest at the Default Rate or
prepayments pursuant to Section 2.3.2 or 2.3.3 hereof);


 


(f)                                    deliver such
estoppel certificates as may be required to be delivered by Borrower
pursuant to Section 5.1.13(a) hereof; and


 


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(g)                                 amend the
Organizational Documents of Mezzanine A Borrower and Mezzanine A Principal to “opt
into” Article 8 of the UCC and in connection therewith, certificate the
interests comprising the Collateral, deliver such certificates to Lender in
accordance with the Pledge Agreement and deliver to Lender “springing control”
endorsements (or the equivalent thereof) to the UCC Title Insurance Policy.


 


All third party costs and expenses and out-of-pocket expenses incurred
by Lender in connection with this Agreement and the Securitization shall be
paid by Lender (except as otherwise expressly set forth herein). These shall
include, but not be limited to, fees and disbursements of legal counsel,
accountants, and other professionals retained by Lender and fees and expenses
incurred for producing any offering documents or any other materials (including
travel by Lender and its agents, design, printing, photograph and document
production costs). Solely for the purposes of this Section 9.1, Lender
shall reimburse Borrower for all of its actual out-of-pocket costs and expenses
(other than the fees and expenses of Borrower’s counsel) that Borrower incurs
in connection with complying with a request made by Lender or any other Person
acting on behalf of Lender under this Section 9.1 in connection with a
Securitization. Notwithstanding the foregoing, the provisions of this paragraph
shall in no way limit or affect any Borrower obligation to pay any costs
expressly required to be paid by Borrower pursuant to any other Sections of
this Agreement.


 


Section 9.2                                      Disclosure
Document Cooperation.


 


Borrower understands that certain of the Provided Information may be
included in disclosure documents in connection with the Securitization,
including a prospectus supplement, private placement memorandum, offering
circular or other offering document (each a “Disclosure Document”) and may also
be included in filings (an “Exchange Act Filing”) with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
“Securities Act”), or the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”), or provided or made available to Investors
or prospective Investors in the Securities, the Rating Agencies, and service
providers relating to the Securitization. In the event that a Disclosure
Document is required to be revised prior to the sale of all Securities,
Borrower will cooperate in all reasonable respects with the holder of the Note
in updating the Disclosure Document by providing all current information
necessary to keep the Provided Information included in the Disclosure Document
accurate and complete in all material respects.


 


Section 9.3                                      Servicer.


 


At the option of Lender, the Loan may be serviced by a
servicer/trustee (the “Servicer”) selected by Lender and Lender may delegate
all or any portion of its responsibilities under this Agreement and the other
Loan Documents to the Servicer pursuant to a servicing agreement (the “Servicing
Agreement”) between Lender and Servicer, provided that in no event shall
such delegation operate to relieve Lender from its obligations hereunder. Lender
will notify Borrower of the appointment of any Servicer on or prior to the date
such appointment shall become effective. Borrower shall 


 


143

















 


not be obligated to pay, or reimburse Lender
for, any servicing fee or other compensation payable to the Servicer.


 


Section 9.4                                      Exculpation.


 


(a)                                  Except as otherwise
expressly provided in this Section 9.4, Lender shall not enforce the
liability and obligation of Borrower to perform and observe the
obligations contained in this Agreement, the Note or the Pledge Agreement or
any other Loan Document by any action or proceeding against Borrower or any
Exculpated Party, except that Lender may bring a foreclosure action,
action for specific performance or other appropriate action or proceeding to
enable Lender to enforce and realize upon this Agreement, the Note, the Pledge
Agreement, the other Loan Documents, and the Collateral and any other
collateral for the Debt in which a security interest is granted to Lender by
this Agreement, the Pledge Agreement or the other Loan Documents; provided, however, that any judgment in any such action or
proceeding shall be enforceable against Borrower only to the extent of Borrower’s
interest in the Collateral, and in any other collateral in which a security
interest is granted to Lender by this Agreement, the Pledge Agreement or the
other Loan Documents. Lender, by accepting this Agreement, the Note and the
Pledge Agreement, agrees that it shall not, except as otherwise expressly
provided in this Section 9.4, sue for, seek or demand any deficiency or
other money judgment against Borrower, any direct or indirect member, manager,
shareholder, partner, beneficiary or other owner of beneficial ownership
interests in Borrower, or any affiliate, director, officer, employee, trustee
or agent of any of the foregoing (each, an “Exculpated Party” and,
collectively, the “Exculpated Parties”) in any such action or
proceeding, under or by reason of or under or in connection with this
Agreement, the Note, the Pledge Agreement or the other Loan Documents. The
provisions of this Section shall not, however, (i) constitute a
waiver, release or impairment of any obligation evidenced or secured by this
Agreement, the Note, the Pledge Agreement or the other Loan Documents; (ii) impair
the right of Lender to name Borrower as a party defendant in any action or suit
for judicial foreclosure and sale under the Pledge Agreement (subject, however,
to the aforesaid limitation on Lender’s right to sue, seek or demand a
deficiency or other money judgment against Borrower or any other Exculpated
Party); (iii) affect the validity or enforceability of any indemnity
(including, without limitation, the Environmental Indemnity), guaranty, master
lease or similar instrument made in connection with this Agreement, the Note,
the Pledge Agreement, or the other Loan Documents (subject, however, to any
exculpatory or non-recourse provisions appearing in such indemnity, guaranty or
similar instrument); (iv) impair the right of Lender to obtain the
appointment of a receiver; (v) [intentionally omitted]; (vi) impair
the right of Lender to enforce the provisions of Sections 4.1.8, 4.1.28, 5.1.9
and 5.2.8 hereof (subject, however, to the aforesaid limitation on Lender’s
right to sue, seek or demand a deficiency or other money judgment against
Borrower or any other Exculpated Party which such limitation, with respect to
Borrower, shall not apply to the Environmental Indemnity); or (vii) impair
the right of Lender to obtain a deficiency judgment or other judgment on the
Note against Borrower if and to the extent necessary to obtain any insurance
proceeds or condemnation awards to which Lender would otherwise be entitled
under this Agreement; provided however, that Lender shall only be 


 


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entitled to enforce such judgment to the extent of the insurance
proceeds and/or condemnation awards.


 


(b)                                 Notwithstanding the
provisions of this Section 9.4 to the contrary, Borrower and Guarantor
pursuant to the Guaranty (but not any other Exculpated Parties) shall be
personally liable to Lender for any actual Losses Lender incurs due to the
following (collectively, the “Recourse Events”):


 


(i)                                     any
fraud committed by Borrower, Mezzanine A Borrower, Mortgage Borrower or by any
of their Affiliates or agents in connection with the Loan, the Mezzanine A Loan
or Mortgage Loan;


 


(ii)                                  any
intentional and material misrepresentation by Borrower, Mezzanine A Borrower or
Mortgage Borrower in any of the Loan Documents, the Mezzanine A Loan Documents
or the Mortgage Loan Documents;


 


(iii)                               the
misappropriation by Borrower, Mezzanine A Borrower, Mortgage Borrower or any of
their Affiliates or agents of any funds (including misappropriation of Rents,
security deposits and/or Net Proceeds);


 


(iv)                              any
Transfer, Sale or Pledge of the Property, the Collateral, the Mezzanine A
Collateral or any interest of a Restricted Party therein, and in each case,
which is prohibited hereunder;


 


(v)                                 the
intentional and material breach of any representation in the Environmental
Indemnity or in Sections 4.1.39 or 5.1.19 hereof;


 


(vi)                              any
voluntary filing by Borrower, Mezzanine A Borrower, Mezzanine A Principal,
Mortgage Borrower, Mortgage Principal or Principal under the Bankruptcy Code or
any other federal or state bankruptcy or insolvency law;


 


(vii)                           any
involuntary filing against Borrower, Mezzanine A Borrower, Mezzanine A
Principal, Mortgage Borrower, Mortgage Principal or Principal under the
Bankruptcy Code or any other federal or state bankruptcy or insolvency law by
any Person acting at the request or under the direction of Borrower, Mezzanine
A Borrower, Mortgage Borrower or any of their Affiliates or agents;


 


(viii)                        Mezzanine
A Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage Principal,
Borrower or Principal consents to or acquiesces in or joins in an application
for the appointment of a custodian, receiver, trustee or examiner for Mezzanine
A Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage Principal,
Borrower or Principal or any portion of the Property, the Mezzanine A
Collateral or the Collateral;


 


(ix)                                Borrower’s
making a distribution to its equity owners after the occurrence and during the
continuance of an Event of Default;


 


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(x)                                   Mezzanine
A Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage Principal,
Borrower or Principal makes an assignment for the benefit of creditors;


 


(xi)                                any
intentional physical waste of the Property or the Mezzanine A Collateral by
Mezzanine A Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage
Principal, Borrower or Principal or any of their Affiliates or agents;


 


(xii)                             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; or


 


(xiii)                          Mortgage
Borrower’s failure to obtain any consent required with respect to the transfer
of the applicable Properties in connection with the merger of Archstone Smith
Operating Trust occurring simultaneously herewith.


 


(c)                                  Intentionally
Omitted.


 


(d)                                 Nothing herein shall
be deemed to be a waiver of any right which Lender may have under Section 506(a),
506(b), 1111 (b) or any other provision of the Bankruptcy Code to file a
claim for the full amount of the indebtedness secured by the Pledge Agreement
or to require that all collateral shall continue to secure all of the
indebtedness owing to Lender in accordance with this Agreement, the Note, the
Pledge Agreement and the other Loan Documents.


 


The term “Reorganization Proceeding” for purposes of this Section 9.4
shall mean a case, proceeding or other action (i) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to any Person, or seeking to adjudicate such Person
as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to such Person or such Person’s debts, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for such Person or for
all or any substantial part of such Person’s assets, or the making of a
general assignment for the benefit of such Person’s creditors.


 


The term “Lien” for purposes of this Section 9.4 shall mean
any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority or other
security agreement or interest or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease (except equipment lease
agreements), and the filing of any UCC financing statement (but only to the
extent any such financing statement purports to record the grant of a security
interest and not including any financing statements filed for notice purposes
only) under the UCC or comparable law of any jurisdiction in respect of any foregoing.)


 


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Section 9.5                                      Limitation
on Borrower’s Obligations.


 


Notwithstanding anything to the contrary in Section 9.1, Section 9.7,
Section 9.8 or any other provision of this Agreement or any other Loan Document,
Borrower shall not be obligated to agree to any modification of the Note, this
Agreement, the Pledge Agreement or the other Loan Documents, or of Borrower’s
Organizational Documents, or to take any other action, that would:


 


(a)                                  increase the reporting
requirements of Borrower, Mortgage Borrower, Mezzanine A Borrower, Guarantor or
any other Person pursuant to Section 5.1.10 hereof;


 


(b)                                 change the outstanding
principal balance of the Loan, except as expressly provided in Sections 9.6,
9.7 and 9.8 hereof (and subject to the limitations set forth therein or
otherwise applicable thereto);


 


(c)                                  change the interest
rate, except as expressly provided in Sections 9.1(e), 9.6, 9.7 and 9.8 hereof
(and subject to the limitations set forth therein or otherwise applicable
thereto), or increase any fee or late charge under the Loan;


 


(d)                                 require any
amortization of the principal amount of the Loan prior to the Maturity Date or
any acceleration of the maturity of the Loan by Lender;


 


(e)                                  shorten the Maturity
Date of the Loan, or provide for other or additional circumstances or events
upon which Lender will be entitled to accelerate the maturity of the Loan;


 


(f)                                    alter in any way
the transfer restrictions relating to direct or indirect interests in the
Properties, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity or any
Mezzanine A Principal’s general partner interest in the related Mezzanine A
Borrower Entity (including any equity interests in the direct or indirect
owners of Borrower), except to address any transfer restrictions necessary in
connection with the creation of any New Mezzanine Loan(s) pursuant to Section 9.8
hereof; provided, however, that there shall be
no greater restrictions than those applicable to transfers by Borrower of
interests that it owns in Mezzanine A Borrower and transfers by Mezzanine A
Borrower of interests that it owns in Mortgage Borrower;


 


(g)                                 affect the limitations
on recourse against Borrower and the Exculpated Parties;


 


(h)                                 increase the amounts
of reserves or escrows;


 


(i)                                     affect the
compensation payable to the Manager;


 


(j)                                     affect Borrower’s
right to extend the term of the Loan, if applicable;


 


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(k)                                  affect Borrower’s
right to repay, prepay or defease the Loan, except as expressly provided in
Sections 9.6 and 9.8 hereof (and subject to the limitations set forth therein
or otherwise applicable thereto) with respect to priority of payment;


 


(l)                                     affect Borrower’s
approval rights (if any) with respect to assignments of the Loan or the
identity of any Servicer or any special servicer;


 


(m)                               affect Borrower’s,
Mezzanine A Borrower’s or Mortgage Borrower’s right to enter into, modify or
terminate Leases or contracts;


 


(n)                                 reduce the materiality
thresholds (whether expressed in dollars or otherwise) appearing in any
provision of this Agreement or any other Loan Document, including those
relating to alterations, casualty, condemnation and expansion;


 


(o)                                 impose or increase any
servicing or similar fee required to be paid or reimbursed by Borrower;


 


(p)                                 add additional Events
of Default, or shorten any grace or cure period applicable to an existing Event
of Default;


 


(q)                                 require Borrower or
any other Person (including Mezzanine A Borrower, Mortgage Borrower, Bank Loan
Borrower, Principal or Guarantor) (i) to provide additional collateral
security, credit support, indemnities or guaranties for or in respect of the
Loan, or (ii) to increase or expand the scope or extent of any existing
security, credit support, indemnity or guaranty (or modify the provisions of Section 9.4
hereof);


 


(r)                                    violate or cause
the violation of any existing agreement to which Borrower or any of its
Affiliates is a party or any Applicable Law;


 


(s)                                  materially change any
obligation of Borrower pursuant to the actions taken herein or pursuant hereto
or in connection herewith;


 


(t)                                    result in Borrower
or any of its Affiliates (including, without limitation, Mezzanine A Borrower,
Mortgage Borrower, Bank Loan Borrower, Principal or Guarantor) being deemed an “issuer”
of the Securities (or any of them); or


 


(u)                                 otherwise adversely
affect Borrower or any of its Affiliates (including, without limitation,
Mezzanine A Borrower, Mortgage Borrower, Bank Loan Borrower, Principal or
Guarantor) in any material way.


 


Section 9.6                                      Reallocation
of Loan Amounts.


 


In the event that Mezzanine A Lender exercises its right to reallocate
the amount of the Loan and the Mezzanine A Loan pursuant to Section 9.6 of
the Mezzanine A Loan Agreement, Borrower agrees to reasonably cooperate to
facilitate such reallocation; provided, however,
that (i) the aggregate principal amount of the Loan and the Mezzanine A
Loan immediately following such reallocation shall equal the outstanding principal
balance of the Loan and the Mezzanine A Loan immediately prior to such
reallocation; 


 


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(ii) the weighted average interest rate
spread of the Loan and the Mezzanine A Loan immediately following such
reallocation shall not exceed the weighted average interest rate spread which
was applicable to the Loan and the Mezzanine A Loan immediately prior to such
reallocation (except for any deviation attributable to the imposition of any
rate of interest at the Default Rate or prepayments pursuant to Section 2.3.2
or 2.3.3 hereof). Borrower shall cooperate with all reasonable requests of
Lender in order to reallocate the amount of the Loan and the Mezzanine A Loan
and shall execute and deliver such documents as shall reasonably be required by
Lender in connection therewith, including, without limitation, amendments to
the Loan Documents and the Mezzanine A Loan Documents and endorsements to the
UCC title insurance policies, all in form and substance reasonably
satisfactory to Lender. Borrower shall cause Mezzanine A Borrower to cooperate
with all reasonable requests of Mezzanine A Lender in connection with the
reallocation of the amount of the Loan and the Mezzanine A Loan, and shall
execute and deliver such documents as shall reasonably be required by Mezzanine
A Lender in connection therewith, including opinions of counsel and UCC
insurance, all in form and substance reasonably satisfactory to Lender. Solely
for the purposes of this Section 9.6, Lender shall reimburse Borrower for
all of its reasonable out-of-pocket costs and expenses (including, any
additional mortgage recording tax due and payable by Borrower in connection
with such restructuring and any title or UCC insurance premiums, costs and
expenses incurred in connection with the issuance of the insurance policies and
endorsements required to be delivered by Borrower pursuant to this Section 9.6,
but excluding the fees and expenses of Borrower’s counsel) that Borrower incurs
in connection with complying with any request made by Lender under this Section 9.6.
Notwithstanding the foregoing, the provisions of this Section 9.6 shall in
no way limit, increase or otherwise affect any Borrower obligation to pay any
costs expressly required to be paid by Borrower pursuant to any other Sections
of this Agreement. It shall be an Event of Default hereunder if Borrower fails
to comply with any of the terms, covenants or conditions of this Section 9.6
and such failure shall continue for more than ten (10) Business Days after
Borrower shall have received written notice thereof.


 


Section 9.7                                      Syndication.


 


9.7.1                        Syndication.


 


The provisions of this Section 9.7 shall only apply in the event
that the Loan is syndicated in accordance with the provisions of this Section 9.7
set forth below.


 


9.7.2                        Sale of
Loan, Co-Lenders, Participations and Servicing.


 


(a)                                  Lender and any
Co-Lender may, at their option, without Borrower’s consent (but with notice to
Borrower), sell with novation all or any part of their right, title and
interest in, and to, and under the Loan (the “Syndication”), to one or
more additional lenders (each a “Co-Lender”). Each additional Co-Lender
shall enter into an assignment and assumption agreement (the “Assignment and
Assumption”) assigning a portion of Lender’s or Co-Lender’s rights and
obligations under the Loan, and pursuant to which the additional Co-Lender
accepts such assignment and assumes the assigned obligations. 


 


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From and after the effective date specified in the Assignment and
Assumption (i) each Co-Lender shall be a party hereto and to each Loan
Document to the extent of the applicable percentage or percentages set forth in
the Assignment and Assumption and, except as specified otherwise herein, shall
succeed to the rights and obligations of Lender and the Co-Lenders hereunder
and thereunder in respect of the Loan, and (ii) Lender, as lender and each
Co-Lender, as applicable, shall, to the extent such rights and obligations have
been assigned by it pursuant to such Assignment and Assumption, relinquish its
rights and be released from its obligations hereunder and under the Loan
Documents.


 


(b)                                 The liabilities of
Lender and each of the Co-Lenders shall be several and not joint. Neither
Lender nor any Co-Lender shall be responsible for the obligations of any other
Co-Lender. If for any reason any of the Co-Lenders shall fail or refuse to
abide by their obligations under this Agreement, Lender and the other
Co-Lenders shall not be relieved of their obligations, if any, hereunder.


 


(c)                                  Borrower agrees that
it shall, in connection with any sale of all or any portion of the Loan,
whether in whole or to an additional Co-Lender or Participant, within ten (10) Business
Days after requested by Lender, furnish Lender with the certificates required
under Sections 5.1.10 and 5.1.13 hereof and such other information as
reasonably requested by any additional Co-Lender or Participant in performing
its due diligence in connection with its purchase of an interest in the Loan.


 


(d)                                 Lender (or an
Affiliate of Lender) shall act as administrative agent for itself and the
Co-Lenders (together with any successor administrative agent, the “Agent”)
pursuant to this Section 9.7. Borrower acknowledges that Lender, as Agent,
shall have the sole and exclusive authority to execute and perform this
Agreement and each Loan Document on behalf of itself, as Lender and as agent
for itself and the Co-Lenders until replaced as Agent pursuant to the terms of
the Co-Lending Agreement; provided, however,
(i) so long as no Event of Default shall then exist or (ii) Agent
shall not be in default under the Co-Lending Agreement (which would entitle the
Co-Lenders to replace Agent), Borrower shall have the right to approve any
replacement or successor Agent, which such approval shall not be unreasonably
withheld or delayed. Lender acknowledges that Lender, as Agent, shall retain
the exclusive right to grant all approvals and give consents with respect to
the operating budgets required to be delivered hereunder and with respect to
matters concerning the establishment and administration of the Accounts. Except
as otherwise provided herein, Borrower shall have no obligation to recognize or
deal directly with any Co-Lender, and no Co-Lender shall have any right to deal
directly with Borrower with respect to the rights, benefits and obligations of
Borrower under this Agreement, the Loan Documents or any one or more documents
or instruments in respect thereof. Borrower may rely conclusively on the
actions of Lender as Agent to bind Lender and the Co-Lenders, notwithstanding
that the particular action in question may, pursuant to this Agreement or the
Co-Lending Agreement be subject to the consent or direction of some or all of
the Co-Lenders. Lender may resign as Agent of the Co-Lenders, in its sole
discretion or if required to by the Co-Lenders in accordance with the term of
the Co-Lending Agreement, in each case without the consent of Borrower. Upon
any such resignation, a successor Agent shall be determined pursuant to the
terms of the Co-Lending Agreement. The term Agent shall mean any successor
Agent.


 


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(e)                                  Notwithstanding any
provision to the contrary in this Agreement, the Agent shall not have any
duties or responsibilities except those expressly set forth herein (and in the
Co-Lending Agreement) and no covenants, functions, responsibilities, duties,
obligations or liabilities of Agent shall be implied by or inferred from this
Agreement, the Co-Lending Agreement, or any other Loan Document, or otherwise
exist against Agent.


 


(f)                                    Except to the
extent its obligations hereunder and its interest in the Loan have been
assigned pursuant to one or more Assignments and Assumption, Lender, as Agent,
shall have the same rights and powers under this Agreement as any other
Co-Lender and may exercise the same as though it were not Agent,
respectively. The term “Co-Lender” or “Co-Lenders” shall, unless otherwise
expressly indicated, include Lender in its individual capacity. Lender and the
other Co-Lenders and their respective Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, Borrower, or any Affiliate of Borrower and any Person
who may do business with or own securities of Borrower or any Affiliate of
Borrower, all as if they were not serving in such capacities hereunder and
without any duty to account therefor to each other.


 


(g)                                 If required by any
Co-Lender, Borrower hereby agrees to execute supplemental notes in the
principal amount of such Co-Lender’s pro rata share of the Loan in the same form of
the Note (provided any such supplemental note or notes do not represent any new
or additional indebtedness), and such supplemental note shall (i) be
payable to order of such Co-Lender, (ii) be dated as of the Closing Date,
and (iii) mature on the Maturity Date. Such supplemental note shall
provide that it evidences a portion of the existing indebtedness hereunder and
under the Note and not any new or additional indebtedness of Borrower (it being
understood that the aggregate face amount and aggregate principal balance of
such supplemental notes together with any other note evidencing the Loan shall
not exceed the then-outstanding principal balance of the Loan at the time of
the execution of such supplemental notes). Simultaneously with the execution of
such supplemental note or notes, Lender shall return the original Note to
Borrower. The term “Note” as used in this Agreement and in all the other
Loan Documents shall include all such supplemental notes.


 


(h)                                 Lender, as Agent,
shall maintain at its domestic lending office or at such other location as
Lender, as Agent, shall designate in writing to each Co-Lender and Borrower a
copy of each Assignment and Assumption delivered to and accepted by it and a
register for the recordation of the names and addresses of the Co-Lenders, the
amount of each Co-Lender’s proportionate share of the Loan and the name and
address of each Co-Lender’s agent for service of process (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders may treat
each Person whose name is recorded in the Register as a Co-Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
and copying by Borrower or any Co-Lender during normal business hours upon
reasonable prior notice to the Agent. A Co-Lender may change its address
and its agent for service of process upon written notice to Lender, as Agent,
which notice shall only be effective upon actual receipt by Lender, as Agent,
which receipt will be acknowledged by Lender, as Agent, upon request.


 


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(i)                                     Notwithstanding
anything herein to the contrary, any financial institution or other entity may be
sold a participation interest in the Loan by Lender or any Co-Lender without
Borrower’s consent (such financial institution or entity, a “Participant”)
(x) if such sale is without novation and (y) if the other conditions set forth
in this paragraph are met. No Participant shall be considered a Co-Lender
hereunder or under the Note or the Loan Documents. No Participant shall have
any rights under this Agreement, the Note or any of the Loan Documents and the
Participant’s rights in respect of such participation shall be solely against
Lender or Co-Lender, as the case may be, as set forth in the participation
agreement executed by and between Lender or Co-Lender, as the case may be,
and such Participant. No participation shall relieve Lender or Co-Lender, as
the case may be, from its obligations hereunder or under the Note or the
Loan Documents and Lender or Co- Lender, as the case may be, shall remain
solely responsible for the performance of its obligations hereunder.


 


(j)                                     Notwithstanding
any other provision set forth in this Agreement, Lender or any Co-Lender may at
any time create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, amounts owing to it in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System), provided that no such security interest or the
exercise by the secured party of any of its rights thereunder shall release
Lender or Co-Lender from its funding obligations hereunder.


 


9.7.3                        Cooperation
in Syndication.


 


(a)                                  Borrower agrees to
use commercially reasonable efforts to assist Lender in completing Syndication
satisfactory to Lender. Such assistance shall include (i) direct contact
between senior management and advisors of Borrower and the proposed Co-Lenders,
(ii) assistance in the preparation of a confidential information
memorandum and other marketing materials to be used in connection with the
Syndication, (iii) the hosting, with Lender, of one (1) or more
meetings of prospective Co-Lenders or with the Rating Agencies, (iv) the
delivery of appraisals reasonably satisfactory to Lender if required, and (v) working
with Lender to procure a rating for the Loan by the Rating Agencies.


 


(b)                                 Lender shall manage
all aspects of the Syndication of the Loan, including decisions as to the
selection of institutions to be approached and when they will be approached,
when their commitments will be accepted, which institutions will participate,
the allocations of the commitments among the Co-Lenders and the amount and
distribution of fees among the Co-Lenders. To assist Lender in its Syndication
efforts, Borrower agrees promptly to prepare and provide to Lender all
information with respect to Borrower, Manager, and the Properties contemplated
hereby, including all financial information and projections (the “Projections”),
as Lender may reasonably request in connection with the Syndication of the
Loan. Borrower hereby represents and covenants that (i) all information
other than the Projections (the “Information”) that has been or will be
made available to Lender by Borrower or any of its representatives is or will
be, to Borrower’s Actual Knowledge, when furnished, complete and correct in all
material respects and does not or will not, to Borrower’s Actual Knowledge,
when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in 


 


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order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made
and (ii) the Projections that have been or will be made available to
Lender by Borrower or any of its representatives have been or will be prepared
in good faith based upon reasonable assumptions. Borrower understands that in
arranging and syndicating the Loan, Lender, the Co-Lenders and, if applicable,
the Rating Agencies, may use and rely on the Information and Projections
without independent verification thereof.


 


(c)                                  If required in
connection with the Syndication, Borrower hereby agrees to:


 


(i)                             amend
the Loan Documents to give Lender the right, at Lender’s sole cost and expense,
to have the Properties reappraised on an annual basis;


 


(ii)                          deliver
updated financial and operating statements (as may be required to be
delivered pursuant to Section 5.1.10 hereof) and other information
reasonably required by Lender (as may be required to be delivered pursuant
to Section 5.1.10 hereof) to facilitate the Syndication;


 


(iii)                       use
commercially reasonable efforts to deliver reliance letters reasonably
satisfactory to Lender with respect to the environmental assessments and reports
delivered to Lender prior to the Closing Date, at Lender’s sole cost and
expense, which will run to Lender and its successors and assigns;


 


(iv)                      subject to
the terms of Section 9.7.4, if Lender elects, in its sole discretion,
prior to or upon a Syndication, to split the Loan into two (2) or more
parts, or the Note into multiple component notes or tranches which may have
different interest rate spreads, principal amounts, maturities, and priorities,
Borrower agrees to reasonably cooperate with Lender in connection with the
foregoing and, subject in all cases to the applicable provisions of Section 9.5
hereof, to execute the required modifications and amendments to the Note, this
Agreement and the Loan Documents and to provide opinions necessary to effectuate
the same. Such notes or components or tranches may be assigned different
interest rate spreads, so long as the weighted average of such interest rate
spreads does not exceed the Eurodollar Rate Margin (except for any deviation
attributable to the imposition of any rate of interest at the Default Rate or
prepayments pursuant to Section 2.3.2 or 2.3.3 hereof);


 


(v)                         Subject
to the terms of Section 9.5 hereof, execute such other modifications to
the Loan Documents reasonably required by the Co-Lenders; and


 


(vi)                      amend the
Organizational Documents of Mezzanine A Borrower and Mezzanine A Principal to “opt
into” Article 8 of the UCC and in connection therewith, certificate the
interests comprising the Collateral, 


 


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deliver such
certificates to Lender in accordance with the Pledge Agreement and deliver to
Lender “springing control” endorsements (or the equivalent thereof) to the UCC
Title Insurance Policy.


 


9.7.4                        Payment
of Agent’s, and Co-Lender’s Expenses.


 


All third party costs and expenses and out-of-pocket expenses incurred
by Lender in connection with this Agreement and the Syndication shall be paid
by Lender (except as otherwise expressly set forth herein). These shall
include, but not be limited to, fees and disbursements of legal counsel,
accountants, and other professionals retained by Lender and fees and expenses
incurred for producing any offering documents or any other materials (including
travel by Lender and its agents, design, printing, photograph and document
production costs). Solely for the purposes of this Section 9.7, Lender
shall reimburse Borrower for all of its actual out-of-pocket costs and expenses
(other than the fees and expenses of Borrower’s counsel) that Borrower incurs
in connection with complying with a request made by Lender under this Section 9.7
in connection with a Syndication. Notwithstanding the foregoing, the provisions
of this paragraph shall in no way limit or affect any Borrower obligation to
pay any costs expressly required to be paid by Borrower pursuant to any other
Sections of this Agreement.


 


9.7.5                        Intentionally
Omitted.


 


9.7.6                        No
Joint Venture.


 


Notwithstanding anything to the contrary herein contained, neither
Agent, nor any Co-Lender by entering into this Agreement or by taking any
action pursuant hereto, will be deemed a partner or joint venturer with
Borrower.


 


Section 9.8                                      Restructuring
of Loan and/or Mezzanine A Loan; Creation of New Mezzanine Loan(s).


 


In the event that Mezzanine A Lender exercises its right to restructure
the Loan and the Mezzanine A Loan (the “Restructuring Option”) pursuant
to Section 9.8 of the Mezzanine A Loan Agreement, Lender shall cooperate
with Mezzanine A Lender to divide the Loan and/or the Mezzanine A Loan into two
(2) or more (but  no more than
five (5))  parts (the “New Mezzanine Loan(s)”)
as required by Mezzanine A Lender. The principal amounts of the New Mezzanine
Loan(s) shall equal the aggregate outstanding principal balance of the Loan and
the Mezzanine A Loan immediately prior to the creation of the New Mezzanine
Loan(s). In effectuating the foregoing, the lender under the New Mezzanine Loan
(the “New Mezzanine Lender”) will make a loan to the direct equity
owners of Borrower (the “New Mezzanine Borrower”); the New Mezzanine
Borrower will contribute the amount of such New Mezzanine Loan to Borrower, and
(i) Borrower will contribute the amount of such New Mezzanine Loan to
Mezzanine A Borrower, and Mezzanine A Borrower will apply the contribution to
pay down the Mezzanine A Loan and/or (ii) Borrower will apply such new
loan to pay down the Loan. The New Mezzanine Loan(s) will be on substantially
the same terms (including, without limitation, the same material economic
terms) and subject to substantially the same 


 


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conditions set forth in this Agreement, the
Note, the Pledge Agreement and the other Loan Documents, and/or the Mezzanine A
Loan Documents except as follows:


 


(a)                                  Mezzanine
A Lender shall have the right to establish different interest rate spreads for
the New Mezzanine Loan(s) and to require the payment of the New Mezzanine
Loan(s) in such order of priority as may be designated by Mezzanine A
Lender; provided, however, that (i) the
total loan amounts for the New Mezzanine Loan(s) shall equal the aggregate
outstanding principal amount of the Loan and the Mezzanine A Loan immediately
prior to the creation of the New Mezzanine Loan(s); (ii) the weighted
average interest rate spread of the New Mezzanine Loan(s) shall equal the weighted
average interest rate spread which was applicable to the Loan and the Mezzanine
A Loan prior to the creation of the New Mezzanine Loan(s) (except for any
deviation attributable to the imposition of any rate of interest at the Default
Rate or prepayments pursuant to Section 2.3.2 or 2.3.3 hereof); (iii) [intentionally
omitted]; and (iv) no additional recording tax shall be payable as a
result of the creation of the New Mezzanine Loan(s) (or, if such additional
recording tax is payable, Mezzanine A Lender shall pay the same). The New
Mezzanine Loan(s) will be governed by the terms of an intercreditor agreement
between or among the respective holders of the New Mezzanine Loan(s).


 


(b)                                 Mezzanine
A Borrower, Borrower and New Mezzanine Borrower shall be a special purpose,
bankruptcy remote entity pursuant to applicable Rating Agency criteria and
shall own directly or indirectly one hundred percent (100%) of Mortgage
Borrower, Mezzanine A Borrower or Borrower, as applicable. The security for the
New Mezzanine Loan(s) shall be a pledge of one hundred percent (100%) of the
direct and indirect ownership interests held by such entity.


 


(c)                                  Mezzanine
A Borrower, Borrower and New Mezzanine Borrower shall cooperate, in all
commercially reasonable respects, with all reasonable requests of Mezzanine A
Lender in order to divide the Loan and/or the Mezzanine A Loan into one or more
New Mezzanine Loan(s) and shall execute and deliver such customary documents as
shall reasonably be required by Mezzanine A Lender and any Rating Agency in
connection therewith, including, without limitation, (i) the delivery of
non-consolidation opinions, (ii) the modification of Loan Documents solely
to reflect the existence of, and/or the terms and provisions of, the New
Mezzanine Loan(s) and the modification of organizational documents, provided
such amendments shall relate exclusively to the single purpose bankruptcy
remote nature of Borrower, Mezzanine A Borrower or New Mezzanine Borrower, (iii) authorize
Mezzanine A Lender to file any UCC-1 Financing Statements reasonably required
by Mezzanine A Lender to perfect its security interest in the collateral
pledged as security for the New Mezzanine Loan(s), (iv) subject in all
cases to the applicable provisions of Section 9.5 hereof, execute such
other documents reasonably required by Mezzanine A Lender in connection with
the creation of the New Mezzanine Loan(s), including, without limitation, a
guaranty substantially similar in form and substance to the Mezzanine A
Guaranty delivered on the date hereof in connection with the Mezzanine A Loan,
an environmental indemnity substantially similar in form and substance to
the Mezzanine A Environmental Indemnity delivered on the date hereof in
connection with the Mezzanine A Loan and an agreement regarding the 


 


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management agreement substantially similar in
form and substance to the Agreement Regarding Management Agreement, if
any, delivered in connection with the Mezzanine A Loan, (v) deliver
appropriate authorization, execution and enforceability opinions with respect
to the New Mezzanine Loan(s) and amendments to the Loan solely to reflect the
existence of, and/or the terms and provisions of, the New Mezzanine Loan(s),
and (vi) deliver such title insurance policies, “Eagle 9” or equivalent
UCC title insurance policies, satisfactory to Mezzanine A Lender, insuring the
perfection and priority of the lien on the collateral pledged as security for
the New Mezzanine Loan(s).


 


It shall be an Event of Default hereunder if Borrower, Mezzanine A
Borrower or New Mezzanine Borrower fails to comply with any of the terms,
covenants or conditions of this Section 9.8 and such failure shall
continue for more than ten (10) Business Days after Borrower, Mezzanine A
Borrower or New Mezzanine Borrower, as the case may be, shall have
received written notice thereof.


 


Solely for the purposes of this Section 9.8, Lender shall
reimburse Borrower for all of its reasonable out-of-pocket costs and expenses
(including, any additional recording tax due and payable by Borrower in
connection with such restructuring and any title or UCC insurance premiums,
costs and expenses incurred in connection with the issuance of the insurance
policies and endorsements required to be delivered by Borrower pursuant to Section 9.8(c)(vi) hereof,
but excluding the fees and expenses of Borrower’s counsel) that Borrower incurs
in connection with complying with a request made by Lender under this Section 9.8.
Notwithstanding the foregoing, the provisions of this paragraph shall in no way
limit or affect any obligation of Borrower to pay any costs expressly required
to be paid by Borrower pursuant to any other Sections of this Agreement.


 


Section 9.9                                      Contributions
and Waivers.


 


(i)                                     As
a result of the transactions contemplated by this Agreement, each Borrower
Entity will benefit, directly and indirectly, from each other Borrower Entity’s
obligation to pay the Debt and perform its Obligations and in
consideration thereof the Borrower Entities desire to enter into an allocation
and contribution agreement among themselves as set forth in this Section 9.9
to allocate such benefits among themselves and to provide a fair and equitable
agreement to make contributions among each of the Borrower Entities in the
event any payment is made by any individual Borrower Entity hereunder to Lender
(each such payment being referred to herein as a “Contribution,” which
term shall, for purposes of this Section 9.9, include any exercise of
recourse by Lender against any Collateral of a Borrower Entity and application
of proceeds of such Collateral in satisfaction of such Borrower Entity’s
obligations to Lender under the Loan Documents).


 


(ii)                                  Each
Borrower Entity shall be liable hereunder with respect to the Obligations only
for such total maximum amount (if any) as would not render its Obligations
hereunder or under any of the Loan Documents subject to avoidance under Section 548
of the Bankruptcy Code or any comparable provisions of any State law.


 


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(iii)                               In
order to provide for a fair and equitable contribution among the Borrower
Entities in the event that any Contribution is made by an individual Borrower
Entity (a “Funding Borrower”), such Funding Borrower shall be entitled
to a Contribution to reimburse such Funding Borrower (a “Reimbursement
Contribution”) from all of the other Borrower Entities for all payments,
damages and expenses incurred by that Funding Borrower in discharging any of
the Obligations, in the manner and to the extent set forth in this Section 9.9.


 


(iv)                              For
purposes hereof, the “Benefit Amount” shall mean, with respect to any
individual Borrower Entity as of any date of determination, the net value of
the benefits to such Borrower Entity and its Affiliates from extensions of
credit made by Lender to (a) such Borrower Entity and (b) to the
other Borrower Entities hereunder and under the Loan Documents to the extent
such other Borrower Entities have pledged their respective Pledged Interests
(as defined in the Pledge Agreement) to secure the Obligations of such Borrower
Entity to Lender.


 


(v)                                 Each
Borrower Entity shall be liable to a Funding Borrower in an amount equal to the
greater of (A) the (i) ratio of the Benefit Amount of such Borrower
Entity to the total amount of Obligations, multiplied by (ii) the amount
of Obligations paid by such Funding Borrower, and (B) ninety-five percent
(95%) of the excess of the fair saleable value of the assets of such Borrower
over the total liabilities of such Borrower Entity (including the maximum
amount reasonably expected to become due in respect of contingent liabilities)
determined as of the date on which the payment made by a Funding Borrower is
deemed made for purposes hereof (giving effect to all payments made by other Funding
Borrowers as of such date in a manner to maximize the amount of such
Contributions).


 


(vi)                              In
the event that at any time there exist two or more Funding Borrowers with
respect to any Contribution (in any such case, the “Applicable Contribution”),
then Reimbursement Contributions from the other Borrowers pursuant hereto shall
be allocated among such Funding Borrowers in proportion to the respective
amounts of the Contribution made for or on account of the other Borrowers by
such Funding Borrowers pursuant to the Applicable Contribution. In the event
that at any time any Borrower pays an amount hereunder in excess of the amount
calculated pursuant to this Section 9.9, that Borrower Entity shall be
deemed to be a Funding Borrower to the extent of such excess and shall be
entitled to a Reimbursement Contribution from the other Borrowers in accordance
with the provisions of this Section 9.9.


 


(vii)                           Each
Borrower Entity acknowledges that the right to Reimbursement Contributions
hereunder shall constitute an asset in favor of the Borrower Entity to which
such Reimbursement Contribution is owing.


 


(viii)                        No
Reimbursement Contribution payments payable by a Borrower pursuant to the terms
of this Section 9.9 shall be paid until all amounts then due and payable
by all of Borrowers to Lender, pursuant to the terms of the Loan 


 


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Documents, are
paid in full in Cash. Nothing contained in this Section 9.9 shall limit or
affect in any way the Obligations of any Borrower to Lender under this Note or
any other Loan Documents.


 


(ix)                                Each
Borrower Entity waives:


 


(A)                              any
right to require Lender to proceed against any other Borrower Entity or any
other person or to proceed against or exhaust any security held by Lender at any
time or to pursue any other remedy in Lender’s power before proceeding against
any Borrower Entity;


 


(B)                                the
defense of the statute of limitations in any action against any other Borrower
Entity or for the collection of any indebtedness or the performance of any
obligation under the Loan;


 


(C)                                any
defense based upon any legal disability or other defense of any other Borrower
Entity, any guarantor of any other person or by reason of the cessation or
limitation of the liability of any other Borrower Entity or any guarantor from
any cause other than full payment of all sums payable under the Note, this
Agreement and any of the other Loan Documents;


 


(D)                               any
defense based upon any lack of authority of the officers, directors, partners
or agents acting or purporting to act on behalf of any other Borrower Entity or
any principal of any other Borrower or any defect in the formation of any other
Borrower Entity or any principal of any other Borrower Entity;


 


(E)                                 any
defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal;


 


(F)                                 any
defense based upon any failure by Lender to obtain collateral for the
indebtedness of any other Borrower Entity or any failure by Lender to perfect a
lien on any collateral of any other Borrower Entity;


 


(G)                                presentment,
demand, protest and notice of any kind with respect to the indebtedness of any
other Borrower Entity;


 


(H)                               any
defense based upon any failure of Lender to give notice to such Borrower Entity
of the sale or other disposition of any collateral of any other Borrower Entity
or to any other person or entity or any defect in any notice that may be
given in connection with any sale or disposition of any collateral;


 


(I)                                    any
defense based upon any failure of Lender to comply with Applicable Laws in
connection with the sale or other disposition of any collateral of any other
Borrower Entity, including, without limitation, 


 


158

















 


any failure of
Lender to conduct a commercially reasonable sale or other disposition of any
collateral;


 


(J)                                   any
defense based upon any election by Lender, in any bankruptcy proceeding, of the
application or non-application of Section 1111(6)(2) of the
Bankruptcy Code or any successor statute;


 


(K)                               any
defense based upon any use of cash collateral under Section 363 of the
Bankruptcy Code;


 


(L)                                 any
defense based upon any agreement or stipulation entered into by Lender with any
other Borrower Entity with respect to the provision of adequate protection in
any bankruptcy proceeding;


 


(M)                            any
defense based upon any borrowing or any grant of a security interest under Section 364
of the Bankruptcy Code by any other Borrower Entity;


 


(N)                               any
defense based upon the avoidance of any security interest granted by any other
Borrower Entity in favor of Lender for any reason;


 


(O)                               any
defense based upon any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding, including any
discharge of, or bar or stay against collecting, all or any of the obligations
evidenced by the Note or owing under any of the Loan Documents; and


 


(P)                                 any
defense or benefit based upon any Borrower Entity’s, or any other party’s,
resignation of the portion of any obligation secured by the Pledge Agreement to
be satisfied by any payment from any other Borrower Entity or any such party.


 


(x)                                   Each
Borrower Entity waives:


 


(A)                              all
rights and defenses arising out of an election of remedies by Lender even
though the election of remedies, such as nonjudicial foreclosure with respect
to security for the Loan or any other amounts owing under the Loan Documents, may have
destroyed such Borrower Entity’s rights of subrogation and reimbursement
against any other Borrower Entity;


 


(B)                                intentionally
omitted; and


 


(C)                                any
claim or other right which any Borrower Entity might now have or hereafter
acquire against any other Borrower Entity or any other person that arises from
the existence or performance of any obligations under the Note, this Agreement,
the Pledge Agreement or the 


 


159

















 


other Loan
Documents, including, without limitation, any of the following: (i) any
right of subrogation, reimbursement, exoneration, contribution (other than the
right to contribution provided for in this Section 9.9), or
indemnification; or (ii) any right to participate in any claim or remedy
of Lender against any other Borrower Entity or any collateral security
therefor, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law.


 


Section 9.10                                Certain
Additional Rights of Lender; VCOC.


 


Subject to the terms hereof, Lender shall have the right:


 


(a)                                  to routinely consult
with Borrower’s management regarding the significant business activities and
business and financial developments of Borrower; provided, however, that such
consultations shall not include discussions of environmental compliance
programs or disposal of hazardous substances. Routine consultation meetings may occur
no more frequently than quarterly, with Lender having the right to call special
meetings at any reasonable time (but not more frequently than once per quarter)
and upon reasonable advance notice. Borrower shall have no obligation to adhere
to any advice proposed by Lender, except where otherwise specifically required
elsewhere in the Loan Documents;


 


(b)                                 in accordance with the
terms of this Agreement, to examine the books and records of Borrower at any
reasonable times upon reasonable notice;


 


(c)                                  in accordance with
the terms of this Agreement, to receive financial reports and other statements
as provided in Section 5.1.10 hereof;


 


(d)                                 in accordance with the
terms of this Agreement, but without restricting any other rights of Lender
under this Agreement (including any similar right), to approve any acquisition
by Borrower of any other significant property;


 


(e)                                  in accordance with
the terms of this Agreement, but without restricting any other rights of Lender
under this Agreement (including any similar right), to restrict the transfer of
interests in Borrower, except for any such transfer that is a permitted
transfer, including, without limitation those transfers not deemed “Transfers”
under Section 5.2.10(c) hereof;


 


(f)                                    in accordance with
the terms of this Agreement, but without restricting any other rights of Lender
under this Agreement (including any similar right), to restrict financing to be
obtained in connection with future property transactions, refinancing of any
acquisition financings, and unsecured debt;


 


(g)                                 in accordance with the
terms of the Agreement Regarding Management Agreement, but without restricting
any other right of Lender under this Agreement (including any similar right),
to restrict, upon the occurrence of an Event of Default, Borrower’s payments of
management fees to Manager; and


 


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(h)                                 in accordance with the
terms of this Agreement, but without restricting any other right of Lender
under this Agreement (including any similar right), to exercise certain
approval rights with respect to the proposed annual operating budgets as
provided in Section 5.1.10(e) hereof.


 


The rights described above may be exercised by any entity which
owns and controls, directly or indirectly, substantially all of the interests
in Lender. Nothing contained in this Section 9.10 is intended (i) to
confer upon Lender any rights or privileges greater than those inuring to
Lender under the other provisions of this Agreement, (ii) to impose upon
Borrower any duties, obligations or liabilities greater than or in addition to
those owed by Borrower under the other provisions of this Agreement, or (iii) to
constitute Lender a partner or member of Borrower or a third-party beneficiary
of Borrower’s Organizational Documents.


 


Section 9.11                                Mortgage
Loan Defaults.


 


(a)                                  Without limiting the
generality of the other provisions of this Agreement, and without waiving or
releasing Borrower from any of its obligations hereunder, if there shall occur
any Mortgage Loan Event of Default, and without regard to any other defenses or
offset rights Mortgage Borrower may have against Mortgage Lender, Borrower
hereby expressly agrees that Lender shall have the immediate right, without notice
to or demand on Borrower or Mortgage Borrower, but shall be under no
obligation: (i) to pay all or any part of the Mortgage Loan, and any
other sums, that are then due and payable and to perform any act or take
any action on behalf of Mortgage Borrower, as may be appropriate, to cause
all of the terms, covenants and conditions of the Mortgage Loan Documents on
the part of Mortgage Borrower to be performed or observed thereunder to be
timely performed or observed; and (ii) to pay any other amounts and take
any other action as Lender shall reasonably determine to be necessary to
protect or preserve the rights and interests of Lender in the Loan and/or the
Collateral. Lender shall have no obligation to complete any cure or attempted
cure undertaken or commenced by Lender. All sums so paid and the costs and
expenses incurred by Lender in exercising rights under this Section (including,
without limitation, reasonable attorneys’ and other professional fees), with
interest at the Default Rate, for the period from the date of demand by Lender
to Borrower for such payments to the date of payment to Lender, shall
constitute a portion of the Debt, shall be secured by the Pledge Agreement and
shall be due and payable to Lender within ten (10) days following demand
therefor.


 


(b)                                 Subject to the rights
of tenants, Borrower hereby grants, and shall cause Mortgage Borrower to grant,
Lender and any Person designated by Lender the right to enter upon the Property
at any time for the purpose of carrying out the rights granted to Lender under
this Section 9.11.


 


(c)                                  Borrower shall
indemnify and hold harmless Lender from and against all actual out-of-pocket
liabilities, obligations, losses, damages, penalties, assessments, actions, or
causes of action, judgments, suits, claims, demands, costs, expenses
(including, without limitation, reasonable attorneys’ and other professional
fees, whether 


 


161

















 


or not suit is brought, and settlement costs), and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Lender as a result of the foregoing actions described in Section 9.11(a) other
than liabilities, obligations, losses, damages, penalties, assessments,
actions, or causes of action, judgments, suits, claims, demands, costs,
expenses and disbursements arising out of the fraud, illegal acts, gross
negligence or willful misconduct of Lender. Lender shall have no obligation to
Borrower, Mortgage Borrower or any other party to make any such payment or
performance. Borrower shall not impede, interfere with, hinder or delay, and
shall cause Mortgage Borrower to not impede, interfere with, hinder or delay,
any effort or action on the part of Lender to cure any default or asserted
default under the Mortgage Loan, or to otherwise protect or preserve Lender’s
interests in the Loan and the Collateral following a default or asserted
default under the Mortgage Loan, in either case, in accordance with the
provisions of this Agreement and the other Loan Documents.


 


(d)                                 If Lender shall
receive a copy of any notice of a Mortgage Loan Event of Default sent by
Mortgage Lender to Mortgage Borrower, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender, in
good faith, in reliance thereon. As a material inducement to Lender’s making
the Loan, Borrower hereby absolutely and unconditionally releases and waives
all claims against Lender arising out of Lender’s exercise of its rights and
remedies provided in this Section other than claims arising out of the
fraud, illegal acts, gross negligence or willful misconduct of Lender. In the
event that Lender makes any payment in respect of the Mortgage Loan, Lender
shall be subrogated, to the extent of such payment, to all of the rights of
Mortgage Lender under the Mortgage Loan Documents against the Property, in
addition to all other rights it may have under the Loan Documents.


 


Section 9.12                                Mezzanine
A Loan Defaults.


 


(a)                                  Without limiting the
generality of the other provisions of this Agreement, and without waiving or
releasing Borrower from any of its obligations hereunder, if there shall occur
any Mezzanine A Event of Default, Borrower hereby expressly agrees that Lender
shall have the immediate right, without notice to or demand on Borrower or
Mezzanine A Borrower, but shall be under no obligation: (i) to pay all or
any part of the Mezzanine A Loan, and any other sums, that are then due
and payable and to perform any act or take any action on behalf of
Mezzanine A Borrower, as may be appropriate, to cause all of the terms,
covenants and conditions of the Mezzanine A Loan Documents on the part of
Mezzanine A Borrower to be performed or observed thereunder to be timely
performed or observed; and (ii) to pay any other amounts and take any
other action as Lender shall reasonably determine to be necessary to protect or
preserve the rights and interests of Lender in the Loan and/or the Collateral. Lender
shall have no obligation to complete any cure or attempted cure undertaken or
commenced by Lender. All sums so paid and the costs and expenses incurred by
Lender in exercising rights under this Section (including, without
limitation, reasonable attorneys’ and other professional fees), with interest
at the Default Rate, for the period from the date of demand by Lender to
Borrower for such payments to the date of payment to Lender, shall constitute a
portion of the Debt, shall be secured by the Pledge Agreement and shall be due
and payable to Lender within ten (10) days following demand therefor.


 


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(b)                                 Subject to the rights
of tenants, Borrower hereby grants, and shall cause Mezzanine A Borrower to
grant, Lender and any Person designated by Lender the right to enter upon the
Property at any time for the purpose of carrying out the rights granted to
Lender under this Section 9.12.


 


(c)                                  Borrower shall
indemnify and hold harmless Lender from and against all out-of-pocket
liabilities, obligations, losses, damages, penalties, assessments, actions, or
causes of action, judgments, suits, claims, demands, costs, expenses
(including, without limitation, reasonable attorneys’ and other professional
fees, whether or not suit is brought, and settlement costs), and disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Lender as a result of the foregoing actions described in Section 9.12(a) other
than liabilities, obligations, losses, damages, penalties, assessments,
actions, or causes of action, judgments, suits, claims, demands, costs,
expenses and disbursements arising out of the fraud, illegal acts, gross
negligence or willful misconduct of Lender. Lender shall have no obligation to
Borrower, Mezzanine A Borrower or any other party to make any such payment or
performance. Borrower shall not impede, interfere with, hinder or delay, and
shall cause Mezzanine A Borrower to not impede, interfere with, hinder or
delay, any effort or action on the part of Lender to cure any default or
asserted default under the Mezzanine A Loan, or to otherwise protect or
preserve Lender’s interests in the Loan and the Collateral following a default
or asserted default under the Mezzanine A Loan, in either case, in accordance
with the provisions of this Agreement and the other Loan Documents.


 


(d)                                 If Lender shall
receive a copy of any notice of a Mezzanine A Event of Default sent by
Mezzanine A Lender to Mezzanine A Borrower, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender, in
good faith, in reliance thereon. As a material inducement to Lender’s making
the Loan, Borrower hereby absolutely and unconditionally releases and waives
all claims against Lender arising out of Lender’s exercise of its rights and
remedies provided in this Section other than claims arising out of the
fraud, illegal acts, gross negligence or willful misconduct of Lender. In the
event that Lender makes any payment in respect of the Mezzanine A Loan, Lender
shall be subrogated, to the extent of such payment, to all of the rights of
Mezzanine A Lender under the Mezzanine A Loan Documents against the Mezzanine A
Collateral, in addition to all other rights it may have under the Loan
Documents.


 


Section 9.13                                Intentionally
Omitted.


 


Section 9.14                                Intercreditor
Agreements.


 


(a)                                  Lender, Mortgage
Lender, Mezzanine A Lender and Bank Loan Agent are parties to one or more
intercreditor agreements dated as of the date hereof (collectively, the “Intercreditor
Agreements”) memorializing their relative rights and obligations with
respect to the Mortgage Loan, the Loan, the Mezzanine A Loan, the Bank Loan,
Mortgage Borrower, Borrower, Mezzanine A Borrower, Bank Loan Borrower and the
Properties. Borrower hereby acknowledges and agrees that (i) such
Intercreditor Agreements are intended solely for the benefit of Lender,
Mezzanine A Lender, 


 


163

















 


Mortgage Lender and Bank Loan Agent and (ii) Borrower, Mortgage
Borrower, Mezzanine A Borrower and Bank Loan Borrower are not intended
third-party beneficiaries of any of the provisions therein and shall not be
entitled to rely on any of the provisions contained therein. Lender, Mortgage
Lender, Mezzanine A Lender and Bank Loan Agent shall have no obligation to
disclose to Borrower, Mortgage Borrower, Mezzanine A Borrower or Bank Loan
Borrower the contents of the Intercreditor Agreements. Borrower’s obligations
hereunder are independent of such Intercreditor Agreements and remain
unmodified by the terms and provisions thereof.


 


(b)                                 In the event the
Lender is required pursuant to the terms of the Intercreditor Agreements to pay
over to Mortgage Lender or Mezzanine A Lender any payment or distribution of
assets, whether in cash, property or securities which is applied to the Debt,
including, without limitation, any proceeds of the Properties previously
received by Lender on account of the Loan, then Borrower shall indemnify Lender
for any amounts so paid, and any amount so paid shall continue to be owing
pursuant to the Loan Documents as part of the Debt notwithstanding the
prior receipt of such payment by Lender.


 


Section 9.15                                Discussions
with Mortgage Lender and Mezzanine A Lender.


 


(a)                                  In connection with
the exercise of its rights set forth in the Loan Documents, Lender shall have
the right at any time to discuss the Properties, the Mortgage Loan, the Loan,
the Mezzanine A Loan, or any other matter directly with Mortgage Lender or
Mortgage Lender’s consultants, agents or representatives without notice to or
permission from Borrower or any other Loan Party. Lender shall not have any
obligation to disclose such discussions or the contents thereof with Borrower
or any other Loan Party.


 


(b)                                 In connection with the
exercise of its rights set forth in the Loan Documents, Lender shall have the
right at any time to discuss the Properties, the Mortgage Loan, the Mezzanine A
Loan, the Loan or any other matter directly with Mezzanine A Lender or
Mezzanine A Lender’s consultants, agents or representatives without notice to
or permission from Borrower or any other Loan Party. Lender shall not have any
obligation to disclose such discussions or the contents thereof with Borrower
or any other Loan Party.


 


Section 9.16                                Independent
Approval Rights.


 


If any action, proposed action or other decision is consented to or
approved by Mortgage Lender or Mezzanine A Lender, such consent or approval
shall not, except as otherwise expressly provided in this Agreement or the
other Loan Documents, be binding or controlling on Lender. Borrower hereby
acknowledges and agrees that (i) the risks of Mortgage Lender in making
the Mortgage Loan are different from the risks of Lender in making the Loan, (ii) the
risks of Mezzanine A Lender in making the Mezzanine A Loan are different from
the risks of Lender in making the Loan, (iii) [intentionally omitted], (iv) in
determining whether to grant, deny, withhold or condition any requested consent
or approval Mortgage Lender, Mezzanine A Lender and Lender may reasonably
reach 


 


164

















 


different conclusions, and (v) Lender
has an independent right to grant, deny, withhold or condition any requested
consent or approval based on its own point of view, subject, however, to any
requirements of reasonableness or good faith expressly set forth in this
Agreement or the other Loan Documents. Further, the denial by Lender of a
requested consent or approval shall not, provided such denial shall not
constitute a default by Lender under this Agreement, create any liability or
other obligation of Lender if the denial of such consent or approval results
directly or indirectly in a default under the Mortgage Loan or the Mezzanine A
Loan and Borrower hereby waives any claim of liability against Lender arising
from any such denial, provided such denial shall not constitute a default by
Lender under this Agreement. Notwithstanding anything to the contrary contained
in this Section 9.16, to the extent that Mortgage Lender requires Mortgage
Borrower to perform, or refrain from performing, any action pursuant to the
terms of the Mortgage Loan Documents, Lender shall not withhold its consent to
the performance or, or the refraining from performing, such action only if such
failure to act or refrain from acting by Mortgage Borrower (after the
expiration of any applicable notice and cure periods) would be a Mortgage Loan
Event of Default.


 


X.                                    MISCELLANEOUS


 


Section 10.1                                Survival.


 


This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note, and shall continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid, unless a longer period is
expressly set forth herein or in the other Loan Documents. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the legal representatives, successors and assigns of such
party. All covenants, promises and agreements in this Agreement, by or on
behalf of Borrower, shall inure to the benefit of the legal representatives,
successors and assigns of Lender.


 


Section 10.2                                Lender’s
Discretion.


 


Whenever pursuant to this Agreement, Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive.


 


Section 10.3                                Governing
Law.


 


(a)                                  THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF
NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS).


 


165






 












 


(b)                                 WITH RESPECT TO ANY
CLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS AGREEMENT, THE NOTE, OR THE
OTHER LOAN DOCUMENTS, EACH OF BORROWER AND LENDER (A) IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK,
NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUE
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE NOTE, THE PLEDGE AGREEMENT OR THE OTHER LOAN DOCUMENTS BROUGHT IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN
THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMED
TO PRECLUDE LENDER OR BORROWER FROM BRINGING AN ACTION OR PROCEEDING WITH
RESPECT HERETO IN ANY OTHER JURISDICTION.


 


Section 10.4                                Modification,
Waiver in Writing.


 


No modification, amendment, extension, discharge, termination or waiver
of any provision of this Agreement, the Note, or of any other Loan Document,
nor consent to any departure by Borrower or Lender therefrom, shall in any
event be effective unless the same shall be in a writing signed by the party
against whom enforcement is sought, and then such waiver or consent shall be
effective only in the specific instance, and for the purpose, for which given. Except
as otherwise expressly provided herein, no notice to, or demand on Borrower,
shall entitle Borrower to any other or future notice or demand in the same,
similar or other circumstances.


 


Section 10.5                                Delay
Not a Waiver.


 


Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or
agreement, or exercising any right, power, remedy or privilege hereunder, or
under the Note or under any other Loan Document, or any other instrument given
as security therefor, shall operate as or constitute a waiver thereof, nor
shall a single or partial exercise thereof preclude any other future exercise,
or the exercise of any other right, power, remedy or privilege. In particular,
and not by way of limitation, by accepting payment after the due date of any
amount payable under this Agreement, the Note or any other Loan Document,
Lender shall not be deemed to have waived any right either to require prompt
payment when due of all other amounts due under this Agreement, the Note or the
other Loan Documents, or to declare a default for failure to effect prompt
payment of any such other amount.


 


166

















 


Section 10.6                                Notices.


 


All notices or other written communications hereunder shall be in
writing and shall be deemed to have been properly given (i) upon delivery,
if delivered in person or by facsimile transmission with receipt acknowledged
by the recipient thereof and confirmed by telephone by sender, (ii) one (1) Business
Day after having been deposited for overnight delivery with any reputable
overnight courier service, or (iii) three (3) Business Days after
having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:


 


	
  If to Borrower:

  	
  c/o Archstone-Smith Operating Trust

  
	
   

  	
  9200 E. Panorama Circle, Suite 400

  
	
   

  	
  Englewood, Colorado 80112

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Facsimile No.: (303) 708-6954

  
	
   

  	
   

  
	
  with a copy to:

  	
  Tishman Speyer

  
	
   

  	
  45 Rockefeller Plaza

  
	
   

  	
  New York, New York 10111

  
	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
  Facsimile No.: (212) 895-0353

  
	
   

  	
   

  
	
  and to:

  	
  Tishman Speyer

  
	
   

  	
  45 Rockefeller Plaza

  
	
   

  	
  New York, New York 10111

  
	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
  Facsimile No.: (212) 895-0314

  
	
   

  	
   

  
	
  and to:

  	
  Schulte Roth & Zabel LLP

  
	
   

  	
  919 Third Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: Andrew J. Dady, Esq.

  
	
   

  	
  Facsimile No.: (212) 593-5955

  
	
   

  	
   

  
	
  If to Lender:

  	
  Lehman Brothers Holdings Inc.

  
	
   

  	
  399 Park Avenue

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: Charles Manna

  
	
   

  	
  Facsimile No.: (646) 758-5366

  
	
   

  	
   

  
	
  and to:

  	
  Bank of
  America, N.A.

  
	
   

  	
  Capital
  Markets Servicing Group

  
	
   

  	
  900 West
  Trade Street, Suite 650

  
	
   

  	
  Mail Code:
  NC1-026-06-01

  
	
   

  	
  Charlotte,
  North Carolina 28255

  



 


167

















 


	
   

  	
  Attention:
  Dean B. Roberson

  
	
   

  	
  Facsimile
  No.: (704) 317-4501

  
	
   

  	
   

  
	
  and to:

  	
  Barclays Capital Real Estate Finance Inc.

  
	
   

  	
  200 Park Avenue, 4th Floor

  
	
   

  	
  New York, New York 10166

  
	
   

  	
  Attention: Lori Ann Rung

  
	
   

  	
  Facsimile No.: (212) 412-1664

  
	
   

  	
   

  
	
  with a copy to:

  	
  Thacher
  Proffitt & Wood LLP

  
	
   

  	
  Two World
  Financial Center

  
	
   

  	
  New York,
  New York 10281

  
	
   

  	
  Attention:
  Mitchell G. Williams, Esq.

  
	
   

  	
  Facsimile
  No.: (212) 912-7751

  



 


or addressed as such party may from time to time designate by written
notice to the other parties.


 


Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.


 


Section 10.7                                Trial
by Jury.


 


EACH OF BORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY
OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER PARTY.


 


Section 10.8                                Headings.


 


The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.


 


Section 10.9                                Severability.


 


Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Agreement shall be prohibited by or invalid under
Applicable Law, such provision shall


 


168

















 


be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.


 


Section 10.10                          Preferences.


 


Lender shall have the continuing and exclusive right to apply or
reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, State or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or part thereof
intended to be satisfied shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received by Lender.


 


Section 10.11                          Waiver
of Notice.


 


Borrower shall not be entitled to any notices of any nature whatsoever
from Lender except with respect to matters for which this Agreement or any of
the other Loan Documents specifically and expressly provides for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or any
of the other Loan Documents does not specifically and expressly provide for the
giving of notice by Lender to Borrower.


 


Section 10.12                          Remedies
of Borrower.


 


In the event that a claim or adjudication is made that Lender or its
agents have acted unreasonably or unreasonably delayed acting in any case where
by law or under this Agreement or the other Loan Documents, Lender or such
agent, as the case may be, has an obligation to act reasonably or
promptly, Borrower agrees that neither Lender nor its agents shall be liable
for any monetary damages, and Borrower’s sole remedies shall be limited to
commencing an action seeking injunctive relief or declaratory judgment. The
parties hereto agree that any action or proceeding to determine whether Lender
has acted reasonably shall be determined by an action seeking declaratory
judgment.


 


Section 10.13                          Expenses;
Indemnity.


 


(a)                                  Except as otherwise
expressly set forth in this Agreement, Borrower covenants and agrees to pay or,
if Borrower fails to pay, to reimburse Lender within five (5) days of
receipt of written notice from Lender, for all reasonable out-of-pocket costs
and expenses (including reasonable out-of-pocket attorneys’ fees and
disbursements) incurred by Lender in connection with (i) [intentionally
omitted]; (ii) Borrower’s ongoing performance of and compliance with
Borrower’s agreements and covenants contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the
Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) Lender’s ongoing
performance and


 


169

















 


compliance with all agreements and conditions contained in this
Agreement and the other Loan Documents on its part to be performed or
complied with after the Closing Date; (iv) the negotiation, preparation,
execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any
other documents or matters reasonably requested by Lender; (v) securing
Borrower’s compliance with any requests made pursuant to the provisions of this
Agreement; (vi) the filing and recording fees and expenses, title
insurance and reasonable fees and expenses of counsel for providing to Lender
all required legal opinions, and other similar expenses incurred in creating
and perfecting the Liens in favor of Lender pursuant to this Agreement and the
other Loan Documents; (vii) enforcing or preserving any rights, in
response to third party claims or the prosecuting or defending of any action or
proceeding or other litigation, in each case against, under or affecting
Borrower, this Agreement, the other Loan Documents, the Collateral, the
Mezzanine A Collateral, any Mortgage Principal’s general partner interest in
the related Mortgage Borrower Entity, any Mezzanine A Principal’s general
partner interest in the related Mezzanine A Borrower Entity, the Properties or
any other security given for the Loan; and (viii) enforcing any
obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to the Collateral or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a “workout” or of any insolvency
or bankruptcy proceedings; provided, however,
that Borrower shall not be liable for the payment or reimbursement of any such
costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.


 


(b)                                 Borrower shall
indemnify, defend and hold harmless Lender from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable out-of-pocket fees
and disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on,
incurred by, or asserted against Lender in any manner relating to or arising
out of (i) any breach by Borrower of its obligations under, or any
material misrepresentation by Borrower contained in, this Agreement or the
other Loan Documents, or (ii) the use or intended use of the proceeds of
the Loan (collectively, the “Indemnified Liabilities”); provided, however, that Borrower shall not have any
obligation to Lender hereunder to the extent that such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses or disbursements, as the case may be, arise from the gross
negligence, illegal acts, fraud or willful misconduct of Lender. To the extent
that the undertaking to indemnify, defend and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under Applicable Law to the payment and satisfaction of all Indemnified
Liabilities incurred by Lender.


 


(c)                                  Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold
harmless Lender and the Indemnified Parties from and against any and all losses
(including, without limitation, reasonable attorneys’ fees and costs incurred
in


 


170

















 


the investigation, defense, and settlement of losses incurred in
correcting any prohibited transaction or in the sale of a prohibited loan, and
in obtaining any individual prohibited transaction exemption under ERISA, the
Code, any State statute or other similar law that may be required, in
Lender’s sole discretion) that Lender may incur, directly or indirectly,
as a result of a default under Sections 4.1.8 or 5.2.8 hereof.


 


(d)                                 Except as otherwise
expressly provided for in this Agreement, Borrower covenants and agrees to pay
for or, if Borrower fails to pay, to reimburse Lender for any customary fees or
expenses payable to any Rating Agency in connection with any consent, approval,
waiver or confirmation obtained from such Rating Agency pursuant to the terms
and conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.


 


Section 10.14                          Schedules
and Exhibits Incorporated.


 


The Schedules and Exhibits annexed hereto are hereby incorporated
herein as a part of this Agreement with the same effect as if set forth in
the body hereof.


 


Section 10.15                          Offsets,
Counterclaims and Defenses.


 


Any assignee of Lender’s interest in and to this Agreement, the Note
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Loan and the Loan
Documents which Borrower may otherwise have against any assignor of such
documents, and no such unrelated counterclaim or defense shall be interposed or
asserted by Borrower in any action or proceeding brought by any such assignee
upon the Loan or the Loan Documents, and any such right to interpose or assert
any such unrelated offset, counterclaim or defense in any such action or
proceeding is hereby expressly waived by Borrower.


 


Section 10.16                          No
Joint Venture or Partnership; No Third Party Beneficiaries.


 


(a)                                  Borrower and Lender
intend that the relationship created hereunder and under the other Loan
Documents be solely that of borrower and lender. Nothing herein or therein is
intended to create a joint venture, partnership, tenancy in common, or joint
tenancy relationship between Borrower and Lender.


 


(b)                                 This Agreement and the
other Loan Documents are solely for the benefit of Lender and Borrower, and
nothing contained in this Agreement or the other Loan Documents shall be deemed
to confer upon anyone other than Lender and Borrower any right to insist upon
or to enforce the performance or observance of any of the obligations contained
herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may


 


171

















 


be freely waived in whole or in part by Lender if, in Lender’s
sole discretion, Lender deems it advisable or desirable to do so.


 


Section 10.17                          Counterparts.


 


This Agreement may be executed in multiple counterparts, each of
which, for all purposes, shall be deemed an original, and all of which together
shall constitute one and the same agreement.


 


Section 10.18                          Waiver
of Marshalling of Assets; Cross-Default; Cross Collateralization.


 


(a)                                  To the fullest extent
permitted by Applicable Law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s
partners and others with interests in Borrower, and of the Collateral, or to a
sale in inverse order of alienation in the event of foreclosure of the Pledge
Agreement, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Properties for the collection of the Debt without
any prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any portion of
the Collateral, any equitable right otherwise available to Borrower which would
require the separate sale of any portion of the Collateral or require Lender to
exhaust its remedies against any portion of the Collateral or any combination
of portions of the Collateral before proceeding against any other portion of
the Collateral or combination of portions of the Collateral; and Borrower
hereby expressly consents to and authorizes, at the option of Lender in the
event of such foreclosure, the foreclosure and sale either separately or
together of any portion of the Collateral or combination of portions of the
Collateral.


 


(b)                                 Borrower acknowledges
that Lender has made the Loan to Borrower upon the security of its collective
interest in the Collateral and in reliance upon the aggregate of the Collateral
taken together being of greater value as collateral security than the sum of
any portion of the Collateral taken separately.


 


Section 10.19                          Waiver
of Counterclaim.


 


Borrower hereby waives the right to assert a counterclaim, other than a
compulsory counterclaim, in any action or proceeding brought against it by
Lender or its agents.


 


Section 10.20                          Conflict;
Construction of Documents; Reliance.


 


In the event of any conflict between the provisions of this Agreement
and any of the other Loan Documents, the provisions of this Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with


 


172

















 


the negotiation, drafting and execution of
the Loan Documents and that the Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its
own judgment and advisors in entering into the Loan without relying in any
manner on any statements, representations or recommendations of Lender or any
parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any
limitation whatsoever in the exercise of any rights or remedies available to it
under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any direct or indirect equity interest any of them may acquire
in Borrower, and Borrower hereby irrevocably waives the right to raise any
defense or take any action on the basis of the foregoing with respect to Lender’s
exercise of any such rights or remedies. Borrower acknowledges that Lender
engages in the business of real estate financings and other real estate transactions
and investments which may be viewed as adverse to or competitive with the
business of Borrower or its Affiliates.


 


Section 10.21                          Brokers
and Financial Advisors.


 


Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower
hereby agrees to indemnify, defend and hold Lender harmless from and against
any and all claims, liabilities, costs and expenses of any kind (including
Lender’s reasonable out-of-pocket attorneys’ fees and expenses) in any way
relating to or arising from a claim by any Person that such Person acted on
behalf of Borrower or Lender in connection with the transactions contemplated
herein. The provisions of this Section 10.21 shall survive the expiration
and termination of this Agreement and the payment of the Debt.


 


Section 10.22                          Prior
Agreements.


 


This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, between Borrower and/or its Affiliates and
Lender are superseded by the terms of this Agreement and the other Loan
Documents.


 


Section 10.23                          Joint
and Several Liability.


 


If Borrower consists of more than one Person, the obligations and
liabilities of each such Person hereunder (as the same may be limited by
any applicable provisions of Section 9.4 hereof) are joint and several.


 


Section 10.24                          USA
Patriot Act.


 


Each Lender hereby notifies each Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)), it is required to obtain, verify and record
information that identifies each Borrower, which


 


173

















 


information includes the name and address of
each Borrower and other information that will allow such Lender to identify
each Borrower in accordance with such Act.


 


[NO
FURTHER TEXT ON THIS PAGE]


 


174

















 


IN WITNESS WHEREOF, the parties hereto have caused this Mezzanine B
Loan Agreement to be duly executed by their duly authorized representatives,
all as of the day and year first above written.


 


BORROWER:


 


[BORROWER]


 

















 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.,
  a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,
  a national banking

  association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARCLAYS CAPITAL REAL ESTATE

  FINANCE INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT A


 


(Borrower Entities)


 


	
  Borrower Entity

  	
   

  	
  Organizational

  Identification Number

  	
   

  	
  Tax Identification No.

  
	
  Tishman
  Speyer Archstone-Smith City Place Mezzanine II, L.L.C.

  	
   

  	
  4431673

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Harbour Pointe Mezzanine II, L.L.C.

  	
   

  	
  4431675

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Northcreek Mezzanine II, L.L.C.

  	
   

  	
  4431676

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Campus Mezzanine II, L.L.C.

  	
   

  	
  4431679

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Park Mezzanine II, L.L.C.

  	
   

  	
  4431687

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Warner Center Mezzanine II, L.L.C.

  	
   

  	
  4431691

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Wall Street Towers Mezzanine II, L.L.C.

  	
   

  	
  4431696

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Court Mezzanine II, L.L.C.

  	
   

  	
  4431700

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Vanoni Ranch Mezzanine II, L.L.C.

  	
   

  	
  4431702

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Vanoni Ranch Mezzanine Lessee II, L.L.C.

  	
   

  	
  4432700

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Fox Plaza Mezzanine II, L.L.C.

  	
   

  	
  4431703

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Boston Common Mezzanine II, L.L.C.

  	
   

  	
  4431704

  	
   

  	
  90-0042860

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Thousand Oaks Crest Mezzanine II, L.L.C.

  	
   

  	
  4432674

  	
   

  	
  90-0042860

  



 

















 


EXHIBIT B


 


(Lender Approved
Standard Form of Lease)


 


None


 

















 


EXHIBIT C


 


(Allocated Loan
Amounts)


 


	
  Property Name

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Archstone Boston Common

  	
   

  	
  $

  	
  15,587,637.60

  	
   

  
	
  Archstone City Place

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Archstone Vanoni Ranch

  	
   

  	
  $

  	
  6,330,034.97

  	
   

  
	
  Archstone Warner Center

  	
   

  	
  $

  	
  11,198,986.09

  	
   

  
	
  Archstone Fox Plaza

  	
   

  	
  $

  	
  6,907,673.79

  	
   

  
	
  Archstone Harbour Pointe

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Archstone Northcreek

  	
   

  	
  $

  	
  6,034,220.74

  	
   

  
	
  Archstone Redmond Campus

  	
   

  	
  $

  	
  6,556,893.70

  	
   

  
	
  Oakwood Village

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Archstone Redmond Park

  	
   

  	
  $

  	
  3,667,803.20

  	
   

  
	
  The Flats at Dupont Circle

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Stone Creek at Bellevue

  	
   

  	
  $

  	
  2,228,604.24

  	
   

  
	
  Wall Street Tower

  	
   

  	
  $

  	
  4,989,874.83

  	
   

  



 

















 


EXHIBIT D


 


(Ground Leases)


 


1.                                       Archstone
Vanoni Ranch, 10676 Veronica Lane, Ventura, California


 

















 


SCHEDULE 4.1.1


 


(Organizational
Chart)


 






 












 


SCHEDULE 4.1.4


 


(Litigation)


 


1.                                       Equal
Rights Center v. Archstone litigation (Civil Action No. 04-03975
(AMD), U.S. Dist. Ct., D. Md.), with respect to various properties (which
properties may include one or more Properties), owned by Mortgage Borrower
or other entities affiliated with Archstone-Smith Operating Trust, as having
potential construction/design violations under the Fair Housing Act and the
Americans with Disabilities Act.


 

















 


SCHEDULE 4.1.9


 


(Exceptions to
Compliance with Legal Requirements)


 


1.                                       Certain
Individual Properties, owned by Mortgage Borrower or other entities affiliated
with Archstone-Smith Operating Trust, are identified in the Equal Rights
Center v. Archstone litigation (Civil Action No. 04-03975 (AMD), U.S.
Dist. Ct., D. Md.) as having potential construction/design violations under the
Fair Housing Act and the Americans with Disabilities Act.


 

















 


SCHEDULE 4.1.10


 


(Financial
Information Exceptions)


 


None


 

















 


SCHEDULE 4.1.13


 


(Utilities and
Public Access Exceptions)


 


None


 

















 


SCHEDULE 4.1.21


 


(Certificate of
Occupancy and Licenses Exceptions)


 


None


 

















 


SCHEDULE 4.1.23


 


(Physical Condition
Exceptions)


 


None


 

















 


SCHEDULE 4.1.25


 


(Lease
Representation Exceptions)


 


None


 

















 


SCHEDULE 4.1.32


 


(Changes in Facts or
Circumstances)


 


None


 

















 


SCHEDULE 4.1.47


 


(List of Mortgage
Loan Documents)


 


Archstone Vanoni Ranch


 


1. Promissory Note made by ASN Vanoni Ranch LLC and Tishman Speyer
Archstone-Smith Vanoni Ranch Lessee, L.L.C. (together, the “Vanoni Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Inc. (together, the “Lender”), as lender, in the
original principal amount of $69,149,000.00


 


2. Loan Agreement between Vanoni Borrower and Lender


 


3. Deed of Trust between Vanoni Borrower and Lender


 


4. Replacement Reserve Agreement between Vanoni Borrower and Lender


 


5. Guaranty executed by Archstone-Smith
Operating Trust (“Guarantor”)


 


6. Cross Collateralization
Agreement between Vanoni Borrower and Lender


 


7. Post Closing Letter executed
by Vanoni Borrower


 


8. Escrow Agreement executed by
Vanoni Borrower and Lender


 


9. Hedge Agreement between Vanoni
Borrower and Lender


 


10. ADA Agreement between Vanoni
Borrower and Lender


 


11. California Guaranty
executed by Guarantor


 


Archstone Warner Center


 


1. Promissory Note made by ASN Warner Center LLC (“Warner Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $110,405,000.00


 


2. Loan Agreement between Warner Borrower and Lender


 


3. Deed of Trust between Warner Borrower and Lender


 


4. Replacement Reserve Agreement between Warner Borrower and Lender


 


5. Guaranty executed by Guarantor


 

















 


6. Cross Collateralization
Agreement between Warner Borrower and Lender


 


7. Post Closing Letter executed
by Warner Borrower


 


8. Escrow Agreement executed by
Warner Borrower and Lender


 


9. Hedge Agreement between Warner
Borrower and Lender


 


10. Debt Service Escrow Agreement
between Warner Borrower and
Lender


 


11. California Guaranty
executed by Guarantor


 


Archstone City Place


 


1. Promissory Note made by ASN City Place LLC (“City Place Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $48,428,000.00


 


2. Loan Agreement between City Place Borrower and Lender


 


3. Deed of Trust between City Place Borrower and Lender


 


4. Replacement Reserve Agreement between City Place Borrower and Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between City Place Borrower and Lender


 


7. Post Closing Letter executed
by City Place Borrower


 


8. Escrow Agreement executed by
City Place Borrower and
Lender


 


9. Hedge Agreement between City
Place Borrower and Lender


 


10. California Guaranty
executed by Guarantor


 


Archstone Fox Plaza


 


1. Promissory Note made by ASN Fox Plaza LLC (“Fox Borrower”), as
borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $61,634,500.00


 


2. Loan Agreement between Fox Borrower and Lender


 

















 


3. Deed of Trust between Fox Borrower and Lender


 


4. Replacement Reserve Agreement between Fox Borrower and Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Fox Borrower and Lender


 


7. Post Closing Letter executed
by Fox Borrower


 


8. Escrow Agreement executed by
Fox Borrower and Lender


 


9. Hedge Agreement between Fox
Borrower and Lender


 


10. Repair Agreement between Fox
Borrower and Lender


 


11. California Guaranty
executed by Guarantor


 


Archstone Boston Common


 


1. Promissory Note made by ASN Park Essex LLC (“Boston Borrower”), as
borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $152,926,000.00


 


2. Loan Agreement between Boston Borrower and Lender


 


3. Mortgage between Boston Borrower and Lender


 


4. Replacement Reserve Agreement between Boston Borrower and Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Boston Borrower and Lender


 


7. Post Closing Letter executed
by Boston Borrower


 


8. Escrow Agreement executed by
Boston Borrower and Lender


 


9. Debt Service Escrow
Agreement between Boston Borrower and Lender


 


10. Hedge Agreement between Boston
Borrower and Lender


 

















 


Archstone
Redmond Campus


 


1. Promissory Note made by Tishman Speyer Archstone-Smith Redmond
Campus, L.L.C. (“Redmond Campus Borrower”), as borrower in favor of Lehman
Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real Estate
Finance Inc. (together, the “Lender”), as lender, in the original principal
amount of $72,358,000.00


 


2. Loan Agreement between Redmond Campus Borrower and Lender


 


3. Mortgage between Redmond Campus Borrower and Lender


 


4. Replacement Reserve Agreement between Redmond Campus Borrower and
Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Redmond Campus Borrower and Lender


 


7. Post Closing Letter executed
by Redmond Campus Borrower


 


8. Escrow Agreement executed by
Redmond Campus Borrower and
Lender


 


9. Hedge Agreement between Redmond
Campus Borrower and Lender


 


Archstone Harbour Pointe


 


1. Promissory Note made by Tishman Speyer Archstone-Smith Harbour
Pointe, L.L.C. (“Harbour Pointe Borrower”), as borrower in favor of Lehman Brothers
Holdings Inc.; Bank of America, N.A.; Barclays Capital Real Estate Finance Inc.
(together, the “Lender”), as lender, in the original principal amount of
$27,625,000.00


 


2. Loan Agreement between Harbour Pointe Borrower and Lender


 


3. Mortgage between Harbour Pointe Borrower and Lender


 


4. Replacement Reserve Agreement between Harbour Pointe Borrower and
Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Harbour Pointe Borrower and Lender


 


7. Post Closing Letter executed
by Harbour Pointe Borrower


 


8. Escrow Agreement executed by
Harbour Pointe Borrower and
Lender


 


9. Hedge Agreement between Harbour
Pointe Borrower and Lender


 

















 


Archstone Northcreek


 


1. Promissory Note made by Tishman Speyer Archstone-Smith Northcreek,
L.L.C. (“Northcreek Borrower”), as borrower in favor of Lehman Brothers
Holdings Inc.; Bank of America, N.A.; Barclays Capital Real Estate Finance Inc.
(together, the “Lender”), as lender, in the original principal amount of
$603,000.00


 


2. Loan Agreement between Northcreek Borrower and Lender


 


3. Mortgage between Northcreek Borrower and Lender


 


4. Replacement Reserve Agreement between Northcreek Borrower and Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Northcreek Borrower and Lender


 


7. Post Closing Letter executed
by Northcreek Borrower


 


8. Escrow Agreement executed by
Northcreek Borrower and
Lender


 


9. Hedge Agreement between Northcreek
Borrower and Lender


 


10. ADA Agreement between
Borrower and Lender


 


Archstone Redmond Park


 


1. Promissory Note made by ASN Redmond Park LLC (“Redmond Park Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $41,063,000.00


 


2. Loan Agreement between Redmond Park Borrower and Lender


 


3. Mortgage between Redmond Park Borrower and Lender


 


4. Replacement Reserve Agreement between Redmond Park Borrower and
Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Redmond Park Borrower and Lender


 


7. Post Closing Letter executed
by Redmond Park Borrower


 


8. Escrow Agreement executed by
Redmond Park Borrower and
Lender


 

















 


9. Hedge Agreement between Redmond
Park Borrower and Lender


 


Stone Creek at Bellevue (Redmond Court)


 


1. Promissory Note made by Tishman Speyer Archstone-Smith Redmond
Court, L.L.C. (“Stone Creek Borrower”), as borrower in favor of Lehman Brothers
Holdings Inc.; Bank of America, N.A.; Barclays Capital Real Estate Finance Inc.
(together, the “Lender”), as lender, in the original principal amount of
$23,100,000.00


 


2. Loan Agreement between Stone Creek Borrower and Lender


 


3. Mortgage between Stone Creek Borrower and Lender


 


4. Replacement Reserve Agreement between Stone Creek Borrower and
Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Stone Creek Borrower and Lender


 


7. Post Closing Letter executed
by Stone Creek Borrower


 


8. Escrow Agreement executed by
Stone Creek Borrower and
Lender


 


9. Hedge Agreement between Stone
Creek Borrower and Lender


 


Wall Street Tower


 


1. Promissory Note made by ASN Belltown LLC (“Wall Street Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $54,410,000.00


 


2. Loan Agreement between Wall Street Borrower and Lender


 


3. Mortgage between Wall Street Borrower and Lender


 


4. Replacement Reserve Agreement between Wall Street Borrower and
Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Wall Street Borrower and Lender


 


7. Post Closing Letter executed
by Wall Street Borrower


 


8. Escrow Agreement executed by
Wall Street Borrower and
Lender


 

















 


9. Hedge Agreement between Wall
Street Borrower and Lender


 


Archstone Thousand Oaks Crest (aka Oakwood
Village)


 


1. Promissory Note made by ASN Thousand Oaks Crest LLC (“Oakwood
Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bank of
America, N.A.; Barclays Capital Real Estate Finance Inc. (together, the “Lender”),
as lender, in the original principal amount of $46,000,000.00


 


2. Loan Agreement between Oakwood Borrower and Lender


 


3. Deed of Trust between Oakwood Borrower and Lender


 


4. Replacement Reserve Agreement between Oakwood Borrower and Lender


 


5. Guaranty executed by Guarantor


 


6. Cross Collateralization
Agreement between Oakwood Borrower and Lender


 


7. Post Closing Letter executed
by Oakwood Borrower


 


8. Escrow Agreement executed by
Oakwood Borrower and Lender


 


9. Hedge Agreement between Oakwood
Borrower and Lender


 


10. Repair Agreement between Oakwood
Borrower and Lender


 


11. Completion Guaranty
executed by Guarantor


 


12. California Guaranty
executed by Guarantor


 


The Flats at Dupont Circle


 


1. Promissory Note made by ASN Dupont Circle LLC (“Dupont Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $90,066,000.00


 


2. Loan Agreement between Dupont Borrower and Lender


 


3. Deed of Trust between Dupont Borrower and Lender


 


4. Replacement Reserve Agreement between Dupont Borrower and Lender


 


5. Guaranty executed by Guarantor


 

















 


6. Cross Collateralization
Agreement between Dupont Borrower and Lender


 


7. Post Closing Letter executed
by Dupont Borrower


 


8. Escrow Agreement executed by
Dupont Borrower and Lender


 


9. Hedge Agreement between Dupont
Borrower and Lender


 

















 


SCHEDULE 4.1.48


 


(Condominium
Properties)


 


1.                                       Archstone
Fox Plaza, 1390 Market Street, San Francisco, California


 

















 


SCHEDULE 4.1.49


 


(List of Mezzanine A
Loan Documents)


 


1. Mezzanine A Promissory Note
made by the entities set forth on Schedule 2 (together, the “Borrower”),
as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;
Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,
in the original principal amount of $71,939,553.23


 


2. Mezzanine A Loan Agreement
between Borrower and Lender


 


3. Mezzanine A Pledge and
Security Agreement between Borrower and Lender


 


4. Mezzanine A Guaranty of
Recourse Obligations executed by Tishman Speyer
Archstone-Smith Multifamily Holdings I, L.P. (“Guarantor”)


 


5. Mezzanine A Environmental
Indemnity Agreement executed by Borrower


 


6. Mezzanine A Assignment of
Interest Rate Cap Agreement and Security Agreement between Borrower and Lender


 

















 


SCHEDULE 5.1.20


 


(Capital
Improvements)


 


None


 

















 


SCHEDULE 5.2.10(c)(vii)


 


Bank Loan Pledged
Interests


 


All entities that have pledged their assets as collateral for the Bank
Loan pursuant to the Bank Loan Documents.