Exhibit 10.10


 


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


 


 

















 


	
  I.

  	
  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 1.2

  	
  Principles of Construction

  	
  36

  
	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL TERMS

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Loan Commitment; Disbursement to Borrower

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.1.1

  	
  Agreement to
  Lend and Borrow

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.1.2

  	
  Single
  Disbursement to Borrower

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.1.3

  	
  The Note,
  Pledge Agreement and Loan Documents

  	
  37

  
	
   

  	
   

  	
   

  
	
  2.1.4

  	
  Use of
  Proceeds

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 2.2

  	
  Interest; Loan Payments; Late Payment Charge

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.1

  	
  Payments

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.2

  	
  Interest
  Calculation

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.3

  	
  Payments
  Before Maturity Date

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.4

  	
  Intentionally
  Omitted

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.5

  	
  Payment on
  Maturity Date

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.6

  	
  Payments
  after Default

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2.7

  	
  Late Payment
  Charge

  	
  39

  
	
   

  	
   

  	
   

  
	
  2.2.8

  	
  Usury
  Savings

  	
  39

  
	
   

  	
   

  	
   

  
	
  2.2.9

  	
  Foreign Taxes

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 2.3

  	
  Prepayments

  	
  41

  
	
   

  	
   

  	
   

  
	
  2.3.1

  	
  Voluntary
  Prepayments

  	
  41

  
	
   

  	
   

  	
   

  
	
  2.3.2

  	
  Liquidation
  Events

  	
  42

  
	
   

  	
   

  	
   

  
	
  2.3.3

  	
  Prepayments
  After Default

  	
  42

  
	
   

  	
   

  	
   

  
	
  2.3.4

  	
  Making of
  Payments

  	
  43

  
	
   

  	
   

  	
   

  
	
  2.3.5

  	
  Application
  of Principal Prepayments

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 2.4

  	
  Intentionally Omitted

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 2.5

  	
  Intentionally Omitted

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 2.6

  	
  Release of an Individual Property

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 2.7

  	
  Intentionally Omitted

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.8

  	
  Release on Payment in Full

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.9

  	
  Substitution of Properties

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 2.10

  	
  Approval of Requests under Mortgage Loan Agreement

  	
  52

  
				



 

















 


	
  III.

  	
  MORTGAGE BORROWER DISTRIBUTIONS

  	
  52

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Mortgage Borrower Distributions

  	
  52

  
	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Borrower Representations

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.1.1

  	
  Organization

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.1.2

  	
  Proceedings

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.1.3

  	
  No Conflicts

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.1.4

  	
  Litigation

  	
  54

  
	
   

  	
   

  	
   

  
	
  4.1.5

  	
  Agreements

  	
  54

  
	
   

  	
   

  	
   

  
	
  4.1.6

  	
  Solvency

  	
  55

  
	
   

  	
   

  	
   

  
	
  4.1.7

  	
  Full and
  Accurate Disclosure

  	
  56

  
	
   

  	
   

  	
   

  
	
  4.1.8

  	
  No Plan
  Assets

  	
  56

  
	
   

  	
   

  	
   

  
	
  4.1.9

  	
  Compliance

  	
  56

  
	
   

  	
   

  	
   

  
	
  4.1.10

  	
  Financial
  Information

  	
  56

  
	
   

  	
   

  	
   

  
	
  4.1.11

  	
  Condemnation

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.1.12

  	
  Federal
  Reserve Regulations

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.1.13

  	
  Utilities
  and Public Access

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.1.14

  	
  Not a
  Foreign Person

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.1.15

  	
  Separate
  Lots

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.1.16

  	
  Assessments

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.17

  	
  Enforceability

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.18

  	
  No Prior
  Assignment

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.19

  	
  Insurance

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.20

  	
  Use of
  Property

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.21

  	
  Certificate
  of Occupancy; Licenses

  	
  58

  
	
   

  	
   

  	
   

  
	
  4.1.22

  	
  Flood Zone

  	
  59

  
	
   

  	
   

  	
   

  
	
  4.1.23

  	
  Physical
  Condition

  	
  59

  
	
   

  	
   

  	
   

  
	
  4.1.24

  	
  Boundaries

  	
  59

  
	
   

  	
   

  	
   

  
	
  4.1.25

  	
  Leases

  	
  59

  
	
   

  	
   

  	
   

  
	
  4.1.26

  	
  Title

  	
  60

  
	
   

  	
   

  	
   

  
	
  4.1.27

  	
  Intentionally
  Omitted

  	
  62

  
	
   

  	
   

  	
   

  
	
  4.1.28

  	
  Filing and
  Recording Taxes

  	
  62

  
				



 


2

















 


	
  4.1.29

  	
  Intentionally
  Omitted

  	
  62

  
	
   

  	
   

  	
   

  
	
  4.1.30

  	
  Management
  Agreement

  	
  62

  
	
   

  	
   

  	
   

  
	
  4.1.31

  	
  Illegal
  Activity

  	
  62

  
	
   

  	
   

  	
   

  
	
  4.1.32

  	
  No Change in
  Facts or Circumstances; Disclosure

  	
  62

  
	
   

  	
   

  	
   

  
	
  4.1.33

  	
  Investment
  Company Act

  	
  63

  
	
   

  	
   

  	
   

  
	
  4.1.34

  	
  Principal
  Place of Business; State of Organization

  	
  63

  
	
   

  	
   

  	
   

  
	
  4.1.35

  	
  Single
  Purpose Entity

  	
  63

  
	
   

  	
   

  	
   

  
	
  4.1.36

  	
  Business
  Purposes

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.1.37

  	
  Taxes

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.1.38

  	
  Forfeiture

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.1.39

  	
  Environmental
  Representations and Warranties

  	
  71

  
	
   

  	
   

  	
   

  
	
  4.1.40

  	
  Taxpayer
  Identification Number

  	
  72

  
	
   

  	
   

  	
   

  
	
  4.1.41

  	
  OFAC

  	
  72

  
	
   

  	
   

  	
   

  
	
  4.1.42

  	
  Intentionally
  Omitted

  	
  72

  
	
   

  	
   

  	
   

  
	
  4.1.43

  	
  Deposit and
  Securities Accounts

  	
  72

  
	
   

  	
   

  	
   

  
	
  4.1.44

  	
  Embargoed
  Person

  	
  72

  
	
   

  	
   

  	
   

  
	
  4.1.45

  	
  Affiliates

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.46

  	
  Mortgage
  Borrower and Mezzanine A Borrower Representations

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.47

  	
  List of
  Mortgage Loan Documents

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.48

  	
  Intentionally
  Omitted

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.49

  	
  Intentionally
  Omitted

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.50

  	
  List of Mezzanine
  A Loan Documents

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.51

  	
  Mortgage
  Loan Event of Default

  	
  73

  
	
   

  	
   

  	
   

  
	
  4.1.52

  	
  Mezzanine A
  Loan Event of Default

  	
  74

  
	
   

  	
   

  	
   

  
	
  Section 4.2

  	
  Survival of Representations

  	
  74

  
	
   

  	
   

  	
   

  
	
  V.

  	
  BORROWER COVENANTS

  	
  74

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Affirmative Covenants

  	
  74

  
	
   

  	
   

  	
   

  
	
  5.1.1

  	
  Existence;
  Compliance with Legal Requirements

  	
  74

  
	
   

  	
   

  	
   

  
	
  5.1.2

  	
  Taxes and
  Other Charges

  	
  75

  
	
   

  	
   

  	
   

  
	
  5.1.3

  	
  Litigation

  	
  76

  
	
   

  	
   

  	
   

  
	
  5.1.4

  	
  Access to
  the Properties

  	
  77

  
	
   

  	
   

  	
   

  
	
  5.1.5

  	
  Notice of
  Default

  	
  77

  
				



 


3

















 


	
  5.1.6

  	
  Cooperate in
  Legal Proceedings

  	
  77

  
	
   

  	
   

  	
   

  
	
  5.1.7

  	
  Award and
  Insurance Benefits

  	
  77

  
	
   

  	
   

  	
   

  
	
  5.1.8

  	
  Further
  Assurances

  	
  77

  
	
   

  	
   

  	
   

  
	
  5.1.9

  	
  Mortgage and
  Intangible Taxes

  	
  78

  
	
   

  	
   

  	
   

  
	
  5.1.10

  	
  Financial
  Reporting

  	
  78

  
	
   

  	
   

  	
   

  
	
  5.1.11

  	
  Business and
  Operations

  	
  81

  
	
   

  	
   

  	
   

  
	
  5.1.12

  	
  Costs of
  Enforcement

  	
  82

  
	
   

  	
   

  	
   

  
	
  5.1.13

  	
  Estoppel
  Statement

  	
  82

  
	
   

  	
   

  	
   

  
	
  5.1.14

  	
  Loan
  Proceeds

  	
  83

  
	
   

  	
   

  	
   

  
	
  5.1.15

  	
  Performance
  by Borrower

  	
  83

  
	
   

  	
   

  	
   

  
	
  5.1.16

  	
  Confirmation
  of Representations

  	
  84

  
	
   

  	
   

  	
   

  
	
  5.1.17

  	
  Leasing
  Matters

  	
  84

  
	
   

  	
   

  	
   

  
	
  5.1.18

  	
  Management
  Agreement

  	
  88

  
	
   

  	
   

  	
   

  
	
  5.1.19

  	
  Environmental
  Covenants

  	
  90

  
	
   

  	
   

  	
   

  
	
  5.1.20

  	
  Alterations

  	
  91

  
	
   

  	
   

  	
   

  
	
  5.1.21

  	
  Intentionally
  Omitted

  	
  92

  
	
   

  	
   

  	
   

  
	
  5.1.22

  	
  OFAC

  	
  92

  
	
   

  	
   

  	
   

  
	
  5.1.23

  	
  Intentionally
  Omitted

  	
  93

  
	
   

  	
   

  	
   

  
	
  5.1.24

  	
  Mortgage
  Loan Reserve Funds

  	
  93

  
	
   

  	
   

  	
   

  
	
  5.1.25

  	
  Notices

  	
  93

  
	
   

  	
   

  	
   

  
	
  5.1.26

  	
  Special
  Distributions

  	
  93

  
	
   

  	
   

  	
   

  
	
  5.1.27

  	
  Mortgage
  Borrower and Mezzanine A Borrower Covenants

  	
  93

  
	
   

  	
   

  	
   

  
	
  5.1.28

  	
  Mortgage
  Loan and Mezzanine A Loan Estoppels

  	
  94

  
	
   

  	
   

  	
   

  
	
  5.1.29

  	
  Intentionally
  Omitted

  	
  94

  
	
   

  	
   

  	
   

  
	
  Section 5.2

  	
  Negative Covenants

  	
  94

  
	
   

  	
   

  	
   

  
	
  5.2.1

  	
  Liens

  	
  95

  
	
   

  	
   

  	
   

  
	
  5.2.2

  	
  Dissolution

  	
  95

  
	
   

  	
   

  	
   

  
	
  5.2.3

  	
  Change in
  Business

  	
  95

  
	
   

  	
   

  	
   

  
	
  5.2.4

  	
  Debt
  Cancellation

  	
  96

  
	
   

  	
   

  	
   

  
	
  5.2.5

  	
  Zoning

  	
  96

  
	
   

  	
   

  	
   

  
	
  5.2.6

  	
  No Joint
  Assessment

  	
  96

  
	
   

  	
   

  	
   

  
	
  5.2.7

  	
  Name,
  Identity, Structure, or Principal Place of Business

  	
  96

  
	
   

  	
   

  	
   

  
	
  5.2.8

  	
  ERISA

  	
  97

  



 


4

















 


	
  5.2.9

  	
  Affiliate
  Transactions

  	
  97

  
	
   

  	
   

  	
   

  
	
  5.2.10

  	
  Transfers

  	
  98

  
	
   

  	
   

  	
   

  
	
  5.2.11

  	
  Permitted
  Transfer

  	
  101

  
	
   

  	
   

  	
   

  
	
  5.2.12

  	
  Limitations
  on Securities Issuances

  	
  104

  
	
   

  	
   

  	
   

  
	
  5.2.13

  	
  Distributions

  	
  104

  
	
   

  	
   

  	
   

  
	
  5.2.14

  	
  Refinancing
  or Prepayment of the Mortgage Loan and Mezzanine A Loan

  	
  104

  
	
   

  	
   

  	
   

  
	
  5.2.15

  	
  Acquisition
  of the Mortgage Loan and Mezzanine A Loan

  	
  104

  
	
   

  	
   

  	
   

  
	
  5.2.16

  	
  Material
  Agreements

  	
  106

  
	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE; CASUALTY AND CONDEMNATION

  	
  106

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Insurance

  	
  106

  
	
   

  	
   

  	
   

  
	
  Section 6.2

  	
  Casualty

  	
  112

  
	
   

  	
   

  	
   

  
	
  Section 6.3

  	
  Condemnation

  	
  113

  
	
   

  	
   

  	
   

  
	
  Section 6.4

  	
  Restoration

  	
  113

  
	
   

  	
   

  	
   

  
	
  Section 6.5

  	
  Rights of Lender

  	
  113

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  RESERVE FUNDS

  	
  114

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Completion/Repair Reserves

  	
  114

  
	
   

  	
   

  	
   

  
	
  Section 7.2

  	
  Impositions and Imposition Deposits

  	
  114

  
	
   

  	
   

  	
   

  
	
  Section 7.3

  	
  Replacement Reserves

  	
  115

  
	
   

  	
   

  	
   

  
	
  Section 7.4

  	
  Other Mortgage Reserves

  	
  115

  
	
   

  	
   

  	
   

  
	
  Section 7.5

  	
  Debt Service Reserve Funds

  	
  115

  
	
   

  	
   

  	
   

  
	
  Section 7.6

  	
  Intentionally Omitted

  	
  117

  
	
   

  	
   

  	
   

  
	
  Section 7.7

  	
  Intentionally Omitted

  	
  117

  
	
   

  	
   

  	
   

  
	
  Section 7.8

  	
  Reserve Funds, Generally

  	
  117

  
	
   

  	
   

  	
   

  
	
  Section 7.9

  	
  Letters of Credit

  	
  118

  
	
   

  	
   

  	
   

  
	
  7.9.1

  	
  Delivery of
  Letters of Credit

  	
  118

  
	
   

  	
   

  	
   

  
	
  7.9.2

  	
  Provisions
  Regarding Letters of Credit

  	
  118

  
	
   

  	
   

  	
   

  
	
  VIII.

  	
  DEFAULTS

  	
  119

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Event of Default

  	
  119

  
	
   

  	
   

  	
   

  
	
  Section 8.2

  	
  Remedies

  	
  123

  
	
   

  	
   

  	
   

  
	
  Section 8.3

  	
  Remedies Cumulative; Waivers

  	
  125

  
	
   

  	
   

  	
   

  
	
  Section 8.4

  	
  Right to Cure Defaults

  	
  125

  
				



 


5

















 


	
  Section 8.5

  	
  Mortgage Loan Reserve Funds

  	
  125

  
	
   

  	
   

  	
   

  
	
  Section 8.6

  	
  Power of Attorney

  	
  126

  
	
   

  	
   

  	
   

  
	
  IX.

  	
  SPECIAL PROVISIONS

  	
  126

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Sale of Notes and Securitization

  	
  126

  
	
   

  	
   

  	
   

  
	
  Section 9.2

  	
  Disclosure Document Cooperation

  	
  128

  
	
   

  	
   

  	
   

  
	
  Section 9.3

  	
  Servicer

  	
  128

  
	
   

  	
   

  	
   

  
	
  Section 9.4

  	
  Exculpation

  	
  128

  
	
   

  	
   

  	
   

  
	
  Section 9.5

  	
  Limitation on Borrower’s Obligations

  	
  131

  
	
   

  	
   

  	
   

  
	
  Section 9.6

  	
  Reallocation of Loan Amounts

  	
  133

  
	
   

  	
   

  	
   

  
	
  Section 9.7

  	
  Syndication

  	
  134

  
	
   

  	
   

  	
   

  
	
  9.7.1

  	
  Syndication

  	
  134

  
	
   

  	
   

  	
   

  
	
  9.7.2

  	
  Sale of Loan, Co-Lenders, Participations and Servicing

  	
  134

  
	
   

  	
   

  	
   

  
	
  9.7.3

  	
  Cooperation in Syndication

  	
  137

  
	
   

  	
   

  	
   

  
	
  9.7.4

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

  	
  138

  
	
   

  	
   

  	
   

  
	
  9.7.5

  	
  Intentionally Omitted

  	
  139

  
	
   

  	
   

  	
   

  
	
  9.7.6

  	
  No Joint Venture

  	
  139

  
	
   

  	
   

  	
   

  
	
  Section 9.8

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

  	
  139

  
	
   

  	
   

  	
   

  
	
  Section 9.9

  	
  Contributions and Waivers

  	
  141

  
	
   

  	
   

  	
   

  
	
  Section 9.10

  	
  Certain Additional Rights of Lender; VCOC

  	
  144

  
	
   

  	
   

  	
   

  
	
  Section 9.11

  	
  Mortgage Loan Defaults

  	
  145

  
	
   

  	
   

  	
   

  
	
  Section 9.12

  	
  Mezzanine A Loan Defaults

  	
  147

  
	
   

  	
   

  	
   

  
	
  Section 9.13

  	
  Intentionally Omitted

  	
  148

  
	
   

  	
   

  	
   

  
	
  Section 9.14

  	
  Intercreditor Agreements

  	
  148

  
	
   

  	
   

  	
   

  
	
  Section 9.15

  	
  Discussions with Mortgage Lender and Mezzanine A Lender

  	
  149

  
	
   

  	
   

  	
   

  
	
  Section 9.16

  	
  Independent Approval Rights

  	
  149

  
	
   

  	
   

  	
   

  
	
  X.

  	
  MISCELLANEOUS

  	
  150

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Survival

  	
  150

  
	
   

  	
   

  	
   

  
	
  Section 10.2

  	
  Lender’s Discretion

  	
  150

  
	
   

  	
   

  	
   

  
	
  Section 10.3

  	
  Governing Law

  	
  150

  
	
   

  	
   

  	
   

  
	
  Section 10.4

  	
  Modification, Waiver in Writing

  	
  151

  
	
   

  	
   

  	
   

  
	
  Section 10.5

  	
  Delay Not a Waiver

  	
  151

  
				



 


6

















 


	
  Section 10.6

  	
  Notices

  	
  151

  
	
   

  	
   

  	
   

  
	
  Section 10.7

  	
  Trial by Jury

  	
  153

  
	
   

  	
   

  	
   

  
	
  Section 10.8

  	
  Headings

  	
  153

  
	
   

  	
   

  	
   

  
	
  Section 10.9

  	
  Severability

  	
  153

  
	
   

  	
   

  	
   

  
	
  Section
  10.10

  	
  Preferences

  	
  153

  
	
   

  	
   

  	
   

  
	
  Section
  10.11

  	
  Waiver of Notice

  	
  153

  
	
   

  	
   

  	
   

  
	
  Section
  10.12

  	
  Remedies of Borrower

  	
  154

  
	
   

  	
   

  	
   

  
	
  Section
  10.13

  	
  Expenses; Indemnity

  	
  154

  
	
   

  	
   

  	
   

  
	
  Section
  10.14

  	
  Schedules and Exhibits Incorporated

  	
  155

  
	
   

  	
   

  	
   

  
	
  Section
  10.15

  	
  Offsets, Counterclaims and Defenses

  	
  156

  
	
   

  	
   

  	
   

  
	
  Section
  10.16

  	
  No Joint Venture or Partnership; No Third Party Beneficiaries

  	
  156

  
	
   

  	
   

  	
   

  
	
  Section 10.17

  	
  Counterparts

  	
  156

  
	
   

  	
   

  	
   

  
	
  Section
  10.18

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

  	
  156

  
	
   

  	
   

  	
   

  
	
  Section
  10.19

  	
  Waiver of Counterclaim

  	
  157

  
	
   

  	
   

  	
   

  
	
  Section
  10.20

  	
  Conflict; Construction of Documents; Reliance

  	
  157

  
	
   

  	
   

  	
   

  
	
  Section
  10.21

  	
  Brokers and Financial Advisors

  	
  158

  
	
   

  	
   

  	
   

  
	
  Section
  10.22

  	
  Prior Agreements

  	
  158

  
	
   

  	
   

  	
   

  
	
  Section
  10.23

  	
  Joint and Several Liability

  	
  158

  
	
   

  	
   

  	
   

  
	
  Section
  10.24

  	
  USA Patriot Act

  	
  158

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A (Borrower Entities)

  	
  161

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B (Lender Approved Standard Form of
  Lease)

  	
  162

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C (Allocated Loan Amounts)

  	
  163

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.1 (Organizational Chart)

  	
  164

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.4 (Litigation)

  	
  165

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.9 (Exceptions to Compliance
  with Legal Requirements)

  	
  166

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.10 (Financial Information
  Exceptions)

  	
  167

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.13 (Utilities and Public Access
  Exceptions)

  	
  168

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.21 (Certificate of Occupancy
  and Licenses Exceptions)

  	
  169

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.23 (Physical Condition
  Exceptions)

  	
  170

  



 


7

















 


	
  SCHEDULE 4.1.25 (Lease Representation
  Exceptions)

  	
  171

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.32 (Changes in Facts or
  Circumstances)

  	
  172

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.47 (List of Mortgage Loan
  Documents)

  	
  173

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.50 (List of Mezzanine A Loan
  Documents)

  	
  174

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5.1.20 (Capital Improvements)

  	
  175

  
	
   

  	
   

  	
   

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

  	
  176

  



 


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:


 


“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.


 


“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.


 


9

















 


“Additional Guarantor” shall mean any entity
that enters into a confirmation and joinder agreement as provided in the
Guaranty and, with regard to any concurrent transfer, such transfer shall not
cause a reduction of the direct or indirect interests in the Guarantors held by
the Lehman Entities and/or the Tishman Speyer Control Persons below 9.7% in the
aggregate.


 


“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 an interest rate equal to           %
per annum.


 


“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.


 


10

















 


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


 


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


 


“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.


 


“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.


 


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


 


11

















 


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


 


“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.


 


“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.


 


“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


 


12

















 


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.


 


“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
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.


 


“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.


 


13

















 


“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.


 


“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.


 


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


 


“Equipment
Lease Agreements” shall have the meaning set forth in Section 5.2.10(a) 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.


 


“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


 


14

















 


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.


 


“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, utility and other
similar deposits and any disbursements to Borrower, Mezzanine A Borrower or
Mortgage Borrower from the Mortgage Loan


 


15

















 


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.


 


“Guarantor”
shall mean, individually and collectively, as the context may require, ASOT,
Multifamily Guarantor, Multifamily Parallel Guarantor, Multifamily Parallel
Guarantor I and Multifamily Parallel Guarantor II and any Additional Guarantor.


 


“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).


 


16

















 


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


 


“Individual
Property” shall mean each parcel of real property, the Improvements thereon 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


 


17

















 


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.


 


“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
Shortfall” shall have the meaning set forth in Section 2.3.1 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 Mortgage Loan Agreement.


 


“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 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.


 


18
















 


“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.


 


“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 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 THIRTY-FOUR MILLION FIVE
HUNDRED NINETY-FOUR THOUSAND NINE HUNDRED FIFTY-


 


19

















 


ONE AND 49/100 DOLLARS ($34,594,951.49) 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.


 


“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


 


20

















 


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, 2017, or such other date on which the final payment of
the principal of the Note becomes due and payable as therein or herein
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.


 


21

















 


“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
$12,125,000.00 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
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 $12,125,000.00, 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.


 


22

















 


“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” and “IDOT
Guarantor” in the Mortgage Loan Agreement.


 


“Mortgage
Borrower Entity” shall have the meaning ascribed to the term “Borrower” and “IDOT
Guarantor” in the Mortgage Loan Agreement.


 


“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
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.


 


“Mortgage Loan”
shall mean that certain loan made by Mortgage Lender to Mortgage Borrower in
the original principal amount of $493,329,410.00.


 


“Mortgage Loan
Agreement” shall mean that certain Master Credit Facility Agreement, dated as
of the Closing Date, between Mortgage Borrower and Mortgage Lender, as the same
may be amended, restated, supplemented or otherwise modified from time to time.


 


“Mortgage Loan
Debt Service” shall have the meaning ascribed to the term “Debt Service”  in the Mortgage Loan Agreement.


 


“Mortgage Loan
Documents” shall mean, collectively, the Mortgage Note, the Mortgage Loan
Agreement, the Security Instrument, and any and all other documents defined as “Loan
Documents” in the Mortgage Loan Agreement, 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 Mortgage Loan Agreement.


 


“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 Mortgage Loan
Agreement.


 


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


 


23

















 


“Mortgage
Title Insurance Policy” shall have the meaning ascribed to the term “Title
Insurance Policies” in the Mortgage Loan Agreement.


 


“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.


 


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


 


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


 


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


 


“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


 


24

















 


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.


 


“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 THIRTY-FOUR MILLION FIVE HUNDRED NINETY-FOUR
THOUSAND NINE HUNDRED FIFTY-ONE AND 49/100 DOLLARS ($34,594,951.49), 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


 


25

















 


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.


 


“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


 


26

















 


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 Agreement, 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 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


 


27

















 


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 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


 


28

















 


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;


 


(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.


 


29

















 


“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.


 


“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 ascribed to the term “Insurance Policies” as set forth
in the Mortgage Loan Agreement.


 


“Prepayment
Consideration” shall mean the greater of:


 


(i)                                     one
percent (1%) of the amount of principal being prepaid; or


 


(ii)                                  the
product obtained by multiplying:


 


(A)                              the
amount of principal being prepaid,


 


by


 


(B)                                the
difference obtained by subtracting from the Applicable Interest Rate the yield
rate (the “Yield Rate”) on the                       %
U.S. Treasury Security due                                                       
(the “Specified U.S. Treasury Security”), on the twenty-fifth (25th)
Business Day preceding (x) the intended date of prepayment, or (y) the date
Lender accelerates the Loan or otherwise accepts a


 


30

















 


prepayment
pursuant to this Agreement, as the Yield Rate is reported in The Wall Street Journal,


 


by


 


(C)                                the
present value factor calculated using the following formula:


 


1 – (1 + r)-n/(12)


r


 


[r =                              Yield
Rate


n =                               the
number of months remaining between (1) either of the following: (x) in the case
of a voluntary prepayment, the date on which the prepayment is made, or (y) in
any other case, the date on which Lender accelerates the unpaid principal
balance of the Note and (2) the Prepayment Consideration Period End Date]


 


In the event
that no Yield Rate is published for the Specified U.S. Treasury Security, then
the nearest equivalent non-callable U.S. Treasury security having a maturity
date closest to the Prepayment Consideration Period End Date shall be selected
at Lender’s discretion. If the publication of such Yield Rates in The Wall Street Journal is discontinued, Lender shall
determine such Yield Rates from another source selected by Lender.


 


No Prepayment Consideration shall be payable
with respect to any prepayment made after the Prepayment Consideration Period
End Date.


 


“Prepayment
Consideration Period End Date” shall mean the last day of April, 2017.


 


“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”);


 


31

















 


(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 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.


 


32

















 


“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.


 


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


 


“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 an amount equal to:


 


(i)                                     if
the release price for such Individual Property under the Mortgage Loan is
determined to be the allocated loan amount for such Individual Property under
the Mortgage Loan, the Allocated Loan Amount for the applicable Individual
Property to be released; and


 


(ii)                                  if
the release price for such Individual Property under the Mortgage Loan is
determined to be greater than the allocated loan amount for such Individual
Property under the Mortgage Loan, an amount equal to (x) the quotient obtained
by dividing (A) the release price for such Individual Property under the
Mortgage Loan by (B) the outstanding principal balance of the Mortgage Loan
immediately prior to the application of such release price to the prepayment of
the Mortgage Loan, multiplied by (y) the outstanding principal balance of the
Loan immediately prior to the application of the Release Price determined
hereunder to the prepayment of the Loan.


 


In no event
shall the Release Price be less than the Allocated Loan Amount for the
applicable Individual Property to be released.


 


 “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


 


33

















 


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.


 


“Request”
shall have the meaning set forth in the Mortgage Loan Agreement.


 


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


 


“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,
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


 


34

















 


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.


 


“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.


 


“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.


 


“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


 


35

















 


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 the Indebtedness permitted to be incurred by Mortgage
Borrower in connection with the operation of the Mortgaged Properties pursuant
to Section 7.03 of the Mortgage Loan Agreement.


 


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


 


“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


 


36

















 


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 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.


 


37
















 


Section 2.2             Interest; Loan Payments; Late Payment
Charge.


 


2.2.1        Payments.


 


(a)           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.


 


(b)           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        Payments Before Maturity Date.


 


Monthly
installments of interest only, in arrears, shall be paid on each Payment Date
commencing on December 1, 2007, and on each subsequent Payment Date thereafter
to but not including the Maturity Date. Interest on the outstanding principal
amount of the Loan to but not including October 31, 2007, shall be paid by
Borrower on the Closing Date.


 


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


 


38

















 


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 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,


 


39

















 


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 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


 


40

















 


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 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 and upon not less than thirty (30) days’ (if given via U.S.
Postal Service) or twenty (20) days’ (if given via facsimile, email or overnight
courier), but no more than sixty (60) days’ prior written notice to Lender,
prepay the Debt in whole or in part, provided (i) Borrower pays to Lender all
accrued and unpaid interest on the amount of principal being prepaid through
and including the date of prepayment and, if such prepayment occurs on a date
which is not a Payment Date, all interest which would have accrued on the
amount of principal being prepaid after the date of such prepayment to the next
Payment Date (the “Interest Shortfall”); (ii) Mezzanine A Borrower
simultaneously prepays the Mezzanine A Loan in whole, but not in part (except
in connection with the release of an Individual Property in accordance with
Section 2.6 of the Mezzanine A Loan Agreement) pursuant to the Mezzanine A Loan
Agreement by a dollar amount which bears the same relation to the principal
amount of the Mezzanine A Loan outstanding immediately prior to such prepayment
as the amount of the Loan prepaid pursuant to this Section 2.3.1 bears to the
principal amount of the Loan outstanding immediately prior to such prepayment;
and (iii) if such prepayment occurs prior to the Prepayment Consideration
Period End Date, Borrower pays to Lender the Prepayment Consideration.


 


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, 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.


 


41

















 


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 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) the


 


42

















 


Prepayment Consideration, if any, and (ii) all accrued and unpaid
interest calculated at the Applicable Interest Rate on the amount of principal
being prepaid through and including the date of prepayment and, if such
prepayment occurs on a date which is not a Payment Date, all interest which
would have accrued on the amount of principal being prepaid after the date of
such prepayment to the next Payment Date.


 


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, (i)
first, to interest on the portion of the outstanding principal balance being
prepaid that accrued through and including the date of prepayment, (ii) second,
to the Interest Shortfall, if any, applicable to the portion of the outstanding
principal balance being prepaid, (iii) third, to all other amounts then due to
Lender under this Agreement or any of the other Loan Documents (including any
Prepayment Consideration) and (iv) finally, to the principal amount of the
Loan.


 


Section 2.4             Intentionally Omitted.


 


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;


 


43

















 


(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, if such prepayment occurs on a date which is not a Payment Date, the
Interest Shortfall; and (ii) if such prepayment is made prior to the Prepayment
Consideration Period End Date, Borrower pays to Lender the Prepayment
Consideration, if any;


 


(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);


 


(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


 


44

















 


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
Mortgage Loan Agreement, 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.


 


45

















 


(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.


 


(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


 


46

















 


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 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


 


47

















 


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 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


 


48

















 


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.


 


(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


 


49

















 


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 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.


 


50

















 


(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.


 


(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


 


51

















 


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.


 


Section 2.10           Approval of Requests
under Mortgage Loan Agreement.


 


Lender’s
consent shall be required in connection with any Requests made under the
Mortgage Loan Agreement. Such consent shall not be unreasonably withheld so
long as no Event of Default then exists and Lender reasonably determines that
all of the terms and conditions of the Mortgage Loan Agreement have been
satisfied relating to such Request.


 


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.


 


52

















 


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.


 


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


 


53

















 


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 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,


 


54

















 


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 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.


 


55
















 


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 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 


 


56

















 


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 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 


 


57

















 


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.


 


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, 


 


58

















 


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 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 


 


59

















 


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 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 


 


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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.


 


(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.


 


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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
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.


 


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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 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 


 


63

















 


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 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 


 


64

















 


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;


 


(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


 


65

















 


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];


 


(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.


 


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(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 Borrower or (x) an Independent Director (as such
term is defined in the Mortgage Loan Agreement) 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 


 


67

















 


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 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 


 


68

















 


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 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, 


 


69

















 


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 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 Agreement 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 Agreement 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.


 


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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.


 


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 


 


71

















 


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      Intentionally
Omitted.


 


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
Agreement 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., The Trading with the Enemy
Act, 50 U.S.C. App. 1, et seq., and any Executive 


 


72

















 


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      Intentionally
Omitted.


 


4.1.49      Intentionally
Omitted.


 


4.1.50      List
of Mezzanine A Loan Documents.


 


There are no
Mezzanine A Loan Documents other than those set forth on Schedule
4.1.50 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.


 


4.1.51      Mortgage
Loan Event of Default.


 


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


 


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4.1.52      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 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.


 


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(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
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 


 


75

















 


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.


 


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.


 


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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 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 


 


77

















 


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


 


(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 6.03 of the Mortgage Loan Agreement 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 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 


 


78

















 


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, in all
material respects and subject to year-end adjustments, presents 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 Sections 6.03 and 6.05 of the Mortgage Loan Agreement
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 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.


 


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(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.


 


(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.


 


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(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.


 


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 


 


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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 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.


 


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(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.


 


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 


 


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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.


 


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 


 


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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 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 


 


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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 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.


 


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(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 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 


 


87

















 


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 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 


 


88

















 


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 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; 


 


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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 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


 


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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 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 Agreement 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 


 


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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 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.


 


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5.1.23      Intentionally
Omitted.


 


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
Agreement and all other 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), 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 


 


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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 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.


 


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 


 


94

















 


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 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.


 


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(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 or otherwise forgive or release any material claim or debt
(other than termination of Leases in accordance with the Mortgage Loan
Agreement) 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.


 


 


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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 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 


 


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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.


 


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 granting of a
security interest or the entering into of an equipment lease by Mortgage
Borrower with respect to the equipment located on an Individual Property and/or
other Personal Property used in connection with the operation and maintenance
of an office in the Improvements or the maintenance of the common areas in the
Improvements (“Equipment”) in the ordinary course of business, provided
(A) any such security agreement or equipment lease agreement (collectively, the
“Equipment Lease Agreements”) is entered into on customary terms and
conditions in the ordinary course of Mortgage Borrower’s business, (B) the
Equipment is readily replaceable without material interference or interruption
to the operation of any Individual Property as required pursuant to the
provisions of this Agreement and the Mortgage Loan Documents, and (C) the
aggregate annual payments pursuant to the Equipment Lease Agreements together
with the Trade Payables do not exceed in the aggregate $150,000 with respect to
any Individual Property at any time.


 


(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 


 


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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; or (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; or (vii) the removal or the resignation of the
Manager (including, without limitation, an Affiliated Manager) other than in
accordance with the Mortgage Loan Agreement, 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; or (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.


 


(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 


 


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


 


(viii)        Intentionally Omitted;


 


(ix)           any transfer of an interest by a Guarantor, provided that,
concurrently with such transfer, the transferee of such interest becomes an
Additional Guarantor; provided that (a) any transferee that is a subsidiary of
any Guarantor shall not be required to become an Additional Guarantor and (b)
any transferee that is not wholly-owned by Guarantor, collectively (e.g., a
joint venture or fund that is controlled by Guarantor or an Affiliate thereof),
shall not be required to become an Additional Guarantor, but the Affiliate of
Guarantor that owns the interest in the transferee in question, if such
Affiliate is not itself a subsidiary of any Guarantor, shall become an
Additional Guarantor;


 


(x)            transfers from one Guarantor to another Guarantor; 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).


 


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:  (A) Principal, Borrower, Mortgage Borrower, Mortgage
Principal, Mezzanine A Borrower and Mezzanine A Principal shall be 100%
owned, directly or indirectly, by ASOT; (B)


 


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one or more
Lehman Entities and/or Tishman Speyer Control Persons shall retain and maintain
control over the day-to-day management and operations of the Properties,
Mortgage Borrower, Mezzanine A Borrower and Borrower; (C) ASOT shall be 100%
owned (exclusive of preferred unit interests existing on the Closing Date),
directly or indirectly, by one or more Guarantors (other than ASOT); (D) the
Guarantors shall be owned, directly or indirectly, at least nine and seven tenths
percent (9.7%), in the aggregate, by one or more one or more Lehman Entities
and/or Tishman Speyer Control Persons; and (E) one or more Lehman Entities
and/or Tishman Speyer Control Persons shall retain and maintain control over
the day-to-day management and operations of each Guarantor.


 


(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 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 6.14 of the
Mortgage Loan Agreement, 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 


 


101

















 


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 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 6.14 of the Mortgage Loan Agreement (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)          Intentionally Omitted;


 


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(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 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.


 


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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.


 


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



 


104

















 


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 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.


 


105

















 


(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
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:


 


106

















 


(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 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, 


 


107

















 


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; 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 


 


108

















 


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;


 


(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 


 


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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 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 


 


110

















 


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


 


(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.


 


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(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 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,


 


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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.


 


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 


 


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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             Completion/Repair
Reserves.


 


(a)           Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
Section 11.04 of the Mortgage Loan Agreement and any Completion/Repair and
Security Agreement executed in accordance therewith.


 


(b)           In the event (i)
Mortgage Lender waives the requirement of Mortgage Borrower to maintain the
Completion/Repair Reserve pursuant to the terms of Section 11.04 of the
Mortgage Loan Agreement or any Completion/Repair and Security Agreement
executed in accordance therewith 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 Completion/Repair Reserve described in
Section 11.04 of the Mortgage Loan Agreement and any Completion/Repair and
Security Agreement executed in accordance therewith, but this sentence shall
not be deemed to require Borrower to maintain the Completion/Repair Reserve (or
the applicable portion thereof) after Mortgage Borrower is no longer obligated
to maintain same under the express provisions of the Mortgage Loan Agreement or
any Completion/Repair and Security Agreement executed in accordance therewith.


 


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
Sections 11.01 and 11.02 of the Mortgage Loan Agreement and 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 Mortgage Loan
Agreement) pursuant to the terms of Section 11.01 or 11.02 of the Mortgage Loan
Agreement or 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 Sections
11.01 and 11.02 of the Mortgage Loan Agreement and Section 7(a) of each
Security Instrument. Notwithstanding the foregoing, Lender shall not require
Borrower to establish and maintain an escrow for the payment of Insurance
Premiums so long as Lender has reasonably determined that the Policies 


 


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maintained by
Mortgage Borrower covering the Properties constitute approved blanket or
umbrella Policies.


 


Section 7.3             Replacement
Reserves.


 


(a)           Borrower shall cause
Mortgage Borrower to comply with all of the terms and conditions set forth in
Section 11.03 of the Mortgage Loan Agreement and any Replacement Reserve
Agreement executed in accordance therewith.


 


(b)           In the event (i)
Mortgage Lender waives the requirement of Mortgage Borrower to maintain the
Replacement Reserve pursuant to the terms of Section 11.03 of the Mortgage Loan
Agreement or any Replacement Reserve Agreement executed in accordance therewith
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
Replacement Reserve described in Section 11.03 of the Mortgage Loan Agreement
and any Replacement Reserve Agreement executed in accordance therewith, but
this sentence shall not be deemed to require Borrower to maintain the
Replacement Reserve (or the applicable portion thereof) after Mortgage Borrower
is no longer obligated to maintain same under the express provisions of the
Mortgage Loan Agreement or any Replacement Reserve Agreement executed in
accordance therewith


 


Section 7.4             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 7.4 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
applicable Other Mortgage Reserves.


 


Section 7.5             Debt
Service Reserve Funds. 


 


(a)           On the Closing Date,
Borrower shall deposit with Lender an amount equal to $[                          ]
(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 7.5. Amounts so deposited hereunder shall
hereinafter be referred to as the “Debt Service Reserve Funds”.


 


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(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 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 7.5, 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 7.5 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 7.5, 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 7.5(e) above, Lender shall return to


 


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Borrower the
Debt Service Reserve Funds remaining on deposit with Lender or such Letter of
Credit, as applicable.


 


Section 7.6             Intentionally
Omitted.


 


Section 7.7             Intentionally
Omitted.


 


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 7.5 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;


 


118

















 


(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 7.5 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)         intentionally omitted;


 


(xxii)        intentionally omitted;


 


(xxiii)       intentionally omitted;


 


(xxiv)       intentionally omitted;


 


(xxv)        intentionally omitted;


 


(xxvi)       intentionally omitted;


 


(xxvii)      intentionally omitted;


 


(xxviii)     intentionally omitted;


 


(xxix)       intentionally omitted;


 


(xxx)        intentionally omitted;


 


(xxxi)       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 (xxx) 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; 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;


 


(xxxii)      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


 


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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;


 


(xxxiii)     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


 


(xxxiv)     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 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 


 


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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.


 


(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


 


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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 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 


 


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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 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;


 


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(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 rates, 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 rates, so long as the weighted average of such interest rates does not
exceed the Applicable Interest Rate (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


 


(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


 


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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 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


 


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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 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;


 


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(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;


 


(x)            Mezzanine A Borrower, Mezzanine A Principal, Mortgage Borrower,
Mortgage Principal, Borrower or Principal makes an assignment for the benefit
of creditors; or


 


(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.


 


(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


 


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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.)


 


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;


 


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(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;


 


(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


 


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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; (ii)
the weighted average interest rate of the Loan and the Mezzanine A Loan
immediately following such reallocation shall not exceed the weighted average
interest rate 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


 


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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. 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”)


 


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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.


 


(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


 


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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.


 


(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.


 


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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 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


 


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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 rates,
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 rates, so long as the
weighted average of such interest rates does not exceed the Applicable Interest
Rate (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, 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.


 


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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 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 rates 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 of the New Mezzanine
Loan(s) shall equal the weighted average interest rate 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).


 


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(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 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


 


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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.


 


(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


 


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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 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


 


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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, 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;


 


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(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 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


 


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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


 


(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


 


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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 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


 


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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.


 


(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


 


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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,
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.


 


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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 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.


 


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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).


 


(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


 


150

















 


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.


 


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


 


151

















 


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

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.


 


152

















 


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 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


 


153

















 


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 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


 


154

















 


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 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.


 


155

















 


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 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


 


156

















 


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 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.


 


157

















 


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 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]


 


158
















 


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 Bear Hill Mezzanine II, L.L.C.

  	
   

  	
  4428991

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Quarry Hills Mezzanine II, L.L.C.

  	
   

  	
  4428996

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Watertown Mezzanine II, L.L.C.

  	
   

  	
  4428886

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Cupertino Mezzanine II, L.L.C.

  	
   

  	
  4429000

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman Speyer
  Archstone-Smith Emerald Park Mezzanine II, L.L.C.

  	
   

  	
  4428913

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Hacienda Mezzanine II, L.L.C.

  	
   

  	
  4428920

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Mountain View Mezzanine II, L.L.C.

  	
   

  	
  4428928

  	
   

  	
  90-0042860

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redwood Shores Mezzanine II, L.L.C.

  	
   

  	
   

  	
   

  	
  90-0042860

  	
   

  



 

















 


EXHIBIT B


 


(Lender Approved Standard Form of Lease)


 


None


 

















 


EXHIBIT C


 


(Allocated Loan Amounts)


 


	
  Property Name

  	
   

  	
  Amount

  	
   

  
	
  Archstone
  Bear Hill

  	
   

  	
  $

  	
  5,481,093.06

  	
   

  
	
  Archstone
  Quarry Hills

  	
   

  	
  $

  	
  5,304,437.13

  	
   

  
	
  Archstone
  Watertown Square

  	
   

  	
  $

  	
  2,257,891.00

  	
   

  
	
  Archstone
  Cupertino

  	
   

  	
  $

  	
  4,944,182.59

  	
   

  
	
  Archstone
  Emerald Park

  	
   

  	
  $

  	
  4,123,407.17

  	
   

  
	
  Archstone
  Hacienda

  	
   

  	
  $

  	
  6,727,664.47

  	
   

  
	
  Archstone
  Mountain View

  	
   

  	
  $

  	
  2,023,507.36

  	
   

  
	
  Archstone
  Redwood Shores

  	
   

  	
  $

  	
  3,732,768.71

  	
   

  



 

















 


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)


 


[INSERT TITLE OF NOTE]
in the original principal amount of $                        
made by Mortgage Borrower in favor of Mortgage Lender


 


Master Credit Facility Agreement between
Mortgage Borrower and Mortgage Lender


 


[INSERT TITLE OF SECURITY INSTRUMENT]
made by                                           
in favor of Mortgage Lender


 


[INSERT ADDITIONAL MORTGAGE LOAN DOCUMENTS]


 


UCC-1 Financing Statements filed with the
Secretary of State of Delaware and with the local recording offices in the                            


 

















 


SCHEDULE 4.1.50


 


(List of Mezzanine A Loan Documents)


 

















 


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.