Exhibit 10.7


 


MEZZANINE A 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

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  GENERAL TERMS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Loan
  Commitment; Disbursement to Borrower

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.1

  	
   

  	
  Agreement to Lend and Borrow

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.2

  	
   

  	
  Single Disbursement to Borrower

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.3

  	
   

  	
  The Note, Pledge Agreement and Loan Documents

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1.4

  	
   

  	
  Use of Proceeds

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.2

  	
   

  	
  Interest;
  Loan Payments; Late Payment Charge

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.1

  	
   

  	
  Payments

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.2

  	
   

  	
  Interest Calculation

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.3

  	
   

  	
  Eurodollar Rate Unascertainable; Illegality; Increased Costs

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.4

  	
   

  	
  Intentionally Omitted

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.5

  	
   

  	
  Payment on Maturity Date

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.6

  	
   

  	
  Payments after Default

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.7

  	
   

  	
  Late Payment Charge

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.8

  	
   

  	
  Usury Savings

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2.9

  	
   

  	
  Foreign Taxes

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.3

  	
   

  	
  Prepayments

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.1

  	
   

  	
  Voluntary Prepayments

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.2

  	
   

  	
  Liquidation Events

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.3

  	
   

  	
  Prepayments After Default

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.4

  	
   

  	
  Making of Payments 

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3.5

  	
   

  	
  Application of Principal Prepayments 

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.4

  	
   

  	
  Interest
  Rate Hedging Agreement 

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.5

  	
   

  	
  Intentionally
  Omitted 

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.6

  	
   

  	
  Release of
  an Individual Property 

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.7

  	
   

  	
  Intentionally
  Omitted 

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.8

  	
   

  	
  Release on
  Payment in Full 

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.9

  	
   

  	
  Substitution
  of Properties 

  	
   

  	
  56

  
						



 

















 


	
  III.

  	
  MORTGAGE BORROWER DISTRIBUTIONS

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Mortgage
  Borrower Distributions

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Borrower
  Representations

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.1

  	
   

  	
  Organization 

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.2

  	
   

  	
  Proceedings 

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.3

  	
   

  	
  No Conflicts 

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.4

  	
   

  	
  Litigation 

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.5

  	
   

  	
  Agreements 

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.6

  	
   

  	
  Solvency 

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.7

  	
   

  	
  Full and Accurate Disclosure 

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.8

  	
   

  	
  No Plan Assets

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.9

  	
   

  	
  Compliance 

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.10

  	
   

  	
  Financial Information 

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.11

  	
   

  	
  Condemnation 

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.12

  	
   

  	
  Federal Reserve Regulations 

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.13

  	
   

  	
  Utilities and Public Access 

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.14

  	
   

  	
  Not a Foreign Person 

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.15

  	
   

  	
  Separate Lots 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.16

  	
   

  	
  Assessments 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.17

  	
   

  	
  Enforceability 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.18

  	
   

  	
  No Prior Assignment 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.19

  	
   

  	
  Insurance 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.20

  	
   

  	
  Use of Property 

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.21

  	
   

  	
  Certificate of Occupancy; Licenses 

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.22

  	
   

  	
  Flood Zone 

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.23

  	
   

  	
  Physical Condition 

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.24

  	
   

  	
  Boundaries 

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.25

  	
   

  	
  Leases 

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.26

  	
   

  	
  Title 

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.27

  	
   

  	
  Intentionally Omitted 

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.28

  	
   

  	
  Filing and Recording Taxes 

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.29

  	
   

  	
  Intentionally Omitted 

  	
   

  	
  72

  
						



 


2

















 


	
  4.1.30

  	
   

  	
  Management Agreement 

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.31

  	
   

  	
  Illegal Activity 

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.32

  	
   

  	
  No Change in Facts or Circumstances; Disclosure 

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.33

  	
   

  	
  Investment Company Act 

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.34

  	
   

  	
  Principal Place of Business; State of Organization 

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.35

  	
   

  	
  Single Purpose Entity 

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.36

  	
   

  	
  Business Purposes 

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.37

  	
   

  	
  Taxes 

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.38

  	
   

  	
  Forfeiture 

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.39

  	
   

  	
  Environmental Representations and Warranties 

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.40

  	
   

  	
  Taxpayer Identification Number 

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.41

  	
   

  	
  OFAC 

  	
   

  	
  81

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.42

  	
   

  	
  Ground Lease Representations 

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.43

  	
   

  	
  Deposit and Securities Accounts 

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.44

  	
   

  	
  Embargoed Person 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.45

  	
   

  	
  Affiliates 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.46

  	
   

  	
  Mortgage Borrower Representations 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.47

  	
   

  	
  List of Mortgage Loan Documents 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.48

  	
   

  	
  Condominium Representations 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1.49

  	
   

  	
  Mortgage Loan Event of Default 

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.2

  	
   

  	
  Survival of
  Representations 

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  BORROWER COVENANTS

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Affirmative
  Covenants 

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.1

  	
   

  	
  Existence; Compliance with Legal Requirements 

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.2

  	
   

  	
  Taxes and Other Charges 

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.3

  	
   

  	
  Litigation 

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.4

  	
   

  	
  Access to the Properties 

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.5

  	
   

  	
  Notice of Default 

  	
   

  	
  86

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.6

  	
   

  	
  Cooperate in Legal Proceedings 

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.7

  	
   

  	
  Award and Insurance Benefits 

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.8

  	
   

  	
  Further Assurances 

  	
   

  	
  87

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.9

  	
   

  	
  Mortgage and Intangible Taxes 

  	
   

  	
  87

  
						



 


3

















 


	
  5.1.10

  	
   

  	
  Financial Reporting 

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.11

  	
   

  	
  Business and Operations 

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.12

  	
   

  	
  Costs of Enforcement 

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.13

  	
   

  	
  Estoppel Statement 

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.14

  	
   

  	
  Loan Proceeds 

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.15

  	
   

  	
  Performance by Borrower 

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.16

  	
   

  	
  Confirmation of Representations 

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.17

  	
   

  	
  Leasing Matters 

  	
   

  	
  94

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.18

  	
   

  	
  Management Agreement 

  	
   

  	
  97

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.19

  	
   

  	
  Environmental Covenants 

  	
   

  	
  99

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.20

  	
   

  	
  Alterations 

  	
   

  	
  101

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.21

  	
   

  	
  Intentionally Omitted 

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.22

  	
   

  	
  OFAC 

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.23

  	
   

  	
  Ground Lease Covenants 

  	
   

  	
  102

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.24

  	
   

  	
  Mortgage Loan Reserve Funds 

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.25

  	
   

  	
  Notices 

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.26

  	
   

  	
  Special Distributions 

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.27

  	
   

  	
  Mortgage Borrower Covenants 

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.28

  	
   

  	
  Mortgage Loan Estoppels 

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.29

  	
   

  	
  Intentionally Omitted 

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1.30

  	
   

  	
  Condominium Covenants 

  	
   

  	
  104

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.2

  	
   

  	
  Negative
  Covenants 

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.1

  	
   

  	
  Liens 

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.2

  	
   

  	
  Dissolution 

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.3

  	
   

  	
  Change in Business 

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.4

  	
   

  	
  Debt Cancellation 

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.5

  	
   

  	
  Zoning 

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.6

  	
   

  	
  No Joint Assessment 

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.7

  	
   

  	
  Name, Identity, Structure, or Principal Place of Business 

  	
   

  	
  107

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.8

  	
   

  	
  ERISA 

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.9

  	
   

  	
  Affiliate Transactions 

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.10

  	
   

  	
  Transfers 

  	
   

  	
  109

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.11

  	
   

  	
  Permitted Transfer 

  	
   

  	
  112

  



 


4

















 


	
  5.2.12

  	
   

  	
  Limitations on Securities Issuances 

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.13

  	
   

  	
  Distributions 

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.14

  	
   

  	
  Refinancing or Prepayment of the Mortgage Loan 

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.15

  	
   

  	
  Acquisition of the Mortgage Loan 

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2.16

  	
   

  	
  Material Agreements 

  	
   

  	
  115

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  INSURANCE; CASUALTY AND CONDEMNATION

  	
   

  	
  116

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Insurance 

  	
   

  	
  116

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.2

  	
   

  	
  Casualty 

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.3

  	
   

  	
  Condemnation
  

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.4

  	
   

  	
  Restoration 

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.5

  	
   

  	
  Rights of
  Lender 

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  RESERVE FUNDS

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Repairs

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.2

  	
   

  	
  Impositions
  and Imposition Deposits 

  	
   

  	
  123

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.3

  	
   

  	
  Replacement
  Reserves 

  	
   

  	
  124

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.4

  	
   

  	
  Debt Service
  Reserve Funds 

  	
   

  	
  124

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.5

  	
   

  	
  Mortgage
  Debt Service Escrows 

  	
   

  	
  125

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.6

  	
   

  	
  Interest
  Rate Hedging Reserves 

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.7

  	
   

  	
  Other
  Mortgage Reserves 

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.8

  	
   

  	
  Reserve
  Funds, Generally 

  	
   

  	
  126

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.9

  	
   

  	
  Letters of
  Credit 

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9.1

  	
   

  	
  Delivery of Letters of Credit 

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.9.2

  	
   

  	
  Provisions Regarding Letters of Credit 

  	
   

  	
  128

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  DEFAULTS

  	
   

  	
  129

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Event of
  Default 

  	
   

  	
  129

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.2

  	
   

  	
  Remedies 

  	
   

  	
  133

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.3

  	
   

  	
  Remedies
  Cumulative; Waivers 

  	
   

  	
  135

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.4

  	
   

  	
  Right to
  Cure Defaults 

  	
   

  	
  135

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.5

  	
   

  	
  Mortgage
  Loan Reserve Funds 

  	
   

  	
  135

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.6

  	
   

  	
  Power of
  Attorney 

  	
   

  	
  135

  
							



 


5

















 


	
  IX.

  	
  SPECIAL PROVISIONS

  	
   

  	
  136

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Sale of
  Notes and Securitization

  	
   

  	
  136

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.2

  	
   

  	
  Disclosure
  Document Cooperation 

  	
   

  	
  138

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.3

  	
   

  	
  Servicer 

  	
   

  	
  138

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.4

  	
   

  	
  Exculpation 

  	
   

  	
  138

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.5

  	
   

  	
  Limitation
  on Borrower’s Obligations 

  	
   

  	
  141

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.6

  	
   

  	
  Reallocation
  of Loan Amounts 

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.7

  	
   

  	
  Syndication 

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.1

  	
   

  	
  Syndication 

  	
   

  	
  143

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.2

  	
   

  	
  Sale of Loan, Co-Lenders, Participations and Servicing 

  	
   

  	
  144

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.3

  	
   

  	
  Cooperation in Syndication 

  	
   

  	
  146

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.4

  	
   

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

  	
   

  	
  148

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.5

  	
   

  	
  Intentionally Omitted 

  	
   

  	
  148

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.7.6

  	
   

  	
  No Joint Venture 

  	
   

  	
  148

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.8

  	
   

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

  	
   

  	
  148

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.9

  	
   

  	
  Contributions
  and Waivers 

  	
   

  	
  150

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.10

  	
   

  	
  Certain
  Additional Rights of Lender; VCOC 

  	
   

  	
  154

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.11

  	
   

  	
  Mortgage
  Loan Defaults 

  	
   

  	
  155

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.12

  	
   

  	
  Intentionally
  Omitted 

  	
   

  	
  156

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.13

  	
   

  	
  Intentionally
  Omitted 

  	
   

  	
  156

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.14

  	
   

  	
  Intercreditor
  Agreements 

  	
   

  	
  156

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.15

  	
   

  	
  Discussions
  with Mortgage Lender 

  	
   

  	
  157

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.16

  	
   

  	
  Independent
  Approval Rights 

  	
   

  	
  157

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  MISCELLANEOUS

  	
   

  	
  158

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Survival 

  	
   

  	
  158

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.2

  	
   

  	
  Lender’s
  Discretion 

  	
   

  	
  158

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.3

  	
   

  	
  Governing
  Law 

  	
   

  	
  158

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.4

  	
   

  	
  Modification,
  Waiver in Writing 

  	
   

  	
  159

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.5

  	
   

  	
  Delay Not a
  Waiver 

  	
   

  	
  159

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.6

  	
   

  	
  Notices 

  	
   

  	
  160

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.7

  	
   

  	
  Trial by
  Jury 

  	
   

  	
  161

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.8

  	
   

  	
  Headings 

  	
   

  	
  161

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.9

  	
   

  	
  Severability
  

  	
   

  	
  161

  
						



 


6

















 


	
  Section
  10.10

  	
   

  	
  Preferences 

  	
   

  	
  162

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.11

  	
   

  	
  Waiver of
  Notice 

  	
   

  	
  162

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.12

  	
   

  	
  Remedies of
  Borrower 

  	
   

  	
  162

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.13

  	
   

  	
  Expenses;
  Indemnity 

  	
   

  	
  162

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.14

  	
   

  	
  Schedules
  and Exhibits Incorporated 

  	
   

  	
  164

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.15

  	
   

  	
  Offsets,
  Counterclaims and Defenses 

  	
   

  	
  164

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.16

  	
   

  	
  No Joint
  Venture or Partnership; No Third Party Beneficiaries 

  	
   

  	
  164

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.17

  	
   

  	
  Counterparts
  

  	
   

  	
  165

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.18

  	
   

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

  	
   

  	
  165

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.19

  	
   

  	
  Waiver of
  Counterclaim 

  	
   

  	
  165

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.20

  	
   

  	
  Conflict;
  Construction of Documents; Reliance 

  	
   

  	
  165

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.21

  	
   

  	
  Brokers and
  Financial Advisors 

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.22

  	
   

  	
  Prior
  Agreements 

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.23

  	
   

  	
  Joint and
  Several Liability 

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.24

  	
   

  	
  USA Patriot
  Act 

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A (Borrower Entities)

  	
   

  	
  169

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT B (Lender Approved Standard Form of
  Lease)

  	
   

  	
  170

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT C (Allocated Loan Amounts)

  	
   

  	
  171

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT D (Ground Leases)

  	
   

  	
  172

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.1 (Organizational Chart)

  	
   

  	
  173

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.4 (Litigation)

  	
   

  	
  174

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.9 (Exceptions to Compliance
  with Legal Requirements)

  	
   

  	
  175

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.10 (Financial Information
  Exceptions)

  	
   

  	
  176

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.13 (Utilities and Public Access
  Exceptions)

  	
   

  	
  177

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.21 (Certificate of Occupancy
  and Licenses Exceptions)

  	
   

  	
  178

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.23 (Physical Condition
  Exceptions)

  	
   

  	
  179

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.25 (Lease Representation
  Exceptions)

  	
   

  	
  180

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.32 (Changes in Facts or
  Circumstances)

  	
   

  	
  181

  



 


7

















 


	
  SCHEDULE 4.1.47 (List of Mortgage Loan
  Documents)

  	
   

  	
  182

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4.1.48 (Condominium Properties)

  	
   

  	
  190

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 5.1.20 (Capital Improvements)

  	
   

  	
  191

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  192

  



 


8

















 


MEZZANINE A LOAN AGREEMENT


 


THIS
MEZZANINE A LOAN AGREEMENT, dated as of October 5,
2007 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, this “Agreement”), between LEHMAN
BROTHERS HOLDINGS INC., a Delaware corporation, having an address at
399 Park Avenue, New York, New York 10022 (“Lehman”), BANK OF AMERICA, N.A., a national banking association,
having an address at Hearst Tower, 214 North Tryon Street, Charlotte, North
Carolina 28255 (“BofA”) and BARCLAYS CAPITAL REAL
ESTATE FINANCE INC., a Delaware corporation, having an address at 200
Park Avenue, New York, New York 10166 (“Barclays”; together with Lehman
and BofA, individually and collectively, as the context may require, “Lender”),
and THE ENTITIES IDENTIFIED IN EXHIBIT A ANNEXED
HERETO, each having its principal place of business at c/o
Archstone-Smith Operating Trust, 9200 E. Panorama Circle, Suite 400, Englewood,
Colorado 80112 (each of such entities being referred to, individually, as a “Borrower
Entity”, and all of such entities being referred to, collectively, as the “Borrower
Entities” or “Borrower”).


 


W
I T N E S S E T H:


 


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


 


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


 


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


 


I.              DEFINITIONS;
PRINCIPLES OF CONSTRUCTION


 


Section 1.1             Definitions.


 


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


 


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


 


“Accommodation
Pledgor” shall mean Smith Property Holdings Three L.P., a Delaware limited
partnership, together with its successors and assigns.


 


“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.


 


9

















 


“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.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10

















 


including the date on which the Debt is paid in full, an interest rate
per annum equal to (I) the Eurodollar Rate or (II) if the Loan begins bearing
interest at the Adjusted Prime Rate in accordance with the provisions of
Section 2.2.3 hereof, the Adjusted Prime Rate.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


14

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


16

















 


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


 


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


 


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


 


“Fitch” shall
mean Fitch, Inc.


 


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


 


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


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


18

















 


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


 


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


 


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


 


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


 


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


 


19
















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


“LIBOR” shall
mean, for the first Interest Period 5.121% per annum. For each Interest Period
thereafter LIBOR shall mean the quoted offered rate for one-month United States
dollar deposits with leading banks in the London interbank market that appears
as of 11:00 a.m. (London time) on the related LIBOR Determination Date on the 


 


21

















 


display page designated as Reuters Screen LIBOR01 Page or such other
page as may replace such page on that service or such other service as may be
nominated by the British Bankers-Association as the information vendor for the
purposes of displaying British Bankers-Association Interest Settlement Rates
for U.S. dollar deposits (the “Reuters Screen LIBOR01 Page”).


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Lien” shall
mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment,
security interest, or any other encumbrance, charge or transfer of, on or
affecting Collateral, Borrower, Mortgage Borrower, any Mortgage Principal’s
general partner interest in the related Mortgage 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.


 


22

















 


“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 SEVENTY-ONE MILLION NINE
HUNDRED THIRTY-NINE THOUSAND FIVE HUNDRED FIFTY-THREE AND 23/100 DOLLARS
($71,939,553.23) 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 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 B
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; 


 


23

















 


provided, however, if such management
agreement shall be entered into after a Securitization, then Lender, at its
option, may condition its approval upon receiving confirmation from the
applicable Rating Agencies that such management agreement will not result in a
downgrade, withdrawal or qualification of the then current rating of the
Securities or any class thereof. Concurrently with the execution and delivery
of any Management Agreement with a Qualified Manager, Lender shall be provided,
at Borrower’s expense, with an Agreement Regarding Management Agreement.


 


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


 


“Material
Adverse Effect” shall mean a material adverse effect on (i) any Individual
Property, (ii) the Collateral, (iii) any Mortgage Principal’s general partner
interest in the related Mortgage Borrower Entity, (iv) the business, profits,
prospects, management, operations or condition (financial or otherwise) of
Borrower, Mortgage Borrower, Guarantor, any Principal, the Collateral, any
Mortgage Principal’s general partner interest in the related Mortgage Borrower
Entity or any Individual Property, (v) the enforceability, validity, perfection
or priority of the lien of this Agreement, the Note, the Pledge Agreement or
the other Loan Documents, or (vi) 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, any Mortgage Principal’s general partner interest in the
related Mortgage Borrower Entity or any other direct or indirect ownership
interest of a Loan Party in the Mortgage Borrower or Borrower requiring the
payment of more than $1,000,000, individually, in
payments or liability in any annual period and which is not cancelable without
penalty or premium on no more than thirty (30) days notice.


 


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


 


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


 


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


 


24

















 


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


 


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


 


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


 


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


 


“Mezzanine B
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 B
Loan” shall mean that certain loan in the original principal amount of
$63,501,729.16 made by Mezzanine B Lender to Mezzanine B Borrower on the date
hereof pursuant to the Mezzanine B Loan Agreement, as the same may be amended
or split pursuant to the terms of the Mezzanine B Loan Documents.


 


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


 


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


 


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


 


“Mezzanine B
Note” shall mean that certain Mezzanine B Promissory Note, dated as of the date
hereof, given by Mezzanine B Borrower to Mezzanine B Lender in the maximum
principal amount of $63,501,729.16, as the same may be amended, restated,
supplemented or otherwise modified from time to time.


 


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


 


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


 


25

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


26

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“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 and Mortgage Loan 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 


 


27

















 


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, 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)
intentionally omitted, (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) intentionally omitted, (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) intentionally omitted,
(xiii) intentionally omitted, and (xiv) the amount of any prepayments required
pursuant to the Mortgage Loan Documents and/or the Loan Documents in connection
with such Liquidation Event.


 


“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 A Promissory Note of even date herewith in the
original principal amount of SEVENTY-ONE MILLION NINE HUNDRED THIRTY-NINE
THOUSAND FIVE HUNDRED FIFTY-THREE AND 23/100 DOLLARS ($71,939,553.23), 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.


 


28

















 


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


 


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


 


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


 


“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.


 


29

















 


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


 


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


 


30

















 


(ii)           Federal Housing Administration
debentures;


 


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


 


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


 


31

















 


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


 


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


 


(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.


 


32

















 


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


 


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


 


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


 


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


 


“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 A Pledge and Security Agreement
dated as of the Closing Date, executed and delivered by Borrower and
Accommodation Pledgor to Lender as security for the Loan, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.


 


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


 


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


 


“Present Value
Factor” means:


 


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


 


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


 


33

















 


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


 


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


 


“Prohibited
Person” shall mean any Person:


 


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


 


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


 


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


 


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


 


34

















 


(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.


 


“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.


 


35

















 


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


 


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


 


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


 


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


 


“Release Price”
shall mean:


 


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


 


plus


 


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


 


36

















 


Loan and the Mezzanine B Loan, multiplied by (y) the minimum amount
reasonably determined by Lender which would be necessary to be applied to the
reduction of the outstanding principal balances of the Loan and the Mezzanine B
Loan in order to satisfy the Required DSCR Ratio and the Required LTV Ratio.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


37

















 


“Restricted
Party” shall mean each Guarantor, each Borrower Entity, each Principal, each
Mortgage Borrower Entity, each Mortgage Principal, each Mezzanine B Borrower
Entity, each Mezzanine B 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 B
Borrower or any Mezzanine B 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 Mortgage Borrower Entity as security for the Mortgage Loan and
encumbering such Individual Property, as the same may hereafter be amended,
restated, replaced, supplemented or otherwise modified from time to time.


 


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


 


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


 


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


 


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


 


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


 


“Spread
Maintenance Payment” shall mean, with respect to any repayment of the
outstanding principal amount of the Loan prior to the end of the Spread
Maintenance Period, a payment to Lender in an amount equal to the Spread
Payment multiplied by the Present Value Factor for each of the remaining
Payment Dates in the Spread Maintenance 


 


38

















 


Period. Notwithstanding the foregoing, no Spread Maintenance Payment
shall be due in connection with a release of an Individual Property pursuant to
Section 2.6 hereof in the event that (i) the aggregate Allocated Loan Amounts
for the Individual Property being released and all of the Properties previously
released in accordance with Section 2.6 hereof equals an amount less than or
equal to 10% of the original principal balance of the Loan and (ii) such
release occurs on or after May 1, 2008.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


39
















 


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


 


“Tenant” shall
mean the tenant under any Lease.


 


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


 


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


 


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


 


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


 


“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.


 


40

















 


Section 1.2             Principles
of Construction.


 


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


 


41

















 


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


 


Section 2.2             Interest;
Loan Payments; Late Payment Charge.


 


2.2.1        Payments.


 


(a)           Interest.
Interest on the outstanding principal balance of the Note shall accrue from the
Closing Date to but excluding the Maturity Date at the Applicable Interest Rate.
Monthly installments of interest only shall be paid on each Payment Date
commencing on December 1, 2007 and on each subsequent Payment Date thereafter
up to and including the Maturity Date for the Interest Period in which such Payment
Date or Maturity Date occurs. The outstanding principal balance of the Loan
together with all accrued and unpaid interest thereon shall be due and payable
on the Maturity Date.


 


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


 


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


 


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


 


42

















 


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


 


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


 


(v)           If the Mezzanine B Loan is no longer outstanding, Borrower
shall have delivered a certificate of Bank Loan Borrower satisfying the
requirements of Section 7.4 hereof (and relating to Debt Service Shortfalls as
projected by Lender through the end of the applicable Extension Period) or
shall have deposited with Lender, cash or delivered to Lender, a Letter of
Credit, satisfying the requirements of Section 7.4 hereof (and in an amount sufficient
to cover Debt Service Shortfalls as projected by Lender through the end of the
applicable Extension Period).


 


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


 


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


 


2.2.2        Interest
Calculation.


 


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


 


2.2.3        Eurodollar
Rate Unascertainable; Illegality; Increased Costs.


 


(a)           (i)  In the event that Lender shall have
reasonably determined (which determination shall be conclusive and binding upon
Borrower absent manifest error) that by reason of circumstances affecting the
interbank eurodollar market, adequate and reasonable means do not exist for
ascertaining LIBOR, then Lender shall forthwith give notice by telephone of
such determination, to Borrower at least one (1) Business Day prior to the last
day of the related Interest Period, with a written confirmation of such
determination promptly thereafter. If such notice is given, the Loan shall bear
interest at the Adjusted Prime Rate beginning on the first day of the next
succeeding Interest Period. (ii) If, pursuant to the terms of this Section
2.2.3(a), the Loan is bearing interest at the Adjusted Prime Rate and Lender
shall reasonably determine (which determination shall be conclusive and binding
upon Borrower absent manifest error) that the event(s) or 


 


43

















 


circumstance(s) which resulted in such conversion shall no longer be
applicable, Lender shall give notice thereof to Borrower by telephone of such
determination, confirmed in writing, to Borrower as soon as reasonably
practical, but in no event later than one (1) Business Day prior to the last
day of the then current Interest Period. If such notice is given, the Loan
shall bear interest at the Eurodollar Rate beginning on the first day of the
next succeeding Interest Period. Notwithstanding any provision of this
Agreement to the contrary, in no event shall Borrower have the right to elect
to have the Loan bear interest at the Adjusted Prime Rate; it being understood
that the Loan shall bear interest at all times at the Eurodollar Rate except to
the extent expressly provided in this Section 2.2.3.


 


(b)           If
any Regulatory Change shall hereafter make it unlawful for Lender or any
Co-Lender in good faith to make or maintain the portion of the Loan bearing
interest at the Eurodollar Rate, Lender or such Co-Lender, as applicable, shall
give notice thereof to Borrower, and without the need for Borrower’s consent,
(I) the obligation of Lender or such Co-Lender hereunder to make the Loan
bearing interest at the Eurodollar Rate may be canceled forthwith and (II) the
Loan shall automatically bear interest at the Adjusted Prime Rate at the
expiration of the then current Interest Period or within such earlier period as
required by Applicable Law. Upon written demand from Borrower, Lender or the
applicable Co-Lender shall demonstrate in reasonable detail the circumstances
giving rise to Lender’s or such Co-Lender’s determination and the calculation
substantiating the Adjusted Prime Rate by Lender or such Co-Lender in making
the conversion. In the event that such Regulatory Change shall no longer exist
or be effective, Lender or such Co-Lender, as applicable, shall give notice
thereof to Borrower, and without the need for Borrower’s consent, the Loan
shall bear interest at the Eurodollar Rate commencing with the first day of the
next succeeding Interest Period.


 


(c)           If, as a result of
any Regulatory Change, any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with,
Lender or any Co-Lender is imposed, modified or deemed applicable and the
result is to increase the actual cost to Lender or such Co-Lender of making the
Loan bearing interest at the Eurodollar Rate, or to reduce the amount
receivable by Lender hereunder in respect of any portion of the Loan bearing
interest at the Eurodollar Rate by an amount reasonably deemed by such Lender
to be material (such increases in cost and reductions in amounts receivable, “Increased
Costs”), then Borrower agrees that it will pay to Lender or such Co-Lender
(as applicable) upon Lender’s or such Co-Lender’s (as applicable) request such
additional amount or amounts (based upon a reasonable allocation thereof by
Lender or such Co-Lender (as applicable) to Eurodollar Rate loans made by
Lender or such Co-Lender (as applicable)) as will compensate Lender of such
Co-Lender (as applicable) for such Increased Costs to the extent that such
Increased Costs are reasonably allocable to the Loan. Lender or any Co-Lender
(as applicable) will notify Borrower in writing of any event occurring after
the Closing Date which will entitle Lender or such Co-Lender (as applicable) to
compensation pursuant to this Section 2.2.3(c) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation and
will designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of Lender of such Co-Lender (as applicable), be otherwise
materially disadvantageous to Lender or such Co-Lender (as applicable). If 


 


44

















 


Lender or such
Co-Lender (as applicable) shall fail to notify Borrower of any such event
within ninety (90) days following the date such event occurred, then Borrower’s
liability for any amounts described in this Section 2.2.3(c) incurred by Lender
or such Co-Lender (as applicable) as a result of such event shall be limited to
those attributable to the period occurring subsequent to the 90th day prior to
the date upon which Lender or such Lender (as applicable) actually notified
Borrower of the occurrence of such event. Notwithstanding the foregoing, in no
event shall Borrower be required to compensate Lender or any Co-Lender for any
portion of Excluded Taxes of Lender or such Co-Lender (as applicable), whether
or not attributable to payments made by Borrower. If Lender or any Co-Lender
requests compensation under this Section 2.2.3(c), Borrower may, by notice to
Lender or such Co-Lender (as applicable), require that Lender or such Co-Lender
(as applicable) furnish to Borrower a statement setting forth in reasonable
detail the basis for requesting such compensation and the method for
determining the amount thereof, which such statement submitted by Lender or
such Co-Lender to Borrower shall be conclusive absent manifest error. Lender or
such Co-Lender (as applicable) shall only charge Borrower amounts hereunder if
Lender or such Co-Lender (as applicable) is generally charging such amounts to
all similarly situated Eurodollar Rate-based borrowers. This provision shall
survive payment of the Note and the satisfaction of all other obligations of
Borrower under the Note, this Agreement and the other Loan Documents. The
provisions of this Section 2.2.3(c) shall not apply if a Securitization has
occurred.


 


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


 


2.2.4        Intentionally
Omitted.


 


2.2.5        Payment
on Maturity Date.


 


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


 


45

















 


2.2.6        Payments
after Default.


 


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


 


46

















 


the Maximum Legal Rate shall be deemed to have been payments in
reduction of principal and not on account of the interest due hereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the sums due under the Loan, shall, to the extent permitted by Applicable
Law, be amortized, prorated, allocated, and spread throughout the full stated
term of the Loan until payment in full so that the rate or amount of interest
on account of the Loan does not exceed the Maximum Legal Rate of interest from
time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.


 


2.2.9        Foreign
Taxes.


 


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


 


47

















 


Service Form W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax on all
interest payments hereunder. Each entity required to deliver to Borrower a Form
W-8BEN or W-8ECI or Form W-9 pursuant to the preceding sentence further
undertakes to deliver to Borrower two (2) further copies of such letter and
W-8BEN or W-8ECI or Form W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such letter
or form expires (which, in the case of the Form W-8ECI, is the last day of each
U.S. taxable year of the non U.S. entity) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent letter and form
previously delivered by it to Borrower, and such other extensions or renewals
thereof as may reasonably be requested by Borrower, certifying in the case of a
Form W-8BEN or W-8ECI that such entity is entitled to receive payments under
the Note without deduction or withholding of any United States federal income
taxes, unless in any such case any change in treaty, law or regulation has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
entity from duly completing and delivering any such letter or form with respect
to it and such entity advises Borrower that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, and in the case of a Form W-9, establishing an exemption from United
States backup withholding tax. Notwithstanding the foregoing, if such entity
fails to provide a duly completed Form W-8BEN or W-8ECI or other applicable
form and, under Applicable Law, in order to avoid liability for Foreign Taxes
or U.S. Taxes, Borrower is required to withhold on payments made to such entity
that has failed to provide the applicable form, Borrower shall be entitled to
withhold the appropriate amount of Foreign Taxes or U.S. Taxes and Borrower
shall have no obligation to pay any additional amounts to such entity under
this Section 2.2.9. In such event, Borrower shall promptly provide to such
entity evidence of payment of such Foreign Taxes or U.S. Taxes to the
appropriate taxing authority and shall promptly forward to such entity any
official tax receipts or other documentation with respect to the payment of the
Foreign Taxes or U.S. Taxes as may be issued by the taxing authority.


 


Section 2.3         Prepayments.


 


2.3.1        Voluntary
Prepayments.


 


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


 


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


 


48

















 


costs and
expenses incurred as a result of Lender’s receipt of such notice of prepayment;


 


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


 


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


 


(d)           Mezzanine B Borrower
shall have simultaneously with such prepayment made a pro rata prepayment of
the Mezzanine B Loan pursuant to and in accordance with  the Mezzanine B Loan Agreement; provided,
however, such pro rata prepayment shall not be required in connection with the
payment in full of the Mezzanine B Loan on the maturity date thereof.


 


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


 


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


 


2.3.2        Liquidation
Events.


 


(a)           In the event of (i)
any Casualty affecting all or any portion of any Individual Property, (ii) any
Condemnation of all or any portion of any Individual 


 


49

















 


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) intentionally omitted,
(v) intentionally omitted or (vi) any refinancing of the Properties or the
Mortgage 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 or the Mortgage 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 Transfer of any Individual Property set forth in this Agreement, and the
other Loan Documents or the Mortgage Loan Documents.


 


2.3.3        Prepayments
After Default. 


 


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


 


50

















 


2.3.4        Making
of Payments.


 


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


 


2.3.5        Application
of Principal Prepayments.


 


All
prepayments received pursuant to this Section 2.3 and Section 2.6 shall be
applied, first, to interest on the portion of the outstanding principal balance
being prepaid that accrued through and including the Prepayment Date, second,
to the Interest Shortfall as the same may be adjusted pursuant to the last
paragraph of Section 2.3.1(c) hereof, if applicable, with respect to the amount
prepaid and third, to all other amounts then due to Lender under this Agreement
or any of the other Loan Documents and then to the payment of principal due
under the Loan.


 


Section 2.4         Interest Rate Hedging Agreement.


 


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


 


(b)           If any Interest Rate
Hedging Agreement is an interest rate exchange agreement (a “Swap”),
Borrower shall not be a party to such Swap and all obligations of the Affiliate
of Borrower (which is the purchaser of such Swap), including, without
limitation, Additional Interest shall not be secured by the Lien of the
Collateral, any 


 


51

















 


Individual
Property or any Mezzanine B Collateral. The Affiliate of Borrower that has
entered into the Swap and its creditworthiness shall be reasonably satisfactory
to Lender. If any Interest Rate Hedging Agreement is an interest rate cap (a “Cap”),
neither Borrower nor any Affiliate of Borrower, as applicable, shall have any
obligations under such Cap other than the payment of a one time, single
installment payment made at the time of the purchase of such Cap.


 


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


 


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


 


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


 


(f)            In the event that
Borrower fails to purchase and deliver to Lender the Interest Rate Hedging
Agreement or any Replacement Interest Rate Hedging Agreement as and when
required hereunder, Lender may purchase such Interest Rate Hedging Agreement
and the cost incurred by Lender in purchasing such Interest Rate Hedging 


 


52

















 


Agreement
shall be paid by Borrower to Lender with interest thereon at the Default Rate
from the date such cost was incurred by Lender until such cost is paid by
Borrower to Lender.


 


(g)           Each Interest Rate
Hedging Agreement shall contain the following language or its equivalent: “In
the event of any downgrade, withdrawal or qualification of the rating of the
Counterparty below “A+” (or the equivalent) by the Rating Agencies, the
Counterparty must, within 30 days, either (x) post collateral on terms
acceptable to each Rating Agency or (y) find a replacement Acceptable
Counterparty, at the Counterparty’s sole cost and expense, acceptable to each
Rating Agency (notwithstanding the foregoing, if the Counterparty’s rating is
downgraded to “A” or lower, only the option described in clause (y) will be
acceptable); provided that, notwithstanding such a downgrade, withdrawal or
qualification, unless and until the Counterparty transfers the Interest Rate
Hedging Agreement to a replacement Acceptable Counterparty pursuant to the
foregoing clause (y), the Counterparty will continue to perform its obligations
under the Interest Rate Hedging Agreement. Failure to satisfy the foregoing
shall constitute an Additional Termination Event as defined by Section 5(b)(v)
of the ISDA Master Agreement, with the Counterparty as the Affected Party.”


 


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


 


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


 


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


 


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


 


53

















 


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


 


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) and (y) 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 B Loan Agreement with respect to such release;


 


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


 


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


 


(d)           Borrower shall
submit to Lender, not later than ten (10) days prior to the release of the
applicable Individual Property, an amendment to the Pledge Agreement and UCC-3
Financing Statements each amending Pledge Agreements and the UCC Financing
Statements to reflect the release of the applicable Borrower Entity. In
addition, Borrower 


 


54

















 


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 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 (i) Mezzanine B Lender if the Loan has been paid in
full and the Mezzanine B Loan is still outstanding or (ii) to Borrower if the
Loan and the Mezzanine B Loan have been paid in full.


 


55

















 


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


 


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


 


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


 


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


 


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


 


(e)           Intentionally
Omitted.


 


56

















 


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


 


57

















 


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 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 


 


58

















 


Borrower to
deposit with Mortgage Lender (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 and shall be
released to Mortgage Borrower upon the delivery to Mortgage Lender 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 stating that all such remediation work has been paid in full
or will be paid for out of the amounts reserved with Mortgage Lender. In the
event that Mortgage Lender elects not to require such deposit, Borrower shall
deliver such deposit to Lender.


 


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


 


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


 


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


 


59
















 


(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 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


 


60

















 


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 to deposit with
Mortgage Lender (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 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
indicating that the costs of all such repairs have been paid. In the event that
Mortgage Lender elects not to require such deposit, Borrower shall deliver such
deposit to Lender.


 


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


 


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


 


61

















 


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 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


 


62

















 


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.


 


III.           MORTGAGE BORROWER
DISTRIBUTIONS


 


Section 3.1             Mortgage Borrower Distributions.


 


All transfers
of Mortgage Borrower’s funds to or for the benefit of Lender or Borrower,
pursuant to this Agreement, the Mortgage Loan Documents or any of the other
Loan Documents, are intended by Borrower and Mortgage Borrower to constitute
and shall constitute distributions from Mortgage Borrower to Borrower, 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 Mortgage Lender.


 


IV.           REPRESENTATIONS AND
WARRANTIES


 


Section 4.1             Borrower Representations.


 


Borrower
represents and warrants as of the Closing Date that:


 


4.1.1        Organization.


 


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


 


63

















 


4.1.2        Proceedings.


 


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


 


4.1.3        No Conflicts.


 


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


 


4.1.4        Litigation.


 


Except as
otherwise disclosed on Schedule 4.1.4,
there are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority or other agency now pending or, to Borrower’s Actual
Knowledge, threatened against or affecting Borrower or, to Borrower’s Actual
Knowledge, Mortgage Borrower, Borrower, the Collateral, any Mortgage Principal’s
general partner interest in the related Mortgage Borrower Entity or any
Individual Property, which actions, suits or proceedings, if determined
adversely to Borrower or, to Borrower’s Actual Knowledge, Mortgage Borrower,
the Collateral, any Mortgage Principal’s general partner interest in the
related Mortgage 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.


 


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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. Neither of Borrower nor Mortgage 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, the Collateral, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower Entity,
or any Individual Property is bound. Neither Borrower nor Mortgage Borrower has
material financial obligations under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which Borrower or Mortgage
Borrower is a party or by which Borrower or, to Borrower’s Actual Knowledge,
Mortgage Borrower, the Collateral, any Mortgage Principal’s general partner
interest in the related Mortgage 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 Mortgage Borrower Entity’s ownership and operation of such
Individual Property and (c) obligations under or permitted by the Loan
Documents and the Mortgage 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,
Guarantor, TSP or any of their respective partners or members in the last seven
(7) years, and neither Borrower, Principal, Mortgage Borrower, Mortgage
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, Guarantor, TSP
nor any of their respective


 


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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 or Mortgage 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, Guarantor, TSP or any of their
respective partners or members.


 


4.1.7        Full and Accurate Disclosure.


 


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


 


4.1.8        No Plan Assets


 


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


 


4.1.9        Compliance.


 


Except as
otherwise disclosed in Schedule 4.1.9
annexed hereto, Borrower, Mortgage Borrower 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, neither Borrower nor Mortgage Borrower has
received written notice from any Governmental Authority asserting that
Borrower, Mortgage 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,


 


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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, any Mortgage
Principal’s general partner interest in the related Mortgage Borrower Entity or
any Individual Property or the operation thereof as a luxury residential
apartment building, except as referred to or reflected in such financial
statements or in Schedule 4.1.10 annexed hereto. To
Borrower’s Actual Knowledge, since the date of such financial statements, there
has been no materially adverse change in the financial condition or operations
of the Properties from that set forth in such financial statements.


 


4.1.11      Condemnation.


 


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


 


4.1.12      Federal Reserve Regulations.


 


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


 


4.1.13      Utilities and Public Access.


 


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


 


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4.1.15      Separate Lots.


 


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


 


4.1.16      Assessments.


 


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


 


4.1.17      Enforceability.


 


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


 


4.1.18      No Prior Assignment.


 


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


 


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4.1.21      Certificate of Occupancy; Licenses.


 


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


 


4.1.22      Flood Zone.


 


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


 


4.1.23      Physical Condition.


 


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


 


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4.1.25      Leases.


 


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


 


70

















 


Lease (other than those for which Mortgage Lender has reserved funds
under the Mortgage Loan Documents).


 


4.1.26      Title.


 


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


 


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


 


(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.


 


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


 


71

















 


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


 


4.1.32      No Change in Facts or Circumstances;
Disclosure.


 


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


 


4.1.33      Investment Company Act.


 


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


 


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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
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;


 


73

















 


(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 Mortgage 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 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);


 


74

















 


(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 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);


 


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(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.


 


(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


 


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


 


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


 


(d)           Borrower
covenants and agrees that, in the event that any Borrower Entity or its
Principal is a Delaware limited liability company that does not have a managing
member which complies with the foregoing requirements of this Section 4.1.35,
the limited liability company agreement of such Borrower Entity or such
Principal, as applicable (an “LLC Agreement”), shall provide that (A)
upon the occurrence of any event that causes the last remaining member of such
Borrower Entity or such Principal, as applicable, (“Member”) to cease to
be the member of such Borrower Entity or such Principal, as applicable, (other
than (1) upon an assignment by Member of all of its limited liability company
interest in such Borrower Entity or such Principal, as applicable, and the
admission of the transferee in accordance with the Loan Documents and the
applicable LLC Agreement, or (2) the resignation of Member and the admission of
an additional member of such Borrower Entity or such Principal, as applicable,
in accordance with the terms of the Loan Documents and the applicable LLC
Agreement),


 


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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 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


 


78

















 


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, 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


 


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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 Documents which relate to the special purpose / single purpose nature of
Mortgage Borrower and Mortgage Principal.


 


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


 


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federal government or any State or local government the right of
forfeiture as against any of the Collateral, any Mortgage Principal’s general
partner interest in the related Mortgage 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 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 B Borrower, Guarantor or any of their respective
Affiliates is a Prohibited Person, and Borrower, Mortgage Borrower, Mezzanine B
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.


 


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4.1.42      Ground Lease Representations.


 


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


 


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


 


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


 


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


 


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


 


4.1.43      Deposit and Securities Accounts.


 


(a)           Intentionally
Omitted;


 


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


 


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


 


(d)           Intentionally
Omitted;


 


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


 


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


 


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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 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 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.


 


4.1.47      List of Mortgage Loan Documents.


 


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


 


4.1.48      Condominium Representations.


 


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


 


4.1.49      Mortgage Loan Event of Default.


 


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


 


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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 to comply in all
material respects, with all Legal Requirements applicable to it, the
Collateral, any Mortgage Principal’s general partner interest in the related
Mortgage 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.


 


(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


 


84

















 


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, any Mortgage
Principal’s general partner interest in the related Mortgage 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 or any
Mortgage 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 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, 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


 


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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, any Mortgage Principal’s general partner interest in the related
Mortgage 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
or Mortgage 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 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.


 


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.


 


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


 


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


 


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


 


5.1.9        Mortgage and Intangible Taxes.


 


Borrower shall
pay all State, county and municipal recording, intangible, and all other taxes
(other than income, inheritance or franchise taxes) imposed upon the


 


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execution of the Pledge Agreement and the filing of the UCC Financing
Statements and/or upon the execution and delivery of the Note.


 


5.1.10      Financial Reporting.


 


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


 


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


 


(c)           Borrower
will furnish, and cause to be furnished, to Lender, within ninety (90) days
after the close of each Fiscal Year, the audited combined balance sheet of the
Guarantors as of the end of such Fiscal Year, the audited combined statement of
operations and the audited combined statement of cash flows of each Guarantor
for such Fiscal Year, all in reasonable detail and, commencing in the second
Fiscal Year during the term of the Loan, stating in comparative form (solely to
the extent such previous year ended after the Closing Date) the respective
figures for the corresponding date and period in the prior Fiscal Year,
prepared in accordance with GAAP consistently applied and accompanied by an
independent auditor’s report stating that the referenced financial statements
present fairly, in all material respects, the combined financial position,
results of operations and cash flows as of and for the applicable periods in
conformity with GAAP, with such certification to be free of exceptions and
qualifications as to the scope of the audit as to the going concern nature of
the business. Such combined audited financial statements will be accompanied by
an audited combined supplemental schedule of real estate by Individual Property
as of the end of the Fiscal Year and a combined supplemental schedule of rental
revenues and rental expenses by Individual Property. The combined totals of
these supplemental schedules will reconcile to the audited balance sheet and
statement of operations for the Fiscal Year, respectively.


 


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


 


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an authorized
representative of the Guarantor, stating that the referenced financial
statements present fairly, in all material respects and subject to year-end
adjustments, the financial position, results of operations and cash flows for
the applicable periods in conformity with GAAP.


 


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


 


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


 


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


 


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


 


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


 


(j)            Borrower
agrees that Lender may forward to each Investor or any Rating Agency rating any
participations in the Loan and/or Securities and each prospective Investor, and
any organization maintaining databases on the underwriting and performance of
commercial mezzanine loans, all documents and information which Lender now has
or may hereafter acquire relating to the Debt and to Borrower, Guarantor
(subject to the last sentence of this Section 5.1.10(j)), Mortgage Borrower,
the Collateral, any Mortgage Principal’s general partner interest in the
related Mortgage Borrower Entity and the Properties, whether furnished by
Borrower, Mortgage 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


 


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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.


 


(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.


 


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(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, any Mortgage Principal’s general partner interest in
the related Mortgage 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 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


 


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


 


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


 


(c)           Borrower
shall use, and shall cause Mortgage Borrower to use, commercially reasonable
efforts (and best efforts in connection with a Securitization or Syndication,
excluding litigation or the payment of any required purchase price or other
compensation for same to tenants) to obtain and deliver to Lender, promptly
upon Lender’s request (to be made no more frequently by Lender or Mortgage
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.


 


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


 


5.1.14      Loan Proceeds.


 


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


 


5.1.15      Performance by Borrower.


 


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


 


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


 


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


 


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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
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


 


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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 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).


 


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(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.


 


(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 Mortgage Lender pursuant to the
terms of the Mortgage 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


 


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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 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


 


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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 the rights of Mortgage Lender pursuant to the terms and conditions of the
Mortgage Loan Documents, if Mortgage Borrower shall default in the performance
or observance of any material term, covenant or condition of any Management
Agreement on the part of Mortgage Borrower to be performed or observed, and
such default shall continue beyond the expiration of any applicable grace or
cure period, then, without limiting the generality of the other provisions of
this Agreement, and without waiving or releasing Borrower from any of its
obligations hereunder, Lender shall have the right, but shall be under no
obligation, to pay any sums and to perform any act or take any action as may be
appropriate to cause all the terms, covenants and conditions of such Management
Agreement on the part of Mortgage Borrower to be performed or observed to be
promptly performed or observed on behalf of Mortgage Borrower, to the end that
the rights of Mortgage Borrower in, to and under such Management Agreement
shall be kept unimpaired and free from default. Lender and any person
designated by Lender shall have, and are hereby granted, the right to enter
upon any Individual Property at any time and from time to time while an uncured
Event of Default exists for the purpose of taking any such action. If the
Manager under any Management Agreement shall deliver to Lender a copy of any
notice sent to Borrower or Mortgage Borrower of default under such Management
Agreement, such notice shall constitute full protection to Lender for any
action taken or omitted to be taken by Lender in good faith, in reliance
thereon. Borrower shall notify Lender if the Manager sub-contracts to a third
party any or all of its management responsibilities under any Management
Agreement. Borrower shall, from time to time, use its best efforts (or
commercially reasonable efforts, at any time when the Manager under any
Management Agreement is not an Affiliate of Borrower, Mortgage Borrower, any
Principal, Guarantor or TSP) to obtain from the Manager under such Management
Agreement such certificates of estoppel with respect to compliance by


 


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


 


5.1.19      Environmental Covenants.


 


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


 


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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 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).


 


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


 


101

















 


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 Mortgage Borrower is required to and
does deliver such security to Mortgage Lender in accordance with the Mortgage
Loan Documents, and in any such case Lender has received evidence reasonably
acceptable to Lender of the delivery of such security.


 


5.1.21      Intentionally Omitted.


 


5.1.22      OFAC.


 


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


 


5.1.23      Ground Lease Covenants.


 


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


 


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


 


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


 


5.1.24      Mortgage Loan Reserve Funds.


 


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


 


5.1.25      Notices.


 


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


 


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 Mortgage Borrower to cause Mortgage 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 Covenants.


 


Borrower shall
cause Mortgage Borrower to comply with all obligations under the Mortgage Loan
Documents (including, without limitation, the affirmative and negative covenants
set forth in the Mortgage Loan Documents) with which Mortgage Borrower has
expressly covenanted in the Mortgage Loan Documents to comply, whether the
Mortgage Loan has been repaid or the related Mortgage Loan Document has been
otherwise terminated (to the extent that such covenants are cross-referenced
herein), unless otherwise consented to in writing by Lender. Borrower shall
cause Mortgage Borrower to promptly notify Lender of all material notices
received by Mortgage


 


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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.


 


5.1.28      Mortgage Loan Estoppels.


 


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.


 


5.1.29      Intentionally Omitted.


 


5.1.30      Condominium Covenants.


 


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


 


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


 


(c)           Borrower
shall not permit any Mortgage Borrower that owns an Individual Property subject
to a condominium regime to, except with the prior written consent of Lender,
which consent shall not be unreasonably withheld, conditioned or delayed, 


 


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(a) institute
any action or proceeding for partition of such Individual Property; (b) vote
for or consent to any material modification of, or amendment to or material
relaxation in the enforcement of the applicable Condominium Documents or the
termination of any condominium regime; and (c) in the event of damage to or
destruction of such Individual Property, vote not to repair, restore or rebuild
such Individual Property if Mortgage Borrower shall have such a voting right.


 


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


 


(e)           To
the extent that any approval rights, consent rights or other rights or
privileges granted to a lender in the applicable Condominium Documents are
conditioned upon such approval rights, consent rights or other rights or
privileges being required or contained in any mortgage, then such approval
rights, consent rights or other rights or privileges shall be deemed to be
required by this Agreement.


 


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


 


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


 


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


 


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


 


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Section 5.2                                      Negative
Covenants.


 


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


 


5.2.1                        Liens.


 


Borrower shall
not permit or cause Mortgage Borrower to create, incur, assume or suffer to
exist any Lien on any portion of the Property or permit any such action to be
taken, except (i) Permitted Encumbrances; (ii) Liens created by or permitted
pursuant to the Mortgage Loan Documents 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 or any
Mortgage Principal’s general partner interest in the related Mortgage 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


 


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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
Documents) owed to Mortgage Borrower by any Person, except for adequate
consideration and in the ordinary course of Mortgage Borrower’s business.


 


5.2.5                        Zoning.


 


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


 


5.2.6                        No Joint Assessment.


 


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


 


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


 


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


 


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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 or any
Mortgage Principal’s general partner interest in the related Mortgage 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, any Mortgage Principal’s general partner
interest in the related Mortgage 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, any such agreement (other than the Management Agreement, as to
which the provisions of the Agreement Regarding Management Agreement and
Section 5.1.18 hereof shall be applicable) shall be terminable by Mortgage
Borrower or Lender within ten (10) days after notice, without the payment of
any fee, penalty, premium or liability


 


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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,
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, any Mortgage Principal’s general partner interest in the related
Mortgage Borrower Entity or any part thereof or any legal or beneficial
interest therein or permit a Sale or Pledge of any interest in any Restricted
Party (collectively, a “Transfer”), without the prior written consent of
Lender, other than (i) pursuant to Leases of space in the Improvements to
tenants in accordance with the provisions of Section 5.1.17 hereof, (ii)
Permitted Encumbrances, and (iii) the transfer of obsolete or worn out Personal
Property and fixtures that are contemporaneously replaced by items of equal or
better function and quality, which are free of liens, encumbrances and security
interests other than those created by the Loan Documents or consented to by
Lender. The replacement requirement in clause (iii) of the preceding sentence
shall not apply to sales or dispositions of Personal Property in any fiscal
year valued at less than $50,000 in the aggregate, provided that Borrower
shall, or shall cause Mortgage Borrower to, upon Lender’s written request,
provide an annual written certification to Lender as to the value of Personal
Property sold in the prior year.


 


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


 


109

















 


managing
member (or if no managing member, any member) or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non-managing
membership interests or the creation or issuance of new non-managing membership
interests; (vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial
interests; (vii) the removal or the resignation of the Manager (including,
without limitation, an Affiliated Manager) other than in accordance with the
Mortgage Loan Documents and Section 5.1.18 hereof; (viii) any deed-in-lieu or
consensual foreclosure relating to any Individual Property with or for the
benefit of Mortgage Lender or any Affiliate thereof; (ix) any transaction,
event or series of transactions or events that result in Borrower holding less
than 100% of the direct limited partnership interests or limited liability
company interests, as applicable, in Mortgage Borrower, or less than 100% of
the membership interests in Mortgage Principal; or (x) any transaction, event
or series of transaction or events that results in a change in Control of
Borrower.


 


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


 


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


 


(ii)                                  intentionally
omitted;


 


(iii)                               intentionally
omitted;


 


(iv)                              the
Pledge to Mezzanine B Lender of (A) the limited partnership or limited
liability company interest in any Borrower Entity, as applicable, held by the
related Mezzanine B Borrower Entity, and (B) the membership interest in any
Principal held by the related Mezzanine B Borrower Entity, in each case as
collateral security for the Mezzanine B 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 B Lender may have under the
Mezzanine B 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 Mezzanine B
Borrower Entity, as applicable, held by the related Bank Loan Borrower, (B) the
membership interest in any Mezzanine B 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


 


110

















 


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)                                Intentionally
Omitted;


 


(x)                                   Intentionally
Omitted; or


 


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


 


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


 


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


 


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


 


111

















 


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 B Borrower and Borrower owning in excess of
forty-nine percent (49%) of the beneficial ownership interest in Mortgage
Borrower, Mezzanine B Borrower and Borrower and a Securitization has occurred,
Borrower shall, prior to such transfer, deliver an updated Insolvency Opinion to
Lender, which opinion shall be in form, scope and substance reasonably
satisfactory to Lender and the Rating Agencies.


 


5.2.11                  Permitted Transfer.


 


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


 


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


 


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


 


(iii)                               Borrower
shall cause the transferee to assume all of the obligations of Borrower arising
from and after the transfer of this Agreement, the Note and the


 


112

















 


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 21
of the Security Instrument (it being agreed that Lender shall have the same
rights to approve such transfer as the Mortgage Lender has);


 


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


 


(vi)                              Intentionally
Omitted;


 


(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.


 


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(b)                                 Intentionally
omitted.


 


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


 


5.2.12                  Limitations on Securities
Issuances.


 


Borrower shall not permit any Mortgage Borrower Entity or any Mortgage
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 Mortgage
Borrower or Mortgage Principal on or in respect of any interests in Mortgage
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.


 


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


 


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(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.


 


5.2.15                  Acquisition of the Mortgage Loan.


 


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


 


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


 


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. Each such Material Agreement shall be in form and
substance reasonably


 


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acceptable to
Lender in all respects, including the amount of the costs and fees thereunder.


 


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


 


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


 


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


 


VI.                                INSURANCE;
CASUALTY AND CONDEMNATION


 


Section 6.1                                      Insurance.


 


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


 


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


 


(ii)                                  business
interruption/loss of rents insurance (A) with loss payable to Lender, Mezzanine
B 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 B 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;


 


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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 B 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 B Borrower, as the case may be, from time to
time due and payable under the Loan, the Mortgage Loan and the Mezzanine B
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 B Borrower of its respective
obligations to pay the amounts due under the Loan, the Mortgage Loan and the
Mezzanine B Loan, as the case may be, on the respective dates of payment
provided for under the Loan, the Mortgage Loan and the Mezzanine B 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)


 


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against all risks insured
against pursuant to Section 6.1(a)(i) hereof, (3) shall include permission to
occupy the applicable Individual Property, and (4) shall contain an agreed
amount endorsement waiving co insurance provisions;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


119

















 


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 B Borrower, as the case may be, as the insured and
Lender, Mortgage Lender and Mezzanine B Lender, as the additional insured, as
their interests may appear, and in the case of property damage, boiler and
machinery, flood and earthquake insurance, shall contain a so called New York
standard non-contributing mortgagee clause in favor of Lender, Mortgage Lender
and Mezzanine B Lender, providing that the loss thereunder shall be payable
directly to Lender, Mortgage Lender and Mezzanine B Lender, or Lender, Mortgage
Lender and Mezzanine B Lender, and Borrower, Mortgage Borrower and Mezzanine B
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 B Borrower, or
anyone acting for Borrower, Mortgage Borrower or Mezzanine B 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 B 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 B 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 B Lender and any other party named therein as an
additional insured;


 


(iii)                               intentionally
omitted; and


 


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(iv)                              neither
Lender, Mortgage Lender or Mezzanine B 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, to take such action as Lender deems
necessary to protect its interest in the Properties, including, without
limitation, the obtaining of such insurance coverage as Lender in its sole
discretion deems appropriate after three (3) Business Days’ notice to Borrower
if prior to the date upon which any such coverage will lapse or at any time
Lender deems necessary (regardless of prior notice to Borrower) to avoid the
lapse of any such coverage. All premiums incurred by Lender in connection with
such action or in obtaining such insurance and keeping it in effect shall be
paid by Borrower to Lender upon demand and, until paid, shall be secured by the
Collateral and shall bear interest at the Default Rate. Lender shall use
commercially reasonable efforts to give Borrower simultaneous notice of any
action taken by Lender pursuant to this Section 6.1(f); provided, however, that
if Lender fails to deliver such notice, its rights and remedies under this
Agreement and the Pledge Agreement shall not be impaired.


 


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


 


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


 


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(i)                                     In
the event that the Mortgage Loan has 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 Mortgage Lender,
Borrower hereby irrevocably empowers Lender, in the name of Mortgage Borrower
as its true and lawful attorney-in-fact, to file and prosecute such claim and
to collect and to make receipt for any such payment.


 


Section 6.2                                      Casualty.


 


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


 


Section 6.3                                      Condemnation.


 


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


 


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


 


122

















 


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 has 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, Lender
shall have the right to demand that Borrower make a deposit of such deficiency
in accordance with the terms of the Mortgage Loan Documents (as if each
reference therein to “Borrower” and “Lender” referred to Borrower and Lender,
respectively).


 


VII.                            RESERVE
FUNDS


 


Section 7.1                                      Repairs


 


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


 


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


 


Section 7.2                                      Impositions
and Imposition Deposits.


 


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


 


(b)                                 In
the event (i) Mortgage Lender waives the requirement of Mortgage Borrower to
make the Impositions and Imposition Deposits (each as defined in the


 


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Security
Instrument) pursuant to the terms of Section 7(a) of each Security Instrument
or (ii) the Mortgage Loan has been repaid in full, Lender shall have the right
to require Borrower to establish and maintain an escrow that will operate in
substantially the same way as the escrow funds to which such Impositions and
Imposition Deposits relate as described in Section 7(a) of each Security
Instrument.


 


Section 7.3                                      Replacement
Reserves.


 


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


 


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


 


Section 7.4                                      Debt Service
Reserve Funds. 


 


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


 


(b)                                 In
lieu of making the Debt Service Reserve Deposit, Borrower may either (i)
deliver to Lender a Letter of Credit in an amount equal to the Debt Service
Reserve Deposit (the “LC Option”) or (ii) deliver to Lender a
certificate of Bank Loan Borrower certifying to Lender that (a) there are
sufficient funds available to Bank Loan Borrower under the Bank Loan for the
purpose of paying Debt Service Shortfalls as projected by Lender through the
end of calendar year 2009, (b) Bank Loan Borrower will, in the event of any
such Debt Service Shortfalls, borrow such funds pursuant to the Bank Loan and
will contribute such funds to Borrower and (c) Borrower will use such funds to
pay for any such Debt Service Shortfalls (the “Certificate Option”).


 


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


 


(d)                                 In
the event Borrower elects to deliver a Letter of Credit under this Section 7.4
or elects the LC Option on the date hereof, Borrower shall have the right, on


 


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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 Mezzanine B Borrower and that Mezzanine B
Borrower will contribute such funds to Borrower and (c) Borrower will use such
funds to pay for any such Debt Service Shortfalls. In the event that Borrower
fails to comply with the provisions of the foregoing sentence, Borrower shall,
within five (5) Business Days following the applicable Determination Date,
deposit with Lender cash or deliver to Lender a Letter of Credit in an amount
equal to the Debt Service Shortfalls as projected by Lender through the end of
the calendar year 2009.


 


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


 


(g)                                 Notwithstanding
the foregoing, in the event that Mezzanine B Borrower is maintaining the Debt
Service Reserve Funds when it is required to do so under the Mezzanine B Loan
Agreement, Borrower shall not be required to maintain the Debt Service Reserve
Funds as required hereunder.


 


Section 7.5                                      Mortgage Debt
Service Escrows. 


 


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


 


(b)                                 In
the event (i) Mortgage Lender waives the requirement of Mortgage Borrower to
maintain the escrow required to be maintained under the Mortgage Debt Service
Escrow Agreement or (ii) the Mortgage Loan has been repaid in full, Lender
shall have the right to require Borrower to establish and maintain an escrow
that will


 


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operate in
substantially the same way as the escrow required to be maintained under the
Mortgage Debt Service Escrow Agreement, but this sentence shall not be deemed
to require Borrower to maintain the escrow required to be maintained under the
Mortgage Debt Service Escrow Agreement (or the applicable portion thereof)
after Mortgage Borrower is no longer obligated to maintain same under the
express provisions of the Mortgage Debt Service Escrow Agreement.


 


Section 7.6                                      Interest Rate
Hedging Reserves.


 


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


 


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


 


Section 7.7                                      Other Mortgage
Reserves.


 


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


 


(b)                                 In
the event (i) Mortgage Lender waives the requirement of Mortgage Borrower to
maintain any Other Mortgage Reserves pursuant to the terms of the Mortgage Loan
Documents or (ii) the Mortgage Loan has 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 7.8                                      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,


 


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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.


 


Section 7.9                                      Letters of
Credit.


 


7.9.1                        Delivery of Letters of
Credit.


 


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


 


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(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;


 


(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


 


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drawn the Letter of Credit, and in the event of the insolvency of the
bank issuing the Letter of Credit or if the bank issuing the Letter of Credit
ceases to be an Eligible Institution, Borrower shall promptly provide to Lender
either (y) a substitute Letter of Credit or (z) cash in the amount of the
Letter of Credit.


 


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


 


VIII.                        DEFAULTS


 


Section 8.1                                      Event of
Default. 


 


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


 


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


 


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


 


(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 or any Mortgage Principal’s general partner interest
in the related Mortgage 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);


 


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(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;


 


(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


 


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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, any Mortgage Principal’s general partner
interest in the related Mortgage 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;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(xxvii)                 if Borrower shall
continue to be in Default under any of the other terms, covenants or conditions
of this Agreement not specified in subsections (i) through (xxvi) above, for
ten (10) days after notice to Borrower from Lender, in the case of any Default
which can be cured by the payment of a sum of money, or for thirty (30) days
after notice from Lender in the case of any other Default; provided, however, that if such non
monetary Default is susceptible of cure but cannot reasonably be cured within
such thirty (30) day period, but Borrower shall have commenced to cure such Default
within such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, such thirty (30) day period shall be extended for
such time as is reasonably necessary for Borrower in the exercise of due
diligence to cure such Default, such additional period not to exceed one
hundred eighty (180) days;


 


(xxviii)              if there shall be a
default under the Pledge Agreement or any of the other Loan Documents beyond
any applicable notice and cure periods contained in such documents, whether as
to Borrower, the Collateral, any Mortgage Principal’s general partner interest
in the related Mortgage 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


 


132

















 


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; or


 


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


 


(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 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


 


133

















 


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 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.


 


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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
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


 


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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, Borrower, Mortgage Borrower, Principal, Mortgage Principal and
any Mortgage Principal’s general partner interest in the related Mortgage
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;


 


(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


 


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other
agreements from parties to agreements that affect the Properties as may be
required under Section 5.1.13(c) hereof, which estoppel letters, subordination
agreements or other agreements shall be reasonably satisfactory to Lender and
the Rating Agencies;


 


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


 


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


 


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


 


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


 


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


 


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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 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


 


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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, Mortgage Borrower or by any of their Affiliates or
agents in connection with the Loan or Mortgage Loan;


 


(ii)                                  any
intentional and material misrepresentation by Borrower or Mortgage Borrower in
any of the Loan Documents or the Mortgage Loan Documents;


 


(iii)                               the
misappropriation by 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 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;


 


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(vi)          any voluntary filing by Borrower, 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, 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, Mortgage Borrower or any of their Affiliates
or agents;


 


(viii)        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 Mortgage Borrower, Mortgage
Principal, Borrower or Principal or any portion of the Property 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)            Mortgage Borrower, Mortgage Principal, Borrower or
Principal makes an assignment for the benefit of creditors;


 


(xi)           any intentional physical waste of the Property by Mortgage
Borrower, Mortgage Principal, Borrower or Principal or any of their Affiliates
or agents;


 


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


 


(xiii)         Mortgage Borrower’s failure to obtain any consent required
with respect to the transfer of the applicable Properties in connection with
the merger of Archstone Smith Operating Trust occurring simultaneously
herewith.


 


(c)           Intentionally
Omitted.


 


(d)           Nothing herein shall
be deemed to be a waiver of any right which Lender may have under Section
506(a), 506(b), 1111 (b) or any other provision of the Bankruptcy Code to
file a claim for the full amount of the indebtedness secured by the Pledge
Agreement or to require that all collateral shall continue to secure all of the
indebtedness owing to Lender in accordance with this Agreement, the Note, the
Pledge Agreement and the other Loan Documents.


 


The term “Reorganization
Proceeding” for purposes of this Section 9.4 shall mean a case, proceeding
or other action (i) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
any Person, or seeking to adjudicate such Person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to such Person or such
Person’s debts, or (ii) seeking appointment of a receiver, trustee, custodian
or other similar official for such Person or for all or any


 


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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, Guarantor or any other
Person pursuant to Section 5.1.10 hereof;


 


(b)           change the
outstanding principal balance of the Loan, except as expressly provided in
Sections 9.6, 9.7 and 9.8 hereof (and subject to the limitations set forth
therein or otherwise applicable thereto);


 


(c)           change the interest
rate, except as expressly provided in Sections 9.1(e), 9.6, 9.7 and 9.8 hereof
(and subject to the limitations set forth therein or otherwise applicable
thereto), or increase any fee or late charge under the Loan;


 


(d)           require any
amortization of the principal amount of the Loan prior to the Maturity Date or
any acceleration of the maturity of the Loan by Lender;


 


(e)           shorten the Maturity
Date of the Loan, or provide for other or additional circumstances or events
upon which Lender will be entitled to accelerate the maturity of the Loan;


 


(f)            alter in any way
the transfer restrictions relating to direct or indirect interests in the
Properties, the Collateral or any Mortgage Principal’s general partner interest
in the related Mortgage 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 Mortgage Borrower;


 


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(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 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 B Borrower, Mortgage Borrower, Bank Loan
Borrower, Principal or Guarantor) (i) to provide additional collateral
security, credit support, indemnities or guaranties for or in respect of the
Loan, or (ii) to increase or expand the scope or extent of any existing
security, credit support, indemnity or guaranty (or modify the provisions of
Section 9.4 hereof);


 


(r)            violate or cause
the violation of any existing agreement to which Borrower or any of its
Affiliates is a party or any Applicable Law;


 


(s)           materially change
any obligation of Borrower pursuant to the actions taken herein or pursuant
hereto or in connection herewith;


 


(t)            result in Borrower
or any of its Affiliates (including, without limitation, Mezzanine B 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 B Borrower, Mortgage Borrower, Bank Loan Borrower, Principal or
Guarantor) in any material way.


 


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Section 9.6             Reallocation
of Loan Amounts.


 


Lender, without
in any way limiting its other rights hereunder, shall have the right, in its
sole and absolute discretion, to reallocate the amount of the Loan and the
Mezzanine B Loan, Borrower agrees to reasonably cooperate to facilitate such
reallocation; provided, however, that (i) the
aggregate principal amount of the Loan and the Mezzanine B Loan immediately
following such reallocation shall equal the outstanding principal balance of
the Loan and the Mezzanine B Loan immediately prior to such reallocation; (ii)
the weighted average interest rate spread of the Loan and the Mezzanine B Loan
immediately following such reallocation shall not exceed the weighted average
interest rate spread which was applicable to the Loan and the Mezzanine B 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 B 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 B Loan Documents
and endorsements to the UCC title insurance policies, all in form and substance
reasonably satisfactory to Lender. Borrower shall cause Mezzanine B Borrower to
cooperate with all reasonable requests of Mezzanine B Lender in connection with
the reallocation of the amount of the Loan and the Mezzanine B Loan, and shall
execute and deliver such documents as shall reasonably be required by Mezzanine
B Lender in connection therewith, including opinions of counsel and UCC
insurance, all in form and substance reasonably satisfactory to Lender. Solely
for the purposes of this Section 9.6, Lender shall reimburse Borrower for all
of its reasonable out-of-pocket costs and expenses (including, any additional
mortgage recording tax due and payable by Borrower in connection with such
restructuring and any title or UCC insurance premiums, costs and expenses
incurred in connection with the issuance of the insurance policies and
endorsements required to be delivered by Borrower pursuant to this Section 9.6,
but excluding the fees and expenses of Borrower’s counsel) that Borrower incurs
in connection with complying with any request made by Lender under this Section
9.6. Notwithstanding the foregoing, the provisions of this Section 9.6 shall in
no way limit, increase or otherwise affect any Borrower obligation to pay any
costs expressly required to be paid by Borrower pursuant to any other Sections
of this Agreement. It shall be an Event of Default hereunder if Borrower fails
to comply with any of the terms, covenants or conditions of this Section 9.6
and such failure shall continue for more than ten (10) Business Days after
Borrower shall have received written notice thereof.


 


Section 9.7             Syndication.


 


9.7.1        Syndication.


 


The provisions
of this Section 9.7 shall only apply in the event that the Loan is syndicated
in accordance with the provisions of this Section 9.7 set forth below.


 


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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”)
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 


 


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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 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 


 


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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.


 


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, 


 


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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
Lender’s sole cost and expense, which will run to Lender and its successors and
assigns;


 


(iv)       subject to the terms of Section 9.7.4, if Lender elects, in
its sole discretion, prior to or upon a Syndication, to split the Loan into two
(2) or more parts, or the Note into multiple component notes or tranches which
may have different interest rate spreads, principal amounts, maturities, and
priorities, Borrower agrees to reasonably cooperate with Lender in connection
with the foregoing and, subject in all cases to the applicable provisions of
Section 9.5 hereof, to execute the required modifications and amendments to the
Note, this Agreement and the Loan Documents and to provide opinions necessary
to effectuate the same. Such notes or components or tranches may be assigned
different interest rate spreads, so long as the weighted average of such
interest rate spreads 


 


147

















 


does not exceed the Eurodollar
Rate Margin (except for any deviation attributable to the imposition of any
rate of interest at the Default Rate or prepayments pursuant to Section 2.3.2
or 2.3.3 hereof);


 


(v)        Subject to the terms of Section 9.5 hereof, execute such
other modifications to the Loan Documents reasonably required by the
Co-Lenders; and


 


(vi)       amend the Organizational Documents of Mortgage Borrower and
Mortgage 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.


 


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 B Loan; Creation of New Mezzanine Loan(s).


 


In connection
with any Securitization of all or any portion of the Loan, Lender shall have
the right (the “Restructuring Option”) at any time to divide the Loan
and/or the Mezzanine B Loan into two (2) or more (but  no
more than five (5))  parts (the “New
Mezzanine Loan(s)”). The principal amounts of the New Mezzanine Loan(s)
shall equal the aggregate outstanding principal balance of the Loan and the
Mezzanine B Loan immediately prior to the creation of the New Mezzanine Loan(s).
In effectuating the 


 


148

















 


foregoing, the lender under the New Mezzanine Loan (the “New
Mezzanine Lender”) will make a loan to the direct equity owners of
Mezzanine B Borrower (the “New Mezzanine Borrower”); the New Mezzanine
Borrower will contribute the amount of such New Mezzanine Loan to Mezzanine B
Borrower, and (i) Mezzanine B Borrower will contribute the amount of such New
Mezzanine Loan to Borrower, and Borrower will apply the contribution to pay
down the Loan and/or (ii) Mezzanine B Borrower will apply such new loan to pay
down the Mezzanine B 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 B Loan Documents except as follows:


 


(a)           Lender shall have the right to
establish different interest rate spreads for the New Mezzanine Loan(s) and to
require the payment of the New Mezzanine Loan(s) in such order of priority as
may be designated by 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 B Loan
immediately prior to the creation of the New Mezzanine Loan(s); (ii) the
weighted average interest rate spread of the New Mezzanine Loan(s) shall equal
the weighted average interest rate spread which was applicable to the Loan and
the Mezzanine B 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, Lender shall pay the same). The New
Mezzanine Loan(s) will be governed by the terms of an intercreditor agreement
between or among the respective holders of the New Mezzanine Loan(s).


 


(b)           Mezzanine B 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 B
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 B Borrower, Borrower and
New Mezzanine Borrower shall cooperate, in all commercially reasonable
respects, with all reasonable requests of Lender in order to divide the Loan
and/or the Mezzanine B Loan into one or more New Mezzanine Loan(s) and shall
execute and deliver such customary documents as shall reasonably be required by
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 B Borrower
or New Mezzanine Borrower, (iii) authorize Lender to file any UCC-1 Financing
Statements reasonably required by Lender to perfect its security interest in
the collateral pledged as security for 


 


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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 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 Guaranty delivered on the date hereof in connection
with the Loan, an environmental indemnity substantially similar in form and
substance to the Environmental Indemnity delivered on the date hereof in
connection with the 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 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 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 B 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 B Borrower or New Mezzanine Borrower, as the
case may be, shall have received written notice thereof.


 


Solely for the
purposes of this Section 9.8, Lender shall reimburse Borrower for all of its
reasonable out-of-pocket costs and expenses (including, any additional
recording tax due and payable by Borrower in connection with such restructuring
and any title or UCC insurance premiums, costs and expenses incurred in
connection with the issuance of the insurance policies and endorsements
required to be delivered by Borrower pursuant to Section 9.8(c)(vi) hereof, but
excluding the fees and expenses of Borrower’s counsel) that Borrower incurs in
connection with complying with a request made by Lender under this Section 9.8.
Notwithstanding the foregoing, the provisions of this paragraph shall in no way
limit or affect any obligation of Borrower to pay any costs expressly required
to be paid by Borrower pursuant to any other Sections of this Agreement.


 


Section 9.9             Contributions
and Waivers.


 


(i)            As
a result of the transactions contemplated by this Agreement, each Borrower
Entity will benefit, directly and indirectly, from each other Borrower Entity’s
obligation to pay the Debt and perform its Obligations and in consideration
thereof the Borrower Entities desire to enter into an allocation and
contribution agreement among themselves as set forth in this Section 9.9 to
allocate such benefits among themselves and to provide a fair and equitable agreement
to make contributions among each of the Borrower Entities in the event any
payment is made by any individual Borrower Entity hereunder to Lender (each
such payment being referred to herein as a “Contribution,” which term
shall, for purposes of this Section 9.9, include any exercise of recourse by
Lender against any Collateral of a Borrower Entity and application of proceeds
of 


 


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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 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


 


151

















 


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 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;


 


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(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;


 


(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 


 


153

















 


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
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;


 


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(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 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.


 


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(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 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           Intentionally
Omitted.


 


Section 9.13           Intentionally
Omitted.


 


Section 9.14           Intercreditor
Agreements.


 


(a)           Lender, Mortgage
Lender, Mezzanine B 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 B Loan, the Bank Loan,
Mortgage Borrower, Borrower, Mezzanine B Borrower, Bank Loan Borrower and the
Properties. Borrower hereby acknowledges and agrees that (i) such Intercreditor



 


156

















 


Agreements are
intended solely for the benefit of Lender, Mezzanine B Lender, Mortgage Lender
and Bank Loan Agent and (ii) Borrower, Mortgage Borrower, Mezzanine B
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 B Lender and
Bank Loan Agent shall have no obligation to disclose to Borrower, Mortgage
Borrower, Mezzanine B 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 B Lender any payment or distribution of
assets, whether in cash, property or securities which is applied to the Debt,
including, without limitation, any proceeds of the Properties previously
received by Lender on account of the Loan, then Borrower shall indemnify Lender
for any amounts so paid, and any amount so paid shall continue to be owing
pursuant to the Loan Documents as part of the Debt notwithstanding the prior
receipt of such payment by Lender.


 


Section 9.15           Discussions
with Mortgage Lender.


 


(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 B 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 B Loan, the Loan or any other matter directly with Mezzanine B Lender
or Mezzanine B 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, 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) [intentionally omitted], (iii)
[intentionally omitted], (iv) in determining whether to grant, deny, withhold
or condition any requested consent or approval Mortgage Lender and Lender may
reasonably reach different conclusions, and (v) Lender has an 


 


157

















 


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 and Borrower hereby
waives any claim of liability against Lender arising from any such denial,
provided such denial shall not constitute a default by Lender under this
Agreement. Notwithstanding anything to the contrary contained in this Section
9.16, to the extent that Mortgage Lender requires Mortgage Borrower to perform,
or refrain from performing, any action pursuant to the terms of the Mortgage
Loan Documents, Lender shall not withhold its consent to the performance or, or
the refraining from performing, such action only if such failure to act or
refrain from acting by Mortgage Borrower (after the expiration of any
applicable notice and cure periods) would be a Mortgage Loan Event of Default.


 


X.            MISCELLANEOUS


 


Section 10.1           Survival.


 


This Agreement
and all covenants, agreements, representations and warranties made herein and
in the certificates delivered pursuant hereto shall survive the making by
Lender of the Loan and the execution and delivery to Lender of the Note, and
shall continue in full force and effect so long as all or any of the Debt is
outstanding and unpaid, unless a longer period is expressly set forth herein or
in the other Loan Documents. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. All covenants, promises
and agreements in this Agreement, by or on behalf of Borrower, shall inure to
the benefit of the legal representatives, successors and assigns of Lender.


 


Section 10.2           Lender’s
Discretion.


 


Whenever
pursuant to this Agreement, Lender exercises any right given to it to approve
or disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to approve or disapprove or to decide whether arrangements
or terms are satisfactory or not satisfactory shall (except as is otherwise
specifically herein provided) be in the sole discretion of Lender and shall be
final and conclusive.


 


Section 10.3           Governing
Law.


 


(a)           THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF
NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS).


 


158

















 


(b)           WITH RESPECT TO ANY
CLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS AGREEMENT, THE NOTE, OR THE
OTHER LOAN DOCUMENTS, EACH OF BORROWER AND LENDER (A) IRREVOCABLY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK,
NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE,
THE PLEDGE AGREEMENT OR THE OTHER LOAN DOCUMENTS BROUGHT IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS
AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMED TO
PRECLUDE LENDER OR BORROWER FROM BRINGING AN ACTION OR PROCEEDING WITH RESPECT
HERETO IN ANY OTHER JURISDICTION.


 


Section 10.4           Modification,
Waiver in Writing.


 


No
modification, amendment, extension, discharge, termination or waiver of any
provision of this Agreement, the Note, or of any other Loan Document, nor
consent to any departure by Borrower or Lender therefrom, shall in any event be
effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar
or other circumstances.


 


Section 10.5           Delay
Not a Waiver.


 


Neither any
failure nor any delay on the part of Lender in insisting upon strict
performance of any term, condition, covenant or agreement, or exercising any
right, power, remedy or privilege hereunder, or under the Note or under any
other Loan Document, or any other instrument given as security therefor, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege. In particular, and not by way of
limitation, by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document, Lender shall not be deemed
to have waived any right either to require prompt payment when due of all other
amounts due under this Agreement, the Note or the other Loan Documents, or to
declare a default for failure to effect prompt payment of any such other
amount.


 


159

















 


Section 10.6           Notices.


 


All notices or
other written communications hereunder shall be in writing and shall be deemed
to have been properly given (i) upon delivery, if delivered in person or by
facsimile transmission with receipt acknowledged by the recipient thereof and
confirmed by telephone by sender, (ii) one (1) Business Day after having been
deposited for overnight delivery with any reputable overnight courier service,
or (iii) three (3) Business Days after having been deposited in any post office
or mail depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested, addressed
as follows:


 


If to Borrower:                                                                 c/o
Archstone-Smith Operating Trust

9200 E. Panorama Circle, Suite 400

Englewood, Colorado 80112

Attention:  General Counsel

Facsimile No.:  (303) 708-6954


 


with a copy
to:                                                                 Tishman
Speyer 

45 Rockefeller Plaza

New York, New York 10111

Attention:  Chief Legal Officer

Facsimile No.:  (212) 895-0353


 


and to:                                                                                                           Tishman
Speyer 

45 Rockefeller Plaza

New York, New York 10111

Attention:  Chief Financial Officer

Facsimile No.:  (212) 895-0314


 


and to:                                                                                                           Schulte
Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention:  Andrew J. Dady, Esq.

Facsimile No.:  (212) 593-5955


 


If to Lender:                                                                               Lehman
Brothers Holdings Inc. 

399 Park Avenue

New York, New York 10022

Attention:  Charles Manna

Facsimile No.:  (646) 758-5366


 


and to:                                                                                                           Bank
of America, N.A.

Capital Markets Servicing Group

900 West Trade Street, Suite 650

Mail Code: NC1-026-06-01

Charlotte, North Carolina 28255


 


160

















 


                                                                                                                                                Attention:  Dean B. Roberson

Facsimile No.:  (704) 317-4501


 


and to:                                                                                                           Barclays
Capital Real Estate Finance Inc. 

200 Park Avenue, 4th Floor

New York, New York 10166

Attention:  Lori Ann Rung

Facsimile No.:  (212) 412-1664


 


with a copy
to:                                                                 Thacher
Proffitt & Wood LLP

Two World Financial Center 

New York, New York 10281

Attention:  Mitchell G. Williams, Esq. 

Facsimile No.:  (212) 912-7751


 


or addressed
as such party may from time to time designate by written notice to the other
parties.


 


Either party
by notice to the other may designate additional or different addresses for
subsequent notices or communications.


 


Section 10.7           Trial
by Jury.


 


EACH OF
BORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN
DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER
PARTY.


 


Section 10.8           Headings.


 


The Article
and/or Section headings and the Table of Contents in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.


 


Section 10.9           Severability.


 


Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under Applicable Law, but if any provision of this
Agreement shall be prohibited by or invalid under Applicable Law, such provision
shall 


 


161

















 


be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.


 


Section 10.10         Preferences.


 


Lender shall
have the continuing and exclusive right to apply or reverse and reapply any and
all payments by Borrower to any portion of the obligations of Borrower
hereunder. To the extent Borrower makes a payment or payments to Lender, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, State or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds received, the obligations hereunder or part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by Lender.


 


Section 10.11         Waiver
of Notice.


 


Borrower shall
not be entitled to any notices of any nature whatsoever from Lender except with
respect to matters for which this Agreement or any of the other Loan Documents
specifically and expressly provides for the giving of notice by Lender to
Borrower and except with respect to matters for which Borrower is not, pursuant
to applicable Legal Requirements, permitted to waive the giving of notice. Borrower
hereby expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement or any of the other Loan Documents does
not specifically and expressly provide for the giving of notice by Lender to
Borrower.


 


Section 10.12         Remedies
of Borrower.


 


In the event
that a claim or adjudication is made that Lender or its agents have acted
unreasonably or unreasonably delayed acting in any case where by law or under
this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower’s sole remedies shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. The parties hereto agree that any
action or proceeding to determine whether Lender has acted reasonably shall be
determined by an action seeking declaratory judgment.


 


Section 10.13         Expenses;
Indemnity.


 


(a)           Except as otherwise
expressly set forth in this Agreement, Borrower covenants and agrees to pay or,
if Borrower fails to pay, to reimburse Lender within five (5) days of receipt
of written notice from Lender, for all reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorneys’ fees and disbursements)
incurred by Lender in connection with (i) [intentionally omitted]; (ii)
Borrower’s ongoing performance of and compliance with Borrower’s agreements and
covenants contained in this Agreement and the other Loan Documents on its part
to be performed or complied with after the Closing Date, including, without
limitation, confirming compliance with environmental and insurance
requirements; (iii) Lender’s ongoing performance and 


 


162

















 


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,
any Mortgage Principal’s general partner interest in the related Mortgage
Borrower Entity, the Properties or any other security given for the Loan; and
(viii) enforcing any obligations of or collecting any payments due from Borrower
under this Agreement, the other Loan Documents or with respect to the
Collateral or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “workout” or of
any insolvency or bankruptcy proceedings; provided, however,
that Borrower shall not be liable for the payment or reimbursement of any such
costs and expenses to the extent the same arise by reason of the gross
negligence, illegal acts, fraud or willful misconduct of Lender.


 


(b)           Borrower shall
indemnify, defend and hold harmless Lender from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable out-of-pocket fees
and disbursements of counsel for Lender in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
Lender shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against Lender in any manner relating to or arising out of (i)
any breach by Borrower of its obligations under, or any material
misrepresentation by Borrower contained in, this Agreement or the other Loan
Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the “Indemnified Liabilities”); provided,
however, that Borrower shall not have any obligation to Lender
hereunder to the extent that such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses or disbursements,
as the case may be, arise from the gross negligence, illegal acts, fraud or
willful misconduct of Lender. To the extent that the undertaking to indemnify,
defend and hold harmless set forth in the preceding sentence may be
unenforceable because it violates any law or public policy, Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under Applicable
Law to the payment and satisfaction of all Indemnified Liabilities incurred by
Lender.


 


(c)           Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold
harmless Lender and the Indemnified Parties from and against any and all losses
(including, without limitation, reasonable attorneys’ fees and costs incurred
in the investigation, defense, and settlement of losses incurred in correcting
any prohibited 


 


163

















 


transaction or
in the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA, the Code, any State statute or other similar
law that may be required, in Lender’s sole discretion) that Lender may incur,
directly or indirectly, as a result of a default under Sections 4.1.8 or 5.2.8
hereof.


 


(d)           Except as otherwise
expressly provided for in this Agreement, Borrower covenants and agrees to pay
for or, if Borrower fails to pay, to reimburse Lender for any customary fees or
expenses payable to any Rating Agency in connection with any consent, approval,
waiver or confirmation obtained from such Rating Agency pursuant to the terms
and conditions of this Agreement or any other Loan Document and Lender shall be
entitled to require payment of such fees and expenses as a condition precedent
to the obtaining of any such consent, approval, waiver or confirmation.


 


Section 10.14         Schedules
and Exhibits Incorporated.


 


The Schedules
and Exhibits annexed hereto are hereby incorporated herein as a part of this
Agreement with the same effect as if set forth in the body hereof.


 


Section 10.15         Offsets,
Counterclaims and Defenses.


 


Any assignee
of Lender’s interest in and to this Agreement, the Note and the other Loan
Documents shall take the same free and clear of all offsets, counterclaims or
defenses which are unrelated to the Loan and the Loan Documents which Borrower
may otherwise have against any assignor of such documents, and no such
unrelated counterclaim or defense shall be interposed or asserted by Borrower
in any action or proceeding brought by any such assignee upon the Loan or the
Loan Documents, and any such right to interpose or assert any such unrelated
offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower.


 


Section 10.16         No
Joint Venture or Partnership; No Third Party Beneficiaries.


 


(a)           Borrower and Lender
intend that the relationship created hereunder and under the other Loan
Documents be solely that of borrower and lender. Nothing herein or therein is
intended to create a joint venture, partnership, tenancy in common, or joint
tenancy relationship between Borrower and Lender.


 


(b)           This Agreement and
the other Loan Documents are solely for the benefit of Lender and Borrower, and
nothing contained in this Agreement or the other Loan Documents shall be deemed
to confer upon anyone other than Lender and Borrower any right to insist upon
or to enforce the performance or observance of any of the obligations contained
herein or therein. All conditions to the obligations of Lender to make the Loan
hereunder are imposed solely and exclusively for the benefit of Lender and no
other Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse to
make the Loan in the absence of strict compliance with any or all thereof and
no other Person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may 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.


 


164

















 


Section 10.17         Counterparts.


 


This Agreement
may be executed in multiple counterparts, each of which, for all purposes,
shall be deemed an original, and all of which together shall constitute one and
the same agreement.


 


Section 10.18         Waiver
of Marshalling of Assets; Cross-Default; Cross Collateralization.


 


(a)           To the fullest
extent permitted by Applicable Law, Borrower, for itself and its successors and
assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s
partners and others with interests in Borrower, and of the Collateral, or to a
sale in inverse order of alienation in the event of foreclosure of the Pledge
Agreement, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Properties for the collection of the Debt without
any prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Properties in preference to
every other claimant whatsoever. In addition, Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any portion of
the Collateral, any equitable right otherwise available to Borrower which would
require the separate sale of any portion of the Collateral or require Lender to
exhaust its remedies against any portion of the Collateral or any combination
of portions of the Collateral before proceeding against any other portion of
the Collateral or combination of portions of the Collateral; and Borrower
hereby expressly consents to and authorizes, at the option of Lender in the
event of such foreclosure, the foreclosure and sale either separately or
together of any portion of the Collateral or combination of portions of the
Collateral.


 


(b)           Borrower
acknowledges that Lender has made the Loan to Borrower upon the security of its
collective interest in the Collateral and in reliance upon the aggregate of the
Collateral taken together being of greater value as collateral security than
the sum of any portion of the Collateral taken separately.


 


Section 10.19         Waiver
of Counterclaim.


 


Borrower
hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or its
agents.


 


Section 10.20         Conflict;
Construction of Documents; Reliance.


 


In the event
of any conflict between the provisions of this Agreement and any of the other
Loan Documents, the provisions of this Agreement shall control. The parties
hereto acknowledge that they were represented by competent counsel in
connection with 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, 


 


165

















 


Borrower shall rely solely on its own judgment and advisors in entering
into the Loan without relying in any manner on any statements, representations
or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender
shall not be subject to any limitation whatsoever in the exercise of any rights
or remedies available to it under any of the Loan Documents or any other
agreements or instruments which govern the Loan by virtue of the ownership by
it or any parent, subsidiary or Affiliate of Lender of any direct or indirect
equity interest any of them may acquire in Borrower, and Borrower hereby irrevocably
waives the right to raise any defense or take any action on the basis of the
foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower
acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse
to or competitive with the business of Borrower or its Affiliates.


 


Section 10.21         Brokers
and Financial Advisors.


 


Borrower
hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the
transactions contemplated by this Agreement. Borrower hereby agrees to
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender’s reasonable out-of-pocket
attorneys’ fees and expenses) in any way relating to or arising from a claim by
any Person that such Person acted on behalf of Borrower or Lender in connection
with the transactions contemplated herein. The provisions of this Section 10.21
shall survive the expiration and termination of this Agreement and the payment
of the Debt.


 


Section 10.22         Prior
Agreements.


 


This Agreement
and the other Loan Documents contain the entire agreement of the parties hereto
and thereto in respect of the transactions contemplated hereby and thereby, and
all prior agreements among or between such parties, whether oral or written,
between Borrower and/or its Affiliates and Lender are superseded by the terms of
this Agreement and the other Loan Documents.


 


Section 10.23         Joint
and Several Liability.


 


If Borrower
consists of more than one Person, the obligations and liabilities of each such
Person hereunder (as the same may be limited by any applicable provisions of
Section 9.4 hereof) are joint and several.


 


Section 10.24         USA
Patriot Act.


 


Each Lender
hereby notifies each Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), it is required to obtain, verify and record information that identifies
each Borrower, which 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]


 


166

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Mezzanine A Loan Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.


 


BORROWER:


 


[BORROWER]


 


 

















 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS HOLDINGS INC., a 

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A., a national banking 

  association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BARCLAYS CAPITAL REAL ESTATE 

  FINANCE INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
									



 

















 


EXHIBIT A


 


(Borrower Entities)


 


	
  Borrower Entity

  	
   

  	
  Organizational

  Identification Number

  	
   

  	
  Tax Identification No.

  	
   

  
	
  Tishman
  Speyer Archstone-Smith City Place Mezzanine I, L.L.C.

  	
   

  	
  4435330

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Harbour Pointe Mezzanine I, L.L.C.

  	
   

  	
  4435327

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Northcreek Mezzanine I, L.L.C.

  	
   

  	
  4435321

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Campus Mezzanine I, L.L.C.

  	
   

  	
  4435326

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Park Mezzanine I, L.L.C.

  	
   

  	
  4435391

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Warner Center Mezzanine I, L.L.C.

  	
   

  	
  4435310

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Wall Street Towers Mezzanine I, L.L.C.

  	
   

  	
  4435305

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Redmond Court Mezzanine I, L.L.C.

  	
   

  	
  4435314

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Vanoni Ranch Mezzanine I, L.L.C.

  	
   

  	
  4435318

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Vanoni Ranch Mezzanine Lessee I, L.L.C.

  	
   

  	
  4432764

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Fox Plaza Mezzanine I, L.L.C.

  	
   

  	
  4435303

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Boston Common Mezzanine I, L.L.C.

  	
   

  	
  4435308

  	
   

  	
  90-0042860

  	
   

  
	
  Tishman
  Speyer Archstone-Smith Thousand Oaks Crest Mezzanine I, L.L.C.

  	
   

  	
   

  	
   

  	
  90-0042860

  	
   

  



 

















 


EXHIBIT B


 


(Lender Approved Standard Form of Lease)


 


None


 

















 


EXHIBIT C


 


(Allocated Loan Amounts)


 


	
  Property Name

  	
   

  	
  Amount

  	
   

  
	
  Archstone
  Boston Common

  	
   

  	
  $

  	
  22,211,000.00

  	
   

  
	
  Archstone
  City Place

  	
   

  	
  $

  	
  4,094,633.22

  	
   

  
	
  Archstone
  Vanoni Ranch

  	
   

  	
  $

  	
  1,978,000.00

  	
   

  
	
  Archstone
  Warner Center

  	
   

  	
  $

  	
  15,419,000.00

  	
   

  
	
  Archstone
  Fox Plaza

  	
   

  	
  $

  	
  15,979,000.00

  	
   

  
	
  Archstone
  Harbour Pointe

  	
   

  	
  $

  	
  1,723,795.59

  	
   

  
	
  Archstone
  Northcreek

  	
   

  	
  $

  	
  5,199,000.00

  	
   

  
	
  Archstone
  Redmond Campus

  	
   

  	
  $

  	
  1,311,000.00

  	
   

  
	
  Oakwood
  Village

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Archstone
  Redmond Park

  	
   

  	
  $

  	
  146,000.00

  	
   

  
	
  The Flats at
  Dupont Circle

  	
   

  	
  $

  	
  287,124.42

  	
   

  
	
  Stone Creek
  at Bellevue

  	
   

  	
  $

  	
  1,934,000.00

  	
   

  
	
  Wall Street
  Tower

  	
   

  	
  $

  	
  1,657,000.00

  	
   

  



 

















 


EXHIBIT D


 


(Ground Leases)


 


1.          Archstone
Vanoni Ranch, 10676 Veronica Lane, Ventura, California


 

















 


SCHEDULE 4.1.1


 


(Organizational Chart)


 

















 


SCHEDULE 4.1.4


 


(Litigation)


 


1.                                       Equal
Rights Center v. Archstone litigation (Civil Action No. 04-03975 (AMD),
U.S. Dist. Ct., D. Md.), with respect to various properties (which properties
may include one or more Properties), owned by Mortgage Borrower or other
entities affiliated with Archstone-Smith Operating Trust, as having potential
construction/design violations under the Fair Housing Act and the Americans
with Disabilities Act.


 

















 


SCHEDULE 4.1.9


 


(Exceptions to Compliance with Legal
Requirements)


 


1.                                       Certain
Individual Properties, owned by Mortgage Borrower or other entities affiliated
with Archstone-Smith Operating Trust, are identified in the Equal Rights
Center v. Archstone litigation (Civil Action No. 04-03975 (AMD), U.S. Dist.
Ct., D. Md.) as having potential construction/design violations under the
Fair Housing Act and the Americans with Disabilities Act.


 
















 


SCHEDULE 4.1.10


 


(Financial Information Exceptions)


 


None


 

















 


SCHEDULE 4.1.13


 


(Utilities and Public Access Exceptions)


 


None


 

















 


SCHEDULE 4.1.21


 


(Certificate of Occupancy and Licenses
Exceptions)


 


None


 

















 


SCHEDULE 4.1.23


 


(Physical Condition Exceptions)


 


None


 

















 


SCHEDULE 4.1.25


 


(Lease Representation Exceptions)


 


None


 

















 


SCHEDULE 4.1.32


 


(Changes in Facts or Circumstances)


 


None


 

















 


SCHEDULE 4.1.47


 


(List of Mortgage Loan Documents)


 


Archstone
Vanoni Ranch


 


1. Promissory
Note made by ASN Vanoni Ranch LLC and Tishman Speyer Archstone-Smith Vanoni
Ranch Lessee, L.L.C. (together, the “Vanoni Borrower”), as borrower in favor of
Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Inc. (together, the “Lender”), as lender, in the original principal
amount of $69,149,000.00


 


2. Loan
Agreement between Vanoni Borrower and Lender


 


3. Deed of
Trust between Vanoni Borrower and Lender


 


4. Replacement
Reserve Agreement between Vanoni Borrower and Lender


 


5. Guaranty
executed by Archstone-Smith Operating Trust (“Guarantor”)


 


6. Cross Collateralization Agreement between Vanoni
Borrower and Lender


 


7. Post Closing Letter executed by Vanoni
Borrower


 


8. Escrow Agreement executed by Vanoni
Borrower and Lender


 


9. Hedge Agreement between Vanoni Borrower and Lender


 


10. ADA Agreement between Vanoni Borrower and Lender


 


11. California Guaranty executed by Guarantor


 


Archstone
Warner Center


 


1. Promissory
Note made by ASN Warner Center LLC (“Warner Borrower”), as borrower in favor of
Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $110,405,000.00


 


2. Loan
Agreement between Warner Borrower and Lender


 


3. Deed of
Trust between Warner Borrower and Lender


 


4. Replacement
Reserve Agreement between Warner Borrower and Lender


 


5. Guaranty
executed by Guarantor


 

















 


6. Cross Collateralization Agreement between Warner
Borrower and Lender


 


7. Post Closing Letter executed by Warner
Borrower


 


8. Escrow Agreement executed by Warner
Borrower and Lender


 


9. Hedge Agreement between Warner Borrower and Lender


 


10. Debt Service Escrow Agreement between Warner
Borrower and Lender


 


11. California Guaranty executed by Guarantor


 


Archstone
City Place


 


1. Promissory
Note made by ASN City Place LLC (“City Place Borrower”), as borrower in favor
of Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $48,428,000.00


 


2. Loan
Agreement between City Place Borrower and Lender


 


3. Deed of
Trust between City Place Borrower and Lender


 


4. Replacement
Reserve Agreement between City Place Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between City
Place Borrower and Lender


 


7. Post Closing Letter executed by City
Place Borrower


 


8. Escrow Agreement executed by City Place
Borrower and Lender


 


9. Hedge Agreement between City Place
Borrower and Lender


 


10. California Guaranty executed by Guarantor


 


Archstone
Fox Plaza


 


1. Promissory
Note made by ASN Fox Plaza LLC (“Fox Borrower”), as borrower in favor of Lehman
Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real Estate
Finance Inc. (together, the “Lender”), as lender, in the original principal
amount of $61,634,500.00


 


2. Loan
Agreement between Fox Borrower and Lender


 

















 


3. Deed of
Trust between Fox Borrower and Lender


 


4. Replacement
Reserve Agreement between Fox Borrower and Lender


 


5. Guaranty executed
by Guarantor


 


6. Cross Collateralization Agreement between Fox
Borrower and Lender


 


7. Post Closing Letter executed by Fox
Borrower


 


8. Escrow Agreement executed by Fox
Borrower and Lender


 


9. Hedge Agreement between Fox Borrower and Lender


 


10. Repair Agreement between Fox Borrower and Lender


 


11. California Guaranty executed by Guarantor


 


Archstone
Boston Common


 


1. Promissory
Note made by ASN Park Essex LLC (“Boston Borrower”), as borrower in favor of
Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $152,926,000.00


 


2. Loan
Agreement between Boston Borrower and Lender


 


3. Mortgage
between Boston Borrower and Lender


 


4. Replacement
Reserve Agreement between Boston Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Boston
Borrower and Lender


 


7. Post Closing Letter executed by Boston
Borrower


 


8. Escrow Agreement executed by Boston Borrower and Lender


 


9. Debt Service Escrow Agreement between Boston
Borrower and Lender


 


10. Hedge Agreement between Boston Borrower and Lender


 

















 


Archstone
Redmond Campus


 


1. Promissory
Note made by Tishman Speyer Archstone-Smith Redmond Campus, L.L.C. (“Redmond
Campus Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bank
of America, N.A.; Barclays Capital Real Estate Finance Inc. (together, the “Lender”),
as lender, in the original principal amount of $72,358,000.00


 


2. Loan
Agreement between Redmond Campus Borrower and Lender


 


3. Mortgage
between Redmond Campus Borrower and Lender


 


4. Replacement
Reserve Agreement between Redmond Campus Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Redmond
Campus Borrower and Lender


 


7. Post Closing Letter executed by Redmond
Campus Borrower


 


8. Escrow Agreement executed by Redmond
Campus Borrower and Lender


 


9. Hedge Agreement between Redmond Campus
Borrower and Lender


 


Archstone
Harbour Pointe


 


1. Promissory
Note made by Tishman Speyer Archstone-Smith Harbour Pointe, L.L.C. (“Harbour
Pointe Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bank
of America, N.A.; Barclays Capital Real Estate Finance Inc. (together, the “Lender”),
as lender, in the original principal amount of $27,625,000.00


 


2. Loan
Agreement between Harbour Pointe Borrower and Lender


 


3. Mortgage
between Harbour Pointe Borrower and Lender


 


4. Replacement
Reserve Agreement between Harbour Pointe Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Harbour
Pointe Borrower and Lender


 


7. Post Closing Letter executed by Harbour
Pointe Borrower


 


8. Escrow Agreement executed by Harbour
Pointe Borrower and Lender


 


9. Hedge Agreement between Harbour Pointe
Borrower and Lender


 

















 


Archstone
Northcreek


 


1. Promissory
Note made by Tishman Speyer Archstone-Smith Northcreek, L.L.C. (“Northcreek
Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bank of
America, N.A.; Barclays Capital Real Estate Finance Inc. (together, the “Lender”),
as lender, in the original principal amount of $603,000.00


 


2. Loan
Agreement between Northcreek Borrower and Lender


 


3. Mortgage
between Northcreek Borrower and Lender


 


4. Replacement
Reserve Agreement between Northcreek Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Northcreek
Borrower and Lender


 


7. Post Closing Letter executed by Northcreek
Borrower


 


8. Escrow Agreement executed by Northcreek
Borrower and Lender


 


9. Hedge Agreement between Northcreek
Borrower and Lender


 


10. ADA Agreement between Borrower and Lender


 


Archstone
Redmond Park


 


1. Promissory
Note made by ASN Redmond Park LLC (“Redmond Park Borrower”), as borrower in
favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital
Real Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $41,063,000.00


 


2. Loan
Agreement between Redmond Park Borrower and Lender


 


3. Mortgage
between Redmond Park Borrower and Lender


 


4. Replacement
Reserve Agreement between Redmond Park Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Redmond
Park Borrower and Lender


 


7. Post Closing Letter executed by Redmond
Park Borrower


 


8. Escrow Agreement executed by Redmond
Park Borrower and Lender


 

















 


9. Hedge Agreement between Redmond Park
Borrower and Lender


 


Stone
Creek at Bellevue (Redmond Court)


 


1. Promissory
Note made by Tishman Speyer Archstone-Smith Redmond Court, L.L.C. (“Stone Creek
Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bank of
America, N.A.; Barclays Capital Real Estate Finance Inc. (together, the “Lender”),
as lender, in the original principal amount of $23,100,000.00


 


2. Loan
Agreement between Stone Creek Borrower and Lender


 


3. Mortgage
between Stone Creek Borrower and Lender


 


4. Replacement
Reserve Agreement between Stone Creek Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Stone
Creek Borrower and Lender


 


7. Post Closing Letter executed by Stone
Creek Borrower


 


8. Escrow Agreement executed by Stone Creek
Borrower and Lender


 


9. Hedge Agreement between Stone Creek
Borrower and Lender


 


Wall
Street Tower


 


1. Promissory
Note made by ASN Belltown LLC (“Wall Street Borrower”), as borrower in favor of
Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $54,410,000.00


 


2. Loan
Agreement between Wall Street Borrower and Lender


 


3. Mortgage
between Wall Street Borrower and Lender


 


4. Replacement
Reserve Agreement between Wall Street Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Wall
Street Borrower and Lender


 


7. Post Closing Letter executed by Wall
Street Borrower


 


8. Escrow Agreement executed by Wall Street
Borrower and Lender


 

















 


9. Hedge Agreement between Wall Street
Borrower and Lender


 


Archstone
Thousand Oaks Crest (aka Oakwood Village)


 


1. Promissory
Note made by ASN Thousand Oaks Crest LLC (“Oakwood Borrower”), as borrower in
favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital
Real Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $46,000,000.00


 


2. Loan
Agreement between Oakwood Borrower and Lender


 


3. Deed of
Trust between Oakwood Borrower and Lender


 


4. Replacement
Reserve Agreement between Oakwood Borrower and Lender


 


5. Guaranty
executed by Guarantor


 


6. Cross Collateralization Agreement between Oakwood
Borrower and Lender


 


7. Post Closing Letter executed by Oakwood
Borrower


 


8. Escrow Agreement executed by Oakwood
Borrower and Lender


 


9. Hedge Agreement between Oakwood Borrower and Lender


 


10. Repair Agreement between Oakwood
Borrower and Lender


 


11. Completion Guaranty executed by Guarantor


 


12. California Guaranty executed by Guarantor


 


The Flats
at Dupont Circle


 


1. Promissory
Note made by ASN Dupont Circle LLC (“Dupont Borrower”), as borrower in favor of
Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real
Estate Finance Inc. (together, the “Lender”), as lender, in the original
principal amount of $90,066,000.00


 


2. Loan
Agreement between Dupont Borrower and Lender


 


3. Deed of
Trust between Dupont Borrower and Lender


 


4. Replacement
Reserve Agreement between Dupont Borrower and Lender


 


5. Guaranty
executed by Guarantor


 

















 


6. Cross Collateralization Agreement between Dupont
Borrower and Lender


 


7. Post Closing Letter executed by Dupont
Borrower


 


8. Escrow Agreement executed by Dupont
Borrower and Lender


 


9. Hedge Agreement between Dupont Borrower and Lender


 

















 


SCHEDULE 4.1.48


 


(Condominium Properties)


 


1.             Archstone Fox Plaza, 1390 Market
Street, San Francisco, California


 

















 


SCHEDULE 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.