**Exhibit 10.7**

 

**MEZZANINE A LOAN AGREEMENT**

** **

** **

Dated as of October 5, 2007

 

 

Between

 

 

**THE ENTITIES IDENTIFIED IN EXHIBIT A ANNEXEDHERETO**,****as Borrower

 

 

and

 

 

**LEHMAN BROTHERS HOLDINGS INC.,BANK OF AMERICA, N.A.ANDBARCLAYS 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                                                                      |

 

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| 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    |

 

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**MEZZANINE A LOAN AGREEMENT**

 

**THISMEZZANINE A LOAN AGREEMENT**, dated as of October 5,2007 (as amended, restated, replaced, supplemented or otherwise modified fromtime to time, this “Agreement”), between **LEHMANBROTHERS HOLDINGS INC.**, a Delaware corporation, having an address at399 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, NorthCarolina 28255 (“BofA”) and **BARCLAYS CAPITAL REALESTATE FINANCE INC.**, a Delaware corporation, having an address at 200Park Avenue, New York, New York 10166 (“Barclays”; together with Lehmanand BofA, individually and collectively, as the context may require, “Lender”),and **THE ENTITIES IDENTIFIED IN EXHIBIT A ANNEXEDHERETO**, each having its principal place of business at c/oArchstone-Smith Operating Trust, 9200 E. Panorama Circle, Suite 400, Englewood,Colorado 80112 (each of such entities being referred to, individually, as a “BorrowerEntity”, and all of such entities being referred to, collectively, as the “BorrowerEntities” or “Borrower”).

 

WI 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 accordancewith the terms of this Agreement and the other Loan Documents (as hereinafterdefined);

 

NOW,THEREFORE, in consideration of the making of the Loan by Lender and thecovenants, agreements, representations and warranties set forth in thisAgreement, the parties hereto hereby covenant, agree, represent and warrant asfollows:

 

**I.              DEFINITIONS;PRINCIPLES OF CONSTRUCTION**

 

Section 1.1             Definitions.

 

For allpurposes of this Agreement, except as otherwise expressly required or unlessthe context clearly indicates a contrary intent:

 

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

 

“AccommodationPledgor” shall mean Smith Property Holdings Three L.P., a Delaware limitedpartnership, together with its successors and assigns.

 

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

 

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

 

“Actual Knowledge” shall mean (and shall belimited to), with respect to Borrower or Principal as of any relevant date, theactual (as distinguished from implied, imputed or constructive) knowledge ofCaroline Brower, Chaz Mueller and Tom Reif****as of suchdate, 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 SwapPayments and Swap Breakage.

 

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

 

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

 

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

 

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

 

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

 

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

 

“AllocatedLoan Amount” shall mean, for any Individual Property, the amount set forthopposite the name of such Individual Property on Exhibit C attached hereto.

 

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

 

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

 

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

 

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

 

“ApplicableLaws” 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 FIRREAand USPAP, prepared by an independent third party appraiser holding an MAIdesignation, who is State licensed or State certified if required under thelaws of the State where the applicable Individual Property is located, whomeets the requirements of FIRREA and USPAP and who is otherwise reasonablysatisfactory to Lender.

 

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

 

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

 

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

 

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

 

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

 

“Award” shallmean any compensation paid by any Governmental Authority in connection with aCondemnation.

 

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

 

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

 

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

 

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

 

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

 

“Bank LoanIntercreditor Agreement” shall mean that certain Intercreditor Agreement, datedas of the date hereof, between and among Lender, Mezzanine B Lender, MortgageLender and Bank Loan Lender.

 

“Bank LoanLenders” shall mean, collectively, the “Lenders” as defined in the Bank LoanCredit Agreement.

 

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

 

“BasicCarrying Costs” shall mean, with respect to any Individual Property, for anyFiscal Year or other payment period, the sum of the following costs associatedwith such Individual Property for such Fiscal Year or payment period: (i) Taxesand (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.

 

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

 

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

 

“BreakageCosts” 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 whichnational banks in New York, New York are not open for business.

 

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

 

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

 

“Cash” shallmean coin or currency of the United States of America or immediately availablefederal funds, including such funds delivered by wire transfer.

 

“Casualty”****shall mean****the occurrenceof any casualty, damage or injury, by fire or otherwise, to any IndividualProperty or any part thereof.

 

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

 

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“Code” shallmean the Internal Revenue Code of 1986, as amended, and as it may be furtheramended from time to time, and any successor statutes thereto, and allapplicable U.S. Department of Treasury regulations issued pursuant thereto intemporary or final form.

 

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

 

“Co-LendingAgreement” 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 eventof a Syndication, as the same may be further supplemented modified, amended orrestated.

 

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

 

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

 

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

 

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

 

“CondominiumProxies” shall mean proxies given by Borrower to Lender as reasonably requiredby Lender with respect to the right to vote on matters under the CondominiumDocuments.

 

“control” (andthe correlative terms “controlled by” and “controlling”) shall mean, withrespect to any entity, the possession, directly or indirectly, of the power todirect or cause the direction of management and policies of the business andaffairs of such entity by reason of the ownership of beneficial interests, bycontract or otherwise.

 

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

 

(i)            if such entity is a limitedpartnership, any general partnership interest the Transfer of which results in(A) one or more Lehman Entities and/or Tishman Speyer Control Persons nothaving control of such entity or (B) the 

 

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Guarantors notbeing owned, directly or indirectly, at least 9.7%, in the aggregate, by one ormore Lehman Entities and/or Tishman Speyer Control Persons;

 

(ii)           if such entity is a limited liabilitycompany or a limited liability partnership, any managing member interest (orequivalent) the Transfer of which results in (A) one or more Lehman Entitiesand/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 theaggregate, by one or more Lehman Entities and/or Tishman Speyer ControlPersons; or

 

(iii)          if such entity is a trust, the removal,appointment or substitution of a trustee of such trust other than (A) in thecase 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 LehmanEntities and/or Tishman Speyer Control Persons and such trustee is subject toremoval at the sole discretion of one or more Lehman Entities and/or TishmanSpeyer Control Persons.

 

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

 

“CreditorsRights Laws” shall mean, with respect to any Person, any existing or future lawof 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 debtsor debtors.

 

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

 

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

 

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

 

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

 

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“Default”shall mean the occurrence of any event hereunder or under any other LoanDocument which, but for the giving of notice or passage of time, or both, wouldconstitute 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.

 

“DeterminationDate” shall mean the first Payment Date in each January, April, July, andOctober, during the term of the Loan.

 

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

 

“DisclosedLitigation” 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.

 

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

 

“EligibleInstitution” shall mean a depository institution or trust company, insured bythe Federal Deposit Insurance Corporation, (a) the short term unsecured debtobligations 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 areheld for thirty (30) days or less, or (b) the long term unsecured debtobligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” byMoody’s in the case of accounts in which funds are held for more than thirty(30) days.

 

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

 

“EnvironmentalIndemnity” shall mean that certain Mezzanine A Environmental IndemnityAgreement executed by Borrower****for the benefitof Lender, as the same may be amended, restated, replaced, supplemented orotherwise modified from time to time.

 

“EnvironmentalLaw” shall mean any federal, State and local laws, statutes, ordinances, rules,regulations, standards, policies and other government directives orrequirements, as well as common law, that, at any time, apply to Borrower orany Individual Property and relate to Hazardous Materials, including, withoutlimitation, the Comprehensive Environmental Response, Compensation and LiabilityAct and the Resource Conservation and Recovery Act.

 

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

 

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

 

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

 

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

 

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

 

“Event ofDefault” 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 ActFiling” shall have the meaning set forth in Section 9.2 hereof.

 

“ExcludedTaxes” shall mean (i) any U.S. Taxes imposed solely by reason of the failure bysuch Person (or, if such Person is not the beneficial owner of the Loan, suchbeneficial 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 suchPerson (or beneficial owner, as the case may be) if such compliance is requiredby statute or regulation of the United States of America as a precondition torelief or exemption from such U.S. Taxes; (ii) with respect to any Person whois a fiduciary or partnership or other than the sole beneficial owner of suchpayment, any U.S. Tax imposed with respect to payments made under the Note to afiduciary or partnership to the extent that the beneficial owner or member ofthe partnership would not have been entitled to the additional amounts if suchbeneficial owner or member of the partnership had been the holder of the Note;or (iii) any taxes on profits, branch profits, franchise taxes and taxesimposed on or measured by all or part of gross or net income of the recipientof such payment by the jurisdiction under the laws of which the recipient isorganized, in which it is a citizen, resident or domiciliary, or, in each case,any political subdivision of any thereof.

 

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

 

“ExecutiveOrder” shall have the meaning ascribed to such term in the definition ofProhibited Person.

 

“ExtendedMaturity 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 principalamount of the Loan.

 

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

 

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

 

“FIRREA” meansthe Financial Institutions Reform, Recovery and Enforcement Act of 1989, asamended, 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 onDecember 31 during the term of the Loan.

 

“Fitch” shallmean 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” shallmean generally accepted accounting principles in the United States of America.

 

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

 

“Gross Incomefrom Operations” shall mean the gross cash receipts derived from the ownershipand operation of the Properties, from whatever source, including, but notlimited to, the Rents, utility charges, escalations, forfeited securitydeposits (but only to the extent applied to rent payable under the applicableLease, as and when payable), interest on credit accounts, service fees orcharges, license fees, parking fees, rent concessions or credits, otherrequired pass-throughs and interest on the Reserve Funds (if and to the extentsuch interest is actually disbursed to Borrower or Mortgage Borrower), butexcluding sales, use and occupancy or other taxes on receipts required to beaccounted for by Mortgage Borrower to any Governmental Authority, refunds anduncollectible accounts, sales of furniture, fixtures and equipment, InsuranceProceeds (other than business interruption or other loss of income insurance),Awards, unforfeited security deposits, payments received under the InterestRate Hedging Agreement (other than in connection with the determination of anyDebt Service Shortfall), utility and other similar deposits and anydisbursements to Borrower or Mortgage Borrower from the Mortgage Loan ReserveFunds and any extraordinary non-recurring items of income. Gross income shallnot be diminished as a result of the Security Instruments or the creation ofany intervening estate or interest in an Individual Property or any partthereof.

 

“Ground Lease”shall mean, individually and collectively, as the context may require, eachground 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 MortgageBorrower under the Ground Lease.

 

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

 

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

 

“HazardousMaterials” shall mean petroleum and petroleum products and compounds containingthem, including gasoline, diesel fuel and oil; explosives; flammable materials;radioactive materials; polychlorinated biphenyls (“PCBs”) and compoundscontaining them; lead and lead-based paint; asbestos or asbestos-containingmaterials in any form that is or could become friable; underground orabove-ground storage tanks, whether empty or containing any substance; toxicmold; any substance the presence of which on any Individual Property isprohibited by any federal, State or local authority; any substance thatrequires special handling; and any other material or substance now or in thefuture defined as a “hazardous substance,” “hazardous material,” “hazardouswaste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant” orother 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 orhereafter erected or located on or which constitute a part of the applicableIndividual Property.

 

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

 

“IndemnifiedParties” shall mean Lender, the Servicer, any Person in whose name the securityinterest created by the Pledge Agreement is or will have been recorded, Personswho may hold or acquire or will have held a full or partial interest in theLoan, the holders of any Securities, as well as custodians, trustees and otherfiduciaries who hold or have held a full or partial interest in the Loan forthe benefit of third parties, as well as the respective directors, officers,shareholders, partners, members, employees, agents, servants, representatives,contractors, subcontractors, Affiliates, subsidiaries, participants, successorsand 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 orother full or partial interest in the Loan or the Properties, whether duringthe 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 asubstantial portion of Lender’s assets and business).

 

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

 

“IndividualProperty” shall mean each parcel of real property (including, withoutlimitation, any interest created pursuant to the Ground Lease), theImprovements thereon 

 

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and all Personal Property owned by the applicable Mortgage BorrowerEntity and encumbered by a Security Instrument, together with all rightspertaining to such Property and Improvements, as more particularly described inthe granting clause of the Security Instrument and referred to therein as the “MortgagedProperty”.

 

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

 

“InsolvencyOpinion” shall mean that certain bankruptcy non-consolidation opinion letterdelivered by counsel for Borrower.

 

“InstitutionalInvestor” shall mean, in connection with any proposed Transfer, any one of thefollowing 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 anentity that controls or manages at least $400,000,000 of real estate equityassets, exclusive of equity interests in Borrower; (b) a pension fund advisorthat 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 insurancecommission, or a similar official or agency, of a state or territory of theUnited States (including the District of Columbia), which has a net worth, asof a date no more than six (6) months prior to the date of such Transfer, of atleast $400,000,000 and controls real estate equity assets of at least$400,000,000 immediately prior to such Transfer; (d) a corporation organizedunder the banking laws of the United States or any state or territory of theUnited States (including the District of Columbia) that has a combined capitaland surplus of at least $200,000,000; (e) any entity (x) with a long-termunsecured 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 morefirst class luxury residential apartment buildings totaling at least 2500residential 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) thatcontrols real estate equity assets of at least $400,000,000 immediately priorto such Transfer; (f) a limited partnership, limited liability company orsimilar entity that shall have been organized for the purpose of facilitatinginvestment in one or more U.S. real estate opportunities, provided such entityshall be sponsored, organized and/or controlled by one or more experienced andreputable syndicators, investment advisors and/or financial institutions andshall have received contributions or binding commitments for contributions ofnot less than $20,000,000 of investment capital; (g) any entity controlled byone 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 UnitedStates, having a net worth of at least $100,000,000 and satisfying Lender’sthen-current criteria with respect to business character and experience, asreasonably determined by Lender, and free from any pending or existingbankruptcy, reorganization or insolvency proceedings in which such party is thedebtor or any criminal charges or proceedings and shall not be, at the time ofsuch Transfer or in the past, a litigant, plaintiff or defendant in any suitbrought against or by Lender; or (i) a trust for the benefit of one or moreindividuals satisfying the criteria of clause (h) above.

 

“InsurancePremiums” shall mean the premiums due under the Policies.

 

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

 

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

 

“InterestPeriod” shall mean, in connection with the calculation of interest accrued withrespect 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 suchcalendar month; provided, however, that with respect to the Payment Dateoccurring in November, 2007, the Interest Period shall be the period commencingon the Closing Date to and including October 31, 2007. Each Interest Period, exceptfor the Interest Period ending October 31, 2007, shall be a full month andshall not be shortened by reason of any payment of the Loan prior to theexpiration of such Interest Period.

 

“Interest RateHedging Agreement” shall mean any interest rate cap agreement or interest rateswap (in each case together with any confirmation and schedules relatingthereto) between an Acceptable Counterparty, and Borrower (if an interest ratecap) or an Affiliate of Borrower (if an interest rate swap) in accordance withSection 2.4. The Interest Rate Hedging Agreement shall be written on the thencurrent standard ISDA documentation, shall provide for interest periods andcalculations consistent with the payment terms of this Agreement and otherwisebe reasonably satisfactory to Lender. After delivery of a Replacement InterestRate Hedging Agreement to Lender, the term “Interest Rate Hedging Agreement”shall be deemed to mean such Replacement Interest Rate Hedging Agreement.

 

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

 

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

 

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

 

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

 

“LeaseTermination Payments” shall mean all payments made to Mortgage Borrower inconnection with the termination, cancellation, surrender, sale or otherdisposition of any Lease.

 

“Leases” shallhave the meaning set forth in the Security Instrument.

 

“LegalRequirements” shall mean all federal, State, county, municipal and othergovernmental 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 interestin the related Mortgage Borrower Entity, or any Individual Property or any partthereof, or the zoning, 

 

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

 

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

 

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

 

“Lender’sApproval Extension Period” shall have the meaning set forth in Section5.1.17(a) hereof.

 

“Letter ofCredit” shall mean a clean, irrevocable, unconditional, transferable letter ofcredit payable on sight draft only, with an initial expiration date of not lessthan one (1) year and with automatic renewals for one (1) year periods (unlessthe obligation being secured by, or otherwise requiring the delivery of, suchletter of credit is required to be performed at least thirty (30) days prior tothe initial expiry date of such letter of credit), for which Borrower shallhave no reimbursement obligation and which reimbursement obligation is notsecured 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 theMezzanine B Note or (z) the Property or any other property that secures theMortgage 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 byBank 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 along-term unsecured debt rating at the time such letter of credit is deliveredand 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 Securitizationhas occurred, has a long-term debt rating that the applicable Rating Agencieshave confirmed in writing will not, in and of itself, result in a downgrade,withdrawal or qualification of the initial, or, if higher, the then currentratings assigned in connection with such Securitization.

 

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

 

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

 

If, as of suchtime on any LIBOR Determination Date, no quotation is given on Reuters ScreenLIBOR01 Page, then Lender shall establish LIBOR on such LIBOR DeterminationDate by requesting four Reference Banks meeting the criteria set forth hereinto provide the quotation offered by its principal London office for makingone-month United States dollar deposits with leading banks in the Londoninterbank market as of 11:00 a.m., London time, on such LIBOR DeterminationDate.

 

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

 

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

 

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

 

Theestablishment of LIBOR on each LIBOR Determination Date by the Lender shall befinal and binding, absent manifest error.

 

“LIBOR Business Day” shall mean a dayupon which (i) United States dollar deposits may be dealt in on the Londoninterbank markets and (ii) commercial banks and foreign exchange markets areopen 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 Dayimmediately preceding the start of such Interest Period.

 

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

 

“Lien” shallmean any mortgage, deed of trust, lien, pledge, hypothecation, assignment,security interest, or any other encumbrance, charge or transfer of, on oraffecting Collateral, Borrower, Mortgage Borrower, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity or anyIndividual 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 theforegoing, the filing of any financing statement, and mechanic’s, materialmen’sand other similar liens and encumbrances.

 

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“LiquidationEvent” 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” shallmean the loan in the original principal amount of SEVENTY-ONE MILLION NINEHUNDRED 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 theother Loan Documents, as the same may hereafter be amended or split pursuant tothe terms hereof.

 

“LoanDocuments” shall mean, collectively, this Agreement, the Note, the PledgeAgreement the Environmental Indemnity, the Guaranty and all other documentsexecuted and/or delivered in connection with the Loan.

 

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

 

“Loan to ValueRatio” shall mean, as of the date of its calculation, the ratio of (i) the sumof the respective outstanding principal amounts of the Loan, the Mezzanine BLoan and the Mortgage Loan as of the date of such calculation to (ii) theaggregate appraised value of the Properties (according to an Appraisal preparednot earlier than one (1) year prior to such date of calculation).

 

“Losses” shallmean 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 notlimited to, reasonable out-of-pocket attorneys’ fees and other costs ofdefense).

 

“LP Act” shallhave 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 ortogether with all other Leases to the same tenant and to all Affiliates of suchtenant 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 allAffiliates of such tenant covers more than ten percent (10%) of the totalnumber of residential units at any Individual Property, (iii) any Lease for theoperation of any parking garage or facility, or (iv) any Lease which is with anAffiliate of Borrower.

 

“ManagementAgreement” shall mean, with respect to any Individual Property, a managementagreement between the applicable Mortgage Borrower Entity and a QualifiedManager, pursuant to which such Qualified Manager is to provide management,leasing and other services with respect to such Individual Property, whichmanagement agreement shall be reasonably acceptable to Lender in form andsubstance; 

 

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*provided, however,* if such managementagreement shall be entered into after a Securitization, then Lender, at itsoption, may condition its approval upon receiving confirmation from theapplicable Rating Agencies that such management agreement will not result in adowngrade, withdrawal or qualification of the then current rating of theSecurities or any class thereof. Concurrently with the execution and deliveryof 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 inaccordance with the terms and conditions of this Agreement.

 

“MaterialAdverse Effect” shall mean a material adverse effect on (i) any IndividualProperty, (ii) the Collateral, (iii) any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity, (iv) the business, profits,prospects, management, operations or condition (financial or otherwise) ofBorrower, Mortgage Borrower, Guarantor, any Principal, the Collateral, anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity or any Individual Property, (v) the enforceability, validity, perfectionor priority of the lien of this Agreement, the Note, the Pledge Agreement orthe other Loan Documents, or (vi) the ability of Borrower to perform itsobligations under this Agreement, the Note, the Pledge Agreement or the otherLoan Documents.

 

“MaterialAgreement” means all agreements, other than the Management Agreement and theLeases, entered into by any Loan Party affecting or relating to the Property,the Collateral, any Mortgage Principal’s general partner interest in therelated Mortgage Borrower Entity or any other direct or indirect ownershipinterest of a Loan Party in the Mortgage Borrower or Borrower requiring thepayment of more than $1,000,000, individually,****inpayments or liability in any annual period and which is not cancelable withoutpenalty or premium on no more than thirty (30) days notice.

 

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

 

“MaterialAlteration 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 ofthe principal of the Note becomes due and payable as therein or hereinprovided, whether at such stated maturity date, by declaration of acceleration,or otherwise.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mezzanine BLender” shall mean Lehman Brothers Holdings Inc., a Delaware corporation, Bankof America, N.A., a national banking association and Barclays Capital RealEstate Finance Inc., a Delaware corporation, together with their respectivesuccessors and assigns.

 

“Mezzanine BLoan” 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 datehereof pursuant to the Mezzanine B Loan Agreement, as the same may be amendedor split pursuant to the terms of the Mezzanine B Loan Documents.

 

“Mezzanine BLoan Agreement” shall mean that certain Mezzanine B Loan Agreement, dated as ofthe date hereof, between Mezzanine B Borrower and Mezzanine B Lender, as thesame may be amended, restated, supplemented or otherwise modified from time totime.

 

“Mezzanine BLoan Documents” shall mean, collectively, all documents or instrumentsevidencing, securing or guaranteeing the Mezzanine B Loan, including, withoutlimitation, the Mezzanine B Loan Agreement and the Mezzanine B Note.

 

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

 

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

 

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

 

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

 

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

 

“MortgageBorrower” shall have the meaning ascribed to the term “Borrower” in theSecurity Instrument.

 

“MortgageBorrower Entity” shall have the meaning ascribed to the term****“Borrower”****in theSecurity Instrument.

 

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

 

“MortgageCross Collateralization Agreement” shall mean that certain Cross-CollateralizationAgreement 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 DebtService Escrow Agreement” shall mean that certain Debt Service EscrowAgreement, dated as of the date hereof, between Mortgage Borrower and MortgageLender, as amended, restated, replaced, supplemented or otherwise modified fromtime to time.

 

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

 

“MortgageLender” shall mean Lehman Brothers Holdings Inc., a Delaware corporation, Bankof America, N.A., a national banking association and Barclays Capital RealEstate Inc., a Delaware corporation, together with their respective successorsand assigns.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“MunicipalViolations” 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 OperatingExpenses and Capital Expenditures for such period from Gross Income fromOperations for such period.

 

“Net Cash FlowAfter Debt Service” shall mean, for any period, the amount obtained bysubtracting Debt Service and Mortgage Loan Debt Service for such period fromNet Cash Flow for such period.

 

“NetLiquidation Proceeds After Debt Service” shall mean, with respect to anyLiquidation Event, all amounts paid to or received by or on behalf of anyMortgage 

 

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Borrower Entity in connection with such Liquidation Event, including,without limitation, proceeds of any sale, refinancing or other disposition orliquidation, less (i) in the event of a Liquidation Event consisting of a Casualtyor Condemnation, Borrower’s, Mortgage Borrower’s, Lender’s and/or MortgageLender’s reasonable out-of-pocket costs incurred in connection with therecovery thereof, (ii) in the event of a Liquidation Event consisting of aCasualty or Condemnation, the costs incurred by Mortgage Borrower in connectionwith a restoration of all or any portion of the applicable Individual Propertymade in accordance with the Mortgage Loan Documents, (iii) in the event of aLiquidation Event consisting of a Casualty or Condemnation or a Transfer,amounts required or permitted to be deducted therefrom and amounts paidpursuant to the Mortgage Loan Documents to Mortgage Lender, (iv) in the eventof a Liquidation Event consisting of a Casualty or Condemnation, the excess InsuranceProceeds or Condemnation Proceeds not used for the Restoration of theapplicable Individual Property which are paid to Mortgage Borrower, (v) in thecase of a foreclosure sale, disposition or transfer of an Individual Propertyin connection with realization thereon following a Mortgage Loan Event ofDefault, reasonable and customary out-of-pocket costs and expenses of sale orother disposition (including attorneys’ fees and brokerage commissions), (vi)intentionally omitted, (vii) intentionally omitted, (viii) in the case of aforeclosure sale relating to the Mortgage Loan, such costs and expensesincurred by Mortgage Lender under the Mortgage Loan Documents as MortgageLender shall be entitled to receive reimbursement for under the terms of the MortgageLoan Documents, (ix) intentionally omitted, (x) intentionally omitted, (xi) inthe 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 requiredpursuant to the Mortgage Loan Documents and/or the Loan Documents in connectionwith such Liquidation Event.

 

“Net OperatingIncome” shall mean, for any period, the amount obtained by subtracting OperatingExpenses 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” shallmean that certain Mezzanine A Promissory Note of even date herewith in theoriginal principal amount of SEVENTY-ONE MILLION NINE HUNDRED THIRTY-NINETHOUSAND FIVE HUNDRED FIFTY-THREE AND 23/100 DOLLARS ($71,939,553.23), made byBorrower in favor of Lender, as the same may be amended, restated, replaced,extended, renewed, supplemented, severed, split, or otherwise modified fromtime to time in accordance with the applicable provisions of this Agreement.

 

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

 

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“Officer’sCertificate” shall mean a certificate delivered to Lender by Borrower which issigned by a Responsible Officer of Borrower, in his or her capacity as an officerof Borrower and not in his or her individual capacity.

 

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

 

“OrganizationalDocuments” shall mean (i) with respect to a corporation, such Person’scertificate of incorporation and by laws, and any shareholder agreement, votingtrust or similar arrangement applicable to any of such Person’s authorizedshares of capital stock or other organizational document affecting the rightsof holders of such stock, (ii) with respect to a partnership, such Person’scertificate of limited partnership, partnership agreement, voting trusts orsimilar arrangements applicable to any of its partnership interests or otherorganizational document affecting the rights of holders of partnership interests,and (iii) with respect to a limited liability company, such Person’scertificate of formation, limited liability company agreement or otherorganizational document affecting the rights of holders of limited liabilitycompany interests. In each case, “Organizational Documents” shall include anyshareholders or other agreement among any of the owners of the entity inquestion.

 

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

 

“Owner’s TitlePolicy” shall mean that certain ALTA extended coverage owner’s policy of titleinsurance issued in connection with the closing of the Mortgage Loan insuringthe Mortgage Borrower as the owner of the Property.

 

“OwnershipInterest” means with respect to any Person, any ownership interest in suchPerson, direct or indirect, contingent or fixed, at any level or any tier, ofany nature whatsoever, whether in the form of a partnership interest, stockinterest, membership interest, equitable interest, beneficial interests, profitinterest, loss interest, voting rights, control rights, management rights orotherwise.

 

“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.

 

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

 

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

 

“PermittedEncumbrances” shall mean, collectively, (a) the Liens and security interestscreated by the Loan Documents and the Mortgage Loan Documents, (b) all Liens,encumbrances and other matters disclosed in the Mortgage Title Insurance Policyrelating to any Individual Property or any part thereof, (c) Liens, if any, forTaxes imposed by any Governmental Authority not yet delinquent or being contestedin good faith and by appropriate proceedings in accordance with the applicableprovisions of the Loan Documents or the Mortgage Loan Documents, (d) otherLiens that are being contested in good faith and by appropriate proceedings inaccordance with the applicable provisions of the Loan Documents or the MortgageLoan Documents, (e) the rights of the lessors or secured parties under anyequipment lease agreements permitted under the Mortgage Loan Documents, and anyfinancing statements filed as evidence of such lessors’ or secured parties’rights, (f) easements, rights-of-way, restrictions, encroachments, and otherminor defects or irregularities in title, in each case, which are necessary forthe operation of the Property and do not or would not have a Material AdverseEffect, and (g) such other title and survey exceptions as Mortgage Lender hasapproved or may approve in writing in Mortgage Lender’s sole discretion.

 

“PermittedInvestments” shall mean any one or more of the following obligations or securities(including those issued by Servicer, the trustee under any Securitization orany of their respective Affiliates) acquired at a purchase price of not greaterthan par, and payable on demand or having a maturity date not later than theBusiness Day immediately prior to the date upon which such funds are requiredto be drawn and meeting one of the appropriate standards set forth below:

 

(i)            obligations of, or obligations fullyguaranteed as to payment of principal and interest by, the United States or anyagency or instrumentality thereof provided such obligations are backed by thefull faith and credit of the United States of America including, withoutlimitation, obligations of: the U.S. Treasury (all direct or fully guaranteedobligations), the Farmers Home Administration (certificates of beneficialownership), the General Services Administration (participation certificates),the U.S. Maritime Administration (guaranteed Title XI financing), the SmallBusiness Administration (guaranteed participation certificates and guaranteedpool certificates), the U.S. Department of Housing and Urban Development (localauthority bonds) and the Washington Metropolitan Area Transit Authority(guaranteed transit bonds); *provided, however*,that the investments described in this clause must (A) have a predeterminedfixed dollar of principal due at maturity that cannot vary or change, (B) ifrated 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 mustbe tied to a single interest rate index plus a fixed spread (if any) and mustmove proportionately with that index, and (D) such investments must not besubject to liquidation prior to their maturity;

 

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(ii)           Federal Housing Administrationdebentures;

 

(iii)          obligations of the following UnitedStates government sponsored agencies: Federal Home Loan Mortgage Corp. (debtobligations), the Farm Credit System (consolidated systemwide bonds and notes),the Federal Home Loan Banks (consolidated debt obligations), the FederalNational Mortgage Association (debt obligations), the Financing Corp. (debtobligations), and the Resolution Funding Corp. (debt obligations); *provided, however*, that the investments described in thisclause must (A) have a predetermined fixed dollar of principal due at maturitythat 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 rateof interest, such interest rate must be tied to a single interest rate indexplus a fixed spread (if any) and must move proportionately with that index, and(D) such investments must not be subject to liquidation prior to theirmaturity;

 

(iv)          federal funds, unsecured certificatesof deposit, time deposits, bankers’ acceptances and repurchase agreements withmaturities of not more than 365 days of any bank, the short term obligations ofwhich at all times are rated in the highest short term rating category by eachRating Agency (or, if not rated by all Rating Agencies, rated by at least oneRating Agency in the highest short term rating category and otherwiseacceptable to each other Rating Agency, as confirmed in writing that suchinvestment would not, in and of itself, result in a downgrade, qualification orwithdrawal of the then current ratings assigned to the Securities); *provided, however*, that the investments described in thisclause must (A) have a predetermined fixed dollar of principal due at maturitythat 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 variablerate of interest, such interest rate must be tied to a single interest rateindex plus a fixed spread (if any) and must move proportionately with thatindex, and (D) such investments must not be subject to liquidation prior totheir maturity;

 

(v)           fully Federal Deposit InsuranceCorporation insured demand and time deposits in, or certificates of deposit of,or bankers’ acceptances with maturities of not more than 365 days and issuedby, 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 shortterm rating category by each Rating Agency (or, if not rated by all RatingAgencies, rated by at least one Rating Agency in the highest short term ratingcategory and otherwise acceptable to each other Rating Agency, as confirmed inwriting that such investment would not, in and of itself, result in adowngrade, qualification or withdrawal of the then current ratings assigned tothe Securities); *provided, however*, that theinvestments described in this clause must (A) have a predetermined fixed dollarof principal due at maturity that cannot vary or change, (B) if rated byS&P, must not have an “r” highlighter affixed to their rating, (C) if suchinvestments have a variable rate of interest, such interest rate must be tiedto a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (D) such investments must not be subjectto liquidation prior to their maturity;

 

(vi)          debt obligations with maturities ofnot more than 365 days and at all times rated by each Rating Agency (or, if notrated by all Rating Agencies, rated by at least one 

 

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Rating Agency and otherwise acceptable to each other Rating Agency, asconfirmed in writing that such investment would not, in and of itself, resultin a downgrade, qualification or withdrawal of the then current ratingsassigned to the Securities) in its highest long term unsecured rating category;*provided, however*, that the investmentsdescribed in this clause must (A) have a predetermined fixed dollar ofprincipal 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 suchinvestments have a variable rate of interest, such interest rate must be tiedto a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (D) such investments must not be subjectto liquidation prior to their maturity;

 

(vii)         commercial paper (including both noninterest bearing discount obligations and interest-bearing obligations payableon demand or on a specified date not more than one year after the date ofissuance thereof) with maturities of not more than 365 days and that at alltimes 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 otherRating Agency, as confirmed in writing that such investment would not, in andof itself, result in a downgrade, qualification or withdrawal of the thencurrent ratings assigned to the Securities) in its highest short term unsecureddebt rating; *provided, however*, that theinvestments described in this clause must (A) have a predetermined fixed dollarof 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 suchinvestments have a variable rate of interest, such interest rate must be tiedto a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (D) such investments must not be subjectto liquidation prior to their maturity;

 

(viii)        units of taxable money market funds,with maturities of not more than 365 days and which funds are regulatedinvestment companies, seek to maintain a constant net asset value per share andinvest solely in obligations backed by the full faith and credit of the UnitedStates, 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 Agencyand otherwise acceptable to each other Rating Agency, as confirmed in writingthat such investment would not, in and of itself, result in a downgrade,qualification or withdrawal of the then current ratings assigned to theSecurities) for money market funds; and

 

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

 

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

 

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

 

“Person” shallmean any individual, corporation, partnership, joint venture, limited liabilitycompany, estate, trust, unincorporated association, any federal, State, countyor municipal government or any bureau, department or agency thereof and anyfiduciary acting in such capacity on behalf of any of the foregoing.

 

“PersonalProperty” shall mean the machinery, equipment, fixtures (including, but notlimited to, the heating, air conditioning, plumbing, lighting, communicationsand elevator fixtures, inventory and goods) and other property of every kindand nature whatsoever owned by Mortgage Borrower, or in which Mortgage Borrowerhas or shall have an interest, now or hereafter located upon the applicableIndividual Property, or appurtenant thereto, and usable in connection with thepresent or future operation and occupancy of the applicable IndividualProperty, and the building equipment, materials and supplies of any naturewhatsoever owned by Mortgage Borrower, or in which Mortgage Borrower has orshall have an interest, now or hereafter located upon the applicable IndividualProperty, or appurtenant thereto, or usable in connection with the present orfuture operation and occupancy of the applicable Individual Property.

 

“Plan” shallmean an employee benefit plan (as defined in section 3(3) of ERISA) whether ornot subject to ERISA or a plan or other arrangement within the meaning ofSection 4975 of the Code.

 

“Plan Assets”shall mean assets of a Plan within the meaning of section 29 C.F.R., Section2510.3-101 or similar law.

 

“Pledge” shallmean, with respect to any Restricted Party, a voluntary or involuntary pledgeof a direct or indirect legal or beneficial interest in such Restricted Party.

 

“PledgeAgreement” shall mean that certain Mezzanine A Pledge and Security Agreementdated as of the Closing Date, executed and delivered by Borrower andAccommodation Pledgor to Lender as security for the Loan, as the same may beamended, restated, replaced, supplemented or otherwise modified from time totime.

 

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

 

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

 

“Present ValueFactor” means:

 

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

 

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

 

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“Prime Rate”shall mean, on a particular date, a rate per annum equal to the rate ofinterest published in The Wall Street Journal as the “prime rate”, as in effecton such day, with any change in the prime rate resulting from a change in saidprime rate to be effective as of the date of the relevant change in said primerate; provided, however, that if more than one prime rate is published in TheWall 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 primerates) will be rounded to the nearest 1/1000 of 1% or, if there is no nearest1/1000 of 1%, to the next higher 1/1000 of 1%. In the event that The WallStreet Journal should cease or temporarily interrupt publication, then thePrime Rate shall mean the daily average prime rate published in anotherbusiness newspaper, or business section of a newspaper, of national standingchosen by Lender. If The Wall Street Journal resumes publication, thesubstitute index will immediately be replaced by the prime rate published inThe Wall Street Journal. In the event that a prime rate is no longer generallypublished or is limited, regulated or administered by a governmental orquasi-governmental body, then Lender shall select a reasonably comparableinterest rate index which is readily available to Borrower and verifiable byBorrower but is beyond the control of Lender. Lender shall give Borrower promptwritten notice of its choice of a substitute index and when the change becameeffective. Such substitute index will also be rounded to the nearest 1/1000 of1% or, if there is no nearest 1/1000 of 1%, to the next higher 1/1000 of 1%. Thedetermination of the Prime Rate by Lender shall be conclusive and bindingabsent manifest error.

 

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

 

“ProhibitedPerson” shall mean any Person:

 

(a)           listed in the Annex to, or otherwisesubject to the provisions of, the Executive Order No. 13224 on TerroristFinancing, effective September 24, 2001, and relating to Blocking Property andProhibiting Transactions With Persons Who Commit, Threaten to Commit, orSupport Terrorism (the “Executive Order”);

 

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

 

(c)           with whom Lender is prohibited fromdealing 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 aPerson who commits, threatens or conspires to commit or supports “terrorism” asdefined in the Executive Order;

 

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

 

(f)            who is an Affiliate of a Personlisted 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 theterms of the Mortgage Loan Documents, in each case if and to the extent thatthe same is encumbered by a Security Instrument and has not been releasedtherefrom pursuant to the terms hereof.

 

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

 

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

 

“QualifiedManager” shall mean (a) TSP or an Affiliate thereof, (b) Archstone PropertyManagement LLC, a Delaware limited liability company, (c) Archstone PropertyManagement (California) Incorporated, a Delaware corporation, (d) a reputableand experienced professional management organization which manages, togetherwith its Affiliates, no fewer than ten (10) first class luxury residentialapartment buildings of a type and size similar to the Properties, totaling inthe aggregate no less than 2500 residential units; *provided,however,* that the employment of such organization described in thisclause (b) as manager of the Properties shall be conditional, (i) if it shalloccur prior to the occurrence of a Securitization, upon approval of suchemployment by Lender, such approval not to be unreasonably withheld, and (ii)if it shall occur after the occurrence of a Securitization, upon Lender havingreceived written confirmation from the Rating Agencies that the employment ofsuch manager will not result in a downgrade, withdrawal or qualification of theinitial, or if higher, then current ratings of the Securities.

 

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

 

“Rating AgencyConfirmation” means each of the Rating Agencies shall have confirmed in writingthat the occurrence of the event with respect to which such Rating AgencyConfirmation is sought shall not result in a downgrade, qualification orwithdrawal of the initial, or, if higher, the then current ratings assigned tothe Securities in connection with a Securitization. In the event that noSecurities are outstanding or the Loan is not part of a Securitization, anyaction that would otherwise require a Rating Agency Confirmation shall requirethe consent of the Lender, which consent shall not be unreasonably withheld ordelayed.

 

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

 

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“Reference Bank” shall mean a leading bank engaged intransactions in Eurodollar deposits in the international Eurocurrency marketthat has an established place of business in London. If any such Reference Bankshould be removed from the Reuters Screen LIBOR01 Page or in any other way failto meet the qualifications of a Reference Bank, Lender may designatealternative Reference Banks meeting the criteria specified above.

 

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

 

“RegulatoryChange” shall mean any change after the date of this Agreement (or with respectto any assignee hereunder, after the date such assignee becomes a Lender) infederal, state or foreign laws or regulations or the adoption or the making,after such date, of any interpretations, directives or requests applying to aclass of banks or companies controlling banks, including such Lender or anycompany controlling such Lender, of or under any federal, state or foreign lawsor regulations (whether or not having the force of law) by any court orgovernmental or monetary authority charged with the interpretation oradministration thereof.

 

“Release” ofany 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 MortgageBorrower does not pay the “Release Price” as defined in the Mortgage CrossCollateralization Agreement, an amount equal to the Allocated Loan Amount forthe applicable Individual Property being released; or (B) in the event thatMortgage Borrower does pay the “Release Price” as defined in the Mortgage CrossCollateralization Agreement, an amount equal to 110% times the Allocated LoanAmount for the applicable Individual Property being released;

 

plus

 

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

 

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

 

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

 

“ReleasedIndividual 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” shallmean the rents, additional rents, payments in connection with any termination,cancellation or surrender of any Lease, revenues, issues and profits (includingthe oil and gas or other mineral royalties and bonuses) from the applicableIndividual Property whether paid or accruing before or after the filing by or againstMortgage Borrower of any petition for relief under the Bankruptcy Code and theproceeds from the sale or other disposition of the Leases.

 

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

 

“ReplacementInterest Rate Hedging Agreement” means an interest rate hedging agreement froman Acceptable Counterparty with terms in all material respects identical to theInterest Rate Hedging Agreement.

 

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

 

“Reserve Rate”shall mean the rate per annum which Lender determines to be either (i) thearithmetic mean (rounded if necessary to the nearest whole multiple of1/1,000%) of the one-month United States dollar lending rates that at leastthree 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 principalLondon offices of at least two of the Reference Banks, or (ii) in the eventthat at least two such rates are not obtained, the lowest one-month UnitedStates dollar lending rate which New York City banks reasonably selected byLender are quoting as of 11:00 a.m. (New York time) on such LIBOR DeterminationDate to leading European banks.

 

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

 

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

 

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“RestrictedParty” shall mean each Guarantor, each Borrower Entity, each Principal, eachMortgage Borrower Entity, each Mortgage Principal, each Mezzanine B BorrowerEntity, each Mezzanine B Principal or any Affiliated Manager or any direct orindirect shareholder, partner, member or non member manager of any Guarantor,any Principal, any Mortgage Borrower, any Mortgage Principal, any Mezzanine BBorrower or any Mezzanine B Principal.

 

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

 

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

 

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

 

“SecuritiesAct” 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.

 

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

 

“SecurityInstrument” shall mean, with respect to any Individual Property, that certainfirst priority Multifamily Mortgage, Deed of Trust or Deed to Secure Debt,Assignment of Leases and Rents and Security Agreement or other similar securityinstrument, dated as of the date hereof, executed and delivered by theapplicable Mortgage Borrower Entity as security for the Mortgage Loan andencumbering 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

“SpreadMaintenance Period” shall mean the period commencing on the Closing Date to andincluding October 31, 2008.

 

“SpreadPayment” shall mean the amount of principal being prepaid times the EurodollarRate Margin divided by 12.

 

“State” shallmean, with respect to an Individual Property, the State or Commonwealth inwhich such Individual Property or any part thereof is located, or the Districtof 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 throughand including November 1, 2010 and (ii) during each Extension Period, a rateper annum, which, when added to the weighted average of the Eurodollar RateMargin and the applicable interest rate spreads under the Mortgage Loan and theMezzanine B Loan, would produce a Debt Service Coverage Ratio (assuming aEurodollar Rate Margin equal to 3.75% per annum) of no less than (x) if only aCap is obtained, 0.85:1.00 or (y) if only a Swap or a Swap and a Cap areobtained, 0.95:1.00, each as determined by Borrower and approved by Lender,such approval not to be unreasonably withheld.

 

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

 

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

 

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

 

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

 

“Swap” shallhave 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 expensesthat Counterparty may incur as a result of any default in the performance of,or the termination of, the obligations of the Affiliate of Borrower (aspurchaser of the Swap) pursuant to such Swap.

 

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

 

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

 

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“Taxes” shallmean all real estate and personal property taxes, assessments, water rates orsewer rents, now or hereafter levied or assessed or imposed against anyIndividual Property or part thereof.

 

“Tenant” shallmean the tenant under any Lease.

 

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

 

“TishmanSpeyer 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 ManagingDirectors of the general partner of Multifamily Guarantor or MultifamilyParallel Guarantor on such determination date who were either serving as suchon the date hereof or have been employed by the general partner of MultifamilyGuarantor or Multifamily Parallel Guarantor for at least five (5) years priorto such determination date; (iii) the Managing Directors of TSP on suchdetermination date who were either serving as such on the date hereof or havebeen employed by TSP for at least five (5) years prior to such determinationdate; or (iv) any Person directly or indirectly controlled by one or more ofthe persons described in clauses (i) through (iii) above.

 

“TradePayables” shall mean****trade payablesincurred by Mortgage Borrower in the ordinary course of its business of owningand operating the Properties.

 

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

 

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

 

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

 

“UCC FinancingStatements” shall mean the UCC financing statements delivered in connectionwith the Pledge Agreement and the other Loan Documents and filed in theapplicable filing offices.

 

“UCC TitleInsurance Policy” shall mean, with respect to the Collateral, a UCC titleinsurance policy in form acceptable to Lender issued with respect to the Collateraland insuring the lien of the Pledge Agreement upon the Collateral.

 

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

 

“USPAP” shallmean the Uniform Standard of Professional Appraisal Practice.

 

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

 

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Section 1.2             Principlesof Construction.

 

All referencesto “Sections” and “Schedules” are to Sections and Schedules in or to thisAgreement unless otherwise specified. All uses of the word “including” shallmean “including, without limitation” unless the context shall indicateotherwise. Unless otherwise specified, the words “hereof,” “herein” and “hereunder”and words of similar import when used in this Agreement shall refer to thisAgreement as a whole and not to any particular provision of this Agreement. Unlessotherwise specified, all meanings attributed to defined terms herein shall beequally applicable to both the singular and plural forms of the terms so defined.All covenants, representations, terms and conditions contained in thisAgreement applicable to “Borrower” shall be deemed to apply to each BorrowerEntity 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 individualBorrower Entity. With respect to terms defined by cross-reference to theMortgage Loan Documents, such defined terms shall have the respectivedefinitions set forth for such terms in the Mortgage Loan Documents as of thedate hereof, and no modifications to the Mortgage Loan Documents shall have theeffect of changing such definitions for the purpose of this Agreement unlessLender expressly agrees that such definitions as used in this Agreement havebeen revised or Lender consents to the modification documents. With respect toany provisions incorporated by reference herein from the Mortgage LoanDocuments, such provisions shall be deemed a part of this Agreementnotwithstanding the fact that the Mortgage Loan shall no longer be effectivefor any reason. The phrase “Borrower shall cause Mortgage Borrower to” or “Borrowershall not cause or permit Mortgage Borrower to” (or phrases of similarmeaning), as used herein, shall mean Borrower shall cause Mortgage Borrower toso act or not to so act, as applicable (or that Borrower shall permit MortgageBorrower to so act or not to so act, as applicable).

 

**II.            GENERALTERMS**

 

Section 2.1         Loan Commitment; Disbursement toBorrower.

 

2.1.1        Agreementto Lend and Borrow.

 

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

 

2.1.2        SingleDisbursement to Borrower.

 

Borrower mayrequest and receive only one borrowing hereunder in respect of the Loan and anyamount borrowed and repaid hereunder in respect of the Loan may not bereborrowed.

 

2.1.3        TheNote, Pledge Agreement and Loan Documents.

 

The Loan shallbe evidenced by the Note and secured by the Pledge Agreement and the other LoanDocuments.

 

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2.1.4        Useof Proceeds.

 

Borrower shalluse the proceeds of the Loan to (a) pay costs and expenses incurred inconnection with the closing of the Loan, (b) to make a capital contribution toMortgage Borrower in order for Mortgage Borrower to (1) repay and discharge anyexisting loans relating to the Properties, (2) pay all past due Basic CarryingCosts, if any, with respect to the Properties, (3) make deposits into theMortgage Loan Reserve Funds on the Closing Date in the amounts provided in theMortgage Loan Documents, (4) pay costs and expenses incurred in connection withthe closing of the Mortgage Loan, or (5) fund any working capital requirementsof the Properties and/or working capital reserves of Mortgage Borrower or (c)fund any working capital reserves of Borrower. The balance, if any, shall bedistributed by Borrower to the Persons owning the ownership interests inBorrower.

 

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 theClosing Date to but excluding the Maturity Date at the Applicable Interest Rate.Monthly installments of interest only shall be paid on each Payment Datecommencing on December 1, 2007 and on each subsequent Payment Date thereafterup to and including the Maturity Date for the Interest Period in which such PaymentDate or Maturity Date occurs. The outstanding principal balance of the Loantogether with all accrued and unpaid interest thereon shall be due and payableon the Maturity Date.

 

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

 

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

#####  

##### (ii)           Borrower shall notify Lender of its election to extend theMaturity Date as aforesaid not earlier than one hundred twenty (120) days andno later than thirty (30) days prior to the then applicable Maturity Date;provided, however, Borrower shall be permitted to rescind and revoke its noticeof extension given in accordance with the terms hereof, provided that (i)written notice of such rescission and revocation is received by Lender nosooner than three (3) Business Days prior to the applicable Maturity Date and(ii) Borrower pays Lender’s reasonable out-of-pocket costs and expensesincurred as a result of Lender’s receipt of such notice of extension;

 

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

#####  

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

#####  

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

#####  

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

 

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

 

2.2.2        InterestCalculation.

 

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

 

2.2.3        EurodollarRate Unascertainable; Illegality; Increased Costs.

 

(a)           (i)  In the event that Lender shall havereasonably determined (which determination shall be conclusive and binding uponBorrower absent manifest error) that by reason of circumstances affecting theinterbank eurodollar market, adequate and reasonable means do not exist forascertaining LIBOR, then Lender shall forthwith give notice by telephone ofsuch determination, to Borrower at least one (1) Business Day prior to the lastday of the related Interest Period, with a written confirmation of suchdetermination promptly thereafter. If such notice is given, the Loan shall bearinterest at the Adjusted Prime Rate beginning on the first day of the nextsucceeding Interest Period. (ii) If, pursuant to the terms of this Section2.2.3(a), the Loan is bearing interest at the Adjusted Prime Rate and Lendershall reasonably determine (which determination shall be conclusive and bindingupon Borrower absent manifest error) that the event(s) or 

 

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circumstance(s) which resulted in such conversion shall no longer beapplicable, Lender shall give notice thereof to Borrower by telephone of suchdetermination, confirmed in writing, to Borrower as soon as reasonablypractical, but in no event later than one (1) Business Day prior to the lastday of the then current Interest Period. If such notice is given, the Loanshall bear interest at the Eurodollar Rate beginning on the first day of thenext succeeding Interest Period. Notwithstanding any provision of thisAgreement to the contrary, in no event shall Borrower have the right to electto have the Loan bear interest at the Adjusted Prime Rate; it being understoodthat the Loan shall bear interest at all times at the Eurodollar Rate except tothe extent expressly provided in this Section 2.2.3.

 

(b)           Ifany Regulatory Change shall hereafter make it unlawful for Lender or anyCo-Lender in good faith to make or maintain the portion of the Loan bearinginterest at the Eurodollar Rate, Lender or such Co-Lender, as applicable, shallgive 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 Loanbearing interest at the Eurodollar Rate may be canceled forthwith and (II) theLoan shall automatically bear interest at the Adjusted Prime Rate at theexpiration of the then current Interest Period or within such earlier period asrequired by Applicable Law. Upon written demand from Borrower, Lender or theapplicable Co-Lender shall demonstrate in reasonable detail the circumstancesgiving rise to Lender’s or such Co-Lender’s determination and the calculationsubstantiating the Adjusted Prime Rate by Lender or such Co-Lender in makingthe conversion. In the event that such Regulatory Change shall no longer existor be effective, Lender or such Co-Lender, as applicable, shall give noticethereof to Borrower, and without the need for Borrower’s consent, the Loanshall bear interest at the Eurodollar Rate commencing with the first day of thenext succeeding Interest Period.

 

#### (c)           If, as a result ofany Regulatory Change, any reserve, special deposit or similar requirementsrelating 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 theresult is to increase the actual cost to Lender or such Co-Lender of making theLoan bearing interest at the Eurodollar Rate, or to reduce the amountreceivable by Lender hereunder in respect of any portion of the Loan bearinginterest at the Eurodollar Rate by an amount reasonably deemed by such Lenderto be material (such increases in cost and reductions in amounts receivable, “IncreasedCosts”), 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 suchadditional amount or amounts (based upon a reasonable allocation thereof byLender or such Co-Lender (as applicable) to Eurodollar Rate loans made byLender or such Co-Lender (as applicable)) as will compensate Lender of suchCo-Lender (as applicable) for such Increased Costs to the extent that suchIncreased Costs are reasonably allocable to the Loan. Lender or any Co-Lender(as applicable) will notify Borrower in writing of any event occurring afterthe Closing Date which will entitle Lender or such Co-Lender (as applicable) tocompensation pursuant to this Section 2.2.3(c) as promptly as practicable afterit obtains knowledge thereof and determines to request such compensation andwill designate a different lending office if such designation will avoid theneed for, or reduce the amount of, such compensation and will not, in thereasonable judgment of Lender of such Co-Lender (as applicable), be otherwisematerially disadvantageous to Lender or such Co-Lender (as applicable). If 

 

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#### Lender or suchCo-Lender (as applicable) shall fail to notify Borrower of any such eventwithin ninety (90) days following the date such event occurred, then Borrower’sliability for any amounts described in this Section 2.2.3(c) incurred by Lenderor such Co-Lender (as applicable) as a result of such event shall be limited tothose attributable to the period occurring subsequent to the 90th day prior tothe date upon which Lender or such Lender (as applicable) actually notifiedBorrower of the occurrence of such event. Notwithstanding the foregoing, in noevent shall Borrower be required to compensate Lender or any Co-Lender for anyportion of Excluded Taxes of Lender or such Co-Lender (as applicable), whetheror not attributable to payments made by Borrower. If Lender or any Co-Lenderrequests compensation under this Section 2.2.3(c), Borrower may, by notice toLender or such Co-Lender (as applicable), require that Lender or such Co-Lender(as applicable) furnish to Borrower a statement setting forth in reasonabledetail the basis for requesting such compensation and the method fordetermining the amount thereof, which such statement submitted by Lender orsuch Co-Lender to Borrower shall be conclusive absent manifest error. Lender orsuch Co-Lender (as applicable) shall only charge Borrower amounts hereunder ifLender or such Co-Lender (as applicable) is generally charging such amounts toall similarly situated Eurodollar Rate-based borrowers. This provision shallsurvive payment of the Note and the satisfaction of all other obligations ofBorrower under the Note, this Agreement and the other Loan Documents. Theprovisions of this Section 2.2.3(c) shall not apply if a Securitization hasoccurred.

####  

#### (d)           Borrower agrees toindemnify Lender and the Co-Lenders and to hold Lender and the Co-Lendersharmless from any actual loss or expense which Lender or any Co-Lender sustainsor incurs as a consequence of (I) any default by Borrower in payment of theprincipal of or interest on the Loan while bearing interest at the EurodollarRate, (II) if the Loan is then bearing interest at the Eurodollar Rate, anyprepayment (whether voluntary or mandatory) of the Loan on a day that is notthe last day of an Interest Period with respect thereto, (III) the conversionof the Applicable Interest Rate from the Eurodollar Rate to the Adjusted PrimeRate with respect to any portion of the outstanding principal amount of theLoan then bearing interest at the Eurodollar Rate on a date other than the lastday of an Interest Period in accordance with this Agreement and (IV) thefailure of Borrower in making any prepayment after Borrower has given a noticethereof in accordance with the provisions of Section 2.3.1 hereof, which suchnotice was not otherwise rescinded or postponed in accordance therewith (theamounts referred to in clauses (I), (II), (III) and (IV) are herein referred tocollectively as the “Breakage Costs”). This provision shall survivepayment of the Note and the satisfaction of all other obligations of Borrowerunder this Agreement and the other Loan Documents.

####  

2.2.4        IntentionallyOmitted.

 

2.2.5        Paymenton Maturity Date.

 

Borrower shallpay to Lender on the Maturity Date the outstanding principal balance, allaccrued and unpaid interest and all other amounts due hereunder and under theNote, the Pledge Agreement and the other Loan Documents.

 

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2.2.6        Paymentsafter Default.

 

Upon theoccurrence and during the continuance of an Event of Default, (a) interest onthe outstanding principal balance of the Loan and, to the extent permitted byApplicable 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 duewithout regard to any grace or cure periods contained herein and (b) Lendershall be entitled to receive and Borrower shall pay to Lender on each PaymentDate during such period an amount equal to the Net Cash Flow After Debt Servicefor the prior month, such amount to be applied by Lender to the payment of theDebt in such order as Lender shall determine in its sole discretion, includingalternating applications thereof between interest and principal. Interest atthe Default Rate and Net Cash Flow After Debt Service shall both be computedfrom the occurrence of the Event of Default until the actual receipt andcollection of the Debt (or that portion thereof that is then due). To theextent permitted by Applicable Law, interest at the Default Rate shall be addedto the Debt, shall itself accrue interest at the same rate as the Loan andshall be secured by the Pledge Agreement. This Section 2.2.6 shall not beconstrued as an agreement or privilege to extend the date of the payment of theDebt, nor as a waiver of any other right or remedy accruing to Lender by reasonof the occurrence of any Event of Default; the acceptance of any payment of NetCash Flow After Debt Service shall not be deemed to cure or constitute a waiverof any Event of Default; and Lender shall retain its rights under the Note toaccelerate and to continue to demand payment of the Debt upon the happening ofany Event of Default, despite any payment of Net Cash Flow After Debt Service.

 

2.2.7        LatePayment Charge.

 

If anyprincipal, interest or any other sums due under the Loan Documents (other thanthe principal sum due on the Maturity Date or on any accelerated maturity ofthe 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 LoanDocuments), Borrower shall pay to Lender within five (5) days after Lender’sdemand therefor an amount equal to the lesser of two percent (2%) of suchunpaid sum or the maximum amount permitted by Applicable Law in order to defraythe expense incurred by Lender in handling and processing such delinquentpayment and to compensate Lender for the loss of the use of such delinquentpayment. Any such amount shall be secured by the Pledge Agreement and the otherLoan Documents to the extent permitted by Applicable Law.

 

2.2.8        UsurySavings.

 

This Agreementand the Note are subject to the express condition that at no time shallBorrower be obligated or required to pay interest on the principal balance ofthe Loan at a rate which could subject Lender to either civil or criminalliability as a result of being in excess of the Maximum Legal Rate. If, by theterms of this Agreement or the other Loan Documents, Borrower is at any timerequired or obligated to pay interest on the principal balance due hereunder ata rate in excess of the Maximum Legal Rate, the Applicable Interest Rate or theDefault Rate, as applicable, shall be deemed to be immediately reduced to theMaximum Legal Rate and all previous payments in excess of 

 

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the Maximum Legal Rate shall be deemed to have been payments inreduction of principal and not on account of the interest due hereunder. Allsums paid or agreed to be paid to Lender for the use, forbearance, or detentionof the sums due under the Loan, shall, to the extent permitted by ApplicableLaw, be amortized, prorated, allocated, and spread throughout the full statedterm of the Loan until payment in full so that the rate or amount of intereston account of the Loan does not exceed the Maximum Legal Rate of interest fromtime to time in effect and applicable to the Loan for so long as the Loan isoutstanding.

 

2.2.9        ForeignTaxes.

 

The provisionsof this Section 2.2.9 shall only apply so long as a Securitization has notoccurred. All payments made by Borrower hereunder shall be made free and clearof, 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. Taxesmeasured by its net income, receipts, capital, net worth and franchise taxesimposed on it, by the jurisdiction under the laws of which Lender or anyCo-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 netincome, receipts, capital, net worth and franchise taxes imposed on it, by thejurisdiction of Lender’s or such Co-Lender’s applicable lending office or anypolitical subdivision thereof or in which Lender or such Co-Lender is residentor engaged in business. If any non excluded Foreign Taxes or U.S. Taxes arerequired to be withheld from any amounts payable to Lender or any Co-Lenderhereunder, the amounts so payable to Lender or such Co-Lender shall beincreased to the extent necessary to yield to Lender or such Co-Lender (afterpayment of all non excluded Foreign Taxes or U.S. Taxes) interest or any suchother amounts payable hereunder at the rate or in the amounts specifiedhereunder. Whenever any non excluded Foreign Tax or U.S. Tax is payablepursuant to Applicable Law by Borrower, Borrower shall send to Lender or theapplicable Co-Lender, within thirty (30) days after such payment, an originalofficial receipt showing payment of such non excluded Foreign Tax or U.S. Taxor other evidence of payment reasonably satisfactory to Lender or theapplicable Co-Lender. Borrower hereby indemnifies Lender and each Co-Lender forany incremental taxes, interest or penalties that may become payable by Lenderor any Co-Lender which may result from any failure or delay by Borrower to payany such non excluded Foreign Tax or U.S. Tax when due to the appropriatetaxing authority or any failure or delay by Borrower to remit to Lender or anyCo-Lender the required receipts or other reasonable evidence of such payment, *provided, however*, that notwithstanding anything to thecontrary contained herein (a) the obligation to pay such additional amountsrequired under this Section 2.2.9 shall not apply to any Foreign Taxes whichotherwise constitute Excluded Taxes and (b) in the event that Lender or anyCo-Lender or any successor and/or assign of Lender or any Co-Lender is notincorporated 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 anypayment is due such entity hereunder, it will deliver to Borrower (i) two dulycompleted copies of United States Internal Revenue Service Form W-8BEN orW-8ECI or successor applicable form, as the case may be, certifying in eachcase that such entity is entitled to receive payments under the Note, withoutdeduction or withholding of any United States federal income taxes, or (ii) anInternal Revenue 

 

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Service Form W-9 or successor applicable form, as the case may be, toestablish an exemption from United States backup withholding tax on allinterest payments hereunder. Each entity required to deliver to Borrower a FormW-8BEN or W-8ECI or Form W-9 pursuant to the preceding sentence furtherundertakes to deliver to Borrower two (2) further copies of such letter andW-8BEN or W-8ECI or Form W-9, or successor applicable forms, or other manner ofcertification, as the case may be, on or before the date that any such letteror form expires (which, in the case of the Form W-8ECI, is the last day of eachU.S. taxable year of the non U.S. entity) or becomes obsolete or after theoccurrence of any event requiring a change in the most recent letter and formpreviously delivered by it to Borrower, and such other extensions or renewalsthereof as may reasonably be requested by Borrower, certifying in the case of aForm W-8BEN or W-8ECI that such entity is entitled to receive payments underthe Note without deduction or withholding of any United States federal incometaxes, unless in any such case any change in treaty, law or regulation hasoccurred prior to the date on which any such delivery would otherwise berequired which renders all such forms inapplicable or which would prevent suchentity from duly completing and delivering any such letter or form with respectto it and such entity advises Borrower that it is not capable of receivingpayments without any deduction or withholding of United States federal incometax, and in the case of a Form W-9, establishing an exemption from UnitedStates backup withholding tax. Notwithstanding the foregoing, if such entityfails to provide a duly completed Form W-8BEN or W-8ECI or other applicableform and, under Applicable Law, in order to avoid liability for Foreign Taxesor U.S. Taxes, Borrower is required to withhold on payments made to such entitythat has failed to provide the applicable form, Borrower shall be entitled towithhold the appropriate amount of Foreign Taxes or U.S. Taxes and Borrowershall have no obligation to pay any additional amounts to such entity underthis Section 2.2.9. In such event, Borrower shall promptly provide to suchentity evidence of payment of such Foreign Taxes or U.S. Taxes to theappropriate taxing authority and shall promptly forward to such entity anyofficial tax receipts or other documentation with respect to the payment of theForeign Taxes or U.S. Taxes as may be issued by the taxing authority.

 

Section 2.3         Prepayments.

 

2.3.1        VoluntaryPrepayments.

 

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

 

#### (a)           Borrower shallprovide prior written notice to Lender (which notice shall be irrevocable)specifying the date upon which the prepayment is to be made, which notice shallbe delivered to Lender not less than thirty (30) days prior to such payment;provided, however, Borrower shall be permitted the right to rescind and revokeor postpone its notice of prepayment given in accordance with this Section2.3.1(a), provided that (i) a written notice of such rescission and revocationor postponement is received by Lender no sooner than three (3) Business Daysprior to the date of prepayment indicated by Borrower and (ii) Borrower paysLender’s reasonable out-of-pocket

 

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#### costs andexpenses incurred as a result of Lender’s receipt of such notice of prepayment;

####  

#### (b)           Borrower shall payto Lender, simultaneously with such prepayment, (i) all accrued and unpaidinterest calculated at the Applicable Interest Rate on the amount of principalbeing prepaid through and including the date upon which the prepayment is made(the “Prepayment Date”); (ii) if such prepayment is not made on aPayment Date, all interest on the principal amount being prepaid which wouldhave accrued from the date of prepayment through and including the end of theInterest Period in which such prepayment occurs, calculated at (1) theApplicable Interest Rate if such prepayment occurs on or after the LIBORDetermination Date for the Interest Period in which such prepayment occurs or(2) the Assumed Note Rate if such prepayment occurs before the LIBORDetermination Date for the Interest Period in which the prepayment occurs (the “InterestShortfall”); (iii) Breakage Costs, if any, without duplication of any sumspaid pursuant to the preceding clause (ii); (iv) the applicable SpreadMaintenance Payment (if any); and (v) all other sums then due under thisAgreement, the Note or the other Loan Documents;

####  

#### (c)           If the InterestShortfall was calculated based upon the Assumed Note Rate, upon determinationof LIBOR on the LIBOR Determination Date for the Interest Period in which thePrepayment Date occurred, (i) if the Applicable Interest Rate for such InterestPeriod is less than the Assumed Note Rate, Lender shall promptly refund toBorrower the amount of the Interest Shortfall paid, calculated at a rate equalto the difference between the Assumed Note Rate and the Applicable InterestRate, or (ii) if the Applicable Interest Rate is greater than the Assumed NoteRate, Borrower shall promptly (and in no event later than the next occurringPayment Date) pay Lender the amount of such additional Interest Shortfallcalculated at a rate equal to the excess of the Applicable Interest Rate overthe Assumed Note Rate; and

####  

#### (d)           Mezzanine B Borrowershall have simultaneously with such prepayment made a pro rata prepayment ofthe 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 thepayment in full of the Mezzanine B Loan on the maturity date thereof.

####  

If a notice ofprepayment is given by Borrower to Lender pursuant to this Section 2.3.1, theamount designated for prepayment and all other sums required under this Section2.3.1 shall be due and payable on the Prepayment Date, subject to Borrower’sright to rescind, revoke or postpone in Section 2.3.1(a) hereof.

 

This Section2.3.1 shall not apply to prepayments made in accordance with the provisions ofSection 2.3.2 hereof.

 

2.3.2        LiquidationEvents.

 

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

 

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#### Property,(iii) a Transfer of any Individual Property in connection with realizationthereon 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 theMortgage Loan (each, a “Liquidation Event”), Borrower shall cause therelated Net Liquidation Proceeds After Debt Service (if any) to be depositedwith Lender and to be applied in accordance with the applicable provisions ofthis Section 2.3.2(a). On each date on which Lender actually receives adistribution of Net Liquidation Proceeds After Debt Service, if such date is aPayment Date, such Net Liquidation Proceeds After Debt Service shall be appliedto the outstanding principal balance of the Note and all other sums then duehereunder or under the Loan Documents and any remaining Net LiquidationProceeds After Debt Service shall be disbursed to Borrower. In the event Lenderreceives a distribution of Net Liquidation Proceeds After Debt Service on adate other than a Payment Date, such amounts shall be held by Lender ascollateral security for the Loan in an interest bearing account, with suchinterest accruing to the benefit of Borrower, and shall be applied by Lender inaccordance with the immediately preceding sentence on the next Payment Date. Noprepayment consideration or any other prepayment premium or penalty shall bedue in connection with any prepayment made as a result of any of the eventsdescribed in clauses (i) or (ii) of this Section 2.3.2(a).

####  

#### (b)           Borrower shallpromptly notify Lender of any Liquidation Event once Borrower has knowledge ofsuch event. Borrower shall be deemed to have knowledge of (i) a sale (otherthan a foreclosure sale) of an Individual Property on the date on which acontract of sale for such sale is entered into, and a foreclosure sale, on thedate 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 thedate on which a commitment for such refinancing is entered into. The provisionsof this Section 2.3.2 shall not be construed to contravene in any manner therestrictions and other provisions regarding refinancing of the Mortgage Loan orthe Transfer of any Individual Property set forth in this Agreement, and theother Loan Documents or the Mortgage Loan Documents.

####  

2.3.3        PrepaymentsAfter Default. 

 

If, followingthe 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 otherwiserecovered by Lender (including, without limitation, through application of anyNet Liquidation Proceeds After Debt Service, other than Net Liquidation ProceedsAfter Debt Service received in connection with a Casualty or Condemnation ofall or a portion of any Individual Property), such tender or recovery shall bedeemed a voluntary prepayment by Borrower and Borrower shall pay, in additionto the Debt, (i) an amount equal to the Spread Maintenance Payment, if any;(ii) all accrued and unpaid interest calculated at the Applicable Interest Rateon the amount of principal being prepaid through and including the PrepaymentDate; (iii) if such Prepayment Date is a date other than a Payment Date, theInterest Shortfall; (iv) Breakage Costs, if any, without duplication of anysums paid pursuant to the preceding clause (iii); and (v) all other sums dueunder this Agreement, the Note or the other Loan Documents in connection with apartial or total prepayment.

 

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2.3.4        Makingof Payments.

 

Each paymentby Borrower hereunder or under the Note shall be made in funds settled throughthe New York Clearing House Interbank Payments System or other fundsimmediately available to Lender by 2:00 p.m., New York City time, on or priorto the date such payment is due, to Lender by deposit to such account as Lendermay designate by written notice to Borrower. Whenever any payment hereunder orunder 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 scheduleddue date.

 

2.3.5        Applicationof Principal Prepayments.

 

Allprepayments received pursuant to this Section 2.3 and Section 2.6 shall beapplied, first, to interest on the portion of the outstanding principal balancebeing prepaid that accrued through and including the Prepayment Date, second,to the Interest Shortfall as the same may be adjusted pursuant to the lastparagraph of Section 2.3.1(c) hereof, if applicable, with respect to the amountprepaid and third, to all other amounts then due to Lender under this Agreementor any of the other Loan Documents and then to the payment of principal dueunder the Loan.

 

Section 2.4         Interest Rate Hedging Agreement.

 

#### (a)           Borrower shallobtain or cause to be obtained, and shall thereafter maintain in effect, anInterest Rate Hedging Agreement with an Acceptable Counterparty, which shall(i) be coterminous with the Loan, (ii) have a notional amount which shall notat any time be less than the sum of the outstanding principal balance of theLoan, and (iii) at all times have a strike rate equal to the then applicableStrike Rate. The Counterparty shall be obligated under the Interest RateHedging Agreement to make monthly payments equal to the excess of one (1) monthLIBOR over the Strike Rate, calculated on the notional amount. The notionalamount of the Interest Rate Hedging Agreement may be reduced from time to timein amounts equal to any prepayment of the principal of the Loan in accordancewith Section 2.3 and Section 2.6 hereof. Notwithstanding the foregoing, in theevent that Mortgage Lender waives the requirements of the Mortgage LoanDocuments to maintain an interest rate hedging agreement with respect to theMortgage Loan or Mortgage Borrower is in violation of its obligations relatingthereto, Lender may require Borrower to obtain, or cause to be obtained, and tothereafter maintain in effect, an Interest Rate Hedging Agreement in accordancewith the terms of this Section 2.4, which shall have a notional amount whichshall not at any time be less than the outstanding principal balance of theLoan and the Mortgage Loan and which shall at all times have a strike rateequal to the Strike Rate (which shall be calculated taking into considerationthe Mortgage Debt Service and the Debt Service and the weighted averageinterest rate spread of the Mortgage Loan and the Loan).

####  

#### (b)           If any Interest RateHedging Agreement is an interest rate exchange agreement (a “Swap”),Borrower shall not be a party to such Swap and all obligations of the Affiliateof Borrower (which is the purchaser of such Swap), including, withoutlimitation, Additional Interest shall not be secured by the Lien of theCollateral, any 

 

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#### IndividualProperty or any Mezzanine B Collateral. The Affiliate of Borrower that hasentered into the Swap and its creditworthiness shall be reasonably satisfactoryto 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 anyobligations under such Cap other than the payment of a one time, singleinstallment payment made at the time of the purchase of such Cap.

####  

#### (c)           Borrower shallcollaterally assign to Lender pursuant to an Assignment of Interest RateHedging Agreement substantially in the form as the Assignment of Interest RateHedging Agreement delivered on the date hereof, all of its right, title andinterest to receive any and all payments under the Interest Rate HedgingAgreement (and any related guarantee, if any) and shall deliver to Lender anexecuted counterpart of such Interest Rate Hedging Agreement and notify theCounterparty of such collateral assignment (either in such Interest RateHedging Agreement or by separate instrument). The Interest Rate HedgingAgreement and any Replacement Interest Rate Hedging Agreement shall be furtherassignable to any party to which the Loan may be assigned without theCounterparty’s consent. The Counterparty shall agree in writing to make allpayments it is required to make under the Interest Rate Hedging Agreement intoan 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 HedgingAgreement shall terminate and Lender shall promptly execute and deliver atBorrower’s sole cost and expense, such documents as may be required to evidenceLender’s release of the Interest Rate Hedging Agreement and to notify theCounterparty of such release.

####  

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

####  

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

####  

#### (f)            In the event thatBorrower fails to purchase and deliver to Lender the Interest Rate HedgingAgreement or any Replacement Interest Rate Hedging Agreement as and whenrequired hereunder, Lender may purchase such Interest Rate Hedging Agreementand the cost incurred by Lender in purchasing such Interest Rate Hedging 

 

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#### Agreementshall be paid by Borrower to Lender with interest thereon at the Default Ratefrom the date such cost was incurred by Lender until such cost is paid byBorrower to Lender.

####  

#### (g)           Each Interest RateHedging Agreement shall contain the following language or its equivalent: “Inthe event of any downgrade, withdrawal or qualification of the rating of theCounterparty below “A+” (or the equivalent) by the Rating Agencies, theCounterparty must, within 30 days, either (x) post collateral on termsacceptable to each Rating Agency or (y) find a replacement AcceptableCounterparty, at the Counterparty’s sole cost and expense, acceptable to eachRating Agency (notwithstanding the foregoing, if the Counterparty’s rating isdowngraded to “A” or lower, only the option described in clause (y) will beacceptable); provided that, notwithstanding such a downgrade, withdrawal orqualification, unless and until the Counterparty transfers the Interest RateHedging Agreement to a replacement Acceptable Counterparty pursuant to theforegoing clause (y), the Counterparty will continue to perform its obligationsunder the Interest Rate Hedging Agreement. Failure to satisfy the foregoingshall 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 withan Interest Rate Hedging Agreement, Borrower shall obtain and deliver to Lenderan opinion of counsel from counsel for the Counterparty (upon which Lender andits successors and assigns may rely) which shall provide, in relevant part,that:

####  

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

#####  

##### (ii)           the execution and delivery of the Interest Rate HedgingAgreement by the Counterparty, and any other agreement which the Counterpartyhas executed and delivered pursuant thereto, and the performance of itsobligations thereunder have been and remain duly authorized by all necessaryaction and do not contravene any provision of its certificate of incorporationor by-laws (or equivalent organizational documents) or any law, regulation orcontractual restriction binding on or affecting it or its property;

#####  

##### (iii)          all consents, authorizations and approvals required for theexecution and delivery by the Counterparty of the Interest Rate HedgingAgreement, and any other agreement which the Counterparty has executed anddelivered pursuant thereto, and the performance of its obligations thereunderhave been obtained and remain in full force and effect, all conditions thereofhave been duly complied with, and no other action by, and no notice to orfiling with any governmental authority or regulatory body is required for suchexecution, delivery or performance; and

 

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

#####  

Section 2.5             IntentionallyOmitted. 

 

Section 2.6             Releaseof an Individual Property.

 

If MortgageBorrower has elected to release an Individual Property from the Lien of theSecurity Instrument thereon and the requirements of this Section 2.6 have beensatisfied, and provided that no Event of Default shall then exist, Borrowershall be entitled to (x) permit Mortgage Borrower to obtain the release of anIndividual Property from the Lien of the Security Instrument thereon (andrelated Mortgage Loan Documents) and (y) the release of the applicable BorrowerEntity’s obligations under the Loan Documents (other than those expresslystated to survive), upon the satisfaction of each of the following conditions:

 

#### (a)           (i) All conditionsto the release of such Individual Property from the Lien of the SecurityInstrument thereon shall have been satisfied in accordance with the terms ofthe Mortgage Loan Documents (as independently determined by Lender in itsreasonable discretion) and (ii) all conditions to the release of suchIndividual Property shall have been satisfied in accordance with the terms ofSection 2.6 of the Mezzanine B Loan Agreement with respect to such release;

####  

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

####  

#### (c)           On or prior to therelease of the applicable Individual Property, Lender shall have received awire transfer of immediately available federal funds in an amount equal to theRelease Price for such Individual Property, together with (i) all accrued andunpaid interest calculated at the Applicable Interest Rate on the amount ofprincipal being prepaid through and including the date of the release, (ii) ifsuch 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 thepreceding clause (ii); (iv) the applicable Spread Maintenance Payment (if any);and (v) all other sums due under this Agreement, the Note or the other LoanDocuments in connection with a prepayment;

####  

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

 

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#### shall provideall other customary documentation Lender reasonably requires to be delivered byBorrower in connection with such release, together with an Officer’sCertificate certifying that such documentation (i) is in compliance with allapplicable Legal Requirements, (ii) will, following execution by Lender andrecordation thereof, effect such releases in accordance with the terms of thisAgreement, and (iii) will not impair or otherwise adversely affect the Liens,security interests and other rights of Lender under the Loan Documents notbeing released (or as to the parties to the Loan Documents not being released);

####  

#### (e)           IntentionallyOmitted;

####  

#### (f)            IntentionallyOmitted;

####  

#### (g)           IntentionallyOmitted;

####  

#### (h)           Lender shall havereceived payment of all of Lender’s reasonable costs and expenses, includingdue diligence review costs and reasonable counsel fees and disbursementsincurred in connection with the release of the Individual Property from thelien of the related Security Instrument and the review and approval of thedocuments and information required to be delivered in connection therewith;

####  

#### (i)            IntentionallyOmitted; and

####  

#### (j)            Immediatelyfollowing such release, the Allocated Loan Amount for the Individual Propertyreleased (the “Released Individual Property”) shall be reduced to zero,and the Allocated Loan Amount for each of the Individual Properties remainingsubject to the Lien of the Security Instruments immediately following suchrelease shall be reduced by such Individual Property’s *pro rata*share of the difference between the Release Price of the Released IndividualProperty and the original Allocated Loan Amount for the Released IndividualProperty. For purposes of the immediately preceding sentence, an IndividualProperty’s “*pro rata* share” shall mean a fraction,the numerator of which is the Allocated Loan Amount for such IndividualProperty prior to giving effect to any reduction pursuant to this Section2.6(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), forall of the Individual Properties other than the Released Individual Property.

####  

Section 2.7             IntentionallyOmitted.

 

Section 2.8             Releaseon Payment in Full.

 

Lender shall,upon the written request and at the expense of Borrower, upon payment in fullof all principal of and interest on the Loan and all other amounts due andpayable under the Loan Documents in accordance with the terms and conditions ofthe Note and this Agreement, release the Lien of the Pledge Agreement and remitany remaining Reserve Funds (i) Mezzanine B Lender if the Loan has been paid infull and the Mezzanine B Loan is still outstanding or (ii) to Borrower if theLoan and the Mezzanine B Loan have been paid in full.

 

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Section 2.9             Substitutionof Properties.

 

Subject to theterms of this Section 2.9, Borrower may cause Mortgage Borrower to obtain, fromtime to time, a release of one or more Individual Properties (each, a “ReleaseProperty”) by substituting therefor one or more luxury residentialapartment building properties of like kind and quality located in the UnitedStates of America acquired by Mortgage Borrower or an Affiliate of MortgageBorrower (*provided, however*, that if theSubstitute Property shall be owned by an Affiliate of Mortgage Borrower, suchAffiliate (i) shall be wholly owned, directly or indirectly, by a Mezzanine BBorrower Entity, (ii) shall assume all the obligations of Mortgage Borrowerunder the Security Instrument, the Mortgage Note and the other Mortgage LoanDocuments (subject, however, to the exculpatory provisions of Section 9.4hereof) and (iii) shall become a party to the Mortgage Note and the otherMortgage Loan Documents and shall be bound by the terms and provisions thereofas if it had executed the Mortgage Note and the other Mortgage Loan Documentsand shall have the rights and obligations of Mortgage Borrower thereunder)(individually, a “Substitute Property” and collectively, the “SubstituteProperties”), provided that the following conditions precedent aresatisfied or, in Lender’s sole discretion, waived:

 

#### (a)           Lender shall havereceived at least thirty (30) days’ prior written notice requesting thesubstitution and identifying the Substitute Property and the Release Property.

####  

#### (b)           (i) All conditionsto the release of such Individual Property and substitution of such SubstituteProperty shall have been satisfied in accordance with the terms of the MortgageLoan Documents (as independently determined by Lender in its reasonablediscretion) and (ii) all conditions to the release of such Individual Propertyand substitution of such Substitute Property shall have been satisfied inaccordance with the terms of Section 2.9 of the Mezzanine B Loan Agreement withrespect to such release and substitution.

####  

#### (c)           If the MortgageBorrower Entity that owns the Release Property will continue to own anIndividual Property subject to the Lien of a Security Instrument, Lender shallhave received (i) a copy of a deed conveying all of such Mortgage BorrowerEntity’s right, title and interest in and to the Release Property to a Personother than Mortgage Borrower or Mortgage Principal and (ii) a letter fromMortgage Borrower countersigned by a title insurance company acknowledgingreceipt of such deed and agreeing to record such deed in the real estaterecords for the county in which the Release Property is located.

####  

#### (d)           Lender shall havereceived a current Appraisal of the Substitute Property prepared not earlierthan one (1) year prior to the release and substitution showing an appraisedvalue for the Substitute Property equal to or greater than the appraised valueof the Release Property as of the Closing Date.

####  

#### (e)           IntentionallyOmitted.

 

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#### (f)            If the Loan is partof a Securitization, Lender shall have received confirmation in writing fromthe Rating Agencies to the effect that such release and substitution will notresult in a withdrawal, qualification or downgrade of the respective ratings ineffect immediately prior to such release and substitution for the Securitiesissued in connection with the Securitization that are then outstanding. If theLoan is not part of a Securitization, Lender shall have consented in writing tosuch release and substitution, which consent shall be given in Lender’sreasonable discretion applying the requirements of a prudent institutionalmortgage loan lender with respect to real estate collateral of a size, scopeand value substantially similar to that of the Substitute Property.

####  

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

####  

#### (h)           If the SubstituteProperty shall be owned by an Affiliate of Mortgage Borrower: (i) Borrowershall execute and deliver a pledge agreement in substantially the same form asthe Pledge Agreement in respect of the ownership interests of Mortgage Borrowerin the new property owner/mortgage borrower (such interests shall otherwisecomply with the requirements of the Loan Documents and be substantiallyidentical in structure, form and substance as the Collateral delivered atclosing of the Loan); (ii) Borrower shall authorize Lender to file such UCCFinancing Statements required by Lender with respect to the substituteCollateral; (iii) Borrower shall deliver, at its sole cost and expense, a UCCInsurance Policy insuring the new pledge agreement as a valid first lien on theownership interests pledged thereunder and substantially identical to the UCCInsurance Policy delivered at the closing of the Loan; and (iv) Borrower shallenter into such modifications to the other Loan Documents as Lender mayreasonably request in order to reflect the substitution of the applicableIndividual Property and the new property owner/mortgage borrower. The amount ofthe Loan allocated to the Substitute Property (such amount being hereinafterreferred to as the “Substitute Allocated Loan Amount”) shall equal theAllocated Loan Amount of the related Release Property; *provided,however*, that in the event the number of Release Properties withrespect to any substitution effected pursuant to this Section 2.9 does notequal the number of Substitute Properties, the Substitute Allocated Loan Amountfor each of such Substitute Properties shall be reasonably determined by Lender(provided, however, that the aggregate 

 

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#### SubstituteAllocated Loan Amount for such Substitute Properties shall not exceed theaggregate Allocated Loan Amount for such Released Properties).

####  

#### (i)            IntentionallyOmitted.

####  

#### (j)            Lender shall havereceived a current Survey for each Substitute Property, certified to the titlecompany and Lender and its successors and assigns, in the same form and havingthe same content as the certification of the Survey of the Release Property,prepared by a professional land surveyor licensed in the State in which theSubstitute Property is located and acceptable to the Rating Agencies in accordancewith the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land TitleSurveys. Such Survey shall reflect the same legal description contained in theMortgage Title Insurance Policy relating to such Substitute Property and shallinclude, among other things, a metes and bounds description of the realproperty constituting part of such Substitute Property (unless such realproperty has been satisfactorily designated by lot number on a recorded plat). Thesurveyor’s seal shall be affixed to each Survey and each Survey shall certifywhether or not the surveyed property is located in a “one-hundred-year floodhazard area.”

####  

#### (k)           Lender shall havereceived (i) valid certificates of insurance indicating that the requirementsfor the policies of insurance required for an Individual Property hereunderhave been satisfied with respect to the Substitute Property and (ii) evidenceof the payment of all Insurance Premiums payable for the existing policyperiod.

####  

#### (l)            Lender shall havereceived 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 andscope reasonably acceptable to a prudent institutional mortgage loan lenderand, if recommended under the Phase I environmental report, a Phase IIenvironmental report that would be in form and scope reasonably acceptable to aprudent institutional mortgage loan lender, which conclude that the SubstituteProperty does not contain any Hazardous Materials in contravention of any applicableLegal Requirements in any material respect and is not subject to anysignificant risk of contamination from any off site Hazardous Materials incontravention of any applicable Legal Requirements in any material respect. Ifany such report discloses the presence of any Hazardous Substance incontravention of any applicable Legal Requirement in any material respect, orthe material risk of contamination from any off site Hazardous Substance incontravention of any applicable Legal Requirement in any material respect, theproposed substitution shall not be allowed without Lender’s prior writtenconsent at any time prior to a Securitization of the Loan. If, subsequent to aSecuritization of the Loan, any such report discloses the presence of anyHazardous Substance in contravention of any applicable Legal Requirement in anymaterial respect, or the risk of contamination from any off site HazardousSubstance in contravention of any applicable Legal Requirement in any materialrespect, the proposed substitution shall not be allowed unless (i) such reportshall include an estimate of the cost of any related remediation required to beundertaken by an environmental consultant reasonably selected by Lender, (ii)the estimated cost of remediation does not exceed ten percent (10%) of theAllocated Loan Amount for such Substitute Property, and (iii) Borrower shallhave caused Mortgage 

 

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#### Borrower todeposit with Mortgage Lender (A) cash, (B) a Letter of Credit, or (C) anindemnity by a reasonably acceptable indemnitor, in either event in an amountequal to one hundred twenty five percent (125%) of such estimated cost, whichdeposit shall constitute additional security for the Mortgage Loan and shall bereleased to Mortgage Borrower upon the delivery to Mortgage Lender of (1) anupdate to such report indicating that there is no longer any HazardousSubstance on the Substitute Property that has not been remediated or containedin accordance with applicable Legal Requirements in all material respects orany material danger of contamination from any off site Hazardous Substance incontravention of any applicable Legal Requirement, and (2) a certificate fromMortgage Borrower stating that all such remediation work has been paid in fullor will be paid for out of the amounts reserved with Mortgage Lender. In theevent that Mortgage Lender elects not to require such deposit, Borrower shalldeliver such deposit to Lender.

####  

#### (m)          Borrower shalldeliver or cause to be delivered to Lender (A) updates or, if the SubstituteProperty is to be owned by an Affiliate of Borrower, originals, in either casecertified by Borrower or such Affiliate, as applicable, of all organizationaldocumentation related to Borrower or such Affiliate, as applicable, and/or theformation, structure, existence, good standing and/or qualification to dobusiness delivered to Lender on the Closing Date; (B) good standingcertificates, certificates of qualification to do business in the jurisdictionin which the Substitute Property is located (if required in such jurisdiction);and (C) resolutions of Borrower or such Affiliate, as applicable, authorizingthe substitution and any actions taken in connection with such substitution.

####  

#### (n)           Lender shall havereceived the following opinions of Borrower’s counsel: (A) an opinion oropinions of counsel stating that the Loan Documents delivered with respect tothe Substitute Property pursuant to clause (h) above are valid and enforceablein accordance with their terms, subject to the laws applicable to creditors’rights and equitable principles; (B) an opinion of counsel acceptable to theRating Agencies, if the Loan is part of a Securitization, or reasonablyacceptable to a prudent institutional mortgage loan lender, if the Loan is notpart of a Securitization, stating that the Loan Documents delivered withrespect to the Substitute Property pursuant to this Section are dulyauthorized, executed and delivered by Borrower and that the execution anddelivery of such Loan Documents and the performance by Borrower of itsobligations thereunder will not cause a breach of, or a default under, anyagreement, document or instrument to which Borrower is a party or by which itor its properties are bound; and (C) an update of the Insolvency Opinionindicating that the substitution does not affect the opinions set forththerein.

####  

#### (o)           Borrower shall havecaused Mortgage Borrower to (i) have paid, (ii) have escrowed with MortgageLender or (iii) be contesting in accordance with the terms hereof, all BasicCarrying Costs relating to each of the Properties and the Substitute Property,including without limitation, (A) accrued but unpaid Insurance Premiumsrelating to each of the Properties and the Substitute Property, and (B)currently due and payable Taxes (including any in arrears) relating to each ofthe Properties and the Substitute Property and (C) currently due and payableOther Charges relating to each of the Properties and Substitute Property.

 

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####  

#### (p)           Borrowershall have paid or reimbursed Lender for all reasonable out-of-pocket costs andexpenses actually incurred by Lender (including, without limitation, reasonableattorneys’ fees and disbursements of outside counsel) in connection with therelease and substitution, and Borrower shall have paid all recording charges,filing fees, taxes or other expenses (including, without limitation, mortgageand intangibles taxes and documentary stamp taxes) payable in connection withthe substitution. Borrower shall have paid all costs and expenses of the RatingAgencies incurred in connection with the substitution.

####  

#### (q)           Lendershall have received annual operating statements and occupancy statements forthe Substitute Property for the most current completed fiscal year and acurrent operating statement for the Release Property, each certified byBorrower to Lender as being true and correct in all material respects, and acertificate from Borrower certifying that there has been no material adversechange in the financial condition of the Substitute Property since the date ofsuch operating statements.

####  

#### (r)            Borrowershall have delivered to Lender estoppel certificates from all tenants underMajor Leases at the Substitute Property. All such estoppel certificates shallbe in the form or containing those statements required under such Major Leaseor substantially in the form approved by Lender in connection with theorigination of the Loan and shall indicate that (1) the subject Major Lease isa valid and binding obligation of the tenant thereunder, (2) to the tenant’sknowledge, there are no defaults under such Major Lease on the part of thelandlord or tenant thereunder, (3) the tenant thereunder has no knowledge ofany defense or offset to the payment of rent under such Lease, (4) no rentunder such Lease has been paid more than one (1) month in advance, (5) thetenant thereunder has no option under such Lease to purchase all or any portionof the Substitute Property, and (6) all tenant improvement work required under suchLease has been substantially completed and the tenant under such Lease is inactual occupancy of its leased premises. If an estoppel certificate indicatesthat all tenant improvement work required under the subject Lease has not yetbeen completed, Borrower shall deliver to Lender financial statementsindicating that Borrower has adequate funds to pay all costs related to suchtenant improvement work as required under such Lease.

####  

#### (s)           Lendershall have received copies of all Major Leases demising space at the SubstituteProperty certified by Borrower as being true and correct.

####  

#### (t)            IntentionallyOmitted.

####  

#### (u)           IntentionallyOmitted.

####  

#### (v)           Lendershall have received a Physical Conditions Report with respect to the SubstituteProperty stating that the Substitute Property and its use comply in allmaterial respects with all applicable Legal Requirements (including, withoutlimitation, zoning, subdivision and building laws) and that the SubstituteProperty is in good condition and repair and free of damage or waste in allmaterial respects. If compliance with applicable Legal Requirements is notaddressed by the Physical Conditions Report, such compliance shall be confirmedby delivery to Lender of a letter from the

 

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#### municipalityin which such Property is located, or a certificate of a surveyor that islicensed in the state in which the Substitute Property is located (with respectto zoning and subdivision laws, if offered in the jurisdiction in which the SubstituteProperty is located), or an ALTA 3.1 zoning endorsement to the applicable TitleInsurance Policy (with respect to zoning laws) or a subdivision endorsement tothe applicable Title Insurance Policy (with respect to subdivision laws). Ifthe Physical Conditions Report recommends that any immediate repairs be madewith respect to the Substitute Property, a substitution shall not be allowedwithout Lender’s prior written consent (not to be unreasonably withheld ordelayed) with respect to such proposed Substitute Property at any time prior toa Securitization of the Loan. If, subsequent to a Securitization of the Loan,any such Physical Conditions Report recommends that any immediate repairs bemade with respect to the Substitute Property, the proposed substitution shallnot be allowed unless (i) such report shall include an estimate of the cost ofsuch recommended repairs, (ii) the estimated cost of such recommended repairsdoes not exceed ten percent (10%) of the Allocated Loan Amount for such SubstituteProperty, and (iii) Borrower shall cause Mortgage Borrower to deposit withMortgage Lender (A) cash, (B) a Letter of Credit, or (C) an indemnity by areasonably acceptable indemnitor, in each such event in an amount equal to onehundred twenty five percent (125%) of such estimated cost, which deposit shallconstitute additional security for the Loan and shall be released to MortgageBorrower upon the delivery to Lender of (1) an update to such PhysicalConditions Report or a letter from the engineer that prepared such PhysicalConditions Report, indicating that the recommended repairs were completed in agood and workmanlike manner, and (2) a certificate from Mortgage Borrowerindicating that the costs of all such repairs have been paid. In the event thatMortgage Lender elects not to require such deposit, Borrower shall deliver suchdeposit to Lender.

####  

#### (w)          Lendershall have received evidence which would be satisfactory to a prudentinstitutional mortgage loan lender to the effect that all material building andoperating licenses and permits necessary for the use and occupancy of theSubstitute Property as a luxury residential apartment building****including, but not limited to, currentcertificates of occupancy, have been obtained and are in full force and effectin all material respects.

####  

#### (x)            Inthe event the Release Property is subject to a Management Agreement along withone or more additional Properties, Lender shall have received a certified copyof an amendment to the Management Agreement reflecting the deletion of theRelease Property and the addition of the Substitute Property as a propertymanaged pursuant thereto, and Manager shall have executed and delivered toLender an amendment to the Agreement Regarding Management Agreement reflectingsuch amendment to the Management Agreement. In the event that the ReleaseProperty is subject to a Management Agreement relating only to such ReleaseProperty, Lender shall have received a certified copy of a new ManagementAgreement for the Substitute Property, which new Management Agreement shall bereasonably acceptable to a prudent institutional mortgage loan lender, and theManager thereunder shall have executed and delivered to Lender an AgreementRegarding Management Agreement with respect to such new Management Agreement onsubstantially the same terms as used in connection

 

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#### with theRelease Property or such other terms as would be acceptable to a prudentinstitutional mortgage loan lender.

####  

#### (y)           Lendershall have received such other approvals, opinions, documents and informationin connection with the substitution as requested by the Rating Agencies, if theLoan is part of a Securitization, or by Lender (applying the requirements of aprudent institutional mortgage loan lender), if the Loan is not part of aSecuritization.

####  

#### (z)            Lendershall have received copies of all contracts and agreements relating to theleasing and operation of the Substitute Property (other than the ManagementAgreement), each of which shall be in such form and substance as would besatisfactory to a prudent institutional mortgage loan lender.

####  

#### (aa)         Lendershall have received certified copies of all material consents, licenses andapprovals of relevant Governmental Authorities, if any, required to be obtainedby Mortgage Borrower in connection with the substitution of a SubstituteProperty, and evidence that such consents, licenses and approvals are in fullforce and effect.

####  

#### (bb)         IntentionallyOmitted.

####  

#### (cc)         IntentionallyOmitted.

####  

#### (dd)         IntentionallyOmitted.

####  

#### (ee)         IfMortgage Borrower owns a leasehold estate in the Substitute Property, Lendershall have received, (i) a certified copy of the ground lease for theSubstitute Property, together with all amendments and modifications thereto anda recorded memorandum thereof, which ground lease would be reasonablysatisfactory in all respects to a prudent institutional mortgage loan lenderand which contains customary leasehold mortgagee provisions and protections,and which shall provide, among other things, (A) for a remaining term of noless than 20 years from the Maturity Date, (B) that the ground lease shall notbe terminated until Mortgage Lender has received notice of a default thereunderand has had a reasonable opportunity to cure or complete foreclosure, and failsto do so in a diligent manner, (C) for a new lease on the same terms toMortgage 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 proceedsand condemnation awards will be applied pursuant to the terms of thisAgreement, and (ii) a ground lease estoppel, executed by the fee owner andground lessor of the Substitute Property, in form and substance reasonablyacceptable to a prudent institutional mortgage loan lender.

####  

#### (ff)           IntentionallyOmitted.

####  

#### (gg)         Uponthe satisfaction of the foregoing conditions precedent, Borrower will beentitled to cause Mortgage Borrower to obtain the release of the Lien of theMortgage Loan Documents from the Release Property and the Substitute Propertyshall be deemed to be an Individual Property for purposes of this Agreement,and (except as otherwise provided in the proviso to the last sentence ofSection 2.9(h) hereof) the Substitute

 

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#### Allocated LoanAmount with respect to such Substitute Property shall be deemed to be theAllocated Loan Amount with respect to such Substitute Property for all purposeshereunder.

####  

**III.****           MORTGAGE BORROWERDISTRIBUTIONS**

 

Section 3.1             Mortgage Borrower Distributions.

 

All transfersof 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 otherLoan Documents, are intended by Borrower and Mortgage Borrower to constituteand shall constitute distributions from Mortgage Borrower to Borrower, and, ineach case, must comply with the requirements as to distributions of theDelaware Revised Uniform Limited Partnership Act or the Delaware LimitedLiability Company Act, as applicable. No provision of the Loan Documents shallcreate a debtor-creditor relationship between Borrower and Mortgage Lender.

 

**IV.****           REPRESENTATIONS ANDWARRANTIES**

 

Section 4.1             Borrower Representations.

 

Borrowerrepresents and warrants as of the Closing Date that:

 

4.1.1        Organization.

 

#### (a)           EachBorrower Entity is duly organized and is validly existing and in good standingin the jurisdiction in which it is organized, with requisite power andauthority to own the assets owned by such Borrower Entity and to transact thebusinesses in which it is now engaged. Each Borrower Entity is duly qualifiedto do business and is in good standing in the State of Delaware. Borrowerpossesses all rights, licenses, permits and authorizations, governmental or otherwise,necessary to entitle it to own its assets and to transact the businesses inwhich it is now engaged. Attached hereto as **Schedule4.1.1** is an organizational chart of Borrower. Each Borrower Entityhas delivered to Lender true and correct copies of the applicable MortgageBorrower Formation Agreement and all other Organizational Documents for theapplicable Mortgage Borrower, Mortgage Principal, Borrower and Principal, allof which are in full force and effect as of the date hereof.

####  

#### (b)           EachBorrower Entity has the power and authority and the requisite OwnershipInterest to control the actions of Mortgage Borrower, and upon the realizationon the Collateral under the Pledge Agreement, Lender or any other partysucceeding to the Borrower’s interest in the Collateral described in the PledgeAgreement would have such control. Without limiting the foregoing, Borrower hassufficient control over Mortgage Borrower to cause Mortgage Borrower to (i)take any action on Mortgage Borrower’s part required by the Loan Documents andthe Mortgage Loan Documents and (ii) refrain from taking any action prohibitedby the Loan Documents and the Mortgage Loan Documents.

 

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4.1.2        Proceedings.

 

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

 

4.1.3        No Conflicts.

 

The execution,delivery and performance of this Agreement and the other Loan Documents byBorrower will not conflict with or result in a breach of any of the terms orprovisions of, or constitute a material default under, or result in thecreation or imposition of any Lien, charge or encumbrance (other than pursuantto the Loan Documents) upon any of the property or assets of Borrower pursuantto the terms of any indenture, mortgage, deed of trust, loan agreement,partnership agreement, management agreement, or other agreement or instrumentto which Borrower is a party or by which any of Borrower’s property or assetsis subject, nor will such action result in any violation of the provisions ofany statute or any order, rule or regulation of any court or governmentalagency 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. Anyconsent, approval, authorization, order, registration or qualification of orwith any Governmental Authority required for the execution, delivery andperformance by Borrower of this Agreement or any other Loan Documents has beenobtained and is in full force and effect.

 

4.1.4        Litigation.

 

Except asotherwise disclosed on **Schedule 4.1.4**,there are no actions, suits or proceedings at law or in equity by or before anyGovernmental Authority or other agency now pending or, to Borrower’s ActualKnowledge, threatened against or affecting Borrower or, to Borrower’s ActualKnowledge, Mortgage Borrower, Borrower, the Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity or anyIndividual Property, which actions, suits or proceedings, if determinedadversely to Borrower or, to Borrower’s Actual Knowledge, Mortgage Borrower,the Collateral, any Mortgage Principal’s general partner interest in therelated Mortgage Borrower Entity or any Individual Property would, individuallyor in the aggregate cause a Material Adverse Effect. Lender acknowledges theexistence of the litigation listed in **Schedule 4.1.4**hereof (the “Disclosed Litigation”) and Borrower further represents andwarrants to Lender that, notwithstanding the Disclosed Litigation, therepresentation by Borrower contained in the preceding sentence shall continueto be true and correct.

 

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4.1.5        Agreements.

 

Borrower isnot a party to any agreement or instrument or subject to any restriction whichmight have a Material Adverse Effect. Neither of Borrower nor Mortgage Borroweris in default in any material respect in the performance, observance orfulfillment of any of the obligations, covenants or conditions contained in anyagreement or instrument to which it is a party or by which Borrower or, toBorrower’s Actual Knowledge, Mortgage Borrower, the Collateral, any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity,or any Individual Property is bound. Neither Borrower nor Mortgage Borrower hasmaterial financial obligations under any indenture, mortgage, deed of trust,loan agreement or other agreement or instrument to which Borrower or MortgageBorrower is a party or by which Borrower or, to Borrower’s Actual Knowledge,Mortgage Borrower, the Collateral, any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity or any Individual Property isotherwise bound, other than (a) obligations incurred in the ordinary course ofthe business relating to each Borrower Entity’s ownership and operation of theCollateral, (b) obligations incurred in the ordinary course of businessrelating to each Mortgage Borrower Entity’s ownership and operation of suchIndividual Property and (c) obligations under or permitted by the LoanDocuments and the Mortgage Loan Documents.

 

4.1.6        Solvency.

 

Borrower (a)has not entered into the transaction or executed the Note, this Agreement orany other Loan Documents with the actual intent to hinder, delay or defraud anycreditor and (b) has received reasonably equivalent value in exchange for itsobligations under the Loan Documents. Giving effect to the Loan, the fairsaleable value of Borrower’s assets exceeds and will, immediately following themaking of the Loan, exceed Borrower’s total liabilities, including, withoutlimitation, subordinated, unliquidated, disputed and contingent liabilities. Thefair saleable value of Borrower’s assets is and will, immediately following themaking of the Loan, be greater than Borrower’s probable liabilities, includingthe maximum amount of its contingent liabilities on its debts as such debtsbecome absolute and matured. Borrower’s assets do not and, immediately followingthe making of the Loan will not, constitute an insufficient amount of capitalto carry out its business as conducted or as proposed to be conducted. Borrowerdoes not intend to incur debt and liabilities (including contingent liabilitiesand other commitments) beyond its ability to pay such debt and liabilities asthey mature (taking into account the timing and amounts of cash to be receivedby Borrower and the amounts to be payable on or in respect of obligations ofBorrower). Except as expressly disclosed to Lender in writing, no petitionunder the Bankruptcy Code or similar state bankruptcy or insolvency law hasbeen 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, MortgagePrincipal, Guarantor, TSP nor any of their respective partners or members inthe last seven (7) years has ever made an assignment for the benefit ofcreditors or taken advantage of any insolvency act for the benefit of debtors. Noneof Borrower, Principal, Mortgage Borrower, Mortgage Principal, Guarantor, TSPnor any of their respective

 

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partners or members is contemplating either the filing of a petition byit under the Bankruptcy Code or similar state bankruptcy or insolvency law orthe liquidation of all or a major portion of Borrower’s or Mortgage Borrower’sassets or property, and Borrower has no Actual Knowledge of any Personcontemplating the filing of any such petition against Borrower, Principal,Mortgage Borrower, Mortgage Principal, Guarantor, TSP or any of theirrespective partners or members.

 

4.1.7        Full and Accurate Disclosure.

 

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

 

4.1.8        No Plan Assets

 

No Loan Partyis a Plan, and none of the assets of any Loan Party constitute or willconstitute “Plan Assets” of one or more Plans. In addition, (a) no Loan Partyis 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 statutesregulating investment of, and fiduciary obligations with respect to,governmental plans similar to the provisions of Section 406 of ERISA or Section4975 of the Code currently in effect, which prohibit or otherwise restrict thetransactions contemplated by this Agreement.

 

4.1.9        Compliance.

 

Except asotherwise disclosed in **Schedule 4.1.9**annexed hereto, Borrower, Mortgage Borrower and the Properties and the usethereof comply in all material respects with all applicable Legal Requirements,including, without limitation, all Environmental Laws, building and zoningordinances and codes. Except as otherwise disclosed in **Schedule4.1.9** annexed hereto, neither Borrower nor Mortgage Borrower hasreceived written notice from any Governmental Authority asserting thatBorrower, Mortgage Borrower or any Individual Property is in default orviolation in any material respect of any order, writ, injunction, decree or demandof such Governmental Authority. Lender acknowledges the existence of thosecertain municipal violations disclosed in Schedule 4.1.9 hereof (the “MunicipalViolations”), and Borrower further represents and warrants to Lender thatthe Municipal Violations do not have a Material Adverse Effect.

 

4.1.10      Financial Information. 

 

To Borrower’sActual Knowledge, all financial data, including, without limitation, thestatements of cash flow and income and operating expense, that have beendelivered to Lender in respect of the Properties (i) are true, complete andcorrect in all material respects, (ii) accurately represent in all materialrespects the financial condition of the Properties as of the date of suchreports, and (iii) to the extent applicable, have been prepared in accordancewith GAAP throughout the periods covered, except as disclosed therein. Exceptfor Permitted Encumbrances, to Borrower’s Actual Knowledge, Borrower does nothave any contingent liabilities, liabilities for taxes,

 

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unusual forward or long term commitments or unrealized or anticipatedlosses from any unfavorable commitments that are known to Borrower andreasonably likely to have a materially adverse effect on the Collateral, any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity orany Individual Property or the operation thereof as a luxury residentialapartment building, except as referred to or reflected in such financialstatements or in **Schedule 4.1.10** annexed hereto. ToBorrower’s Actual Knowledge, since the date of such financial statements, therehas been no materially adverse change in the financial condition or operationsof the Properties from that set forth in such financial statements.

 

4.1.11      Condemnation.

 

NoCondemnation or other similar proceeding has been commenced or, to Borrower’sActual Knowledge, is threatened or contemplated with respect to all or anyportion of any Individual Property or for the relocation of roadways providingaccess to any Individual Property.

 

4.1.12      Federal Reserve Regulations.

 

No part of theproceeds of the Loan will be used for the purpose of purchasing or acquiringany “margin stock” within the meaning of Regulation U of the Board of Governorsof the Federal Reserve System or for any other purpose which would beinconsistent with such Regulation U or any other Regulations of such Board ofGovernors, or for any purposes prohibited by Legal Requirements or by the termsand conditions of this Agreement or the other Loan Documents.

 

4.1.13      Utilities and Public Access.

 

EachIndividual Property has rights of access to public ways and is served by publicwater, sewer, sanitary sewer and storm drain facilities adequate to servicesuch Individual Property for its intended use. Except as otherwise shown on thesurvey with respect to any Individual Property reviewed by Lender prior to thedate hereof (the “Survey”) or disclosed in **Schedule4.1.13** annexed hereto with respect to such Individual Property, allpublic utilities necessary or convenient to the full use and enjoyment of suchIndividual Property are located either in the public right of way abutting suchIndividual Property (which are connected so as to serve such IndividualProperty without passing over other property) or in recorded easements servingsuch Individual Property and such easements are set forth in and insured by theOwner’s Title Policy. All public roads and streets necessary for the use ofeach Individual Property for its current purpose have been completed, arephysically open and are dedicated to public use and have been accepted by allGovernmental Authorities.

 

4.1.14      Not a Foreign Person.

 

Borrower isnot a “foreign person” within the meaning of §1445(f)(3) of the Code.

 

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4.1.15      Separate Lots.

 

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

 

4.1.16      Assessments.

 

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

 

4.1.17      Enforceability.

 

The LoanDocuments are not subject to any right of rescission, set-off, counterclaim ordefense by Borrower, including the defense of usury, and Borrower has notasserted any right of rescission, set-off, counterclaim or defense with respectthereto.

 

4.1.18      No Prior Assignment.

 

Other thanunder the Mortgage Loan Documents, there are no prior assignments of the Leasesor any portion of the Rents due and payable or to become due and payable whichare presently outstanding. There are no prior assignments of the Collateral orany Mortgage Principal’s general partner interest in the related MortgageBorrower Entity which are presently outstanding except in accordance with theLoan Documents.

 

4.1.19      Insurance.

 

Mortgage Borrowerhas obtained and Borrower has delivered to Lender certified copies of allinsurance policies, or certificates of insurance, reflecting the insurancecoverages, amounts and other requirements set forth in this Agreement. NeitherBorrower nor, to Borrower’s Actual Knowledge, any other Person, has done, byact or omission, anything which would impair the coverage of any such policy.

 

4.1.20      Use of Property.

 

EachIndividual Property is used exclusively for (a) luxury residential apartmentpurposes (including ancillary retail space), (b) other uses expressly permittedunder the certificate of occupancy issued for the Improvements or the zoningordinances and codes applicable to the Properties (or any variances for theProperties) or (c) other appurtenant and related uses.

 

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4.1.21      Certificate of Occupancy; Licenses.

 

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

 

4.1.22      Flood Zone.

 

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

 

4.1.23      Physical Condition.

 

Except asotherwise disclosed in **Schedule 4.1.23**annexed hereto, neither Borrower nor Mortgage Borrower has received writtennotice from any insurance company or bonding company of any material defects orinadequacies in any Individual Property, or any part thereof, which wouldadversely affect the insurability of the same or cause the imposition ofextraordinary premiums or charges thereon or of any termination or threatenedtermination of any policy of insurance or bond. Except as otherwise disclosedin **Schedule 4.1.23** annexed hereto, toBorrower’s Actual Knowledge, each Individual Property is free from damagecaused by fire or other casualty. To Borrower’s Actual Knowledge, all liquidand solid waste disposal, septic and sewer systems located on each IndividualProperty are in a good and safe condition and repair and in compliance in allmaterial respects with all Legal Requirements applicable to such IndividualProperty.

 

4.1.24      Boundaries.

 

Except asotherwise shown on the Survey with respect to any Individual Property, all ofthe Improvements on such Individual Property which were included in determiningthe appraised value of such Individual Property lie wholly within theboundaries and building restriction lines of such Individual Property, and noimprovements on adjoining properties encroach upon such Individual Property,and no easements or other encumbrances upon such Individual Property encroachupon any of the Improvements on such Individual Property.

 

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4.1.25      Leases.

 

To Borrower’sActual Knowledge. the Properties are not subject to any Leases other than theLeases described in **Schedule 4.1.25**attached hereto and made a part hereof. Except as disclosed in the rent rolland arrearages report for each Individual Property delivered to and approved byLender, in the tenant estoppel letters delivered to Lender on or prior to theClosing Date, or in **Schedule****4.1.25** annexed hereto, as of the date hereof, (i) Mortgage Borroweris the sole owner of the entire lessor’s interest in the Leases; (ii) toBorrower’s Actual Knowledge, the Leases are valid and enforceable and in fullforce and effect; (iii) to Borrower’s Actual Knowledge, all of the Leases arearms-length agreements with bona fide, independent third parties; (iv) toBorrower’s Actual Knowledge, no party under any Lease is in default in theperformance of any of such party’s material obligations under such Lease beyondthe expiration of any applicable grace or cure period; (v) to Borrower’s ActualKnowledge, 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 toLender true and correct copies of all Major Leases including all amendments andmodifications thereto; (vii) none of the Rents reserved in the Leases have beenassigned or otherwise pledged or hypothecated by Mortgage Borrower in favor ofany party other than Mortgage Lender; (viii) none of the Rents have beencollected by Mortgage Borrower or Manager for more than one (1) month inadvance (except that a security deposit or prepayment of first month’s and lastmonth’s rent shall not be deemed rent collected in advance); (ix) to Borrower’sActual Knowledge, the premises demised under the Leases have been completed(other than with respect to tenant improvements that remain outstanding and forwhich Mortgage Lender has reserved funds under the Mortgage Loan Documents) andthe tenants under the Leases have accepted the same and have taken possessionof the same on a rent-paying basis; (x) no tenant under any of the Leases hasasserted in writing to Borrower, Mortgage Borrower or Manager any offset ordefense to the payment of any portion of the Rents; (xi) neither Borrower nor MortgageBorrower has received written notice from any tenant challenging the validityor enforceability of any Lease; (xii) to Borrower’s Actual Knowledge, there areno agreements with the tenants under the Leases other than as expressly setforth in each Lease; (xiii) to Borrower’s Actual Knowledge, the Leases arevalid and enforceable against Mortgage Borrower and the tenants thereunder,subject to applicable bankruptcy, insolvency, reorganization and other lawsaffecting creditor’s rights generally, to moratorium laws from time to time ineffect and to general principles of equity (regardless of whether suchenforceability 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) toBorrower’s Actual Knowledge, no person or entity has any possessory interestin, or right to occupy, any Individual Property except under and pursuant to aLease; (xvi) Borrower does not have Actual Knowledge of any currently effectiveunrecorded non-disturbance agreement in favor of any Tenant under a Major Leasethat would be considered unacceptable to prudent institutional lenders; (xvii)all security deposits relating to the Leases reflected on the certified rentroll delivered to Lender by Borrower are being held by Mortgage Borrower; and(xviii) to Borrower’s Actual Knowledge, no brokerage commissions or findersfees are due and payable regarding any

 

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

 

4.1.26      Title.

 

#### (a)           EachLoan Party purporting to grant a Lien on any Collateral is the record andbeneficial owner of, and has good title to, such Collateral, free and clear ofall Liens whatsoever, other than Permitted Encumbrances. The Pledge Agreement,together with the UCC Financing Statements relating to the Collateral whenproperly filed in the appropriate records, will create a valid, perfected firstpriority security interests in and to such Collateral, all in accordance withthe terms thereof for which a Lien can be perfected by filing a UCC FinancingStatement. For so long as the Lien of the Pledge Agreement is outstanding withrespect to any Collateral, Borrower shall forever warrant, defend and preservesuch title and the validity and priority of the Lien of the Pledge Agreementwith respect to such Collateral and shall forever warrant and defend suchtitle, validity and priority to Lender against the claims of all personswhomsoever.

####  

#### (b)           EachMortgage Borrower Entity has good title to the applicable Individual Propertyand possesses a fee simple absolute estate in such Individual Property and itowns such Individual Property free and clear of all liens, encumbrances andcharges whatsoever except for the Permitted Encumbrances. To Borrower’s ActualKnowledge, the Permitted Encumbrances disclosed in the Mortgage Title InsurancePolicy do not and will not materially adversely affect or interfere with thevalue, or materially adversely affect or interfere with the current use oroperation, of the Properties or the ability of Borrower to repay the Note orany other amount owing under the Note, the Pledge Agreement, the LoanAgreement, or the other Loan Documents or to perform its obligations thereunderin accordance with the terms of the Loan Agreement, the Note, the PledgeAgreement or the other Loan Documents. Other than Mortgage Lender, no Personother than Mortgage Borrower owns any interest in any payments due under theLeases. Each Borrower Entity shall cause the applicable Mortgage BorrowerEntity to forever warrant, defend and preserve the title to the applicableIndividual Property and to forever warrant and defend the same to Lenderagainst the claims of all persons whomsoever.

####  

#### (c)           EachMortgage Principal has good title to its ownership interests in the applicableMortgage Borrower Entity free and clear of all liens, encumbrances and chargeswhatsoever except for the Permitted Encumbrances. Borrower shall cause eachMortgage Principal to forever warrant, defend and preserve the title to suchownership interests in the applicable Mortgage Borrower Entity and to foreverwarrant and defend the same to Lender against the claims of all personswhomsoever.

####  

4.1.27      Intentionally Omitted.

 

4.1.28      Filing and Recording Taxes.

 

All transfertaxes, deed stamps, intangible taxes or other amounts in the nature of transfertaxes required to be paid by Borrower or, to Borrower’s Actual Knowledge, any

 

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other Person under applicable Legal Requirements currently in effect inconnection with the transfer of the Properties to Mortgage Borrower, theCollateral, the making of the Mortgage Loan, the Loan or the other transactionscontemplated by this Agreement have been paid. All mortgage, recording, stamp,intangible or other similar tax required to be paid by any Person underapplicable Legal Requirements currently in effect in connection with theexecution, delivery, recordation, filing, registration, perfection orenforcement of any of the Loan Documents, including, without limitation, thePledge Agreement, have been paid.

 

4.1.29      Intentionally Omitted.****

 

4.1.30      Management Agreement.

 

The ManagementAgreement is in full force and effect and there is no material defaultthereunder by either party thereto and no event has occurred that, with thepassage of time and/or the giving of notice would constitute a material defaultthereunder.

 

4.1.31      Illegal Activity.

 

No portion ofany Individual Property, the Collateral or any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity is being or will bepurchased with proceeds of any illegal activity and, to Borrower’s ActualKnowledge, there are no illegal activities or activities relating to anycontrolled substances at any Individual Property.

 

4.1.32      No Change in Facts or Circumstances;Disclosure.

 

To Borrower’sActual Knowledge, all information submitted by Borrower to Lender and in allfinancial statements, rent rolls, reports, certificates and other documentssubmitted in connection with the Loan or in satisfaction of the terms thereofand all statements of fact made by Borrower or Principal in this Agreement orin any other Loan Document, are accurate, complete and correct in all materialrespects. To Borrower’s Actual Knowledge, except as otherwise disclosed in **Schedule 4.1.32** annexed hereto, there has been no materialadverse change in any condition, fact, circumstance or event that would makeany such information inaccurate, incomplete or otherwise misleading in anymaterial respect or that otherwise has a Material Adverse Effect. To Borrower’sActual Knowledge, Borrower has disclosed to Lender all material facts and hasnot failed to disclose any material fact that could cause any ProvidedInformation or any representation or warranty made herein to be materiallymisleading.

 

4.1.33      Investment Company Act.

 

No BorrowerEntity is (a) an “investment company” or a company “controlled” by an “investmentcompany,” 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 purportsto restrict or regulate its ability to borrow money.

 

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4.1.34      Principal Place of Business; State ofOrganization.

 

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

 

4.1.35      Single Purpose Entity.

 

#### (a)           Borrowerrepresents and warrants that it has not, and that no Principal has, since itsdate of formation, and covenants and agrees that its organizational documentsshall provide that it shall not, and that the organizational documents of eachPrincipal shall provide that such Principal shall not:

####  

##### (i)            with respect toBorrower, 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 ofthe Collateral, and entering into the Loan, and activities incidental thereto,and with respect to any Principal, engage in any business or activity otherthan the ownership of its interest in the related Borrower Entity, andactivities incidental thereto;

#####  

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

#####  

##### (iii)          merge into orconsolidate with any Person or dissolve, terminate or liquidate in whole or inpart, transfer or otherwise dispose of all or substantially all of its assetsor change its legal structure, other than pursuant to the terms of the LoanDocuments;

#####  

##### (iv)          with respect to anyBorrower Entity, (i) fail to observe its organizational formalities or preserveits existence as an entity duly organized, validly existing and in goodstanding (if applicable) under the laws of the jurisdiction of its organizationor formation, or (ii) without the prior written consent of Lender, amend,modify, terminate or fail to comply in any material respects with theprovisions of such Borrower Entity’s Limited Partnership Agreement, Certificateof Limited Partnership, Limited Liability Company Agreement, Certificate ofFormation or similar organizational documents, as the case may be, or of therelated Principal’s Limited Liability Company Agreement, Certificate ofFormation or similar organizational documents, as the case may be, whichever isapplicable;

 

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##### (v)           other than anyPrincipal’s ownership interest in the related Borrower Entity, own anysubsidiary or make any investment in any Person without the prior writtenconsent of Lender;

#####  

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

#####  

##### (vii)         with respect to Borrower,incur any debt, secured or unsecured, direct or contingent (includingguaranteeing any obligation), other than the Debt, except for liabilitiesincurred in the ordinary course of its business relating to the ownership ofthe Collateral and the routine administration of Mortgage Borrower, in amountsnot to exceed $100,000 and which liabilities are not more than ninety (90) dayspast due and are not evidenced by a note, and with respect to any Principal,incur any debt secured or unsecured, direct or contingent (includingguaranteeing any obligations) except for liabilities incurred in the ordinarycourse of its business relating to the ownership of the Collateral and theroutine administration of Borrower, in amounts not to exceed $100,000 and whichliabilities are not more than ninety (90) days past due and are not evidencedby a note (the “Permitted Debt”);

#####  

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

#####  

##### (ix)           (A) fail to maintainits records (including financial statements), books of account and bankaccounts separate and apart from those of the members, general partners,principals and Affiliates of any Borrower Entity or of any Principal, as thecase may be, the Affiliates of a member, general partner or principal of anyBorrower 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 onthe financial statement of any other Person (except where consolidatedfinancial statements are permitted or required by Applicable Law or GAAP,provided that such consolidated statements shall reflect that such entities areseparate legal entities and indicate that the Borrower’s assets and liabilitiesare not available to satisfy the debts and other obligations of such Affiliateor 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 financialstatements (except where consolidated financial statements are permitted orrequired by Applicable Law or GAAP, provided that such consolidated statementsshall reflect that such entities are separate legal entities and indicate thatthe Borrower’s assets and liabilities are not available to satisfy the debtsand other obligations of such Affiliate or any other Person, other than asexpressly provided in the Loan Documents);

 

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

#####  

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

#####  

##### (xii)          fail to correct anyknown 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 becomeobligated for the debts of any other Person or hold itself out to beresponsible for the debts of another Person;

#####  

##### (xiv)        make any loans or advancesto any third party, including any member, general partner, principal orAffiliate of any Borrower Entity or of any Principal, as the case may be, orany member, general partner, principal or Affiliate thereof, and shall notacquire obligations or securities of any member, general partner, principal orAffiliate of any Borrower Entity or any Principal, as the case may be, or anymember, general partner, or Affiliate thereof;

#####  

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

#####  

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

 

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

#####  

##### (xviii)      share any common logo withor hold itself out as or be considered as a department or division of (A) anygeneral partner, principal, member or Affiliate of any Borrower Entity or ofany 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 maybe, or (C) any other Person;

#####  

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

#####  

##### (xx)          pledge its assets forthe benefit of any other Person, and with respect to Borrower, other than withrespect 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) Certificateof Incorporation, if it is a corporation, that for so long as the Loan isoutstanding 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 orinvoluntary, to take advantage of any applicable insolvency, bankruptcy,liquidation or reorganization statute, or make an assignment for the benefit ofcreditors without the affirmative vote of the Independent Director and of allother general partners/managing members/directors;

#####  

##### (xxiii)       fail to hold its assets inits own name;

#####  

##### (xxiv)       if any Borrower Entity orPrincipal is a corporation, fail to consider the interests of such corporation’screditors in connection with all corporate actions to the extent permitted byApplicable Law;

#####  

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

#####  

##### (xxvi)       violate or cause to beviolated the assumptions made with respect to the Borrower Entities and theirrespective Principals in the Insolvency Opinion.

#####  

#### (b)           Borrowercovenants and agrees that, if any Borrower Entity is a single member limitedliability company that complies with the requirements of Section 4.1.35(d)below, its organizational documents shall provide that such Borrower Entityshall not, and if any Borrower Entity is not a single member limited liabilitycompany that complies with the requirements of Section 4.1.35(d) below, theorganizational

 

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#### documents ofsuch 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 “IndependentDirector”) 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 suchBorrower Entity’s Principal or any Affiliate of either of them (other than hisor her service as an independent director of such Borrower Entity or any of itsAffiliates); (ii) a customer, supplier or other Person who derives itspurchases or revenues (other than any fee paid to such director as compensationfor such director to serve as an Independent Director) from its activities withsuch Borrower Entity, such Principal or any Affiliate of either of them (a “BusinessParty”); (iii) a Person controlling or under common control with any suchstockholder, partner, member, director, officer, attorney, counsel or BusinessParty; or (iv) a member of the immediate family of any such stockholder,director, officer, employee, partner, member, attorney, counsel or BusinessParty; *provided, however*, that a Person shallnot be deemed to be a director of an Affiliate solely by reason of such Personbeing a director of an affiliated single-purpose entity (other than Mezzanine BBorrower or Mortgage Borrower). Notwithstanding the foregoing, no IndependentDirector shall also serve as (w) an Independent Director (as such term isdefined in the Mezzanine B Loan Agreement) for Mezzanine B Borrower orPrincipal (as such term is defined in the Mezzanine B Loan Agreement) ofMezzanine B Borrower or (x) an Independent Director****(as such term is defined in the Security Instrument) forMortgage Borrower or Mortgage Principal.

####  

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

####  

#### (d)           Borrowercovenants and agrees that, in the event that any Borrower Entity or itsPrincipal is a Delaware limited liability company that does not have a managingmember which complies with the foregoing requirements of this Section 4.1.35,the limited liability company agreement of such Borrower Entity or suchPrincipal, as applicable (an “LLC Agreement”), shall provide that (A)upon the occurrence of any event that causes the last remaining member of suchBorrower Entity or such Principal, as applicable, (“Member”) to cease tobe the member of such Borrower Entity or such Principal, as applicable, (otherthan (1) upon an assignment by Member of all of its limited liability companyinterest in such Borrower Entity or such Principal, as applicable, and theadmission of the transferee in accordance with the Loan Documents and theapplicable LLC Agreement, or (2) the resignation of Member and the admission ofan additional member of such Borrower Entity or such Principal, as applicable,in accordance with the terms of the Loan Documents and the applicable LLCAgreement),

 

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#### any personacting as Independent Director of such Borrower Entity or such Principal, asapplicable, shall, without any action of any other Person and simultaneouslywith the Member ceasing to be the member of such Borrower Entity or suchPrincipal, as applicable, automatically be admitted to such Borrower Entity orsuch Principal, as applicable, (“Special Member”) and shall continuesuch 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 successorSpecial Member has been admitted to such Borrower Entity or such Principal, asapplicable, as Special Member in accordance with the applicable LLC Agreementand (2) such successor Special Member has also accepted its appointment as anIndependent Director. Each LLC Agreement shall further provide that (v) SpecialMember shall automatically cease to be a member of such Borrower Entity orPrincipal, as applicable, upon the admission to such Borrower Entity or suchPrincipal, as applicable, of a substitute Member, (w) Special Member shall be amember of such Borrower Entity or such Principal, as applicable, that has nointerest in the profits, losses and capital of such Borrower Entity or suchPrincipal, as applicable, and has no right to receive any distributions of suchBorrower Entity or Principal, as applicable, assets, (x) pursuant to Section18-301 of the Delaware Limited Liability Company Act (the “Act”), SpecialMember shall not be required to make any capital contributions to such Borroweror such Principal, as applicable, and shall not receive a limited liabilitycompany interest in such Borrower Entity or such Principal, as applicable, (y)Special Member, in its capacity as Special Member, may not bind such Borrower Entityor such Principal, as applicable, and (z) except as required by any mandatoryprovision of the Act, Special Member, in its capacity as Special Member, shallhave no right to vote on, approve or otherwise consent to any action by, ormatter relating to, such Borrower Entity or such Principal, as applicable,including, without limitation, the merger, consolidation or conversion of suchBorrower Entity or such Principal, as applicable; *provided,however*, such prohibition shall not limit the obligations of SpecialMember, in its capacity as Independent Director, to vote on such matters as maybe expressly required by the applicable LLC Agreement. In order to implementthe admission to any Borrower Entity or any Principal, as applicable, ofSpecial Member, Special Member shall execute a counterpart of the applicableLLC Agreement. Prior to its admission to any Borrower Entity or any Principal,as applicable, as Special Member, no Person acting as Independent Directorshall be a member of such Borrower Entity or such Principal, as applicable.

####  

Upon theoccurrence of any event that causes the Member to cease to be a member of anyBorrower Entity or any Principal, as applicable, (other than (1) upon anassignment by Member of all of its limited liability company interest in suchBorrower Entity or such Principal, as applicable, and the admission of thetransferee in accordance with the Loan Documents and the applicable LLCAgreement, or (2) the resignation of Member and the admission of an additionalmember of such Borrower Entity or such Principal, as applicable, in accordancewith the terms of the Loan Documents and the applicable LLC Agreement), to thefullest extent permitted by law, the personal representative of Member shall,within ninety (90) days after the occurrence of the event that terminated thecontinued membership of Member in such Borrower Entity or such Principal, asapplicable, agree in writing (A) to continue such Borrower Entity or such

 

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Principal, as applicable, and (B) to the admission of the personalrepresentative or its nominee or designee, as the case may be, as a substitutemember of such Borrower Entity or such Principal, as applicable, effective asof the occurrence of the event that terminated the continued membership ofMember of such Borrower Entity or such Principal, as applicable. Any actioninitiated by or brought against Member or Special Member under any CreditorsRights Laws shall not cause Member or Special Member to cease to be a member ofany Borrower Entity or any Principal, as applicable, and upon the occurrence ofsuch an event, the business of such Borrower Entity or such Principal, asapplicable, shall continue without dissolution. Each LLC Agreement shallprovide that each of Member and Special Member waives any right it may have toagree in writing to dissolve any Borrower Entity or any Principal, asapplicable, upon the occurrence of any action initiated by or brought againstMember or Special Member under any Creditors Rights Laws, or the occurrence ofan event that causes Member or Special Member to cease to be a member of suchBorrower or such Principal, as applicable.

 

#### (e)           Borrowercovenants and agrees that, in the event any Borrower Entity is a Delawarelimited partnership that has a general partner which directly owns a zeropercent (0%) economic interest in Borrower Entity, the limited partnershipagreement of such Borrower Entity (an “LP Agreement”), shall providethat (A) upon the occurrence of any event that causes the last remaininglimited partner of such Borrower Entity (“Partner”) to cease to be thelimited partner of such Borrower Entity (other than (1) upon an assignment byPartner of all of its partnership interest in such Borrower Entity and theadmission of the transferee in accordance with the Loan Documents and the LPAgreement, or (2) the resignation of Partner and the admission of an additionallimited partner of such Borrower Entity in accordance with the terms of theLoan Documents and such LP Agreement), any person acting as or any person thatmeets the definition of Independent Director of such Borrower Entity shall,without any action of any other Person and simultaneously with the Partnerceasing to be the Partner of such Borrower Entity, automatically be admitted toBorrower (“Special Limited Partner”) and shall continue such BorrowerEntity without dissolution and (B) Special Limited Partner may not resign fromsuch Borrower Entity or transfer its rights as Special Limited Partner unless asuccessor Special Limited Partner has been admitted to such Borrower Entity asSpecial Limited Partner in accordance with the applicable LP Agreement. Each LPAgreement shall further provide that (v) Special Limited Partner shallautomatically cease to be a limited partner of the applicable Borrower Entityupon the admission to such Borrower Entity of a substitute Partner, (w) SpecialLimited Partner shall be a Partner of such Borrower Entity that has no interestin the profits, losses and capital of Borrower Entity and has no right toreceive any distributions or assets of such Borrower Entity (x) pursuant to theDelaware Revised Uniform Limited Partnership Act (the “LP Act”), SpecialLimited Partner shall not be required to make any capital contributions to suchBorrower Entity and shall not receive a limited partnership interest in suchBorrower Entity, (y) Special Limited Partner, in its capacity as SpecialLimited Partner, may not bind such Borrower Entity, and (z) except as requiredby any mandatory provision of the LP Act, Special Limited Partner, in itscapacity as Special Limited Partner, shall have no right to vote on, approve orotherwise consent to any action by, or matter relating to, such Borrower Entityincluding, without limitation, the merger, consolidation or conversion ofBorrower. In order to implement the admission to such

 

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#### BorrowerEntity of Special Limited Partner, Special Limited Partner shall execute acounterpart of the applicable LP Agreement.

####  

Upon theoccurrence of any event that causes Partner to cease to be a limited partner inany Borrower Entity, (other than (1) upon an assignment by Partner of all ofits partnership interest in such Borrower Entity and the admission of thetransferee in accordance with the Loan Documents and the LP Agreement, or (2)the resignation of Partner and the admission of an additional limited partnerof such Borrower Entity in accordance with the terms of the Loan Documents andsuch LP Agreement), to the fullest extent permitted by law, the personalrepresentative of Partner shall, within ninety (90) days after the occurrenceof the event that terminated the continued limited partnership of Partner insuch 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 limitedpartnership of Partner of such Borrower Entity. Any action initiated by orbrought against Partner or Special Limited Partner under any Creditors RightsLaws shall not cause Partner or Special Limited Partner to cease to be alimited partner of any Borrower Entity, and upon the occurrence of such anevent, the business of such Borrower Entity shall continue without dissolution.Each LP Agreement shall provide that each of Partner and Special LimitedPartner waives any right it may have to agree in writing to dissolve theapplicable Borrower Entity upon the occurrence of any action initiated by orbrought against Partner or Special Limited Partner under any Creditors RightsLaws, or the occurrence of an event that causes Partner or Special Limited Partnerto cease to be a limited partner in such Borrower Entity.

 

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

 

4.1.36      Business Purposes.

 

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

 

4.1.37      Taxes.

 

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

 

4.1.38      Forfeiture.

 

NeitherBorrower nor any Affiliate of Borrower in occupancy of or involved with theoperation or use of the Properties has committed any act or omission affordingthe

 

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federal government or any State or local government the right offorfeiture as against any of the Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity or any IndividualProperty or any material part thereof or any monies paid in performance ofBorrower’s obligations under the Note, this Agreement or the other LoanDocuments. Borrower hereby covenants and agrees not to commit, permit or sufferto exist any act or omission affording such right of forfeiture.

 

4.1.39      Environmental Representations and Warranties.

 

Borrowerrepresents and warrants that, to Borrower’s Actual Knowledge, based solely uponan environmental site assessment of the Properties, a copy of which has beenfurnished to Lender (the “Environmental Report”), except as otherwisedisclosed or described in the Environmental Report: (a) there are no HazardousMaterials or underground storage tanks in, on, or under any IndividualProperty, except those that are in compliance with Environmental Laws and withpermits issued pursuant thereto (if such permits are required); (b) there areno past, present or threatened Releases of Hazardous Materials in violation ofany Environmental Law and which would require remediation by a GovernmentalAuthority in, on, under or from any Individual Property; (c) there is no threatof any Release of Hazardous Materials migrating to any Individual Property; (d)there is no past or present non-compliance with current Environmental Laws, orwith permits issued pursuant thereto, in connection with any IndividualProperty; (e) Borrower does not know of, and neither Borrower nor MortgageBorrower has received, any written or oral notice or other communication fromany Person (including but not limited to a Governmental Authority) relating toHazardous Materials in, on, under or from any Individual Property; and (f)Borrower has truthfully and fully provided to Lender, in writing, any and allmaterial information relating to environmental conditions in, on, under or fromany Individual Property known to Borrower or Mortgage Borrower or contained inBorrower’s or Mortgage Borrower’s files and records, including but not limitedto any reports relating to Hazardous Materials in, on, under or migrating to orfrom any Individual Property and/or to the environmental condition of theProperties.

 

4.1.40      Taxpayer Identification Number.

 

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

 

4.1.41      OFAC.

 

None ofBorrower, Mortgage Borrower, Mezzanine B Borrower, Guarantor or any of their respectiveAffiliates is a Prohibited Person, and Borrower, Mortgage Borrower, Mezzanine BBorrower, Guarantor and, to Borrower’s Actual Knowledge, their respectiveAffiliates are in full compliance with all applicable orders, rules andregulations of The Office of Foreign Assets Control of the U.S. Department ofthe 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 oramended in any manner whatsoever, (ii) there are no defaults under any GroundLease by Mortgage Borrower, or, to the best of Borrower’s knowledge, landlordthereunder, and, to the best of Borrower’s knowledge, no event has occurredwhich but for the passage of time, or notice, or both would constitute adefault under such Ground Lease, (iii) all rents, additional rents and othersums due and payable under each Ground Lease have been paid in full, and (iv)neither Mortgage Borrower nor the landlord under each Ground Lease hascommenced any action or given or received any notice for the purpose ofterminating such Ground Lease.

####  

#### (b)           TheGround Leases or a memorandum thereof have been duly recorded, and there hasnot been any change in the terms of the Ground Leases since their recordation;

####  

#### (c)           TheGround 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 beyondthe amortization term for the Loan;

####  

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

####  

#### (e)           TheGround Leases do not impose restrictions on subletting.

####  

4.1.43      Deposit and Securities Accounts.

 

#### (a)           IntentionallyOmitted;

####  

#### (b)           Eachof the Accounts constitutes a “securities account” or a “deposit account” withinthe meaning of the UCC;

####  

#### (c)           MortgageBorrower owns and has good title to the Accounts, free and clear of any Lien orclaim of any Person, other than Mortgage Lender;

####  

#### (d)           IntentionallyOmitted;

####  

#### (e)           Otherthan the security interest granted to Mortgage Lender pursuant to the MortgageLoan Documents and the Security Instruments, Mortgage Borrower has not pledged,assigned, or sold, granted a security interest in, or otherwise conveyed theAccounts; and

####  

#### (f)            Noneof the Accounts is in the name of any Person other than Mortgage Lender.

 

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4.1.44      Embargoed Person.

 

To Borrower’sActual Knowledge, as of the date hereof and at all times throughout the term ofthe Loan, including after giving effect to any Transfers permitted pursuant tothe Loan Documents, (a) none of the funds or other assets of Borrower orPrincipal, constitute property of, or are beneficially owned, directly orindirectly, by any person, entity or government subject to trade restrictionsunder U.S. law, including but not limited to, the International EmergencyEconomic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the EnemyAct, 50 U.S.C. App. 1, et seq., and any Executive Orders or regulationspromulgated thereunder with the result that the investment in Borrower orPrincipal, as applicable (whether directly or indirectly), is prohibited by lawor that the Loan is in violation of law (“Embargoed Person”); (b) noEmbargoed Person has any interest of any nature whatsoever in Borrower orPrincipal, as applicable, with the result that the investment in Borrower orPrincipal, as applicable (whether directly or indirectly), is prohibited by lawor that the Loan is in violation of law; and (c) none of the funds of Borroweror Principal, as applicable, have been derived from any unlawful activity withthe result that the investment in Borrower or Principal, as applicable (whetherdirectly or indirectly), is prohibited by law or the Loan is in violation oflaw.

 

4.1.45      Affiliates.

 

Borrower doesnot own any equity interests in any other Person other than the Collateral.

 

4.1.46      Mortgage Borrower Representations.

 

Borrower hasreviewed the representations and warranties made by, and covenants of, MortgageBorrower to and for the benefit of Mortgage Lender contained in the MortgageLoan Documents and, to Borrower’s Actual Knowledge, such representations andwarranties are true, correct and complete.

 

4.1.47      List of Mortgage Loan Documents.

 

There are noMortgage Loan Documents other than those set forth on **Schedule4.1.47** annexed hereto. Borrower has, or has caused to be, deliveredto Lender true, complete and correct copies of all Mortgage Loan Documents, andnone of the Mortgage Loan Documents has been amended or modified as of the datethereof.

 

4.1.48      Condominium Representations.

 

The Propertiesdescribed on **Schedule 4.1.48** annexed hereto aresubject to a condominium regime.

 

4.1.49      Mortgage Loan Event of Default.

 

No MortgageLoan Event of Default exists as of the date hereof.

 

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Section 4.2             Survival of Representations.

 

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

 

**V.****            BORROWER COVENANTS**

 

Section 5.1             Affirmative Covenants.

 

From the datehereof and until payment and performance in full of all obligations of Borrowerunder the Loan Documents or the earlier release of the Lien encumbering theCollateral (and all related obligations) in accordance with the terms of thisAgreement and the other Loan Documents, Borrower hereby covenants and agreeswith Lender that:

 

5.1.1        Existence; Compliance with LegalRequirements.

 

#### (a)           Borrowershall do or cause to be done all things necessary to preserve, renew and keepin full force and effect its existence, rights, licenses, permits andfranchises, and shall comply, or cause Mortgage Borrower to comply in allmaterial respects, with all Legal Requirements applicable to it, theCollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity and the Properties. There shall never be committed byBorrower, and Borrower shall not permit or cause Mortgage Borrower to permitany other Person in occupancy of or involved with the operation or use of theProperties any act or omission affording the federal government or any State orlocal government the right of forfeiture against any Individual Property or anypart thereof or any monies paid in performance of Borrower’s obligations underany of the Loan Documents. Borrower hereby covenants and agrees not to permitor cause Mortgage Borrower to commit, permit or suffer to exist any act oromission affording such right of forfeiture. Borrower shall at all times causeMortgage Borrower to maintain, preserve and protect all material franchises andtrade names and preserve all the remainder of its property used or useful inthe conduct of its business and shall keep the Properties in good working orderand repair, and from time to time make, or cause to be made, all repairs,renewals, replacements, betterments and improvements thereto reasonablynecessary to maintain each Individual Property as a first class luxuryresidential apartment building and in a condition similar to other first classluxury residential apartment buildings of a type and size similar to suchIndividual Property, all as more fully provided in this Agreement.

####  

#### (b)           Afterprior written notice to Lender, Borrower, at no expense to Lender, may, or maycause Mortgage Borrower to, contest by appropriate legal proceeding, promptlyinitiated and conducted in good faith and with due diligence, the validity orapplicability of any Legal Requirements to Mortgage Borrower, Mortgage Borroweror

 

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#### any IndividualProperty, or the assertion or claim by any Governmental Authority or otherPerson that Borrower, Mortgage Borrower or any Individual Property is inviolation of such Legal Requirement, provided (i) no Event of Default shallhave occurred and be continuing under the Note, this Agreement or any of theother Loan Documents; (ii) such proceeding shall not violate the provisions ofany other mortgage, deed of trust or deed to secure debt affecting suchIndividual Property; (iii) such proceeding shall be permitted under and beconducted in accordance with the provisions of any other instrument to whichBorrower, Mortgage Borrower or such Individual Property is subject and shallnot constitute a default thereunder; (iv) none of the Collateral, any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity orany Individual Property, nor any part thereof or interest therein, nor any ofthe tenants or occupants thereof, or Borrower, Mortgage Borrower or anyMortgage Principal shall be affected in any material adverse way as a result ofsuch proceeding; (v) non-compliance with such Legal Requirement during thependency of such proceeding shall not impose civil or criminal liability onBorrower, Mortgage Borrower or Lender; and (vi) Borrower shall have furnishedor caused Mortgage Borrower to have furnished such security as may be requiredin the proceeding, or as may be reasonably required by Lender, to ensurecompliance by Borrower or Mortgage Borrower with such Legal Requirement.

####  

5.1.2        Taxes and Other Charges.

 

Subject to theprovisions of the last sentence of this Section 5.1.2, Borrower shall causeMortgage Borrower to promptly pay all Taxes, Other Charges and utility servicecharges, in each case prior to the date on which such Taxes, Other Charges orutility 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 thatthe Taxes, Other Charges and utility service charges have been so paid or arenot then delinquent (*provided, however,*that Borrower shall not be required to furnish such receipts for payment ofTaxes or Other Charges in the event that such Taxes or Other Charges have beenor are required to be paid by Mortgage Lender pursuant to the Mortgage LoanDocuments). Subject to the provisions of the last sentence of this Section5.1.2, Borrower shall not suffer, and shall not permit Mortgage Borrower tosuffer, and shall cause Mortgage Borrower to pay and discharge any lien orcharge whatsoever which may be or become a Lien against any IndividualProperty, other than Permitted Encumbrances and liens in favor of Lender orMortgage Lender, as promptly as practicable and in any event no later thansixty (60) days after Borrower or Mortgage Borrower receives written noticefrom any source whatsoever or otherwise has Actual Knowledge of the existenceof such lien or charge. Except to the extent sums sufficient to pay all Taxeshave been deposited with Mortgage Lender in accordance with the terms of theMortgage Loan Documents, Borrower shall furnish, or cause Mortgage Borrower tofurnish, to Lender paid receipts for the payment of the Taxes and Other Chargesor other reasonably satisfactory evidence of the payment of such Taxes andOther 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 notpaid in full prior to such contest) by appropriate legal proceedings, promptlyinitiated and conducted in good faith and with due diligence, the amount orvalidity or application in

 

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whole or in part of any of the Taxes, Other Charges or utility servicecharges, provided (i) no Event of Default has occurred and is continuing underthe Note, this Agreement or any of the other Loan Documents, (ii) suchproceeding shall not violate the provisions of any other mortgage, deed oftrust or deed to secure debt affecting any Individual Property, (iii) suchproceeding shall suspend the collection of the Taxes, Other Charges or utilityservice charges, as applicable, from Mortgage Borrower and from any IndividualProperty 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 withthe provisions of any other instrument to which Borrower or Mortgage Borroweris subject and shall not constitute a default thereunder, (v) none of theCollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity or any Individual Property nor any part thereof orinterest therein will be in danger of being sold, forfeited, terminated,cancelled or lost as a result of such proceeding, (vi) Borrower shall have, orshall have caused Mortgage Borrower to, deposit with Lender adequate reservesfor the payment of the Taxes, Other Charges or utility service charges, asapplicable, together with all interest and penalties thereon, unless Borroweror Mortgage Borrower has paid all of the Taxes, Other Charges or utilityservice charges, as applicable, under protest (*provided,however,* that with respect to Taxes, Borrower shall not be requiredto deposit such reserves with Lender, or to furnish the security required underclause (vii) below, in the event that funds sufficient to pay such Taxes shalltheretofore have been deposited with or collected by Mortgage Lender pursuantto the Mortgage Loan Documents except as may be required in such proceeding asset forth under clause (vii) below), and (vii) Borrower shall have furnished,or shall have caused Mortgage Borrower to have furnished, the security as maybe required in such proceeding, or as may be reasonably requested by Lender toinsure the payment of any contested Taxes, Other Charges or utility servicecharges, as applicable, together with all interest and penalties thereon.

 

5.1.3        Litigation.

 

Borrower shallgive prompt written notice to Lender of any litigation or governmentalproceedings pending or threatened against any Loan Party which would, ifdetermined adversely to such Loan Party, materially adversely affect such LoanParty’s condition (financial or otherwise) or business or the Properties.

 

5.1.4        Access to the Properties.

 

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

 

5.1.5        Notice of Default. 

 

Borrower shallpromptly advise Lender of any material adverse change in any Loan Party’scondition, financial or otherwise, or of the occurrence of any Default or Eventof Default of which Borrower has Actual Knowledge.

 

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5.1.6        Cooperate in Legal Proceedings.

 

Borrowershall, and shall cause Mortgage Borrower to, cooperate in all reasonable respectswith Lender with respect to any proceedings before any court, board or otherGovernmental Authority which may in any way adversely affect the rights ofLender hereunder or any rights obtained by Lender under any of the other LoanDocuments and, in connection therewith, Borrower shall, and shall causeMortgage Borrower to, permit Lender, at its election, to participate in anysuch proceedings.

 

5.1.7        Award and Insurance Benefits.

 

Borrower shallcooperate in all reasonable respects with Lender in obtaining for Lender thebenefits of any Awards or Insurance Proceeds lawfully or equitably payable inconnection with any Individual Property, and Lender shall be reimbursed for anyexpenses reasonably incurred in connection therewith (including reasonable out-of-pocketattorneys’ fees and disbursements, and the payment by Borrower of the expenseof an appraisal on behalf of Lender in case of Casualty or Condemnationaffecting any Individual Property or any part thereof) out of such Award orInsurance 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.

 

Borrowershall, at Borrower’s sole cost and expense:

 

#### (a)           furnishto Lender all instruments, documents, boundary surveys, footing or foundationsurveys, certificates, plans and specifications, appraisals, title and otherinsurance reports and agreements relating to the Collateral, any MortgagePrincipal’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 theterms of the Loan Documents;

####  

#### (b)           executeand deliver to Lender such customary documents, instruments, certificates,assignments and other writings, and do such other customary acts necessary ordesirable, to evidence, preserve and/or protect the collateral at any timesecuring or intended to secure the obligations of Borrower under the LoanDocuments, as Lender may reasonably require, including, without limitation, theauthorization of Lender to file any UCC financing statements and delivery ofCondominium Proxies; and

####  

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

####  

5.1.9        Mortgage and Intangible Taxes.

 

Borrower shallpay 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 FinancingStatements and/or upon the execution and delivery of the Note.

 

5.1.10      Financial Reporting.

 

#### (a)           Borrowerwill keep and maintain on a Fiscal Year basis, in accordance with GAAP or on afederal income tax basis, to the extent applicable, or in accordance with othermethods acceptable to Lender in its reasonable discretion, consistentlyapplied, proper and accurate books, records and accounts reflecting all of thefinancial affairs of Borrower and all items of income and expense with respectto the Collateral.

####  

#### (b)           Borrowershall cause Mortgage Borrower to keep adequate books and records of account inaccordance with GAAP or on a federal income tax basis, to the extentapplicable, or in accordance with other methods acceptable to Lender in itsreasonable discretion, consistently applied. Borrower shall be deemed to havecomplied with the requirements of this Section 5.1.10(b) with respect to anyperiod if it shall have caused Mortgage Borrower to maintain the books andrecords required under Section 14 of the Security Instrument to be maintainedby Mortgage Borrower.

####  

#### (c)           Borrowerwill furnish, and cause to be furnished, to Lender, within ninety (90) daysafter the close of each Fiscal Year, the audited combined balance sheet of theGuarantors as of the end of such Fiscal Year, the audited combined statement ofoperations and the audited combined statement of cash flows of each Guarantorfor such Fiscal Year, all in reasonable detail and, commencing in the secondFiscal Year during the term of the Loan, stating in comparative form (solely tothe extent such previous year ended after the Closing Date) the respectivefigures for the corresponding date and period in the prior Fiscal Year,prepared in accordance with GAAP consistently applied and accompanied by anindependent auditor’s report stating that the referenced financial statementspresent fairly, in all material respects, the combined financial position,results of operations and cash flows as of and for the applicable periods inconformity with GAAP, with such certification to be free of exceptions andqualifications as to the scope of the audit as to the going concern nature ofthe business. Such combined audited financial statements will be accompanied byan audited combined supplemental schedule of real estate by Individual Propertyas of the end of the Fiscal Year and a combined supplemental schedule of rentalrevenues and rental expenses by Individual Property. The combined totals ofthese supplemental schedules will reconcile to the audited balance sheet andstatement of operations for the Fiscal Year, respectively.

####  

#### (d)           Borrowerwill furnish, and cause to be furnished, to Lender, within sixty (60) daysafter each of the first three fiscal quarters of each Fiscal Year, theunaudited combined balance sheet of the Guarantors as of the end of such fiscalquarter, the unaudited statement of operations and the unaudited statements ofcash flows of each Guarantor for the portion of the Fiscal Year ended with thelast day of such quarter, all prepared in accordance with GAAP and inreasonable detail and, commencing in the second Fiscal Year during the term ofthe Loan, stating in comparative form (solely to the extent such previous yearended after the Closing Date) the respective figures for the corresponding dateand period in the previous fiscal year, accompanied by a certificate of

 

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#### an authorizedrepresentative of the Guarantor, stating that the referenced financialstatements present fairly, in all material respects and subject to year-endadjustments, the financial position, results of operations and cash flows forthe applicable periods in conformity with GAAP.

####  

#### (e)           Borrowerwill furnish, and cause to be furnished, to Lender, within sixty (60) daysafter each of the first three calendar quarters, a statement of income andexpenses of each Individual Property prepared in accordance with GAAP andaccompanied by a certificate of an authorized representative of each MortgageBorrower Entity and each Guarantor reasonably acceptable to Lender to theeffect that each such statement of income and expenses fairly, accurately andcompletely presents, in all material respects and subject to year-endadjustments, the operations of each such Individual Property for the periodindicated.

####  

#### (f)            Borrowerwill 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 andexpenses of each Individual Property prepared in accordance with GAAP andaccompanied by a certificate of an authorized representative of each MortgageBorrower Entity and each Guarantor reasonably acceptable to Lender to theeffect that each such statement of income and expenses fairly, accurately andcompletely presents the operations of each such Individual Property for theperiod indicated.

####  

#### (g)           Borrowershall, or cause Mortgage Borrower to, furnish to Lender a copy of the financialstatements and all other materials Mortgage Borrower is required to provideMortgage Lender under Section 14 of the Security Instrument within the timeperiods required under such Section.

####  

#### (h)           Borrowershall cause Mortgage Borrower to submit to Lender the annual operating budgetrequired to be delivered under the Mortgage Loan Documents.

####  

#### (i)            Anyreports, statements or other information required to be delivered under thisAgreement shall be delivered to Lender in paper form. If requested by Lender,Borrower shall also endeavor to deliver, and shall cause Mortgage Borrower toendeavor to deliver, such reports, statements or other information inelectronic form.

####  

#### (j)            Borroweragrees that Lender may forward to each Investor or any Rating Agency rating anyparticipations in the Loan and/or Securities and each prospective Investor, andany organization maintaining databases on the underwriting and performance ofcommercial mezzanine loans, all documents and information which Lender now hasor 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 therelated Mortgage Borrower Entity and the Properties, whether furnished byBorrower, Mortgage Borrower, Guarantor or otherwise, as Lender reasonablydetermines necessary or desirable (the “Furnished Information”). Borrowerirrevocably waives any and all rights it may have under any Applicable Laws toprohibit such disclosure, including but not limited to any right of privacy. Notwithstandingthe foregoing, Lender agrees that if Borrower requests

 

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#### in writingthat certain of the Furnished Information be kept confidential, (i) Lenderagrees that it shall keep such Furnished Information confidential unless suchFurnished Information is required to be disclosed by Applicable Law and (ii) ifin connection with a Securitization or Syndication of the Loan, Lenderfurnishes such Furnished Information to any Investor, any Rating Agency ratingsuch participations and/or Securities, any prospective Investor, or anyorganization maintaining databases on the underwriting and performance ofcommercial mortgage or mezzanine loans, Lender shall inform any such Investor,Rating Agency, prospective Investor, or organization that directly receivessuch Furnished Information from Lender about the confidential nature of suchFurnished Information. Notwithstanding the foregoing, Lender agrees that itshall not, unless required by Applicable Law, disclose any financialinformation 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 summaryfinancial information, provided that such Rating Agency or Investor agrees inwriting to keep such net worth or summary financial information confidential.

####  

#### (k)           Withina reasonable time after Lender’s request, Borrower shall, and shall causeMortgage Borrower to, furnish Lender with such other additional financial ormanagement information as may, from time to time, be reasonably required byLender in form and substance reasonably satisfactory to Lender, subject,however, to the confidentiality requirements set forth in Section 5.1.10(j)hereof.

####  

#### (l)            Borrowershall, and shall cause Mortgage Borrower to, furnish to Lender and its agentsconvenient facilities for the examination and audit of any of the books andrecords 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)          Allfinancial statements provided by Borrower hereunder pursuant to Section5.1.10(n) hereof shall be prepared in accordance with GAAP or on a federalincome tax basis, and shall meet the requirements of Regulation S-K orRegulation S-X, as applicable, Regulation AB and other applicable legalrequirements. All financial statements (audited or unaudited) provided byBorrower under this Section 5.1.10 shall be certified by Borrower, whichcertification shall (A) be executed on behalf of Borrower by its the chieffinancial officer or administrative member, and (B) state that such financialstatements meet the requirements set forth in the first sentence of thisSection 5.1.10(m).

####  

#### (n)           Ifrequested by Lender and reasonably required in connection with aSecuritization, Borrower shall provide Lender, promptly upon request (butsubject to the last sentence of Section 5.1.10(j) hereof), with any other oradditional financial statements, or financial, statistical or operatinginformation, as Lender shall reasonably determine to be required pursuant toRegulation S-K or Regulation S-X, as applicable, Regulation AB or anyamendment, modification or replacement thereto or other legal requirements inconnection with any Disclosure Document or any Exchange Act filing inconnection with or relating to a Securitization or as shall otherwise bereasonably requested by the Lender.

 

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#### (o)           Inthe event Lender reasonably determines, in connection with a Securitization,that the financial statements required in order to comply with Regulation S-Kor Regulation S-X, as applicable, Regulation AB or other legal requirements areother than as provided herein, then notwithstanding the provisions of Sections5.1.10(m) and 5.1.10(n) hereof (but subject to the last sentence of Section5.1.10(j) hereof), Lender may request, and Borrower shall promptly provide,such other financial statements as Lender determines to be necessary orappropriate for such compliance.

####  

#### (p)           Lendershall have the right from time to time at all times during normal businesshours upon reasonable advance written notice to examine such books, records andaccounts at the office of Borrower, Mortgage Borrower or any other Personmaintaining such books, records and accounts and to make such copies orextracts thereof as Lender shall reasonably require. After the occurrence andduring the continuance of an Event of Default, Borrower shall pay any costs andexpenses incurred by Lender to examine Borrower’s accounting records withrespect to the Collateral, any Mortgage Principal’s general partner interest inthe related Mortgage Borrower Entity and the Properties or any Loan Party, asLender shall reasonably determine to be necessary or appropriate in theprotection of Lender’s interest.

####  

5.1.11      Business and Operations.

 

Borrower willcause Mortgage Borrower to continue to engage in the businesses presentlyconducted by it as and to the extent the same are necessary for the ownership,maintenance, management and operation of the Properties. Each Borrower Entityshall cause the applicable Mortgage Borrower Entity to remain in good standingunder the laws of the State in which the Individual Property owned by suchMortgage 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 PledgeAgreement or any other Loan Document as and when permitted thereby or (b) ofthe bankruptcy, insolvency, rehabilitation or other similar proceeding inrespect of Borrower or any of its constituent Persons or an assignment byBorrower or any of its constituent Persons for the benefit of its creditors,Borrower, its successors or assigns, shall be chargeable with and agrees to payall costs of collection and defense, including reasonable out-of-pocketattorneys’ fees and costs, incurred by Lender or Borrower in connectiontherewith and in connection with any appellate proceeding or post-judgmentaction involved therein, together with all required service or use taxes.

 

5.1.13      Estoppel Statement.

 

#### (a)           Afterrequest by Lender, Borrower, within ten (10) Business Days, shall furnishLender or any proposed assignee with a statement, duly acknowledged andcertified, setting forth (i) the amount of the original principal amount of theNote, (ii) the unpaid principal amount of the Note, (iii) the ApplicableInterest Rate, (iv) the Maturity

 

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#### Date, (v) thedate installments of interest and/or principal were last paid, (vi) that,except as provided in such statement, to Borrower’s Actual Knowledge, there areno defaults or events which with the passage of time or the giving of notice orboth, would constitute an Event of Default, (vii) that this Agreement, theNote, the Pledge Agreement and the other Loan Documents are valid, legal andbinding obligations of Borrower and have not been modified or, if modified,giving particulars of such modification, (viii) whether, to Borrower’s ActualKnowledge, any offsets or defenses exist against the obligations secured by thePledge Agreement and, if any are alleged to exist, a detailed descriptionthereof, (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 ifmodified, setting forth all modifications), (x) the date to which the Rentsthereunder have been paid pursuant to the Leases, (xi) whether or not, toBorrower’s Actual Knowledge after due inquiry of the Manager, any of thelessees under the Leases are in default under the Leases, and, if any of thelessees are in default, setting forth the specific nature of all such defaults,(xii) the amount of security deposits held by Mortgage Borrower under eachLease and that such amounts are consistent with the amounts required under eachLease, and (xiii) as to any other matters reasonably requested by Lender andreasonably related to the Obligations, the Properties, this Agreement, theCollateral or any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity. With respect to clauses (ix), (x), (xi) and (xii)above, such certifications shall only be included in such statement ifrequested by the Rating Agencies or the Investors and such certifications mayonly be requested by Lender once in any calendar year.

####  

#### (b)           Uponwritten request by Borrower to Lender, Lender shall provide an estoppelcertificate to Borrower which states (A) the current principal balance of theNote and the date to which interest has been paid, (B) the Applicable InterestRate, (C) the date installments of interest and/or principal were last receivedby Lender, (D) the Maturity Date, and (E) that, except as provided in suchestoppel certificate, to Lender’s knowledge, no default on the part of Borrowerunder the Note, this Agreement, the Pledge Agreement or the other LoanDocuments has occurred and is continuing. Lender shall not be required todeliver such an estoppel certificate more than one (1) time in any twelve-monthperiod.

####  

#### (c)           Borrowershall use, and shall cause Mortgage Borrower to use, commercially reasonableefforts (and best efforts in connection with a Securitization or Syndication,excluding litigation or the payment of any required purchase price or othercompensation for same to tenants) to obtain and deliver to Lender, promptlyupon Lender’s request (to be made no more frequently by Lender or MortgageLender than once in any twelve-month period, unless such request is made inconnection with a Securitization or Syndication), duly executed estoppelcertificates from the lessees under one or more Major Leases, as required byLender, attesting to such facts regarding such Major Leases as Lender mayreasonably require, including but not limited to attestations that each MajorLease covered thereby is in full force and effect with no defaults thereunderon the part of any party, that none of the Rents payable under such Major Leasehave been paid more than one month in advance, and that the lessee claims nodefense or offset against the full and timely performance of its obligationsunder such Major Lease.

 

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#### (d)           Borrowershall use, and shall cause Mortgage Borrower to use, commercially reasonableefforts (and best efforts in connection with a Securitization or Syndication,excluding litigation or the payment of any required purchase price or othercompensation for same to the condominium board) to obtain and deliver toLender, promptly upon Lender’s request (to be made no more frequently by Lenderor Mortgage Lender than once in any twelve-month period, unless such request ismade in connection with a Securitization or Syndication), a duly executedestoppel certificate from the applicable condominium board or the applicableIndividual Property that is subject to a condominium regime which shallinclude, without limitation, (i) the amount of the unpaid common charges andother amounts, if any, accrued against such Individual Property, (ii) that theapplicable Condominium Documents have not been modified or amended, or, if theyhave, a description of the modifications or amendments, (iii) that all paymentsdue and payable by Mortgage Borrower under the applicable Condominium Documentshave been paid in full, and (iv) that Mortgage Borrower is not in default underthe Condominium Documents or, if it is in default, a detailed description ofsuch default.

####  

5.1.14      Loan Proceeds.

 

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

 

5.1.15      Performance by Borrower.

 

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

####  

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

####  

5.1.16      Confirmation of Representations.

 

Borrower shalldeliver, in connection with any Securitization or Syndication effected byLender in accordance with the applicable provisions of Article IX hereof, (a)one or more Officer’s Certificates certifying as to the accuracy in allmaterial respects of all representations made by Borrower in the Loan Documentsas of the date of the closing

 

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of such Securitization or Syndication (or, to the extent any of suchrepresentations shall no longer be accurate in all material respects as of thedate of such closing, disclosing any material inaccuracy in suchrepresentations), and (b) certificates of the relevant Governmental Authoritiesin all relevant jurisdictions indicating the good standing and qualification ofeach Borrower Entity and each Principal as of the date of the closing of such Securitizationor Syndication.

 

5.1.17      Leasing Matters.

 

#### (a)           Borrowermay cause or permit Mortgage Borrower enter into a proposed Lease (includingthe renewal or extension of an existing Lease (a “Renewal Lease”))without the prior written consent of Lender, provided such proposed Lease orRenewal Lease (i) provides for rental rates and terms comparable or superior toexisting local market rates and terms (taking into account the type and qualityof the tenant and the location and quality of the space to be leased) as of thedate such Lease is executed by Mortgage Borrower (unless, in the case of aRenewal Lease or a Lease covering expansion space, the rent payable during suchrenewal or with respect to such expansion space, as the case may be, or aformula or other method to compute such rent, is provided for in the originalLease), (ii) is an arms-length transaction with a bona fide, independent thirdparty tenant, (iii) does not have a materially adverse effect on the value orquality 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) (whichsuch standard form of lease currently approved by Lender is attached hereto asExhibit B), unless Mortgage Borrower determines in good faith that deviationsfrom the approved Lease form do not materially and adversely affect MortgageBorrower’s interests under the Lease or Renewal Lease, and (vi) is not a MajorLease. All proposed Leases which do not satisfy the requirements set forth inthis Section 5.1.17 shall be subject to the prior approval of Lender (suchapproval not to be unreasonably withheld, delayed or conditioned), at Borrower’sexpense. At Lender’s request, Borrower shall cause Mortgage Borrower topromptly deliver to Lender copies of all Leases which are entered into pursuantto this Section 5.1.17(a), together with Borrower’s certification that it hassatisfied or caused Mortgage Borrower to satisfy all of the conditions of thisSection 5.1.17(a) (other than conditions waived in writing by Lender)applicable to such Leases. Any Lease submitted to Lender for Lender’s approvalshall be deemed approved if Lender shall not have notified Borrower in writingof its approval or disapproval (together with a statement of the grounds ofsuch disapproval, if applicable) within ten (10) Business Days (the “ApprovalPeriod”) after Lender has received such submission; *provided,however*, that upon notice to Borrower, Lender shall be entitled to afive (5) Business Day extension of the Approval Period (“Lender’s ApprovalExtension Period”). Notwithstanding the leasing approval procedure setforth above, to facilitate Mortgage Borrower’s leasing process, Borrower maypresent prospective leasing transactions to Lender for its approval prior tothe negotiation of a final Lease. Such presentation shall include a summaryterm 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 orthe tenant thereunder as may be reasonably requested by Lender (the “LeaseTerm Sheet”). Lender shall approve or disapprove the Lease Term Sheetwithin ten (10) Business Days of its receipt, provided

 

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#### Lender shallbe entitled to Lender’s Approval Extension Period and such request to Lendercomplies with the requirements of Section 5.1.17(g) hereof, and if Lender failsto so approve or disapprove of the Lease Term Sheet within such Approval Periodand Lender’s Approval Extension Period, if applicable, the Lease Term Sheetshall be deemed approved by Lender. If Lender approves or is deemed to haveapproved the Lease Term Sheet, Lender’s prior approval shall not be requiredfor the final Lease, except to the extent such final Lease (i) deviates in anymaterial respect from the terms set forth on the Lease Term Sheet or containsany material terms not set forth in the Lease Term Sheet, and Borrower determinesin good faith that such deviation shall materially and adversely affect either(A) Mortgage Borrower’s interest under the Lease or (B) Lender’s interest inthe Pledge Agreement or the other Loan Documents, (ii) [intentionally omitted]or (iii) is not fully executed within one hundred twenty (120) days after theLease Term Sheet is received by Lender; *provided, however*,that (x) nothing contained in this sentence shall be construed to requireLender’s approval of any Lease for which approval is not required by the otherprovisions of this Section 5.1.17, (y) Borrower shall cause Mortgage Borrowerto deliver to Lender copies of the following: (1) the fully-executed Lease entered into by Mortgage Borrower inaccordance 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 changesthat were not contained in the Lease Term Sheet initially reviewed and approvedor 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) aboveshall be deemed to be Borrower’s certification that the terms and conditions ofthis Section 5.1.17 have been satisfied.

####  

#### (b)           Borrowershall cause Mortgage Borrower to (i) observe and perform all the obligationsimposed upon the lessor under the Leases in all material respects and shall notdo or permit to be done anything to impair the value of any of the Leases assecurity for the Debt; (ii) promptly send copies to Lender of all notices ofdefault which Mortgage Borrower shall send or receive thereunder; (iii) enforcein a commercially reasonable manner all of the material terms, covenants andconditions contained in the Leases upon the part of the tenant thereunder to beobserved or performed (except for termination of a Major Lease which, except asotherwise provided in Section 5.1.17(d) hereof, shall require Lender’s priorapproval, such approval not to be unreasonably withheld, delayed orconditioned); (iv) not collect any of the Rents more than one (1) month inadvance except security deposits and prepayments of first month’s and lastmonth’s rent shall not be deemed Rents collected in advance; (v) deposit orcause to be deposited all Lease Termination Payments relating to commercialleases, if any, into an account designated by Lender, if required by Lender,not later than the first Business Day after Mortgage Borrower’s receiptthereof; (vi) not execute any other assignment of the lessor’s interest in anyof the Leases or the Rents (except as contemplated by the Mortgage LoanDocuments); and (vii) not consent to any assignment of or subletting under anyMajor Leases relating to commercial space not in accordance with their terms,without the prior written consent of Lender (such approval not to beunreasonably withheld, delayed or conditioned and to be deemed granted ifLender shall not have disapproved such assignment or subletting in writingwithin ten (10) Business Days after Borrower’s request for Lender’s approval, providedLender is entitled to Lender’s Approval Extension Period and such request forapproval complies with Section 5.1.17(g) hereof).

 

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#### (c)           Borrowermay, 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 (includingany 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 orshortening of term, the planned alternative use of the affected space) does nothave a materially adverse effect on the value of the applicable IndividualProperty taken as a whole, and provided such Lease, as amended, modified orwaived, is otherwise in compliance with the requirements of this Agreement. Atermination of a Lease (other than a Major Lease) with a tenant who is indefault beyond applicable notice and grace periods shall not be considered anaction which has a materially adverse effect on the value of the applicableIndividual Property taken as a whole. Any amendment, modification, waiver, termination,rent reduction, space surrender or term shortening which does not satisfy therequirements set forth in this Subsection shall be subject to the priorapproval of Lender (such approval not to be unreasonably withheld, delayed orconditioned and to be deemed granted if Lender shall not have disapproved suchamendment, modification, waiver, termination, rent reduction, space surrenderor term shortening, as the case may be, in writing within ten (10) BusinessDays after Borrower’s request for Lender’s approval (fifteen (15) Business Daysfor any termination, rent reduction, space surrender or term shorteningrequest), provided that Lender is entitled to Lender’s Approval ExtensionPeriod and such request for approval complies with the requirements of Section5.1.17(g) hereof), at Borrower’s expense. Borrower shall cause MortgageBorrower to promptly deliver to Lender copies of all Leases, amendments,modifications and waivers which are entered into pursuant to this Section5.1.17(c), together with Borrower’s certification that it has satisfied orcaused to be satisfied all of the conditions of this Section 5.1.17(c)applicable to such Leases, amendments, modifications and waivers.

####  

#### (d)           Notwithstandinganything contained herein to the contrary, Borrower shall not cause or permitMortgage Borrower, without the prior written consent of Lender (which consentshall 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 orany instrument guaranteeing or providing credit support for any Major Lease; *provided, however*, that the procedures set forth in Section5.1.17(a) regarding Lender’s approval or deemed approval of leasingtransactions as well as Borrower’s rights to deliver Lease Term Sheets shallalso apply to Major Lease approvals pursuant to this Section 5.1.17(d).

####  

#### (e)           Uponthe occurrence and during the continuance of an Event of Default, to the extentpermitted by law and subject to the rights of Mortgage Lender pursuant to theterms of the Mortgage Loan Documents, Borrower shall promptly deposit withLender any and all monies then held by Borrower representing security depositsunder the Leases (collectively, the “Security Deposits”). Borrower andnot Lender shall be liable for the delivery of security deposits to tenantsunder Leases which are not delivered to and held by Lender pursuant to thisSection 5.1.17(e). Lender shall hold the Security Deposits in accordance withthe terms of the respective Leases, and shall only release the SecurityDeposits in order to return a tenant’s Security Deposit to such tenant if suchtenant is

 

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#### entitled tothe return of the Security Deposit under the terms of the Lease and is nototherwise in default under the Lease beyond the expiration of any applicablegrace or cure period. To the extent required by Applicable Laws, Lender shallhold the Security Deposits in an interest bearing account selected by Lender inits sole discretion. In the event Lender is not permitted by law to hold theSecurity Deposits, Borrower shall deposit the Security Deposits into aninterest-bearing account with a federally insured institution reasonablyapproved by Lender.

####  

#### (f)            IntentionallyOmitted.

####  

#### (g)           Notwithstandinganything to the contrary contained in this Section 5.1.17, to the extent Lender’sprior written approval is required pursuant to the provisions of this Section5.1.17, Lender shall, with respect to such proposed Leases, Lease Term Sheetsand/or renewals, modifications, amendments or terminations of, or waivers withrespect to, existing Leases, have ten (10) Business Days (fifteen (15) BusinessDays for any termination, rent reduction, space surrender or term shorteningrequest) from receipt of such written request in which to approve or disapprovesuch Lease or other documentation, provided such written request to Lender forapproval 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, RENTREDUCTION, SPACE SURRENDER OR TERM SHORTENING REQUEST) OF RECEIPT OF THISNOTICE (THE “APPROVAL PERIOD”) PURSUANT TO THE TERMS OF A LOAN AGREEMENTBETWEEN THE UNDERSIGNED AND LENDER; PROVIDED, HOWEVER, THAT LENDER SHALL HAVETHE RIGHT TO A FIVE (5) DAY EXTENSION OF THE APPROVAL PERIOD UPON NOTICE TOBORROWER” and the envelope containing the request must be marked “PRIORITY”. Inthe event Lender fails to respond to the proposed Lease, Lease Term Sheetand/or renewal, modification, amendment or termination of, or waiver withrespect to, an existing Lease within such time, Lender’s approval shall bedeemed given. The reasonable out-of-pocket attorneys’ fees incurred by Lenderin connection with any such proposed Lease, Lease Term Sheet and/or renewal,modification, amendment or termination of, or waiver with respect to, anexisting Lease shall be payable by Borrower to Lender within ten (10) BusinessDays after Lender’s written request therefor.

####  

5.1.18      Management Agreement.

 

#### (a)           TheProperties are currently self-managed by Mortgage Borrower. In the event thatthe Improvements on each Individual Property are operated under the terms andconditions of a Management Agreement, the provisions of this Section 5.1.18shall apply. Borrower shall not permit any Mortgage Borrower Entity to retain amanager to manage any Individual Property unless such manager is a QualifiedManager and has entered into a Management Agreement and an Agreement RegardingManagement Agreement, each in form and substance, reasonably acceptable toLender. All management fees payable pursuant to the Management Agreements shallbe market fees similar to those payable to managers of properties of a similartype and quality pursuant to arm’s-length management agreements, taking intoaccount differences in the quality or

 

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#### level ofservice provided; *provided, however*, that if TSP oran Affiliate of TSP is employed as Manager of the Properties, such fees payableto TSP or such Affiliate, as the case may be, shall be deemed to be market andarm’s-length. Borrower shall cause Mortgage Borrower to (i) diligently performand observe all of the material terms, covenants and conditions of theManagement Agreements on the part of Mortgage Borrower to be performed andobserved to the end that all things shall be done which are necessary to keepunimpaired the rights of Mortgage Borrower under the Management Agreements and(ii) promptly notify Lender of the giving of any notice to Mortgage Borrower ofany default by Mortgage Borrower in the performance or observance of any of theterms, covenants or conditions of any Management Agreement on the part ofMortgage Borrower to be performed and observed and deliver to Lender a truecopy of each such notice. Borrower shall not cause or permit Mortgage Borrowerto surrender any Management Agreement, consent to the assignment by Manager ofits interest under any Management Agreement, or terminate or cancel anyManagement Agreement or, in any respect that would have a Material AdverseEffect, modify, change, supplement, alter or amend any Management Agreement,either orally or in writing. Notwithstanding the foregoing, Borrower shall beentitled to cause or permit Mortgage Borrower to enforce and terminate anyManagement 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 simultaneouslyenter into a replacement Management Agreement for such Individual Property. Subjectto the rights of Mortgage Lender pursuant to the terms and conditions of theMortgage Loan Documents, if Mortgage Borrower shall default in the performanceor observance of any material term, covenant or condition of any ManagementAgreement on the part of Mortgage Borrower to be performed or observed, andsuch default shall continue beyond the expiration of any applicable grace orcure period, then, without limiting the generality of the other provisions ofthis Agreement, and without waiving or releasing Borrower from any of itsobligations hereunder, Lender shall have the right, but shall be under noobligation, to pay any sums and to perform any act or take any action as may beappropriate to cause all the terms, covenants and conditions of such ManagementAgreement on the part of Mortgage Borrower to be performed or observed to bepromptly performed or observed on behalf of Mortgage Borrower, to the end thatthe rights of Mortgage Borrower in, to and under such Management Agreementshall be kept unimpaired and free from default. Lender and any persondesignated by Lender shall have, and are hereby granted, the right to enterupon any Individual Property at any time and from time to time while an uncuredEvent of Default exists for the purpose of taking any such action. If theManager under any Management Agreement shall deliver to Lender a copy of anynotice sent to Borrower or Mortgage Borrower of default under such ManagementAgreement, such notice shall constitute full protection to Lender for anyaction taken or omitted to be taken by Lender in good faith, in reliancethereon. Borrower shall notify Lender if the Manager sub-contracts to a thirdparty any or all of its management responsibilities under any ManagementAgreement. Borrower shall, from time to time, use its best efforts (orcommercially reasonable efforts, at any time when the Manager under anyManagement Agreement is not an Affiliate of Borrower, Mortgage Borrower, anyPrincipal, Guarantor or TSP) to obtain from the Manager under such ManagementAgreement such certificates of estoppel with respect to compliance by

 

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#### MortgageBorrower and Manager with the terms of such Management Agreement as may bereasonably requested by Lender. Borrower shall cause Mortgage Borrower toexercise each individual option, if any, to extend or renew the term of eachManagement Agreement upon demand by Lender made at any time within one (1) yearof the last day upon which any such option may be exercised. Any sums expendedby Lender pursuant to this Section 5.1.18(a) shall bear interest at the DefaultRate from the date which is ten (10) Business Days after the date Lender firstmakes written demand upon Borrower for reimbursement of such cost to the dateof 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 LoanDocuments and shall be due and payable promptly upon demand by Lender therefor.

####  

#### (b)           Withoutlimitation of the foregoing, Borrower, upon the request of Lender, shall causeMortgage Borrower to terminate any Management Agreement and replace the Manager(so long as such termination and/or replacement is not prohibited under theMortgage Loan Documents), without penalty or fee, if at any time during theLoan: (i) there exists an uncured Event of Default, (ii) there exists a defaultby Manager (other than TSP or any other Affiliated Manager) under suchManagement Agreement, which default shall have continued beyond the expirationof any applicable grace or cure period, (iii) the Manager shall becomeinsolvent or a debtor in any bankruptcy or insolvency proceeding, or (iv) theMaturity Date occurs and the Loan is not paid in full. At such time as theManager is removed as the Manager with respect to any Individual Property, aQualified Manager shall assume management of such Individual Property pursuantto a replacement Management Agreement, and shall receive a property managementfee not to exceed then current market rates for managers of properties of asimilar type and quality pursuant to arm’s length management agreements andtaking into account differences in the quality or level of service provided;provided, however, that (A) if a Securitization has occurred, Lender shallreceive written confirmation from the Rating Agencies that management of suchIndividual Property by such Qualified Manager will not result in a downgrade,withdrawal or qualification of the initial, or, if higher, the then currentratings issued in connection with such Securitization, and (B) if aSecuritization has not occurred, such Qualified Manager shall be subject to theapproval of Lender, such approval not to be unreasonably withheld, delayed orconditioned.

####  

5.1.19      Environmental Covenants.

 

#### (a)           Borrowercovenants and agrees that so long as the Loan is outstanding (i) all uses andoperations on or of each Individual Property, whether by Mortgage Borrower orany other Person, shall be in compliance in all material respects with allapplicable Environmental Laws and permits issued pursuant thereto; (ii) thereshall be no Releases of Hazardous Materials in, on, under or from any of theProperties in violation of any Environmental Law; (iii) there shall be noHazardous Materials in, on, or under any Individual Property, except those thatare in compliance with all applicable Environmental Laws and with permitsissued pursuant thereto, if and to the extent required; (iv) Borrower shallcause Mortgage Borrower to keep each Individual Property free and clear of allliens and other encumbrances imposed pursuant to any Environmental Lawapplicable to such Individual Property, whether due to any act or

 

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#### omission ofMortgage Borrower or any other Person (the “Environmental Liens”); (v)Borrower shall, at its sole cost and expense, cause Mortgage Borrower to fullyand expeditiously cooperate in all activities pursuant to Section 5.1.19(b)below, including but not limited to providing all relevant information andmaking knowledgeable persons available for interviews; (vi) Borrower shall, atits sole cost and expense, cause Mortgage Borrower to perform any environmentalsite assessment or other investigation of environmental conditions inconnection with any Individual Property, pursuant to any reasonable writtenrequest of Lender, upon Lender’s reasonable belief that such IndividualProperty is not in compliance in all material respects with all applicableEnvironmental Laws, and share with Lender the reports and other resultsthereof, and Lender and other Indemnified Parties shall be entitled to rely onsuch reports and other results thereof; (vii) Borrower shall, at its sole costand expense, cause Mortgage Borrower to comply with all reasonable writtenrequests of Lender to (A) reasonably effectuate remediation of any Hazardous Materialsin, on, under or from such Individual Property; and (B) comply with anyEnvironmental Law applicable to such Individual Property; (viii) Borrower shallnot knowingly cause or permit Mortgage Borrower to allow any tenant or otheruser of any Individual Property to violate any Environmental Law applicable tosuch Individual Property; and (ix) Borrower shall immediately notify Lender inwriting after it has become aware of (A) any presence or Release or threatenedReleases of Hazardous Materials in, on, under, from or migrating towards anyIndividual Property in violation of any Environmental Law; (B) any materialnon-compliance with any Environmental Laws related in any way to any IndividualProperty; (C) any actual or potential Environmental Lien; (D) any required orproposed remediation of environmental conditions relating to any IndividualProperty; and (E) any written or oral notice or other communication of whichBorrower becomes aware from any source whatsoever (including but not limited toa Governmental Authority) relating in any way to Hazardous Materials in, on,under, from or migrating towards any Individual Property.

####  

#### (b)           Inthe event that Lender shall reasonably believe that any Individual Property isnot in compliance in all material respects with all Environmental Lawsapplicable to such Individual Property, Lender and any other Person designatedby Lender, including but not limited to any environmental consultant, and anyreceiver appointed by any court of competent jurisdiction, shall have theright, but not the obligation, to enter upon such Individual Property at allreasonable times and after reasonable prior written notice (and subject to therights of tenants under their respective Leases), to assess any and all aspectsof 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 goodfaith business judgment) and taking samples of soil, groundwater or otherwater, air, or building materials, and conducting other invasive testing. Borrowershall cause Mortgage Borrower to cooperate in all reasonable respects with andprovide access to Lender and any such Person designated by Lender at allreasonable times and after reasonable prior written notice (and subject to therights of tenants under their respective Leases).

 

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5.1.20      Alterations.

 

Borrower shallobtain Lender’s prior written consent, which consent shall not be unreasonablywithheld, conditioned or delayed, to any alterations to the Improvements thatmay have a material adverse effect on Borrower’s or Mortgage Borrower’sfinancial condition, the use, operation or value of any Individual Property,the Collateral, any Mortgage Principal’s general partner interest in therelated Mortgage Borrower Entity, or the net operating income of any IndividualProperty or the Collateral (an “Alteration”), other than (a) tenantimprovement work performed pursuant to the terms of any Lease executed on orbefore the date hereof, or of any Lease executed subsequent to the date hereofif Lender shall have approved (or shall be deemed to have approved) such Leasepursuant to Section 5.1.17 hereof, (b) tenant improvement work performedpursuant to the terms and conditions of a Lease and not adversely affecting anystructural component of any Improvements, any utility or HVAC system containedin any Improvements or (except in the case of customary tenant signage) theexterior of any building constituting a part of any Improvements, (c)alterations performed in connection with the restoration of an IndividualProperty after the occurrence of a casualty in accordance with the terms andconditions of this Agreement and the Mortgage Loan Documents or (d) the capitalimprovements identified in **Schedule 5.1.20**annexed hereto. Any approval by Lender of the plans, specifications or workingdrawings for Alterations of any Individual Property shall not create responsibilityor liability on behalf of Lender for their completeness, design, sufficiency ortheir compliance with Applicable Laws. Lender may condition any such approvalupon receipt of a certificate of compliance with Applicable Laws from anindependent architect, engineer, or other person reasonably acceptable toLender. If the total unpaid amounts due and payable with respect to anAlteration to the Improvements of any Individual Property (other than suchamounts to be paid or reimbursed by tenants under the Leases or Alterations notrequiring approval under clauses (a) through (d) above) shall at any timeexceed an amount equal to the lesser of (x) five percent (5%) of the AllocatedLoan Amount for such Individual Property and (y) $2,500,000 (the “ThresholdAmount”; and any such Alteration a “Material Alteration”), Borrowershall promptly deliver or cause to be delivered to Lender, (i) as security forthe payment of such amounts and as additional security for Borrower’sobligations under the Loan Documents, any of the following:  (1) cash, (2) U.S. Obligations, (3) othersecurities having a rating reasonably acceptable to Lender or, if aSecuritization has occurred, the applicable Rating Agencies have confirmed inwriting that such securities delivered will not, in and of themselves, resultin a downgrade, withdrawal or qualification of the initial, or if higher, thethen current ratings assigned in connection with such Securitization, (4) acompletion bond and performance bond or (5) a Letter of Credit (the securitydescribed in clauses (1) through (5) above being sometimes referred tohereinafter, collectively, as the “Material Alteration Security”), and(ii) if a Securitization has occurred, written confirmation from the applicableRating Agencies that any such Material Alteration shall not result in thedowngrade, withdrawal or qualification of the initial, or, if higher, thecurrent 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 theImprovements (other than such amounts to be paid or reimbursed by Tenants underLeases or to be paid from Reserve Funds or Alterations not requiring approvalunder clauses (a) through (d) above)

 

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over (y) the Threshold Amount. Upon Borrower’s request therefor, Lendershall disburse any Material Alteration Security that is cash to Borrower to payfor Material Alterations or permit Borrower to partially reduce any non-cashMaterial Alteration Security for work completed and paid for with respect toMaterial Alterations from time to time, subject to the same conditions to therelease and disbursement of Required Repair Funds. Provided that no Event ofDefault then exists, upon completion of the Material Alteration, as determinedby Lender in its reasonable discretion, Lender shall cancel the MaterialAlteration Security or disburse or return to Borrower the Material AlterationSecurity, as applicable. **Notwithstanding the foregoing,Borrower shall be relieved of its obligation to deposit the security forcertain alterations described above if Mortgage Borrower is required to anddoes deliver such security to Mortgage Lender in accordance with the MortgageLoan Documents, and in any such case Lender has received evidence reasonablyacceptable to Lender of the delivery of such security.**

 

5.1.21      Intentionally Omitted.

 

5.1.22      OFAC.

 

At all timesthroughout the term of the Loan, Borrower, Mortgage Borrower, Guarantor andtheir respective Affiliates shall be in compliance in all material respectswith all applicable orders, rules, regulations and recommendations of TheOffice of Foreign Assets Control of the U.S. Department of the Treasury.

 

5.1.23      Ground Lease Covenants.

 

#### (a)           Withrespect to each Ground Lease, (a) Borrower shall cause each Mortgage Borrowerthat is the holder of the leasehold interest under such Ground Lease to (i) payall rents, additional rents and other sums required to be paid by such MortgageBorrower, 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 MortgageBorrower, as tenant thereunder, (iii) promptly notify Lender of the giving ofany notice by the landlord under such Ground Lease to such Mortgage Borrower ofany default by such Mortgage Borrower, as tenant thereunder, and deliver toLender a true copy of each such notice within five (5) Business Days of receiptand (iv) promptly notify Lender of any bankruptcy, reorganization or insolvencyof the landlord under such Ground Lease or of any notice thereof, and deliverto Lender a true copy of such notice within five (5) Business Days of Borrower’sreceipt. Borrower shall not, without the prior consent of Lender, cause suchMortgage Borrower to surrender the leasehold estate created by such GroundLease or terminate or cancel such Ground Lease or modify, change, supplement,alter or amend such Ground Lease in any material respect, either orally or inwriting, and if such Mortgage Borrower shall default in the performance orobservance of any term, covenant or condition of such Ground Lease on the partof such Mortgage Borrower, as tenant thereunder, and shall fail to cure thesame 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 performany 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 beperformed or observed on behalf of Borrower, to the end that the rights of suchMortgage Borrower in, to and under such Ground Lease shall be kept unimpairedand free from default; provided, however, that Lender shall have no suchobligation to perform any such actions. If the landlord under such Ground Leaseshall deliver to Lender a copy of any notice of default under such GroundLease, such notice shall constitute full protection to Lender for any actiontaken or omitted to be taken by Lender, in good faith, in reliance thereon. Borrowershall 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 Lendermade at any time within one (1) year prior to the last day upon which any suchoption 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 leaseholdinterest under a Ground Lease to not further sublet any portion of the relatedIndividual Property (other than as permitted pursuant to Section 5.1.17 hereof)without prior written consent of Lender, which consent shall not beunreasonably withheld, conditioned or delayed.

####  

5.1.24      Mortgage Loan Reserve Funds.

 

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

 

5.1.25      Notices.

 

Borrower shallgive notice, or cause notice to be given, to Lender promptly upon theoccurrence 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 theMortgage Loan Documents, Borrower shall exercise its rights under theOrganizational Documents of Mortgage Borrower to cause Mortgage Borrower tomake a distribution to Borrower, in each case in an aggregate amount such thatLender shall receive the amount required to be disbursed pursuant to theMortgage Loan Documents.

 

5.1.27      Mortgage Borrower Covenants.

 

Borrower shallcause Mortgage Borrower to comply with all obligations under the Mortgage LoanDocuments (including, without limitation, the affirmative and negative covenantsset forth in the Mortgage Loan Documents) with which Mortgage Borrower hasexpressly covenanted in the Mortgage Loan Documents to comply, whether theMortgage Loan has been repaid or the related Mortgage Loan Document has beenotherwise terminated (to the extent that such covenants are cross-referencedherein), unless otherwise consented to in writing by Lender. Borrower shallcause Mortgage Borrower to promptly notify Lender of all material noticesreceived by Mortgage

 

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Borrower under or in connection with theMortgage Loan, including, without limitation, any notice by the Mortgage Lenderto Mortgage Borrower of any default by Mortgage Borrower in the performance orobservance of any of the terms, covenants or conditions of the Mortgage LoanDocuments on the part of Mortgage Borrower to be performed or observed, andshall deliver to Lender a true copy of each such notice, together with anyother material consents, notices, requests or other written correspondencebetween Mortgage Borrower and Mortgage Lender.

 

5.1.28      Mortgage Loan Estoppels.

 

Borrowershall, or shall cause Mortgage Borrower to, use commercially reasonable effortsfrom time to time, to obtain from the Mortgage Lender such certificates ofestoppel with respect to compliance by Mortgage Borrower with the terms of theMortgage Loan Documents as may be reasonably requested by Lender. In the eventor to the extent that Mortgage Lender is not legally obligated to deliver suchcertificates of estoppel and is unwilling to deliver the same, or is legallyobligated to deliver such certificates of estoppel but breaches suchobligation, then Borrower shall not be in breach of this provision so long asBorrower furnishes to Lender an estoppel certificate executed by Borrower, inwhich Borrower shall expressly represent to Lender such information as may bereasonably requested by Lender regarding compliance by Mortgage Borrower withthe terms of the Mortgage Loan Documents.

 

5.1.29      Intentionally Omitted.

 

5.1.30      Condominium Covenants.

 

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

####  

#### (b)           Borrowershall cause each Mortgage Borrower that owns an Individual Property subject toa condominium regime to promptly deliver to Lender a true and full copy of allwritten notices of default received by such Mortgage Borrower with respect toany obligation or duty of such Mortgage Borrower under the applicableCondominium Documents.

####  

#### (c)           Borrowershall not permit any Mortgage Borrower that owns an Individual Property subjectto 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) instituteany action or proceeding for partition of such Individual Property; (b) votefor or consent to any material modification of, or amendment to or materialrelaxation in the enforcement of the applicable Condominium Documents or thetermination of any condominium regime; and (c) in the event of damage to ordestruction of such Individual Property, vote not to repair, restore or rebuildsuch Individual Property if Mortgage Borrower shall have such a voting right.

####  

#### (d)           Borrowershall not permit any Mortgage Borrower that owns an Individual Property subjectto a condominium regime to revoke any proxy delivered to Lender in connectionwith the Loan and relating to any voting rights such Mortgage Borrower may haveas a unit owner in any condominium regime.

####  

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

####  

#### (f)            Withrespect to the Boston Common Individual Property, Borrower may permit MortgageBorrower to convert the Boston Common Individual Property to a condominium formof ownership in accordance with the terms and provisions of Section 54 of theSecurity Instrument relating to the Boston Common Individual Property so longas:

####  

##### (i)            (A) Mortgage Borrowercomplies with all of such terms and provisions to the satisfaction of Lender(such compliance as independently determined by Lender in its reasonablediscretion), (B) Borrower obtains the approval of Lender for each matter requiringthe approval of Mortgage Lender under the provisions of such Section 54 of theSecurity Instrument, and (C) Borrower causes such Mortgage Borrower to deliverto Lender copies of all notices, instruments and documents required to bedelivered by such Mortgage Borrower to Mortgage Lender under such Section 54 ofthe Security Instrument;

#####  

##### (ii)           Borrower complies withsuch additional requirements of Lender which are reasonably required by Lenderto insure that the conversion of the Boston Common Individual Property will notimpair or otherwise adversely affect the Liens, security interests and otherrights of Lender under the Loan Documents (including, without limitation,delivery of such documents as shall reasonably be required by Lender, includingopinions of counsel, UCC and title insurance, all in form and substancereasonably satisfactory to Lender); and

#####  

##### (iii)          Lender shall havereceived payment of all of Lender’s reasonable costs and expenses, includingdue diligence review costs and reasonable counsel fees and disbursementsincurred in connection with the conversion of the Boston Common IndividualProperty and the review and approval of the documents and information requiredto be delivered in connection therewith.

 

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Section 5.2                                      NegativeCovenants.

 

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

 

5.2.1                        Liens.

 

Borrower shallnot permit or cause Mortgage Borrower to create, incur, assume or suffer toexist any Lien on any portion of the Property or permit any such action to betaken, except (i) Permitted Encumbrances; (ii) Liens created by or permittedpursuant to the Mortgage Loan Documents or the Loan Documents, and (iii) Liensfor 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 anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity, 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 rightto contest Liens as provided in the Mortgage Loan Documents.

 

5.2.2                        Dissolution.

 

No BorrowerEntity shall (a) engage in any dissolution, liquidation or consolidation ormerger with or into any other business entity, (b) transfer, lease or sell, inone transaction or any combination of transactions, all or substantially all ofthe properties or assets of such Borrower Entity except to the extent expresslypermitted under the Loan Documents, (c) except as expressly permitted under theLoan Documents, modify, amend, waive or terminate its Organizational Documentsor its qualification and good standing in any jurisdiction or (d) cause itsPrincipal or the applicable Mortgage Borrower Entity to (i) dissolve, wind upor liquidate or take any action, or omit to take an action, as a result ofwhich such Principal or Mortgage Borrower Entity would be dissolved, wound upor liquidated in whole or in part, or (ii) except as expressly permitted underthe Loan Documents, amend, modify, waive or terminate the OrganizationalDocuments of such Principal or Mortgage Borrower Entity, in each case, withoutobtaining the prior written consent of Lender. Nothing contained in thisSection 5.2.2 is intended to expand, modify or decrease the rights of Borrowercontained in Section 5.2.10 hereof.

 

5.2.3                        Change in Business.

 

#### (a)                                  Borrowershall not enter into any line of business other than those permitted underSection 4.1.35(a) hereof, or make any material change in the scope or nature ofits business objectives, purposes or operations or undertake or participate inactivities other than the continuance of its present business.

####  

#### (b)                                 Borrowershall not cause Mortgage Borrower to enter into any line of business other thanthose permitted under the Mortgage Loan Documents, or make any

 

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#### materialchange in the scope or nature of its business objectives, purposes oroperations or undertake or participate in activities other than the continuanceof its present business.

####  

5.2.4                        Debt Cancellation.

 

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

 

5.2.5                        Zoning.

 

Borrower shallnot cause Mortgage Borrower to initiate or consent to any zoningreclassification of any portion of any Individual Property or seek any varianceunder any existing zoning ordinance or use or permit the use of any portion ofany Individual Property in any manner that could result in such use becoming anonconforming use under any zoning ordinance or any other Applicable Lawwithout the prior written consent of Lender.

 

5.2.6                        No Joint Assessment.

 

Borrower shallnot cause or permit Mortgage Borrower to suffer, permit or initiate the jointassessment of any Individual Property with (a) any other real propertyconstituting a tax lot separate from such Individual Property, or (b) anyportion of such Individual Property which may be deemed to constitute personalproperty, or any other procedure whereby the Lien of any taxes which may belevied against such personal property shall be assessed or levied or charged tosuch Individual Property.

 

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

 

No BorrowerEntity shall change its name (including its trade name or names) without firstgiving Lender fifteen (15) days’ prior written notice. Except as otherwiseexpressly permitted under Section 5.2.10 hereof, no Borrower Entity shallchange its limited liability company, partnership or other structure, or theplace of its organization as set forth in Section 4.1.34, without, in eachcase, the consent of Lender. Upon Lender’s request, Borrower shall execute anddeliver additional financing statements, security agreements and otherinstruments which may be necessary to effectively evidence or perfect Lender’ssecurity interest in the Collateral as a result of such change of principalplace of business or place of organization.

 

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5.2.8                        ERISA.

 

#### (a)                                  Duringthe term of the Loan or of any obligation, or right hereunder, no Loan Partyshall be a Plan and none of the assets of any Loan Party shall constitute PlanAssets.

####  

#### (b)                                 Borrowerfurther covenants and agrees to deliver to Lender such certifications or otherevidence from time to time throughout the term of the Loan as may be requestedby Lender, and represents and covenants that (A) no Loan Party is an “employeebenefit plan” as defined in Section 3(3) of ERISA, which is subject to Title Iof ERISA, or a “governmental plan” within the meaning of Section 3(32) ofERISA; (B) no Loan Party is subject to State statutes regulating investmentsand fiduciary obligations with respect to governmental plans; and (C) one ormore of the following circumstances is true:

####  

##### (i)                                     Equityinterests such Loan Party are publicly offered securities, within the meaningof 29 C.F.R. §2510.3-101(b)(2);

#####  

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

#####  

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

#####  

5.2.9                        Affiliate Transactions.

 

#### (a)                                  Borrowershall not enter into, or be a party to, any transaction with an Affiliate ofBorrower, Principal or any of the partners of Borrower or Principal except inthe ordinary course of business and on terms which are fully disclosed to Lenderin advance and are substantially similar to those that would be obtained in acomparable arm’s-length transaction (taking into account the relative standardsfor quality and reputation of the party rendering the service) with anunrelated third party. Lender acknowledges that it has approved the ManagementAgreement.

####  

#### (b)                                 Anycontracts or agreements relating to the Property, the Collateral or anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity in any manner between or among any Loan Parties or their Affiliates,including the Management Agreement and any other agreement specifically relatedto the Property, the Collateral, any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity or any Loan Party(collectively, the “Affiliate Agreements”) shall be made on an arm’s-lengthbasis (taking into account differences in the quality or standards of goods orservices provided); and the parties to each Affiliate Agreement shallacknowledge and agree that, to the extent not prohibited under the MortgageLoan Documents, any such agreement (other than the Management Agreement, as towhich the provisions of the Agreement Regarding Management Agreement andSection 5.1.18 hereof shall be applicable) shall be terminable by MortgageBorrower or Lender within ten (10) days after notice, without the payment ofany fee, penalty, premium or liability

 

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#### for futureliabilities or obligations, if an Event of Default shall have occurred and becontinuing. To the extent not prohibited under the Mortgage Loan Documents,upon the occurrence and during the continuation of an Event of Default, ifrequested by Lender in writing, Borrower shall, or shall cause the applicableLoan Party or any Affiliate thereof to, terminate any existing AffiliateAgreement specified by Lender within ten (10) days after delivery of Lender’srequest without payment of any penalty, premium or termination fee.

####  

5.2.10                  Transfers.

 

#### (a)                                  Exceptas otherwise permitted under Section 5.2.10(c) or 5.2.11 hereof, Borrower shallnot sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grantoptions with respect to, or otherwise transfer or dispose of (directly orindirectly, voluntarily or involuntarily, by operation of law or otherwise, andwhether or not for consideration or of record) any Individual Property, theCollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity or any part thereof or any legal or beneficialinterest therein or permit a Sale or Pledge of any interest in any RestrictedParty (collectively, a “Transfer”), without the prior written consent ofLender, other than (i) pursuant to Leases of space in the Improvements totenants in accordance with the provisions of Section 5.1.17 hereof, (ii)Permitted Encumbrances, and (iii) the transfer of obsolete or worn out PersonalProperty and fixtures that are contemporaneously replaced by items of equal orbetter function and quality, which are free of liens, encumbrances and securityinterests other than those created by the Loan Documents or consented to byLender. The replacement requirement in clause (iii) of the preceding sentenceshall not apply to sales or dispositions of Personal Property in any fiscalyear valued at less than $50,000 in the aggregate, provided that Borrowershall, or shall cause Mortgage Borrower to, upon Lender’s written request,provide an annual written certification to Lender as to the value of PersonalProperty sold in the prior year.

####  

#### (b)                                 ATransfer shall include, but shall not be limited to, (i) an installment salesagreement wherein (A) Mortgage Borrower agrees to sell one or more of theProperties or any part thereof or (B) Borrower agrees to sell the Collateral orany part thereof, for a price to be paid in installments; (ii) an agreement byMortgage Borrower to lease all or substantially all of any Individual Propertyfor 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 anyRents; (iii) if a Restricted Party is a corporation, any merger, consolidationor Sale or Pledge of such corporation’s stock or the creation or issuance ofnew stock; (iv) if a Restricted Party is a limited or general partnership orjoint venture, any merger or consolidation or the change, removal, resignationor addition of a managing general partner or the Sale or Pledge of the partnershipinterest of any managing general partner or any profits or proceeds relating tosuch partnership interest, or the Sale or Pledge of limited partner interestsor any profits or proceeds relating to such limited partner interests or thecreation or issuance of new limited partner interests; (v) if a RestrictedParty is a limited liability company, any merger or consolidation or thechange, removal, resignation or addition of a managing member or non-membermanager (or if no managing member, any member) or the Sale or Pledge of themembership interest of a

 

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#### managingmember (or if no managing member, any member) or any profits or proceedsrelating to such membership interest, or the Sale or Pledge of non-managingmembership interests or the creation or issuance of new non-managing membershipinterests; (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 aRestricted Party or the creation or issuance of new legal or beneficialinterests; (vii) the removal or the resignation of the Manager (including,without limitation, an Affiliated Manager) other than in accordance with theMortgage Loan Documents and Section 5.1.18 hereof; (viii) any deed-in-lieu orconsensual foreclosure relating to any Individual Property with or for thebenefit of Mortgage Lender or any Affiliate thereof; (ix) any transaction,event or series of transactions or events that result in Borrower holding lessthan 100% of the direct limited partnership interests or limited liabilitycompany interests, as applicable, in Mortgage Borrower, or less than 100% ofthe membership interests in Mortgage Principal; or (x) any transaction, eventor series of transaction or events that results in a change in Control ofBorrower.

####  

#### (c)                                  Notwithstandingthe provisions of Sections 5.2.10(a) and 5.2.10(b) hereof, none of thefollowing transfers shall be deemed to be a Transfer:

####  

##### (i)                                     atransfer by devise or descent or by operation of law upon the death of amember, partner or shareholder of a Restricted Party (other than MortgageBorrower or Mortgage Principal);

#####  

##### (ii)                                  intentionallyomitted;

#####  

##### (iii)                               intentionallyomitted;

#####  

##### (iv)                              thePledge to Mezzanine B Lender of (A) the limited partnership or limitedliability company interest in any Borrower Entity, as applicable, held by therelated Mezzanine B Borrower Entity, and (B) the membership interest in anyPrincipal held by the related Mezzanine B Borrower Entity, in each case ascollateral security for the Mezzanine B Loan (or any restructuring thereof inaccordance with Section 9.8 hereof), or any registration of such Pledge or theexercise of any rights or remedies Mezzanine B Lender may have under theMezzanine B Loan Documents with respect to such Pledge in accordance with theterms of the Intercreditor Agreements;

#####  

##### (v)                                 IntentionallyOmitted;

#####  

##### (vi)                              IntentionallyOmitted;

#####  

##### (vii)                           thePledge to Bank Loan Agent for the benefit of the Bank Loan Lenders of (A) thelimited partnership or limited liability company interest in any Mezzanine BBorrower Entity, as applicable, held by the related Bank Loan Borrower, (B) themembership interest in any Mezzanine B Principal held by the related Bank LoanBorrower and (C) 100% of the equity interests in each of the entities set forthon **Schedule 5.2.10(c)(vii)** annexedhereto, in each case as collateral security for the Bank Loan, or anyregistration of such Pledge or the

 

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##### exercise of any rights orremedies Bank Loan Lender may have under the Bank Loan Documents with respectto such Pledge in accordance with the terms of the Bank Loan IntercreditorAgreement;

#####  

##### (viii)                        IntentionallyOmitted;

#####  

##### (ix)                                IntentionallyOmitted;

#####  

##### (x)                                   IntentionallyOmitted; or

#####  

##### (xi)                                theSale or Pledge, in one or a series of transactions, of any direct or indirectlegal or beneficial interest in any Restricted Party other than a directinterest in any Mortgage Borrower Entity, any Mortgage Principal, any MezzanineB Borrower Entity, any Mezzanine B Principal, any Borrower Entity or anyPrincipal (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 madepursuant to clause (i) above within thirty (30) days after the occurrence ofsuch transfer. With respect to the transfers referenced in (iv) through (vii)above, Lender shall receive no less than thirty (30) days’ prior written noticeof such proposed transfer. With respect to transfers referenced in (xi) above,Borrower shall, upon request, deliver an Officer’s Certificate to Lendercertifying that no transfers in violation of such clause (xi) have occurred.

#####  

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

#####  

#### (d)                                 Lendershall not be required to demonstrate any actual impairment of its security orany increased risk of default hereunder in order to declare the Debtimmediately 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 ornot, or whether or not Lender has consented to any previous Transfer. Notwithstandinganything 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 anyProhibited Person; (b) Borrower shall provide to Lender, no later than ten (10)Business Days after written request, the name and identity of each Person andits Affiliates which own, directly or indirectly, more than twenty percent(20%) of the legal or beneficial interest in Borrower or Principal (excludingownership interests in any fund or other entity which (i) is controlled by oneor more Tishman Speyer Control Persons and/or Lehman Entities, (ii) owns anindirect interest in Borrower or Principal and (iii) owns, directly orindirectly, real property assets other than the Properties), together with thenames of their controlling principals, and Lender, except as may be required byApplicable Law, agrees to keep such information confidential; notwithstandingthe foregoing, Lender may disclose such information to a Rating Agency, Investoror prospective Investor that requests such information, provided that suchRating Agency, Investor or prospective Investor agrees in writing to keep such

 

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#### informationconfidential and (c) in the event any transfer (whether or not such transfershall constitute a Transfer) results in any Person that as of the date hereofowns less than forty-nine percent (49%) of the beneficial ownership interest inMortgage Borrower, Mezzanine B Borrower and Borrower owning in excess offorty-nine percent (49%) of the beneficial ownership interest in MortgageBorrower, Mezzanine B Borrower and Borrower and a Securitization has occurred,Borrower shall, prior to such transfer, deliver an updated Insolvency Opinion toLender, which opinion shall be in form, scope and substance reasonablysatisfactory to Lender and the Rating Agencies.

####  

5.2.11                  Permitted Transfer.

 

#### (a)                                  Withoutlimiting the provisions of Section 5.2.10 hereof, in the event that MortgageBorrower is permitted to transfer all of the Properties pursuant to Section 21of the Security Instrument, Lender shall not unreasonably withhold its consentto a one-time sale, assignment, or other transfer of all of the Properties to aPermitted Transferee (defined below), provided that (w) Lender receives sixty(60) days’ prior written notice of such transfer, (x) Borrower or suchPermitted Transferee shall pay, concurrently with the closing of such sale,assignment or transfer, a non-refundable transfer fee in an amount equal toone-quarter of one percent (0.25%) of the then outstanding principal balance ofthe Note, (y) no Event of Default has occurred and is continuing under thisAgreement, the Pledge Agreement, the Note or the other Loan Documents and (z)upon the satisfaction (in the reasonable determination of Lender) of suchconditions as may be reasonably imposed by Lender, which may include, but shallnot be limited to, the following matters:

####  

##### (i)                                     Borroweror such Permitted Transferee shall pay any and all reasonable out-of-pocketcosts 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)                                  Borrowershall cause the transferee to comply with all of the requirements of Section4.1.35 hereof and to be wholly owned and controlled by one or moreInstitutional Investors or shall itself be an Institutional Investor, and, in addition, Lender shall be reasonablysatisfied that each such Institutional Investor (1) is generally creditworthyand 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 ordefendant in any suit brought against or by Lender, (4) has not been found by acourt of competent jurisdiction to have committed a crime, fraud or similarmalfeasance, (5) has not been indicted for any crime, and (6) has experienceand a track record in owning and operating facilities similar to theProperties, in the case of each of clauses (1) through (5) above, as reasonablydetermined by Lender based on a Lexis/Nexis or similar background search ofeach such Person and its Affiliates (the “Permitted Transferee”);

#####  

##### (iii)                               Borrowershall cause the transferee to assume all of the obligations of Borrower arisingfrom and after the transfer of this Agreement, the Note and the

 

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##### other Loan Documents and areplacement guarantor acceptable to Lender in all respects shall assume all ofthe obligations of Guarantor, accruing from and after the date of suchtransfer, under the Guaranty, in each case, in a manner reasonably satisfactoryto Lender in all respects, including, without limitation, by entering into anassumption agreement (the “Assumption Agreement”) in form and substancereasonably satisfactory to Lender and delivering such legal opinions as Lendermay reasonably require;

#####  

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

#####  

##### (v)                                 theIndividual Property, at the time of the proposed Transfer, meets all Lender’sstandards as to its physical condition, occupancy, net operating income and thecollection of reserves that are customarily applied by Lender at the time ofthe proposed Transfer to the approval of properties in connection with theorigination or purchase of similar mortgages on multifamily properties;

#####  

##### (vi)                              IntentionallyOmitted;

#####  

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

#####  

##### (viii)                        Borrowershall cause the transferee to authorize Lender to file such UCC FinancingStatements required by Lender with respect to the substitute Collateral;

#####  

##### (ix)                                Borrowershall deliver, at its sole cost and expense, a UCC Insurance Policy insuringthe new pledge agreement as a valid first lien on the Ownership Interestspledged thereunder and substantially identical to the UCC Insurance Policy deliveredat the closing of the Loan;

#####  

##### (x)                                   Borrowershall cause the transferee to provide opinion letters in substantially the sameform and substance as such opinion letters delivered at the closing of the Loan(including enforcement and perfection opinions and a substantivenon-consolidation opinion of the transferee and its constituent entities, whichand opinions shall be reasonably satisfactory to Lender;

#####  

##### (xi)                                Thetransferee shall receive an Owner’s Title Policy reasonably acceptable toLender; and

#####  

##### (xii)                             Borrowershall cause the transferee to execute and deliver such other replacement loanand closing documents in substantially the same forms as the Loan Documents andsuch other closing documents as reasonably requested by Lender.

 

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#### (b)                                 Intentionallyomitted.

####  

Provided the Permitted Transferee has assumed all of Borrower’sobligations and liabilities (including, without limitation, those pursuant tothe Environmental Indemnity) and a replacement guarantor acceptable to Lenderin all respects has assumed all of Guarantor’s obligations and liabilities(including, without limitation, those pursuant to the Guaranty) in a mannerreasonably acceptable to Lender and all the conditions set forth in thisSection 5.2.11 have been satisfied, Lender shall (i) release Borrower from itsobligations under the Loan Documents (other than those obligations expresslystated to survive) from and after the date of sale, assignment, or othertransfer of the Properties to such Permitted Transferee; (ii) release Guarantorfrom its obligations under the Guaranty (other than those obligations expresslystated to survive) from and after the date of sale, assignment, or othertransfer of the Properties to such Permitted Transferee; and (iii) promptlyafter Borrower’s written request, deliver a written confirmation of suchrelease to Borrower; *provided, however*,that such written confirmation shall not be required to effectuate suchrelease.

 

5.2.12                  Limitations on SecuritiesIssuances.

 

Borrower shall not permit any Mortgage Borrower Entity or any MortgagePrincipal to issue any **equity or ownership******interestsor other securities other than those that have been issued as of the ClosingDate.

 

5.2.13                  Distributions.

 

#### (a)                                  Anyand all dividends, including capital dividends, stock or liquidating dividends,distributions of property, redemptions or other distributions made by MortgageBorrower or Mortgage Principal on or in respect of any interests in MortgageBorrower, and any and all cash and other property received in payment of theprincipal 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 theLien of the Pledge Agreement or any other Loan Document, any Distributions **Borrower**receives, but only upon the express condition that no Event of Default hasoccurred and is continuing under this Agreement.

####  

#### (b)                                 Ifany Distributions shall be received by Borrower or any Affiliate of Borrowerafter 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 thebenefit of Lender. Any and all revenue derived from the Property paid directlyby tenants, subtenants or occupants of the Property shall be held and appliedin accordance with the terms and provisions of the Mortgage Loan Documents.

####  

5.2.14                  Refinancing or Prepayment of theMortgage Loan.

 

NeitherBorrower nor Mortgage Borrower shall be required to obtain the consent ofLender 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 thisAgreement

 

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(including any prepayment premiums and other amounts due and payable toLender under the Loan Documents). Borrower shall cause Mortgage Borrower toobtain the prior written consent of Lender to enter into any other refinancingof the Mortgage Loan.

 

5.2.15                  Acquisition of the Mortgage Loan.

 

#### (a)                                  NoLoan Party or any Affiliate of any of them or any Person acting at any suchPerson’s request or direction, shall acquire or agree to acquire the lender’sinterest in the Mortgage Loan, or any portion thereof or any interest therein,or any direct or indirect ownership interest in the holder of the MortgageLoan, by way of purchase, transfer, exchange or otherwise, and any breach orattempted breach of this provision shall constitute an Event of Defaulthereunder. If, solely by operation of applicable subrogation law, Borrowershall have failed to comply with the foregoing, then Borrower: (i) shallpromptly notify Lender of such failure; (ii) shall cause any and all suchprohibited 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 authorityto do so, to promptly: (1) cancel the promissory note evidencing the MortgageLoan, (2) re-convey and release the Lien securing the Mortgage Loan and anyother collateral under the Mortgage Loan Documents, and (3) discontinue and terminateany enforcement proceeding(s) under the Mortgage Loan Documents.

####  

#### (b)                                 Lendershall have the right at any time to acquire all or any portion of the MortgageLoan or any interest in any holder of, or participant in, the Mortgage Loanwithout notice or consent of Borrower or any other Loan Party, in which eventLender shall have and may exercise all rights of Mortgage Lender thereunder (tothe extent of its interest), including the right, if and when permitted underthe Mortgage Loan Documents, (i) to declare that the Mortgage Loan is indefault and (ii) to accelerate the Mortgage Loan indebtedness, in accordancewith the terms thereof and (iii) to pursue all remedies against any obligorunder the Mortgage Loan Documents. In addition, Borrower hereby expresslyagrees that any claims, counterclaims, defenses, offsets, deductions orreductions of any kind which Mortgage Borrower or any other Person may haveagainst Mortgage Lender relating to or arising out of the Mortgage Loan shallbe the personal obligation of Mortgage Lender, and in no event shall MortgageBorrower be entitled to bring, pursue or raise any such claims, counterclaims,defenses, offsets, deductions or reductions against Lender or any Affiliate ofLender or any other Person as the successor holder of the Mortgage Loan or anyinterest therein; provided, however, that Mortgage Borrower may seek specificperformance of its contractual rights and Lender’s contractual obligationsunder the Mortgage Loan Documents.

####  

5.2.16                  Material Agreements.

 

#### (a)                                  Borrowershall not, and shall not permit any Loan Party to, enter into any MaterialAgreement without the consent of Lender, not to be unreasonably withheld ordelayed. Lender may condition its consent upon Mortgage Borrower also obtainingthe consent of Mortgage Lender, if such consent shall be required under theMortgage Loan Documents. Each such Material Agreement shall be in form andsubstance reasonably

 

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#### acceptable toLender in all respects, including the amount of the costs and fees thereunder.

####  

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

####  

#### (c)                                  Borrowershall and shall cause each Loan Party to observe and perform each and everyterm to be observed or performed by such Loan Party under the MaterialAgreements the non-performance of which would cause a Material Adverse Effect.

####  

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

####  

**VI.****                                INSURANCE;CASUALTY AND CONDEMNATION**

** **

Section 6.1                                      Insurance.

 

#### (a)                                  Borrowershall obtain and maintain, or cause Mortgage Borrower to maintain, Policiesproviding at least the following coverages:

####  

##### (i)                                     comprehensiveall risk insurance, including the peril of wind (named storms) on the Improvementsand the Personal Property, in each case (A) having a 100% “Replacement CostValuation” clause or endorsement, which for purposes of this Agreement shallmean actual replacement value of each Individual Property (exclusive of costsof excavations, foundations, underground utilities and footings), with a waiverof depreciation, (B) containing an agreed amount endorsement with respect tothe 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, whichdeductible will not exceed 5% of the total insurable value of the IndividualProperty where the physical loss or damage occurred); and (D) providingcoverage for contingent liability from Operation of Building Laws, DemolitionCosts and Increased Cost of Construction Endorsements together with an “Ordinanceor Law Coverage” or “Enforcement” endorsement if any of the Improvements or theuse of any Individual Property shall at any time constitute legalnon-conforming structures or uses;

#####  

##### (ii)                                  businessinterruption/loss of rents insurance (A) with loss payable to Lender, MezzanineB Lender and/or Mortgage Lender, as their interests may appear; (B) coveringall risks required to be covered by the insurance provided for in Section6.1(a)(i) above; (C) in an amount equal to the greater of (1) the estimatedgross income from the operation of each Individual Property, or (2) theprojected operating expenses (including Debt Service, Mezzanine B Debt Serviceand Mortgage Loan Debt Service) for the maintenance and operation of eachIndividual Property, in each case for the period of restoration on an actualloss sustained basis for limit purchased not less than the succeeding 18 monthperiod;

 

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##### the amount of such insuranceshall be increased from time to time, at Lender’s request but in no event morefrequently than once every calendar year, as and when the Rents increase or theestimate of (or the actual) gross income increases; and (D) containing anextended period of indemnity endorsement which provides that after the physicalloss to the Improvements and the Personal Property has been repaired, thecontinued loss of income will be insured until either such income returns tothe same level it was at prior to the loss, or the date which is 365 days afterthe date that the applicable Individual Property is repaired or replaced andoperations are resumed, whichever first occurs, in each case notwithstandingthat the policy may expire prior to the end of such period. All insuranceproceeds payable to Lender, Mezzanine B Lender and/or Mortgage Lender, as theirinterests may appear, pursuant to the insurance coverage required under thisSection 6.1(a)(ii) which (x) are for losses in the month in which such proceedsare received or for losses prior to the date of receipt, and (y) are forprojected or future losses shall be applied to the obligations of Borrower,Mortgage Borrower and Mezzanine B Borrower, as the case may be, from time totime due and payable under the Loan, the Mortgage Loan and the Mezzanine BLoan, as the case may be, for each period as and when incurred; provided,however, that nothing herein contained shall be deemed to relieveBorrower, Mortgage Borrower or Mezzanine B Borrower of its respectiveobligations to pay the amounts due under the Loan, the Mortgage Loan and theMezzanine B Loan, as the case may be, on the respective dates of paymentprovided for under the Loan, the Mortgage Loan and the Mezzanine B Loan, as thecase may be, except to the extent such amounts are actually paid out of theproceeds of such business interruption/loss of rents insurance.

#####  

##### (iii)                               commercialgeneral liability insurance against claims for personal injury, bodily injury,death or property damage occurring upon, in or about the Properties, suchinsurance (A) to be on the so called “occurrence” form and containing minimumlimits per occurrence of $1,000,000 with a $2,000,000 general aggregate for anypolicy year; (B) to continue at not less than the aforesaid limit untilreasonably required to be changed by Lender in writing by reason of changedeconomic conditions making such protection inadequate; and (C) to cover atleast 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 allwritten and oral contracts; and (5) contractual liability covering theindemnities contained in the Security Instruments to the extent the same isavailable;

#####  

##### (iv)                              ifand to the extent not covered by the insurance required to be maintainedpursuant to Section 6.1(a)(i) and Section 6.1(a)(iii) hereof, at all timesduring which structural construction, repairs or alterations are being madewith respect to the Improvements (A) owner’s contingent liability insurance orits equivalent covering claims not covered by or under the terms or provisionsof 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 bewritten in a so called builder’s risk completed value form (1) on anon-reporting basis, (2)

 

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##### against all risks insuredagainst pursuant to Section 6.1(a)(i) hereof, (3) shall include permission tooccupy the applicable Individual Property, and (4) shall contain an agreedamount endorsement waiving co insurance provisions;

#####  

##### (v)                                 workers’compensation, subject to the statutory limits of the State(s) in which eachIndividual Property is located, and employer’s liability insurance with a limitof 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 onor about any Individual Property, or in connection with such IndividualProperty or its operation (if applicable);

#####  

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

#####  

##### (vii)                           if anyportion of the Improvements on any Individual Property is at any time locatedin an area identified by the Secretary of Housing and Urban Development or anysuccessor thereto as an area having special flood hazards pursuant to theNational Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973or the National Flood Insurance Reform Act of 1994, as each may be amended, orany successor law (the “Flood Insurance Acts”), flood hazard insuranceof the following types and in the following amounts: (A) coverage underPolicies issued pursuant to the Flood Insurance Acts (the “Flood InsurancePolicies”) in an amount equal to the maximum limit of coverage availablefor such Individual Property under the Flood Insurance Acts, subject only tocustomary deductibles under such Policies and (B) coverage under supplementalprivate Policies in an amount, which when added to the coverage provided underthe Flood Insurance Policies with respect to such Individual Property, is notless the aggregate amount of the Loan, the Mortgage Loan and the Mezzanine BLoan (provided such private flood hazard insurance is generallyavailable at reasonable premiums and is generally required by institutional lendersfor similar properties);

#####  

##### (viii)                        earthquakeinsurance, 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 indicatedin the applicable engineering report, with a deductible reasonably approved byLender, (B) having a deductible reasonably approved by Lender and subject toRating Agency Confirmation (but in any event earthquake insurance for suchIndividual Property shall not be in excess of 5% of the full replacement costof such Individual Property) and (C) if such Individual Property is legallynonconforming under applicable zoning ordinances and codes, containingordinance of law coverage;

 

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##### (ix)                                umbrellaliability insurance in an amount not less than $200,000,000 per occurrence onterms consistent with the commercial general liability insurance policyrequired under Section 6.1(a) hereof;

#####  

##### (x)                                   insuranceagainst terrorism, terrorist acts or similar acts of sabotage, but excludingacts of war (“Terrorism Insurance”) with coverage amounts of not lessthan an amount equal to the full insurable value of the Improvements and thePersonal Property (the “Terrorism Insurance Required Amount”). Thebusiness interruption/rent loss insurance Policy required pursuant to Section6.1(a)(ii) hereof shall not contain an exclusion from coverage under suchPolicy for loss incurred as a result of an act of terrorism (but may contain anexclusion for acts of war). If TRIA or similar statue is not in effect, thenBorrower shall be required to, or Borrower shall cause Mortgage Borrower to,carry Terrorism Insurance throughout the term of the Loan, as required by thepreceding sentence, but in such event neither Borrower nor Mortgage Borrowershall be required to spend on terrorism insurance coverage more than two timesthe amount of the insurance premium that is payable at such time in respect ofthe all-risk insurance, excluding the cost of earthquake, flood and terrorismcoverage (and in such event such terrorism coverage shall be from suchinsurers, and with such coverage, as shall be acceptable to Lender in itsreasonable discretion) (the “Terrorism Insurance Cap”) and if the costof the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap,Borrower shall, or shall cause Mortgage Borrower to, purchase the maximumamount of Terrorism Insurance obtainable for a premium equal in amount to theTerrorism Insurance Cap; and

#####  

##### (xi)                                suchother insurance and in such amounts as Lender from time to time may reasonablyrequest against such other insurable hazards which at the time are commonlyinsured against for property similar to the Properties located in the region inwhich the Properties are located.

#####  

#### (b)                                 Allinsurance provided for in Section 6.1(a) hereof shall be obtained under validand enforceable policies (collectively, the “Policies” or in thesingular, the “Policy”), in such forms and, from time to time after thedate hereof, subject to the terms of Section 6.1(a) hereof, in such amounts asmay be reasonably satisfactory to Lender. The Policies shall be issued byfinancially sound and responsible insurance companies authorized to do businessin the State in which the Individual Property is located and having a claimspaying ability/ rating of “A” or better (and the equivalent thereof) by atleast two of the Rating Agencies rating the Securities (one of which shall beS&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 ratingthe Securities, then only by such Rating Agency; provided, however, that if theinsurance coverage is provided by a syndicate of insurers, then (i) if suchsyndicate consists of five or more members, (A) at least 40% of the insurancecoverage (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 companieshaving a claims paying ability rating of “A” or better by S&P and 20% shallbe 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 beprovided by insurance

 

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#### companieshaving a claims paying ability rating of “BBB” or better by S&P. Not lessthan ten days prior to the expiration dates of the Policies theretoforefurnished to Lender, binders or certificates of insurance evidencing thePolicies accompanied by evidence reasonably satisfactory to Lender of paymentof the Insurance Premiums shall be delivered by Borrower to Lender.Notwithstanding the foregoing, Lender will allow 10% of the property program tobe 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)                                  Theinsurance coverage required under Section 6.1(a) hereof may be effected under ablanket Policy or Policies covering one or more Individual Properties and otherproperty and assets not constituting a part of the Properties; provided,however, that the certificates of insurance evidencing the coverage requiredherein shall specify any sublimits in such blanket Policy applicable to eachIndividual Property insured by such Policy, which amounts shall not be less thanthe amounts required pursuant to Section 6.1(a), and which shall in any casecomply in all other applicable respects with the requirements of this Section6.1.

####  

#### (d)                                 AllPolicies provided for or contemplated by Section 6.1(a) hereof, except for thePolicy referenced in Section 6.1(a)(v) hereof, shall name Borrower, MortgageBorrower and Mezzanine B Borrower, as the case may be, as the insured andLender, Mortgage Lender and Mezzanine B Lender, as the additional insured, astheir interests may appear, and in the case of property damage, boiler andmachinery, flood and earthquake insurance, shall contain a so called New Yorkstandard non-contributing mortgagee clause in favor of Lender, Mortgage Lenderand Mezzanine B Lender, providing that the loss thereunder shall be payabledirectly to Lender, Mortgage Lender and Mezzanine B Lender, or Lender, MortgageLender and Mezzanine B Lender, and Borrower, Mortgage Borrower and Mezzanine BBorrower, as the case may be, by joint check; provided, however,that Borrower hereby grants to Lender an irrevocable power of attorney toendorse the joint check on Borrower’s behalf.

####  

#### (e)                                  AllPolicies shall contain clauses or endorsements to the effect that:

####  

##### (i)                                     noact or negligence of Borrower, Mortgage Borrower or Mezzanine B Borrower, oranyone acting for Borrower, Mortgage Borrower or Mezzanine B Borrower, or anytenant or other occupant, or failure to comply with the provisions of anyPolicy, which might otherwise result in a forfeiture of the insurance or anypart thereof, except for the willful misconduct of Lender, Mortgage Lender orMezzanine B Lender, in violation of the conditions of such Policy, shall in anyway affect the validity or enforceability of the insurance insofar as Lender,Mortgage Lender or Mezzanine B Lender is concerned;

#####  

##### (ii)                                  thePolicy shall not be cancelled without at least 15 days’ written notice (or tendays’ 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 anadditional insured;

#####  

##### (iii)                               intentionallyomitted; and

 

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##### (iv)                              neitherLender, Mortgage Lender or Mezzanine B Lender shall be liable for any InsurancePremiums thereon or subject to any assessments thereunder.

#####  

#### (f)                                    Borrowershall give written notice to Lender if the Policy has not been renewed 10 daysprior to the expiration. If at any time Lender is not in receipt of writtenevidence that all insurance required hereunder is in full force and effect,Lender shall have the right, without notice to Borrower, but subject to theterms of the Mortgage Loan Documents, to take such action as Lender deemsnecessary to protect its interest in the Properties, including, withoutlimitation, the obtaining of such insurance coverage as Lender in its solediscretion deems appropriate after three (3) Business Days’ notice to Borrowerif prior to the date upon which any such coverage will lapse or at any timeLender deems necessary (regardless of prior notice to Borrower) to avoid thelapse of any such coverage. All premiums incurred by Lender in connection withsuch action or in obtaining such insurance and keeping it in effect shall bepaid by Borrower to Lender upon demand and, until paid, shall be secured by theCollateral and shall bear interest at the Default Rate. Lender shall usecommercially reasonable efforts to give Borrower simultaneous notice of anyaction taken by Lender pursuant to this Section 6.1(f); provided, however, thatif Lender fails to deliver such notice, its rights and remedies under thisAgreement and the Pledge Agreement shall not be impaired.

####  

#### (g)                                 Notwithstandinganything to the contrary set forth in Section 6.1, the Policies requiredpursuant to Sections 6.1(a)(iii), (v), (vii), and (ix) may be issued by acaptive insurance company, provided that, Borrower shall have the ability toprocure a portion of the insurance coverage required hereunder (including theso called catastrophe perils) through a “captive” insurance arrangement with aprovider that is Affiliated with TSP, provided that (i) Lender and any relevantinvestors with respect to the Loan are reasonably satisfied with theformation/structure of the captive provider and the coverage provided, and (ii)Lender has received a Rating Agency Confirmation and a written confirmationfrom each of the investors of any portion of the Loan that the use of suchcaptive insurance arrangement shall not result in any adverse ratings effectupon any applicable certificates. Lender shall cooperate with and permitBorrower to participate in the presentation to the Rating Agencies or investorswith respect to any such captive insurance program. Except for theaforementioned condition, such “captive” insurance company shall not be subjectto any of the above rating requirements or conditions in Section 6.1(b).

####  

#### (h)                                 Forpurposes of this Agreement, Lender shall have the same approval rights over theinsurance referred to in the Mortgage Loan Documents (including, withoutlimitation, the insurers, deductibles and coverages thereunder, as well as theright to require other reasonable insurance pursuant to the Mortgage LoanDocuments) as are provided in favor of the Mortgage Lender in the Mortgage LoanDocuments. All liability insurance provided for in the Mortgage Loan Documentsshall provide insurance with respect to the liabilities of Mortgage Borrowerand Borrower. The insurance policies delivered pursuant to the Mortgage LoanDocuments shall include endorsements of the type described thereof, butpursuant to which Lender shall have the same protections as the Mortgage Lenderas referred to therein.

 

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#### (i)                                     Inthe event that the Mortgage Loan has been paid in full, except upon theoccurrence and continuance of an Event of Default, Borrower shall permitMortgage Borrower to settle any insurance or condemnation claims with respectto Insurance Proceeds or Awards which in the aggregate are less than or equalto the Threshold Amount. Lender shall have the right to participate in andreasonably approve any settlement for insurance or condemnation claims withrespect to the Insurance Proceeds or Awards which in the aggregate are equal toor greater than the Threshold Amount. If an Event of Default shall haveoccurred and be continuing but subject to the rights of Mortgage Lender,Borrower hereby irrevocably empowers Lender, in the name of Mortgage Borroweras its true and lawful attorney-in-fact, to file and prosecute such claim andto collect and to make receipt for any such payment.

####  

Section 6.2                                      Casualty.

 

If anIndividual Property shall be damaged or destroyed, in whole or in part, by fireor other casualty (a “Casualty”), Borrower shall cause Mortgage Borrowerto give prompt notice of such damage to Lender and shall, promptly commence anddiligently prosecute the completion of the Restoration of such IndividualProperty as nearly as possible to the condition such Individual Property was inimmediately prior to such Casualty, provided applicable zoning laws in effectat the time permit such rebuilding, with such alterations as may be reasonablyapproved by Lender (which approval shall not be unreasonably withheld,conditioned or delayed) and otherwise in accordance with the Mortgage LoanDocuments.

 

Section 6.3                                      Condemnation.

 

Borrower shallcause Mortgage Borrower to promptly give Lender notice of the actual orthreatened commencement of any proceeding for the Condemnation of all or anypart of any Individual Property and shall cause Mortgage Borrower to deliver toLender copies of any and all papers served in connection with such proceedings.Lender may participate in any such proceedings, and Borrower shall from time totime cause Mortgage Borrower to deliver to Lender all instruments reasonablyrequested by Lender to permit such participation. Borrower shall cause MortgageBorrower, at its expense, to diligently prosecute any such proceedings, andshall consult with Lender, its attorneys and experts, and cooperate with themin all reasonable respects in the carrying on or defense of any suchproceedings. Notwithstanding any Condemnation by any public or quasi publicauthority through eminent domain or otherwise (including, but not limited to,any transfer made in lieu of or in anticipation of the exercise of suchtaking), Borrower shall continue to pay the Debt at the time and in the mannerprovided for its payment in the Note and in this Agreement.

 

Section 6.4                                      Restoration.

 

#### (a)                                  Borrowershall, or shall cause Mortgage Borrower to, deliver to Lender all reports,plans, specifications, documents and other materials that are delivered toMortgage Lender under****the MortgageLoan Documents in connection with a restoration of the applicable IndividualProperty after a Casualty or Condemnation. If any Insurance

 

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#### Proceeds orAwards are to be disbursed by Mortgage Lender for restoration, Borrower shalldeliver or cause to be delivered to Lender copies of all material writtencorrespondence delivered to and received from Mortgage Lender that relates tothe restoration and release of the Insurance Proceeds or Awards.

####  

#### (b)                                 Notwithstandingany provision in this Agreement to the contrary, all Insurance Proceeds orAwards will be made available to Mortgage Borrower in accordance with theMortgage Loan Documents. In the event the Mortgage Loan has been paid in fulland Lender receives any Insurance Proceeds or Awards, Lender shall either applysuch proceeds to the Debt or to the restoration of the applicable IndividualProperty in accordance with the same terms and conditions contained in theMortgage Loan Documents.

####  

Section 6.5                                      Rights ofLender.

 

For purposesof this Article VI, Borrower shall obtain the approval of Lender for eachmatter requiring the approval of Mortgage Lender under the provisions of theMortgage Loan Documents relating to a Casualty or Condemnation. If the MortgageLender does not require the deposit by Mortgage Borrower of any deficiency inthe net insurance proceeds pursuant to the Mortgage Loan Documents, Lendershall have the right to demand that Borrower make a deposit of such deficiencyin accordance with the terms of the Mortgage Loan Documents (as if eachreference therein to “Borrower” and “Lender” referred to Borrower and Lender,respectively).

 

**VII.****                            RESERVEFUNDS**

** **

Section 7.1                                      Repairs

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditionsset forth in the Mortgage Repair Agreement.

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomaintain the escrow required to be maintained under the Mortgage RepairAgreement or (ii) the Mortgage Loan has been repaid in full, Lender shall have theright to require Borrower to establish and maintain an escrow that will operatein substantially the same way as the escrow required to be maintained under theMortgage Repair Agreement, but this sentence shall not be deemed to requireBorrower to maintain the escrow required to be maintained under the MortgageRepair Agreement (or the applicable portion thereof) after Mortgage Borrower isno longer obligated to maintain same under the express provisions of theMortgage Repair Agreement.

####  

Section 7.2                                      Impositionsand Imposition Deposits.

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditionsset forth in Section 7(a) of each Security Instrument.

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomake the Impositions and Imposition Deposits (each as defined in the

 

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

####  

Section 7.3                                      ReplacementReserves.

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditionsset forth in the Mortgage Replacement Reserve Agreement.

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomaintain the escrow required to be maintained under the Mortgage ReplacementReserve Agreement or (ii) the Mortgage Loan has been repaid in full, Lendershall have the right to require Borrower to establish and maintain an escrowthat will operate in substantially the same way as the escrow required to bemaintained under the Mortgage Replacement Reserve Agreement, but this sentenceshall not be deemed to require Borrower to maintain the escrow required to bemaintained under the Mortgage Replacement Reserve Agreement (or the applicableportion thereof) after Mortgage Borrower is no longer obligated to maintainsame under the express provisions of the Mortgage Replacement ReserveAgreement.

####  

Section 7.4                                      Debt ServiceReserve Funds. 

 

#### (a)                                  Onthe Closing Date, Borrower shall deposit with Lender an amount equal to$11,797,746.00 (the “Debt Service Reserve Deposit”), which is the amountof Debt Service Shortfalls projected by Lender through the end of calendar year2009 and which shall be held and disbursed by Lender in accordance with theapplicable provisions of this Section 7.4. Amounts so deposited hereunder shallhereinafter be referred to as the “Debt Service Reserve Funds”.

####  

#### (b)                                 Inlieu 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 ServiceReserve Deposit (the “LC Option”) or (ii) deliver to Lender acertificate of Bank Loan Borrower certifying to Lender that (a) there aresufficient funds available to Bank Loan Borrower under the Bank Loan for thepurpose of paying Debt Service Shortfalls as projected by Lender through theend of calendar year 2009, (b) Bank Loan Borrower will, in the event of anysuch Debt Service Shortfalls, borrow such funds pursuant to the Bank Loan andwill contribute such funds to Borrower and (c) Borrower will use such funds topay for any such Debt Service Shortfalls (the “Certificate Option”).

####  

#### (c)                                  Inthe event Borrower elects to deliver cash under this Section 7.4, Borrowershall have the right, on any Determination Date, to receive a disbursement ofamounts in excess of the amount of the Debt Service Shortfalls then projectedby Lender through the end of calendar year 2009.

####  

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

 

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#### anyDetermination Date, to replace the Letter of Credit previously delivered toLender with a Letter of Credit in an amount equal to the Debt ServiceShortfalls then projected by Lender through the end of calendar year 2009.

####  

#### (e)                                  Onor prior to each Determination Date, Borrower shall deliver to Lender acertificate of Bank Loan Borrower certifying to Lender that (a) there aresufficient funds available to Bank Loan Borrower under the Bank Loan for thepurpose of paying for Debt Service Shortfalls as projected by Lender throughthe end of calendar year 2009, (b) Bank Loan Borrower will, in the event of anysuch Debt Service Shortfalls, borrow such funds pursuant to the Bank Loan andwill contribute such funds to Mezzanine B Borrower and that Mezzanine BBorrower will contribute such funds to Borrower and (c) Borrower will use suchfunds to pay for any such Debt Service Shortfalls. In the event that Borrowerfails 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 amountequal to the Debt Service Shortfalls as projected by Lender through the end ofthe calendar year 2009.

####  

#### (f)                                    Providedno Event of Default shall have occurred and be continuing, Lender shall makedisbursements of Debt Service Reserve Funds, upon and subject to the terms andconditions set forth in this Section 7.4, to pay for Debt Service Shortfalls. Borrowermay, on written request received by Lender at least five (5) Business Daysprior to any Payment Date, request that Lender withdraw sums held as DebtService Reserve Funds and apply such sums toward the Debt Service due on suchPayment Date, provided Borrower delivers evidence acceptable to Lender in allrespects that there is a Debt Service Shortfall. The amount permitted by Lenderto be withdrawn from the Debt Service Reserve Funds and applied to the DebtService due on such Payment Date shall not exceed the amount of such DebtService Shortfall. In the event that on any subsequent Determination Datefollowing the deposit of cash or delivery of a Letter of Credit as requiredhereunder, Borrower delivers to Lender a certificate of Bank Loan Borrower thatsatisfies the requirements of Section 7.4(e) above, Lender shall return toBorrower the Debt Service Reserve Funds remaining on deposit with Lender orsuch Letter of Credit, as applicable.

####  

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

####  

Section 7.5                                      Mortgage DebtService Escrows. 

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditions setforth in the Mortgage Debt Service Escrow Agreement.

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomaintain the escrow required to be maintained under the Mortgage Debt ServiceEscrow Agreement or (ii) the Mortgage Loan has been repaid in full, Lendershall have the right to require Borrower to establish and maintain an escrowthat will

 

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

####  

Section 7.6                                      Interest RateHedging Reserves.

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditionsset forth in the Mortgage Interest Rate Hedge Reserve Agreement.

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomaintain the escrow required to be maintained under the Mortgage Interest RateHedge Reserve Agreement or (ii) the Mortgage Loan has been repaid in full,Lender shall have the right to require Borrower to establish and maintain anescrow that will operate in substantially the same way as the escrow requiredto be maintained under the Mortgage Interest Rate Hedge Reserve Agreement, butthis sentence shall not be deemed to require Borrower to maintain the escrowrequired to be maintained under the Mortgage Interest Rate Hedge ReserveAgreement (or the applicable portion thereof) after Mortgage Borrower is nolonger obligated to maintain same under the express provisions of the MortgageInterest Rate Hedge Reserve Agreement.

####  

Section 7.7                                      Other MortgageReserves.

 

#### (a)                                  Borrowershall cause Mortgage Borrower to comply with all of the terms and conditionsset forth in the Mortgage Loan Documents with respect to any reserves orescrows established thereunder that are not specifically referenced in anyother section of this Article VII (the “Other Mortgage Reserves”).

####  

#### (b)                                 Inthe event (i) Mortgage Lender waives the requirement of Mortgage Borrower tomaintain any Other Mortgage Reserves pursuant to the terms of the Mortgage LoanDocuments or (ii) the Mortgage Loan has been repaid in full, Lender shall havethe right to require Borrower to establish and maintain an escrow that willoperate in substantially the same way as the applicable Other MortgageReserves.

####  

Section 7.8                                      Reserve Funds,Generally.

 

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

####  

#### (b)                                 Uponthe 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 sumsthen held in any or all of the Reserve Funds established hereunder, if any, tothe payment of the Debt in any order in its sole discretion.

####  

#### (c)                                  AnyReserve Funds established hereunder shall not constitute trust funds and may becommingled with other monies held by Lender.

####  

#### (d)                                 AnyReserve Funds established hereunder shall be held in interest-bearing accountsand all earnings or interest on a Reserve Fund shall be added to and become apart of such Reserve Fund and shall be disbursed in the same manner as othermonies deposited in such Reserve Fund.

####  

#### (e)                                  Borrowershall not, without obtaining the prior written consent of Lender, furtherpledge, assign or grant any security interest in any Reserve Fund or relatedAccount established hereunder, if any, or the monies deposited therein orpermit any lien or encumbrance to attach thereto, or any levy to be madethereon, or any UCC-1 Financing Statements, except those naming Lender as thesecured party, to be filed with respect thereto.

####  

#### (f)                                    Borrowershall indemnify Lender and hold Lender harmless from and against any and allactions, suits, claims, demands, liabilities, losses, damages, obligations andcosts and expenses (including litigation costs and reasonable attorneys’ feesand expenses) arising from or in any way connected with the Reserve Funds orthe related Accounts established hereunder, if any, or the performance of theobligations for which the Reserve Funds or the related Accounts wereestablished, except to the extent arising from the gross negligence or willfulmisconduct of Lender, its agents or employees (including willful breach of thisAgreement). Borrower shall assign to Lender all rights and claims Borrower may haveagainst all Persons supplying labor, materials or other services which are tobe paid from or secured by such Reserve Funds or the related Accounts; *provided, however*, that Lender may not pursue any such rightor claim unless an Event of Default has occurred and remains uncured.

####  

Section 7.9                                      Letters ofCredit.

 

7.9.1                        Delivery of Letters ofCredit.

 

#### (a)                                  Theaggregate amount of any Letter of Credit and cash on deposit with respect tothe Debt Service Reserve Funds at any time during the term of the Loan shall atall times be at least equal to the amount which Borrower would otherwise berequired to have on deposit pursuant to Section 7.4 hereof if Borrower did notelect to deliver a Letter of Credit in lieu thereof. In the event that a Letterof Credit is delivered in lieu of any portion of the Debt Service ReserveFunds, Borrower shall be responsible for the direct payment of any Debt ServiceShortfalls that would otherwise have been payable from such portion of the DebtService Reserve Funds. Lender shall not draw on any Letter of Credit deliveredin lieu of any portion of the Debt Service Reserve Funds unless (i) Borrowerfails to pay any Debt Service Shortfall or (ii) an Event of Default hasoccurred and is continuing.

 

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#### (b)                                 Borrowershall give Lender not less than five (5) Business Days prior written notice ofBorrower’s election to deliver a Letter of Credit and Borrower shall pay toLender all of Lender’s reasonable out-of-pocket costs and expenses inconnection therewith. Lender shall be the beneficiary of any Letter of Creditand Borrower shall not be entitled to draw down any such Letter of Credit forany reason whatsoever. Upon not less than five (5) Business Days prior writtennotice to Lender, Borrower may replace a Letter of Credit with a cash depositto 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 DebtService Reserve Fund deposit requirement.

####  

7.9.2                        Provisions Regarding Lettersof Credit.

 

#### (a)                                  EachLetter of Credit delivered under this Agreement shall be additional securityfor the payment of the Debt. Upon the occurrence and during the continuation ofan Event of Default, Lender shall have the right, at its option, to draw on anyLetter of Credit and to apply all or any part thereof to the payment of theitems for which such Letter of Credit was established or to apply such Letterof Credit to payment of the Debt in such order, proportion or priority asLender may determine. Any such application to the Debt shall be subject to theSpread Maintenance Payment and any Interest Shortfall, if applicable. On theMaturity Date, if the Debt is not paid in full, any such Letter of Credit maybe applied to reduce the Debt.

####  

#### (b)                                 Inaddition to any other right Lender may have to draw upon a Letter of Creditpursuant to the terms and conditions of this Agreement, Lender shall have theadditional rights to draw in full on any Letter of Credit:

####  

##### (i)                                     ifLender has received a notice from the issuing bank that such Letter of Creditwill not be renewed and either (y) a substitute Letter of Credit or (z) cash inthe amount of the Letter of Credit is not provided at least ten (10) BusinessDays prior to the date on which the outstanding Letter of Credit is scheduledto expire;

#####  

##### (ii)                                  uponreceipt of notice from the issuing bank that the Letter of Credit will beterminated (except if the termination of such Letter of Credit is permittedpursuant to the terms and conditions of this Agreement), and Borrower hasfailed to deliver to Lender either (y) a substitute Letter of Credit or (z)cash in the amount of the Letter of Credit; or

#####  

##### (iii)                               ifLender has received notice that the bank issuing the Letter of Credit shallcease to be an Eligible Institution and Borrower has failed to deliver toLender either (y) a substitute Letter of Credit or (z) cash in the amount ofthe Letter of Credit.

#####  

Notwithstandinganything to the contrary contained in the above, Lender shall not be obligatedto draw down on any Letter of Credit upon the happening of an event specifiedin clause (i), (ii) or (iii) above and shall not be liable for any lossessustained by Borrower due to the insolvency of the bank issuing the Letter ofCredit if Lender has not

 

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

 

#### (c)                                  Ifany Letter of Credit or Letters of Credit delivered pursuant to Section 7.4 ofthis Agreement, in the aggregate, are in an amount greater than ten percent(10%) of the then outstanding principal balance of the Loan, Borrower shalldeliver to Lender, together with such Letter of Credit, a new substantivenon-consolidation opinion substantially similar to the Insolvency Opinion deliveredon the date hereof in connection with the Loan, which new opinion shall be inform and substance reasonably acceptable to Lender, and, if a Securitizationhas occurred, to the Rating Agencies.

####  

**VIII.****                        DEFAULTS**

** **

Section 8.1                                      Event ofDefault. 

 

#### (a)                                  Eachof the following events shall constitute an event of default hereunder (an “Eventof Default”):

####  

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

#####  

##### (ii)                                  ifany of the Taxes or Other Charges are not paid on or before the date that theyshall become delinquent, subject to Borrower’s or Mortgage Borrower’s right tocontest Taxes in accordance with Section 5.1.2 hereof, except to the extentsums sufficient to pay such Taxes and Other Charges have been deposited withMortgage Lender in accordance with the terms of the Mortgage Loan Documents orwith Lender in accordance with Section 7.2 hereof;

#####  

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

#####  

##### (iv)                              ifBorrower transfers or encumbers any Individual Property (or any portionthereof), the Collateral or any Mortgage Principal’s general partner interestin the related Mortgage Borrower Entity in violation of the provisions ofSection 5.2.10 hereof or the Pledge Agreement (excluding the removal orresignation of Manager, provided the replacement manager is a Qualified Managerand Borrower employs such manager in accordance with Section 5.1.18 hereof);

 

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##### (v)                                 ifany representation or warranty made by Borrower, Principal or Guarantor hereinor in any other Loan Document, or in any report, certificate, financialstatement or other instrument, agreement or document furnished to Lender inconnection with the Loan shall have been false or misleading in any materialrespect as of the date such representation or warranty was made; *provided, however*, that as to any suchfalse or misleading representation, warranty, acknowledgement or statementwhich was unintentionally submitted to Lender and which can be made true andcorrect by action of Borrower, Borrower shall have a period of thirty (30) daysfollowing written notice thereof to Borrower to undertake and complete allaction necessary to make such representation, warranty, acknowledgement orstatement true and correct in all material respects;

#####  

##### (vi)                              ifany Loan Party or Guarantor shall make an assignment for the benefit ofcreditors generally;

#####  

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

#####  

##### (viii)                        ifBorrower attempts to assign its rights under this Agreement or any of the otherLoan Documents or any interest herein or therein in contravention of the LoanDocuments;

#####  

##### (ix)                                ifBorrower 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)                                   intentionallyomitted;

#####  

##### (xi)                                ifa default by Mortgage Borrower has occurred and continues beyond any applicablenotice or cure period under the Management Agreement (or any replacementManagement Agreement) and such default permits the manager thereunder toterminate or cancel the Management Agreement (or any replacement ManagementAgreement), unless such default is waived by such manager in writing;

#####  

##### (xii)                             ifBorrower or Principal violates or does not comply with any of the provisions ofSection 4.1.35 hereof in any material respect;

#####  

##### (xiii)                          if anyIndividual Property becomes subject to any mechanic’s, materialman’s or otherLien (other than a Lien for local real estate taxes and

 

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##### assessments not then due andpayable) and, subject to Section 5.2.1 hereof, such Lien shall remainundischarged of record (by payment, bonding or otherwise) for a period of sixty(60) days after Borrower or Mortgage Borrower shall have received writtennotice of such Lien;

#####  

##### (xiv)                         if anyfederal tax Lien or state or local income tax Lien is filed against any LoanParty, Guarantor, the Collateral, any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity or any Individual Propertyand, subject to Section 5.1.2 hereof, the same is not discharged of recordwithin sixty (60) days after same is filed;

#####  

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

#####  

##### (xvi)                         ifBorrower shall fail to deliver to Lender, within thirty (30) days after requestby Lender, the estoppel certificates required pursuant to the terms of Section5.1.13(a) hereof;

#####  

##### (xvii)                      intentionallyomitted;

#####  

##### (xviii)                   if Borrowershall be in default beyond applicable notice and grace periods under any otherpledge agreement or other security agreement covering any of the Collateral (orany portion thereof), whether it be superior or junior in lien to the PledgeAgreement;

#####  

##### (xix)                           withrespect to any term, covenant or provision set forth herein which specificallycontains a notice requirement or grace period, if Borrower shall be in defaultunder such term, covenant or condition after the giving of such notice or theexpiration of such grace period;

#####  

##### (xx)                              ifany of the assumptions contained in the Insolvency Opinion, including, but notlimited to, any exhibits attached thereto, were not true and correct in anymaterial respect as of the date of such Insolvency Opinion or thereafter becameuntrue or incorrect in any material respect;

#####  

##### (xxi)                           if,without the prior written consent of Lender, Mortgage Borrower votes for, orpermits any modification or amendment to any of the terms or provisions of theapplicable 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 complyin any material respect with any terms of the applicable Condominium Documentsand the applicable condominium act and such default continues for thirty (30)days after receipt of written notice from Lender or such earlier time asrequired for compliance under the applicable Condominium Documents or theapplicable condominium act;

#####  

##### (xxiii)                     if anyIndividual Property that is subject to a condominium regime is partitionedpursuant to any action for partition by Mortgage Borrower;

#####  

##### (xxiv)                    if thecondominium regime to which an Individual Property is subject to is terminatedwithout Lender’s written consent;

#####  

##### (xxv)                       if Borrowershall cause Mortgage Borrower to fail to pay the Ground Rent or any additionalrent or other charge mentioned in or made payable by any Ground Lease when saidrent or other charge is due and payable;

#####  

##### (xxvi)                    if there shalloccur any default by Mortgage Borrower, as tenant under any Ground Lease, inthe observance or performance of any term, covenant or condition of such GroundLease on the part of Mortgage Borrower to be observed or performed and saiddefault is not cured following the expiration of any applicable grace andnotice periods therein provided, or if the leasehold estate created by suchGround Lease shall be surrendered or if such Ground Lease shall cease to be infull force and effect or such Ground Lease shall be terminated or canceledwithout Lender’s consent, or if any of the terms, covenants or conditions ofsuch 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 shallcontinue to be in Default under any of the other terms, covenants or conditionsof this Agreement not specified in subsections (i) through (xxvi) above, forten (10) days after notice to Borrower from Lender, in the case of any Defaultwhich can be cured by the payment of a sum of money, or for thirty (30) daysafter notice from Lender in the case of any other Default; *provided, however*, that if such nonmonetary Default is susceptible of cure but cannot reasonably be cured withinsuch thirty (30) day period, but Borrower shall have commenced to cure such Defaultwithin such thirty (30) day period and thereafter diligently and expeditiouslyproceeds to cure the same, such thirty (30) day period shall be extended forsuch time as is reasonably necessary for Borrower in the exercise of duediligence to cure such Default, such additional period not to exceed onehundred eighty (180) days;

#####  

##### (xxviii)              if there shall be adefault under the Pledge Agreement or any of the other Loan Documents beyondany applicable notice and cure periods contained in such documents, whether asto Borrower, the Collateral, any Mortgage Principal’s general partner interestin the related Mortgage Borrower Entity or any Individual Property (provided,however, that if no notice or cure period is specified, then the provisions ofSection 8.1(a)(xxii) hereof shall apply to such default), or if any

 

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##### other such event shall occur orcondition shall exist, if the effect of such event or condition is toaccelerate the maturity of any portion of the Debt or to permit Lender toaccelerate the maturity of all or any portion of the Debt; or

#####  

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

#####  

#### (b)                                 Uponthe occurrence of an Event of Default (other than an Event of Default describedin 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 thisAgreement and the other Loan Documents or at law or in equity, Lender may takesuch action, without notice or demand (except for such notice or demand as maybe expressly required under the Note, this Agreement, the Pledge Agreement orthe other Loan Documents), that Lender deems advisable to protect and enforceits rights against Borrower and in and to the Collateral, including, withoutlimitation, declaring the Debt to be immediately due and payable, and Lender mayenforce or avail itself of any or all rights or remedies provided in the LoanDocuments against Borrower and/or the Collateral and may exercise all therights and remedies of a secured party under the Uniform Commercial Codeagainst Borrower and the Collateral, including, without limitation, all rightsor remedies available at law or in equity; and upon any Event of Defaultdescribed in clause (vi) or (vii) of Section 8.1(a) hereof, the Debt and allother obligations of Borrower hereunder and under the other Loan Documentsshall immediately and automatically become due and payable, without notice ordemand, and Borrower hereby expressly waives any such notice or demand,anything contained herein or in any other Loan Document to the contrarynotwithstanding.

####  

Section 8.2                                      Remedies.

 

#### (a)                                  Uponthe occurrence of an Event of Default, all or any one or more of the rights,powers, privileges and other remedies available to Lender against Borrowerunder this Agreement or any of the other Loan Documents executed and deliveredby, or applicable to, Borrower or at law or in equity may be exercised byLender at any time and from time to time, whether or not all or any of the Debtshall be declared due and payable, and whether or not Lender shall havecommenced any foreclosure proceeding or other action for the enforcement of itsrights and remedies under any of the Loan Documents with respect to all or anypart of the Collateral. Any such actions taken by Lender shall be cumulativeand concurrent and may be pursued independently, singly, successively, togetheror otherwise, at such time and in such order as Lender may determine in itssole discretion, to the fullest extent permitted by Applicable Law, withoutimpairing or otherwise affecting the other rights and remedies of Lenderpermitted by Applicable Law, equity or contract or as set forth herein or inthe other Loan Documents. Without limiting the generality of the foregoing,Borrower agrees that if an

 

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#### Event of Defaultis continuing all Liens and other rights, remedies or privileges provided toLender with respect to the Collateral shall remain in full force and effectuntil Lender has exhausted all of its remedies against the Collateral, and thePledge Agreement has been foreclosed, sold and/or otherwise realized upon insatisfaction of the Debt, or the Debt has been paid in full.

####  

#### (b)                                 Withrespect to Borrower and the Collateral, nothing contained herein or in anyother Loan Document shall be construed as requiring Lender to resort to anyspecific portion of the Collateral for the satisfaction of any of the Debt inpreference or priority to any other Collateral, and Lender may seeksatisfaction out of the Collateral or any part thereof, in its absolutediscretion in respect of the Debt. In addition, Lender shall have the rightfrom time to time to partially foreclose upon the Collateral in any manner andfor any amounts secured by the Pledge Agreement then due and payable asdetermined by Lender in its sole discretion, including, without limitation, thefollowing circumstances:  (i) in theevent Borrower defaults beyond any applicable grace period in the payment ofone (1) or more scheduled payments of principal and interest, Lender mayforeclose upon any portion of the Collateral to recover such delinquentpayments, or (ii) in the event Lender elects to accelerate less than the entireoutstanding principal balance of the Loan, Lender may foreclose upon theCollateral to recover so much of the principal balance of the Loan as Lendermay accelerate and such other sums secured by the Pledge Agreement as Lendermay elect. Notwithstanding one or more partial foreclosures, the Collateral notforeclosed upon shall remain subject to the Pledge Agreement to secure paymentof sums secured by the Pledge Agreement and not previously recovered.

####  

#### (c)                                  Lendershall have the right, from time to time, to sever the Note, the PledgeAgreement and the other Loan Documents into one or more separate notes, pledgesand other security documents (the “Severed Loan Documents”) in suchdenominations as Lender shall determine in its sole discretion for purposes ofevidencing and enforcing its rights and remedies provided hereunder. Borrowershall execute and deliver to Lender from time to time, promptly after thewritten request of Lender, a severance agreement and such other documents asLender shall reasonably request in order to effect the severance described inthe preceding sentence, all in form and substance reasonably satisfactory toLender. The Severed Loan Documents shall not (x) contain any representations,warranties or covenants not contained in the Loan Documents (and any suchrepresentations and warranties contained in the Severed Loan Documents will begiven by Borrower only as of the Closing Date) or (y) change the ApplicableInterest Rate or the Maturity Date, or (z) otherwise amend or modify any othermaterial term of the Note, this Agreement, the Pledge Agreement or the otherLoan Documents.

####  

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

 

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Section 8.3                                      RemediesCumulative; Waivers.

 

The rights,powers and remedies of Lender under this Agreement shall be cumulative and notexclusive of any other right, power or remedy which Lender may have againstBorrower pursuant to this Agreement or the other Loan Documents, or existing atlaw 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 deemedexpedient. A waiver of one or more Defaults or Events of Default with respectto Borrower shall not be construed to be a waiver of any subsequent Default orEvent of Default by Borrower or to impair any remedy, right or power consequentthereon.

 

Section 8.4                                      Right to CureDefaults.

 

Upon theoccurrence and during the continuance of any Event of Default, Lender may, butwithout any obligation to do so and without notice to or demand on Borrower(other than such notice as may otherwise be expressly required hereunder) andwithout releasing Borrower from any obligation hereunder, make any payment ordo any act required of Borrower hereunder in such manner and to such extent asLender may deem necessary to protect the security hereof. Lender is authorizedto enter upon the Properties for such purposes, or appear in, defend, or bringany action or proceeding to protect its interest in the Properties for suchpurposes, and the cost and expense thereof (including reasonable attorneys’fees to the extent permitted by law), with interest as provided in this Section8.4, shall constitute a portion of the Debt and shall be due and payable toLender upon demand. All such costs and expenses incurred by Lender in remedyingsuch Event of Default or such failed payment or act or in appearing in,defending, or bringing any action or proceeding shall bear interest, at theDefault Rate, for the period after notice from Lender that such cost or expensewas incurred to the date of payment to Lender. All such costs and expensesincurred by Lender, together with interest thereon calculated at the DefaultRate, shall be deemed to constitute a portion of the Debt and to be secured bythe liens, claims and security interests provided to Lender under the LoanDocuments and shall be immediately due and payable upon demand by Lendertherefor.

 

Section 8.5                                      Mortgage LoanReserve Funds.

 

Any MortgageLoan Reserve Funds that Mortgage Lender disburses to Lender during thecontinuance of an Event of Default shall be held and applied by Lender to thepayment of the Debt in such order and priority determined by Lender in its solediscretion.

 

Section 8.6                                      Power ofAttorney.

 

Upon theoccurrence and during the continuation of an Event of Default, for the purposeof carrying out the provisions and exercising the rights, powers and privilegesgranted in this Article VIII, Borrower hereby irrevocably appoints the Lenderas its true and lawful attorney-in-fact to execute, acknowledge and deliver anyinstruments and do

 

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and perform any acts such as are referred to in this subsection in thename and on behalf of Borrower. This power of attorney is a power coupled withan interest and cannot be revoked.

 

**IX.****                                SPECIALPROVISIONS**

** **

Section 9.1                                      Sale of Notesand Securitization

 

Lender may, atany time, sell, transfer, pledge or assign the Note, this Agreement, the PledgeAgreement and the other Loan Documents, and any or all servicing rights withrespect thereto, or grant participations therein or issue either (i) mortgagepass-through certificates or other securities evidencing a beneficial interestin the Loan or (ii) collateralized debt obligations secured by the Loan(collectively, “Securities”), in either case in a rated or unratedpublic offering or private placement of such Securities (a “Securitization”).At the request of Lender, Borrower and Principal shall cooperate in allreasonable respects with Lender in connection with a Securitization or the saleof the Note or the participations therein or the Securities, including, withoutlimitation, to:

 

#### (a)                                  (i)provide such financial and other information with respect to the Properties,the Collateral, Borrower, Mortgage Borrower, Principal, Mortgage Principal andany Mortgage Principal’s general partner interest in the related MortgageBorrower Entity as may be required to be delivered pursuant to Section 5.1.10hereof (subject to the provisions of Section 5.1.10(g) hereof), (ii) causeMortgage Borrower to provide (A) the information set forth on **Schedule 9.1** annexed hereto and (B) theannual operating budgets relating to the Properties in accordance with therequirements of the Mortgage Loan Documents, and (iii) perform or permit orcause to be performed or permitted such site inspection, appraisals, marketstudies, environmental reviews and reports (Phase I’s and, if appropriate,Phase II’s), engineering reports and other due diligence investigations of theProperties, as may be reasonably requested by the holder of the Note or theRating Agencies or as may be necessary or appropriate in connection with theSecuritization 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 ProvidedInformation reasonably acceptable to Lender and the Rating Agencies;

####  

#### (b)                                 ifrequired by the Rating Agencies, deliver (i) an Insolvency Opinion reasonablysatisfactory to Lender and the Rating Agencies, (ii) revised opinions ofcounsel, reasonably satisfactory to Lender and the Rating Agencies, as to dueexecution and enforceability with respect to the Loan Documents, theCollateral, any Borrower Entity and any Principal, and (iii) amendments,reasonably satisfactory to Lender and the Rating Agencies, to theOrganizational Documents for any Borrower Entity or any Principal or any otherLoan Party, provided such amendments shall relate exclusively to the singlepurpose bankruptcy remote nature of such Borrower Entity or such Principal orsuch other Loan Party, as the case may be;

####  

#### (c)                                  ifrequired by the Rating Agencies, use commercially reasonable efforts to obtainand deliver such additional tenant estoppel letters, subordination agreementsor

 

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#### otheragreements from parties to agreements that affect the Properties as may berequired under Section 5.1.13(c) hereof, which estoppel letters, subordinationagreements or other agreements shall be reasonably satisfactory to Lender andthe Rating Agencies;

####  

#### (d)                                 subjectin all cases to the applicable provisions of Section 9.5 hereof, execute suchamendments to the Loan Documents as may be reasonably requested by the holderof the Note or the Rating Agencies or otherwise to effect the Securitization;

####  

#### (e)                                  ifLender elects, in its sole discretion, prior to or upon a Securitization, tosplit the Loan into two or more parts, or any Note into multiple componentnotes or tranches, or reallocate the principal amounts of the Notes, whichparts, components, tranches or Notes may have different interest rate spreads,principal amounts and maturities, Borrower agrees to cooperate with Lender inconnection with the foregoing and, subject in all cases to the applicableprovisions of Section 9.5 hereof, to execute the required modifications andamendments to the Note, this Agreement and the Loan Documents and to provideopinions necessary to effectuate the same. Such Notes or components may beassigned different interest rate spreads, so long as the weighted average ofsuch interest rate spreads does not exceed the Eurodollar Rate Margin (exceptfor any deviation attributable to the imposition of any rate of interest at theDefault Rate or prepayments pursuant to Section 2.3.2 or 2.3.3 hereof);

####  

#### (f)                                    deliversuch estoppel certificates as may be required to be delivered by Borrowerpursuant to Section 5.1.13(a) hereof; and

####  

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

####  

All thirdparty costs and expenses and out-of-pocket expenses incurred by Lender inconnection with this Agreement and the Securitization shall be paid by Lender(except as otherwise expressly set forth herein). These shall include, but notbe limited to, fees and disbursements of legal counsel, accountants, and otherprofessionals retained by Lender and fees and expenses incurred for producingany offering documents or any other materials (including travel by Lender andits agents, design, printing, photograph and document production costs). Solelyfor the purposes of this Section 9.1, Lender shall reimburse Borrower for all ofits actual out-of-pocket costs and expenses (other than the fees and expensesof Borrower’s counsel) that Borrower incurs in connection with complying with arequest made by Lender or any other Person acting on behalf of Lender underthis Section 9.1 in connection with a Securitization. Notwithstanding theforegoing, the provisions of this paragraph shall in no way limit or affect anyBorrower obligation to pay any costs expressly required to be paid by Borrowerpursuant to any other Sections of this Agreement.

 

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Section 9.2                                      DisclosureDocument Cooperation.

 

Borrowerunderstands that certain of the Provided Information may be included indisclosure documents in connection with the Securitization, including aprospectus supplement, private placement memorandum, offering circular or otheroffering document (each a “Disclosure Document”) and may also beincluded in filings (an “Exchange Act Filing”) with the Securities andExchange Commission pursuant to the Securities Act of 1933, as amended (the “SecuritiesAct”), or the Securities and Exchange Act of 1934, as amended (the “ExchangeAct”), or provided or made available to Investors or prospective Investorsin the Securities, the Rating Agencies, and service providers relating to theSecuritization. In the event that a Disclosure Document is required to berevised prior to the sale of all Securities, Borrower will cooperate in allreasonable respects with the holder of the Note in updating the DisclosureDocument by providing all current information necessary to keep the ProvidedInformation included in the Disclosure Document accurate and complete in allmaterial respects.

 

Section 9.3                                      Servicer.

 

At the optionof Lender, the Loan may be serviced by a servicer/trustee (the “Servicer”)selected by Lender and Lender may delegate all or any portion of itsresponsibilities under this Agreement and the other Loan Documents to theServicer pursuant to a servicing agreement (the “Servicing Agreement”)between Lender and Servicer, provided that in no event shall such delegationoperate to relieve Lender from its obligations hereunder. Lender will notifyBorrower of the appointment of any Servicer on or prior to the date suchappointment shall become effective. Borrower shall not be obligated to pay, orreimburse Lender for, any servicing fee or other compensation payable to theServicer.

 

Section 9.4                                      Exculpation.

 

#### (a)                                  Exceptas otherwise expressly provided in this Section 9.4, Lender shall not enforcethe liability and obligation of Borrower to perform and observe the obligationscontained in this Agreement, the Note or the Pledge Agreement or any other LoanDocument by any action or proceeding against Borrower or any Exculpated Party,except that Lender may bring a foreclosure action, action for specificperformance or other appropriate action or proceeding to enable Lender toenforce and realize upon this Agreement, the Note, the Pledge Agreement, theother Loan Documents, and the Collateral and any other collateral for the Debtin which a security interest is granted to Lender by this Agreement, the PledgeAgreement or the other Loan Documents; *provided, however*,that any judgment in any such action or proceeding shall be enforceable againstBorrower only to the extent of Borrower’s interest in the Collateral, and inany other collateral in which a security interest is granted to Lender by thisAgreement, the Pledge Agreement or the other Loan Documents. Lender, byaccepting this Agreement, the Note and the Pledge Agreement, agrees that itshall not, except as otherwise expressly provided in this Section 9.4, sue for,seek or demand any deficiency or other money judgment against Borrower, anydirect or indirect member, manager, shareholder, partner, beneficiary or otherowner of beneficial ownership interests in

 

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#### Borrower, orany affiliate, director, officer, employee, trustee or agent of any of theforegoing (each, an “Exculpated Party” and, collectively, the “ExculpatedParties”) in any such action or proceeding, under or by reason of or underor in connection with this Agreement, the Note, the Pledge Agreement or theother Loan Documents. The provisions of this Section shall not, however, (i)constitute a waiver, release or impairment of any obligation evidenced orsecured by this Agreement, the Note, the Pledge Agreement or the other LoanDocuments; (ii) impair the right of Lender to name Borrower as a partydefendant in any action or suit for judicial foreclosure and sale under thePledge Agreement (subject, however, to the aforesaid limitation on Lender’sright to sue, seek or demand a deficiency or other money judgment againstBorrower or any other Exculpated Party); (iii) affect the validity orenforceability of any indemnity (including, without limitation, theEnvironmental Indemnity), guaranty, master lease or similar instrument made inconnection with this Agreement, the Note, the Pledge Agreement, or the otherLoan Documents (subject, however, to any exculpatory or non-recourse provisionsappearing in such indemnity, guaranty or similar instrument); (iv) impair theright of Lender to obtain the appointment of a receiver; (v) [intentionallyomitted]; (vi) impair the right of Lender to enforce the provisions of Sections4.1.8, 4.1.28, 5.1.9 and 5.2.8 hereof (subject, however, to the aforesaidlimitation on Lender’s right to sue, seek or demand a deficiency or other moneyjudgment 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 otherjudgment on the Note against Borrower if and to the extent necessary to obtainany insurance proceeds or condemnation awards to which Lender would otherwisebe entitled under this Agreement; provided however, that Lender shall only beentitled to enforce such judgment to the extent of the insurance proceedsand/or condemnation awards.

####  

#### (b)                                 Notwithstandingthe provisions of this Section 9.4 to the contrary, Borrower and Guarantorpursuant to the Guaranty (but not any other Exculpated Parties) shall bepersonally liable to Lender for any actual Losses Lender incurs due to thefollowing (collectively, the “Recourse Events”):

####  

##### (i)                                     anyfraud committed by Borrower, Mortgage Borrower or by any of their Affiliates oragents in connection with the Loan or Mortgage Loan;

#####  

##### (ii)                                  anyintentional and material misrepresentation by Borrower or Mortgage Borrower inany of the Loan Documents or the Mortgage Loan Documents;

#####  

##### (iii)                               themisappropriation by Borrower, Mortgage Borrower or any of their Affiliates oragents of any funds (including misappropriation of Rents, security depositsand/or Net Proceeds);

#####  

##### (iv)                              anyTransfer, Sale or Pledge of the Property, the Collateral or any interest of aRestricted Party therein, and in each case, which is prohibited hereunder;

#####  

##### (v)                                 theintentional and material breach of any representation in the EnvironmentalIndemnity 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 federalor state bankruptcy or insolvency law;

#####  

##### (vii)         any involuntary filing against Borrower, Mortgage Borrower,Mortgage Principal or Principal under the Bankruptcy Code or any other federalor state bankruptcy or insolvency law by any Person acting at the request orunder the direction of Borrower, Mortgage Borrower or any of their Affiliatesor agents;

#####  

##### (viii)        Mortgage Borrower, Mortgage Principal, Borrower or Principalconsents to or acquiesces in or joins in an application for the appointment ofa custodian, receiver, trustee or examiner for Mortgage Borrower, MortgagePrincipal, Borrower or Principal or any portion of the Property or theCollateral;

#####  

##### (ix)           Borrower’s making a distribution to its equity ownersafter the occurrence and during the continuance of an Event of Default;

#####  

##### (x)            Mortgage Borrower, Mortgage Principal, Borrower orPrincipal makes an assignment for the benefit of creditors;

#####  

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

#####  

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

#####  

##### (xiii)         Mortgage Borrower’s failure to obtain any consent requiredwith respect to the transfer of the applicable Properties in connection withthe merger of Archstone Smith Operating Trust occurring simultaneouslyherewith.

#####  

#### (c)           IntentionallyOmitted.

####  

#### (d)           Nothing herein shallbe deemed to be a waiver of any right which Lender may have under Section506(a), 506(b), 1111 (b) or any other provision of the Bankruptcy Code tofile a claim for the full amount of the indebtedness secured by the PledgeAgreement or to require that all collateral shall continue to secure all of theindebtedness owing to Lender in accordance with this Agreement, the Note, thePledge Agreement and the other Loan Documents.

####  

The term “ReorganizationProceeding” for purposes of this Section 9.4 shall mean a case, proceedingor other action (i) under any existing or future law of any jurisdiction,domestic or foreign, relating to bankruptcy, insolvency, reorganization orrelief of debtors, seeking to have an order for relief entered with respect toany Person, or seeking to adjudicate such Person as bankrupt or insolvent, orseeking reorganization, arrangement, adjustment, winding-up, liquidation,dissolution, composition or other relief with respect to such Person or suchPerson’s debts, or (ii) seeking appointment of a receiver, trustee, custodianor 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 generalassignment 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 orother), or preference, priority or other security agreement or interest orpreferential arrangement of any kind or nature whatsoever (including, withoutlimitation, any conditional sale or other title retention agreement, anyfinancing lease (except equipment lease agreements), and the filing of any UCCfinancing statement (but only to the extent any such financing statementpurports to record the grant of a security interest and not including anyfinancing statements filed for notice purposes only) under the UCC orcomparable law of any jurisdiction in respect of any foregoing.)

 

Section 9.5             Limitationon Borrower’s Obligations.

 

Notwithstandinganything to the contrary in Section 9.1, Section 9.7, Section 9.8 or any otherprovision of this Agreement or any other Loan Document, Borrower shall not beobligated to agree to any modification of the Note, this Agreement, the PledgeAgreement or the other Loan Documents, or of Borrower’s OrganizationalDocuments, or to take any other action, that would:

 

#### (a)           increase thereporting requirements of Borrower, Mortgage Borrower, Guarantor or any otherPerson pursuant to Section 5.1.10 hereof;

####  

#### (b)           change theoutstanding principal balance of the Loan, except as expressly provided inSections 9.6, 9.7 and 9.8 hereof (and subject to the limitations set forththerein or otherwise applicable thereto);

####  

#### (c)           change the interestrate, 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 applicablethereto), or increase any fee or late charge under the Loan;

####  

#### (d)           require anyamortization of the principal amount of the Loan prior to the Maturity Date orany acceleration of the maturity of the Loan by Lender;

####  

#### (e)           shorten the MaturityDate of the Loan, or provide for other or additional circumstances or eventsupon which Lender will be entitled to accelerate the maturity of the Loan;

####  

#### (f)            alter in any waythe transfer restrictions relating to direct or indirect interests in theProperties, the Collateral or any Mortgage Principal’s general partner interestin the related Mortgage Borrower Entity (including any equity interests in thedirect or indirect owners of Borrower), except to address any transferrestrictions necessary in connection with the creation of any New MezzanineLoan(s) pursuant to Section 9.8 hereof; *provided, however*,that there shall be no greater restrictions than those applicable to transfersby Borrower of interests that it owns in Mortgage Borrower;

####  

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#### (g)           affect thelimitations on recourse against Borrower and the Exculpated Parties;

####  

#### (h)           increase the amountsof reserves or escrows;

####  

#### (i)            affect thecompensation payable to the Manager;

####  

#### (j)            affect Borrower’sright to extend the term of the Loan, if applicable;

####  

#### (k)           affect Borrower’sright to repay, prepay or defease the Loan, except as expressly provided inSections 9.6 and 9.8 hereof (and subject to the limitations set forth thereinor otherwise applicable thereto) with respect to priority of payment;

####  

#### (l)            affect Borrower’sapproval rights (if any) with respect to assignments of the Loan or theidentity of any Servicer or any special servicer;

####  

#### (m)          affect Borrower’s orMortgage Borrower’s right to enter into, modify or terminate Leases orcontracts;

####  

#### (n)           reduce themateriality thresholds (whether expressed in dollars or otherwise) appearing inany provision of this Agreement or any other Loan Document, including thoserelating to alterations, casualty, condemnation and expansion;

####  

#### (o)           impose or increaseany servicing or similar fee required to be paid or reimbursed by Borrower;

####  

#### (p)           add additionalEvents of Default, or shorten any grace or cure period applicable to anexisting Event of Default;

####  

#### (q)           require Borrower orany other Person (including Mezzanine B Borrower, Mortgage Borrower, Bank LoanBorrower, Principal or Guarantor) (i) to provide additional collateralsecurity, credit support, indemnities or guaranties for or in respect of theLoan, or (ii) to increase or expand the scope or extent of any existingsecurity, credit support, indemnity or guaranty (or modify the provisions ofSection 9.4 hereof);

####  

#### (r)            violate or causethe violation of any existing agreement to which Borrower or any of itsAffiliates is a party or any Applicable Law;

####  

#### (s)           materially changeany obligation of Borrower pursuant to the actions taken herein or pursuanthereto or in connection herewith;

####  

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

####  

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Section 9.6             Reallocationof Loan Amounts.

 

Lender, withoutin any way limiting its other rights hereunder, shall have the right, in itssole and absolute discretion, to reallocate the amount of the Loan and theMezzanine B Loan, Borrower agrees to reasonably cooperate to facilitate suchreallocation; *provided, however*, that (i) theaggregate principal amount of the Loan and the Mezzanine B Loan immediatelyfollowing such reallocation shall equal the outstanding principal balance ofthe 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 Loanimmediately following such reallocation shall not exceed the weighted averageinterest rate spread which was applicable to the Loan and the Mezzanine B Loanimmediately prior to such reallocation (except for any deviation attributableto the imposition of any rate of interest at the Default Rate or prepaymentspursuant to Section 2.3.2 or 2.3.3 hereof). Borrower shall cooperate with allreasonable requests of Lender in order to reallocate the amount of the Loan andthe Mezzanine B Loan and shall execute and deliver such documents as shallreasonably be required by Lender in connection therewith, including, withoutlimitation, amendments to the Loan Documents and the Mezzanine B Loan Documentsand endorsements to the UCC title insurance policies, all in form and substancereasonably satisfactory to Lender. Borrower shall cause Mezzanine B Borrower tocooperate with all reasonable requests of Mezzanine B Lender in connection withthe reallocation of the amount of the Loan and the Mezzanine B Loan, and shallexecute and deliver such documents as shall reasonably be required by MezzanineB Lender in connection therewith, including opinions of counsel and UCCinsurance, all in form and substance reasonably satisfactory to Lender. Solelyfor the purposes of this Section 9.6, Lender shall reimburse Borrower for allof its reasonable out-of-pocket costs and expenses (including, any additionalmortgage recording tax due and payable by Borrower in connection with suchrestructuring and any title or UCC insurance premiums, costs and expensesincurred in connection with the issuance of the insurance policies andendorsements required to be delivered by Borrower pursuant to this Section 9.6,but excluding the fees and expenses of Borrower’s counsel) that Borrower incursin connection with complying with any request made by Lender under this Section9.6. Notwithstanding the foregoing, the provisions of this Section 9.6 shall inno way limit, increase or otherwise affect any Borrower obligation to pay anycosts expressly required to be paid by Borrower pursuant to any other Sectionsof this Agreement. It shall be an Event of Default hereunder if Borrower failsto comply with any of the terms, covenants or conditions of this Section 9.6and such failure shall continue for more than ten (10) Business Days afterBorrower shall have received written notice thereof.

 

Section 9.7             Syndication.

 

9.7.1        Syndication.

 

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

 

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9.7.2        Saleof Loan, Co-Lenders, Participations and Servicing.

 

#### (a)           Lender and anyCo-Lender may, at their option, without Borrower’s consent (but with notice toBorrower), sell with novation all or any part of their right, title andinterest in, and to, and under the Loan (the “Syndication”), to one ormore additional lenders (each a “Co-Lender”). Each additional Co-Lendershall enter into an assignment and assumption agreement (the “Assignment andAssumption”) assigning a portion of Lender’s or Co-Lender’s rights andobligations under the Loan, and pursuant to which the additional Co-Lenderaccepts such assignment and assumes the assigned obligations. From and afterthe effective date specified in the Assignment and Assumption (i) eachCo-Lender shall be a party hereto and to each Loan Document to the extent ofthe applicable percentage or percentages set forth in the Assignment andAssumption and, except as specified otherwise herein, shall succeed to therights and obligations of Lender and the Co-Lenders hereunder and thereunder inrespect of the Loan, and (ii) Lender, as lender and each Co-Lender, asapplicable, shall, to the extent such rights and obligations have been assignedby it pursuant to such Assignment and Assumption, relinquish its rights and bereleased from its obligations hereunder and under the Loan Documents.

####  

#### (b)           The liabilities ofLender and each of the Co-Lenders shall be several and not joint. NeitherLender nor any Co-Lender shall be responsible for the obligations of any otherCo-Lender. If for any reason any of the Co-Lenders shall fail or refuse toabide by their obligations under this Agreement, Lender and the otherCo-Lenders shall not be relieved of their obligations, if any, hereunder.

####  

#### (c)           Borrower agrees thatit 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 certificatesrequired under Sections 5.1.10 and 5.1.13 hereof and such other information asreasonably requested by any additional Co-Lender or Participant in performingits due diligence in connection with its purchase of an interest in the Loan.

####  

#### (d)           Lender (or anAffiliate of Lender) shall act as administrative agent for itself and theCo-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 thisAgreement and each Loan Document on behalf of itself, as Lender and as agentfor itself and the Co-Lenders until replaced as Agent pursuant to the terms ofthe Co-Lending Agreement; *provided, however*,(i) so long as no Event of Default shall then exist or (ii) Agent shall not bein default under the Co-Lending Agreement (which would entitle the Co-Lendersto replace Agent), Borrower shall have the right to approve any replacement orsuccessor Agent, which such approval shall not be unreasonably withheld ordelayed. Lender acknowledges that Lender, as Agent, shall retain the exclusiveright to grant all approvals and give consents with respect to the operatingbudgets required to be delivered hereunder and with respect to mattersconcerning the establishment and administration of the Accounts. Except asotherwise provided herein, Borrower shall have no obligation to recognize ordeal directly with any Co-Lender, and no Co-Lender shall have any right to dealdirectly with Borrower with respect to the rights, benefits and obligations of 

####  

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#### Borrower underthis Agreement, the Loan Documents or any one or more documents or instrumentsin respect thereof. Borrower may rely conclusively on the actions of Lender asAgent to bind Lender and the Co-Lenders, notwithstanding that the particularaction in question may, pursuant to this Agreement or the Co-Lending Agreementbe subject to the consent or direction of some or all of the Co-Lenders. Lendermay resign as Agent of the Co-Lenders, in its sole discretion or if required toby the Co-Lenders in accordance with the term of the Co-Lending Agreement, ineach case without the consent of Borrower. Upon any such resignation, asuccessor Agent shall be determined pursuant to the terms of the Co-LendingAgreement. The term Agent shall mean any successor Agent.

####  

#### (e)           Notwithstanding anyprovision to the contrary in this Agreement, the Agent shall not have anyduties or responsibilities except those expressly set forth herein (and in theCo-Lending Agreement) and no covenants, functions, responsibilities, duties, obligationsor liabilities of Agent shall be implied by or inferred from this Agreement,the Co-Lending Agreement, or any other Loan Document, or otherwise existagainst Agent.

####  

#### (f)            Except to theextent its obligations hereunder and its interest in the Loan have beenassigned pursuant to one or more Assignments and Assumption, Lender, as Agent,shall have the same rights and powers under this Agreement as any otherCo-Lender and may exercise the same as though it were not Agent, respectively. Theterm “Co-Lender” or “Co-Lenders” shall, unless otherwise expressly indicated,include Lender in its individual capacity. Lender and the other Co-Lenders andtheir respective Affiliates may accept deposits from, lend money to, act astrustee 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 withor own securities of Borrower or any Affiliate of Borrower, all as if they werenot serving in such capacities hereunder and without any duty to accounttherefor to each other.

####  

#### (g)           If required by anyCo-Lender, Borrower hereby agrees to execute supplemental notes in theprincipal amount of such Co-Lender’s pro rata share of the Loan in the sameform of the Note (provided any such supplemental note or notes do not representany new or additional indebtedness), and such supplemental note shall (i) bepayable 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 itevidences a portion of the existing indebtedness hereunder and under the Noteand not any new or additional indebtedness of Borrower (it being understoodthat the aggregate face amount and aggregate principal balance of suchsupplemental notes together with any other note evidencing the Loan shall notexceed the then-outstanding principal balance of the Loan at the time of theexecution of such supplemental notes). Simultaneously with the execution ofsuch supplemental note or notes, Lender shall return the original Note toBorrower. The term “Note” as used in this Agreement and in all the otherLoan Documents shall include all such supplemental notes.

####  

#### (h)           Lender, as Agent,shall maintain at its domestic lending office or at such other location asLender, as Agent, shall designate in writing to each Co-Lender and Borrower acopy of each Assignment and Assumption delivered to and accepted by it and aregister for the recordation of the names and addresses of the Co-Lenders, theamount 

####  

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#### of eachCo-Lender’s proportionate share of the Loan and the name and address of eachCo-Lender’s agent for service of process (the “Register”). The entriesin the Register shall be conclusive and binding for all purposes, absentmanifest error, and Borrower, Lender, as Agent, and the Co-Lenders may treateach Person whose name is recorded in the Register as a Co-Lender hereunder forall purposes of this Agreement. The Register shall be available for inspectionand copying by Borrower or any Co-Lender during normal business hours uponreasonable prior notice to the Agent. A Co-Lender may change its address andits agent for service of process upon written notice to Lender, as Agent, whichnotice shall only be effective upon actual receipt by Lender, as Agent, whichreceipt will be acknowledged by Lender, as Agent, upon request.

####  

#### (i)            Notwithstandinganything herein to the contrary, any financial institution or other entity maybe sold a participation interest in the Loan by Lender or any Co-Lender withoutBorrower’s consent (such financial institution or entity, a “Participant”)(x) if such sale is without novation and (y) if the other conditions set forthin this paragraph are met. No Participant shall be considered a Co-Lenderhereunder or under the Note or the Loan Documents. No Participant shall haveany rights under this Agreement, the Note or any of the Loan Documents and theParticipant’s rights in respect of such participation shall be solely againstLender or Co-Lender, as the case may be, as set forth in the participationagreement executed by and between Lender or Co-Lender, as the case may be, andsuch Participant. No participation shall relieve Lender or Co-Lender, as thecase may be, from its obligations hereunder or under the Note or the LoanDocuments and Lender or Co- Lender, as the case may be, shall remain solelyresponsible for the performance of its obligations hereunder.

####  

#### (j)            Notwithstanding anyother provision set forth in this Agreement, Lender or any Co-Lender may at anytime create a security interest in all or any portion of its rights under thisAgreement (including, without limitation, amounts owing to it in favor of anyFederal Reserve Bank in accordance with Regulation A of the Board of Governorsof the Federal Reserve System), provided that no such security interest or theexercise by the secured party of any of its rights thereunder shall releaseLender or Co-Lender from its funding obligations hereunder.

####  

9.7.3        Cooperationin Syndication.

 

#### (a)           Borrower agrees touse commercially reasonable efforts to assist Lender in completing Syndicationsatisfactory to Lender. Such assistance shall include (i) direct contactbetween senior management and advisors of Borrower and the proposed Co-Lenders,(ii) assistance in the preparation of a confidential information memorandum andother marketing materials to be used in connection with the Syndication, (iii)the hosting, with Lender, of one (1) or more meetings of prospective Co-Lendersor with the Rating Agencies, (iv) the delivery of appraisals reasonablysatisfactory to Lender if required, and (v) working with Lender to procure arating for the Loan by the Rating Agencies.

 

#### (b)           Lender shall manageall aspects of the Syndication of the Loan, including decisions as to theselection 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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#### theallocations of the commitments among the Co-Lenders and the amount anddistribution of fees among the Co-Lenders. To assist Lender in its Syndicationefforts, Borrower agrees promptly to prepare and provide to Lender allinformation with respect to Borrower, Manager, and the Properties contemplatedhereby, 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 thanthe Projections (the “Information”) that has been or will be madeavailable to Lender by Borrower or any of its representatives is or will be, toBorrower’s Actual Knowledge, when furnished, complete and correct in allmaterial respects and does not or will not, to Borrower’s Actual Knowledge,when furnished, contain any untrue statement of a material fact or omit tostate a material fact necessary in order to make the statements containedtherein not materially misleading in light of the circumstances under whichsuch statements are made and (ii) the Projections that have been or will bemade available to Lender by Borrower or any of its representatives have been orwill be prepared in good faith based upon reasonable assumptions. Borrowerunderstands that in arranging and syndicating the Loan, Lender, the Co-Lendersand, if applicable, the Rating Agencies, may use and rely on the Informationand Projections without independent verification thereof.

####  

#### (c)           If required inconnection with the Syndication, Borrower hereby agrees to:

####  

##### (i)          amend the Loan Documents to give Lender the right, atLender’s sole cost and expense, to have the Properties reappraised on an annualbasis;

#####  

##### (ii)         deliver updated financial and operating statements (as maybe required to be delivered pursuant to Section 5.1.10 hereof) and otherinformation reasonably required by Lender (as may be required to be deliveredpursuant to Section 5.1.10 hereof) to facilitate the Syndication;

#####  

##### (iii)        use commercially reasonable efforts to deliver relianceletters reasonably satisfactory to Lender with respect to the environmentalassessments and reports delivered to Lender prior to the Closing Date, atLender’s sole cost and expense, which will run to Lender and its successors andassigns;

#####  

##### (iv)       subject to the terms of Section 9.7.4, if Lender elects, inits 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 whichmay have different interest rate spreads, principal amounts, maturities, andpriorities, Borrower agrees to reasonably cooperate with Lender in connectionwith the foregoing and, subject in all cases to the applicable provisions ofSection 9.5 hereof, to execute the required modifications and amendments to theNote, this Agreement and the Loan Documents and to provide opinions necessaryto effectuate the same. Such notes or components or tranches may be assigneddifferent interest rate spreads, so long as the weighted average of suchinterest rate spreads 

#####  

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

#####  

##### (v)        Subject to the terms of Section 9.5 hereof, execute suchother modifications to the Loan Documents reasonably required by theCo-Lenders; and

#####  

##### (vi)       amend the Organizational Documents of Mortgage Borrower andMortgage Principal to “opt into” Article 8 of the UCC and in connectiontherewith, certificate the interests comprising the Collateral, deliver suchcertificates to Lender in accordance with the Pledge Agreement and deliver toLender “springing control” endorsements (or the equivalent thereof) to the UCCTitle Insurance Policy.

#####  

9.7.4        Paymentof Agent’s, and Co-Lender’s Expenses.

 

All thirdparty costs and expenses and out-of-pocket expenses incurred by Lender inconnection with this Agreement and the Syndication shall be paid by Lender(except as otherwise expressly set forth herein). These shall include, but notbe limited to, fees and disbursements of legal counsel, accountants, and otherprofessionals retained by Lender and fees and expenses incurred for producingany offering documents or any other materials (including travel by Lender andits agents, design, printing, photograph and document production costs). Solelyfor the purposes of this Section 9.7, Lender shall reimburse Borrower for allof its actual out-of-pocket costs and expenses (other than the fees andexpenses of Borrower’s counsel) that Borrower incurs in connection withcomplying with a request made by Lender under this Section 9.7 in connectionwith a Syndication. Notwithstanding the foregoing, the provisions of this paragraphshall in no way limit or affect any Borrower obligation to pay any costsexpressly required to be paid by Borrower pursuant to any other Sections ofthis Agreement.

 

9.7.5        IntentionallyOmitted.

 

9.7.6        NoJoint Venture.

 

Notwithstandinganything to the contrary herein contained, neither Agent, nor any Co-Lender byentering into this Agreement or by taking any action pursuant hereto, will bedeemed a partner or joint venturer with Borrower.

 

Section 9.8             Restructuringof Loan and/or Mezzanine B Loan; Creation of New Mezzanine Loan(s).

 

In connectionwith any Securitization of all or any portion of the Loan, Lender shall havethe right (the “Restructuring Option”) at any time to divide the Loanand/or the Mezzanine B Loan into two (2) or more (but****nomore than five (5))****parts (the “NewMezzanine Loan(s)”). The principal amounts of the New Mezzanine Loan(s)shall equal the aggregate outstanding principal balance of the Loan and theMezzanine B Loan immediately prior to the creation of the New Mezzanine Loan(s).In effectuating the 

 

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foregoing, the lender under the New Mezzanine Loan (the “NewMezzanine Lender”) will make a loan to the direct equity owners ofMezzanine B Borrower (the “New Mezzanine Borrower”); the New MezzanineBorrower will contribute the amount of such New Mezzanine Loan to Mezzanine BBorrower, and (i) Mezzanine B Borrower will contribute the amount of such NewMezzanine Loan to Borrower, and Borrower will apply the contribution to paydown the Loan and/or (ii) Mezzanine B Borrower will apply such new loan to paydown the Mezzanine B Loan. The New Mezzanine Loan(s) will be on substantiallythe same terms (including, without limitation, the same material economicterms) and subject to substantially the same conditions set forth in thisAgreement, the Note, the Pledge Agreement and the other Loan Documents, and/orthe Mezzanine B Loan Documents except as follows:

 

(a)           Lender shall have the right toestablish different interest rate spreads for the New Mezzanine Loan(s) and torequire the payment of the New Mezzanine Loan(s) in such order of priority asmay be designated by Lender; *provided, however*,that (i) the total loan amounts for the New Mezzanine Loan(s) shall equal theaggregate outstanding principal amount of the Loan and the Mezzanine B Loanimmediately prior to the creation of the New Mezzanine Loan(s); (ii) theweighted average interest rate spread of the New Mezzanine Loan(s) shall equalthe weighted average interest rate spread which was applicable to the Loan andthe Mezzanine B Loan prior to the creation of the New Mezzanine Loan(s) (exceptfor any deviation attributable to the imposition of any rate of interest at theDefault 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 payableas a result of the creation of the New Mezzanine Loan(s) (or, if suchadditional recording tax is payable, Lender shall pay the same). The NewMezzanine Loan(s) will be governed by the terms of an intercreditor agreementbetween or among the respective holders of the New Mezzanine Loan(s).

 

(b)           Mezzanine B Borrower, Borrower andNew Mezzanine Borrower shall be a special purpose, bankruptcy remote entitypursuant to applicable Rating Agency criteria and shall own directly orindirectly one hundred percent (100%) of Mortgage Borrower, Mezzanine BBorrower 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 indirectownership interests held by such entity.

 

(c)           Mezzanine B Borrower, Borrower andNew Mezzanine Borrower shall cooperate, in all commercially reasonablerespects, with all reasonable requests of Lender in order to divide the Loanand/or the Mezzanine B Loan into one or more New Mezzanine Loan(s) and shallexecute and deliver such customary documents as shall reasonably be required byLender and any Rating Agency in connection therewith, including, withoutlimitation, (i) the delivery of non-consolidation opinions, (ii) themodification of Loan Documents solely to reflect the existence of, and/or theterms and provisions of, the New Mezzanine Loan(s) and the modification oforganizational documents, provided such amendments shall relate exclusively tothe single purpose bankruptcy remote nature of Borrower, Mezzanine B Borroweror New Mezzanine Borrower, (iii) authorize Lender to file any UCC-1 FinancingStatements reasonably required by Lender to perfect its security interest inthe collateral pledged as security for 

 

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the New Mezzanine Loan(s), (iv) subject in all cases to the applicableprovisions of Section 9.5 hereof, execute such other documents reasonablyrequired by Lender in connection with the creation of the New MezzanineLoan(s), including, without limitation, a guaranty substantially similar inform and substance to the Guaranty delivered on the date hereof in connectionwith the Loan, an environmental indemnity substantially similar in form andsubstance to the Environmental Indemnity delivered on the date hereof inconnection with the Loan and an agreement regarding the management agreementsubstantially similar in form and substance to the Agreement RegardingManagement Agreement, if any, delivered in connection with the Loan, (v)deliver appropriate authorization, execution and enforceability opinions withrespect to the New Mezzanine Loan(s) and amendments to the Loan solely toreflect the existence of, and/or the terms and provisions of, the New MezzanineLoan(s), and (vi) deliver such title insurance policies, “Eagle 9” orequivalent UCC title insurance policies, satisfactory to Lender, insuring theperfection and priority of the lien on the collateral pledged as security forthe New Mezzanine Loan(s).

 

It shall be anEvent of Default hereunder if Borrower, Mezzanine B Borrower or New MezzanineBorrower fails to comply with any of the terms, covenants or conditions of thisSection 9.8 and such failure shall continue for more than ten (10) BusinessDays after Borrower, Mezzanine B Borrower or New Mezzanine Borrower, as thecase may be, shall have received written notice thereof.

 

Solely for thepurposes of this Section 9.8, Lender shall reimburse Borrower for all of itsreasonable out-of-pocket costs and expenses (including, any additionalrecording tax due and payable by Borrower in connection with such restructuringand any title or UCC insurance premiums, costs and expenses incurred inconnection with the issuance of the insurance policies and endorsementsrequired to be delivered by Borrower pursuant to Section 9.8(c)(vi) hereof, butexcluding the fees and expenses of Borrower’s counsel) that Borrower incurs inconnection with complying with a request made by Lender under this Section 9.8.Notwithstanding the foregoing, the provisions of this paragraph shall in no waylimit or affect any obligation of Borrower to pay any costs expressly requiredto be paid by Borrower pursuant to any other Sections of this Agreement.

 

Section 9.9             Contributionsand Waivers.

 

(i)            Asa result of the transactions contemplated by this Agreement, each BorrowerEntity will benefit, directly and indirectly, from each other Borrower Entity’sobligation to pay the Debt and perform its Obligations and in considerationthereof the Borrower Entities desire to enter into an allocation andcontribution agreement among themselves as set forth in this Section 9.9 toallocate such benefits among themselves and to provide a fair and equitable agreementto make contributions among each of the Borrower Entities in the event anypayment is made by any individual Borrower Entity hereunder to Lender (eachsuch payment being referred to herein as a “Contribution,” which termshall, for purposes of this Section 9.9, include any exercise of recourse byLender against any Collateral of a Borrower Entity and application of proceedsof 

 

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such Collateral in satisfaction of suchBorrower Entity’s obligations to Lender under the Loan Documents).

 

(ii)           EachBorrower Entity shall be liable hereunder with respect to the Obligations onlyfor such total maximum amount (if any) as would not render its Obligationshereunder or under any of the Loan Documents subject to avoidance under Section548 of the Bankruptcy Code or any comparable provisions of any State law.

 

(iii)          Inorder to provide for a fair and equitable contribution among the BorrowerEntities in the event that any Contribution is made by an individual BorrowerEntity (a “Funding Borrower”), such Funding Borrower shall be entitledto a Contribution to reimburse such Funding Borrower (a “ReimbursementContribution”) from all of the other Borrower Entities for all payments,damages and expenses incurred by that Funding Borrower in discharging any ofthe Obligations, in the manner and to the extent set forth in this Section 9.9.

 

(iv)          Forpurposes hereof, the “Benefit Amount” shall mean, with respect to anyindividual Borrower Entity as of any date of determination, the net value ofthe benefits to such Borrower Entity and its Affiliates from extensions ofcredit made by Lender to (a) such Borrower Entity and (b) to the other BorrowerEntities hereunder and under the Loan Documents to the extent such other BorrowerEntities have pledged their respective Pledged Interests (as defined in thePledge Agreement) to secure the Obligations of such Borrower Entity to Lender.

 

(v)           EachBorrower Entity shall be liable to a Funding Borrower in an amount equal to thegreater of (A) the (i) ratio of the Benefit Amount of such Borrower Entity tothe total amount of Obligations, multiplied by (ii) the amount of Obligationspaid by such Funding Borrower, and (B) ninety-five percent (95%) of the excessof the fair saleable value of the assets of such Borrower over the totalliabilities of such Borrower Entity (including the maximum amount reasonablyexpected to become due in respect of contingent liabilities) determined as ofthe date on which the payment made by a Funding Borrower is deemed made forpurposes hereof (giving effect to all payments made by other Funding Borrowersas of such date in a manner to maximize the amount of such Contributions).

 

(vi)          Inthe event that at any time there exist two or more Funding Borrowers withrespect to any Contribution (in any such case, the “Applicable Contribution”),then Reimbursement Contributions from the other Borrowers pursuant hereto shallbe allocated among such Funding Borrowers in proportion to the respectiveamounts of the Contribution made for or on account of the other Borrowers bysuch Funding Borrowers pursuant to the Applicable Contribution. In the eventthat at any time any Borrower pays an amount hereunder in excess of the amountcalculated pursuant to this Section 9.9, that Borrower Entity shall be deemedto be a Funding Borrower to the extent of such excess and shall be

 

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entitled to a Reimbursement Contribution fromthe other Borrowers in accordance with the provisions of this Section 9.9.

 

(vii)         EachBorrower Entity acknowledges that the right to Reimbursement Contributionshereunder shall constitute an asset in favor of the Borrower Entity to whichsuch Reimbursement Contribution is owing.

 

(viii)        NoReimbursement Contribution payments payable by a Borrower pursuant to the termsof this Section 9.9 shall be paid until all amounts then due and payable by allof Borrowers to Lender, pursuant to the terms of the Loan Documents, are paidin full in Cash. Nothing contained in this Section 9.9 shall limit or affect inany way the Obligations of any Borrower to Lender under this Note or any otherLoan Documents.

 

(ix)           EachBorrower Entity waives:

 

###### (A)          any right to require Lender to proceedagainst any other Borrower Entity or any other person or to proceed against orexhaust any security held by Lender at any time or to pursue any other remedyin Lender’s power before proceeding against any Borrower Entity;

######  

###### (B)           the defense of the statute oflimitations in any action against any other Borrower Entity or for thecollection of any indebtedness or the performance of any obligation under theLoan;

######  

###### (C)           any defense based upon any legaldisability or other defense of any other Borrower Entity, any guarantor of anyother person or by reason of the cessation or limitation of the liability ofany other Borrower Entity or any guarantor from any cause other than fullpayment of all sums payable under the Note, this Agreement and any of the otherLoan Documents;

######  

###### (D)          any defense based upon any lack ofauthority of the officers, directors, partners or agents acting or purportingto act on behalf of any other Borrower Entity or any principal of any otherBorrower or any defect in the formation of any other Borrower Entity or anyprincipal of any other Borrower Entity;

######  

###### (E)           any defense based upon any statute orrule of law which provides that the obligation of a surety must be neitherlarger in amount nor in any other respects more burdensome than that of aprincipal;

######  

###### (F)           any defense based upon any failure byLender to obtain collateral for the indebtedness of any other Borrower Entityor any failure by Lender to perfect a lien on any collateral of any otherBorrower Entity;

######  

###### (G)           presentment, demand, protest andnotice of any kind with respect to the indebtedness of any other BorrowerEntity;

 

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###### (H)          any defense based upon any failure ofLender to give notice to such Borrower Entity of the sale or other dispositionof any collateral of any other Borrower Entity or to any other person or entityor any defect in any notice that may be given in connection with any sale ordisposition of any collateral;

######  

###### (I)            any defense based upon any failureof Lender to comply with Applicable Laws in connection with the sale or otherdisposition of any collateral of any other Borrower Entity, including, withoutlimitation, any failure of Lender to conduct a commercially reasonable sale orother disposition of any collateral;

######  

###### (J)            any defense based upon any electionby Lender, in any bankruptcy proceeding, of the application or non-applicationof Section 1111(6)(2) of the Bankruptcy Code or any successor statute;

######  

###### (K)          any defense based upon any use of cashcollateral under Section 363 of the Bankruptcy Code;

######  

###### (L)           any defense based upon any agreementor stipulation entered into by Lender with any other Borrower Entity withrespect to the provision of adequate protection in any bankruptcy proceeding;

######  

###### (M)         any defense based upon any borrowing orany grant of a security interest under Section 364 of the Bankruptcy Code byany other Borrower Entity;

######  

###### (N)          any defense based upon the avoidanceof any security interest granted by any other Borrower Entity in favor ofLender for any reason;

######  

###### (O)          any defense based upon any bankruptcy,insolvency, reorganization, arrangement, readjustment of debt, liquidation ordissolution proceeding, including any discharge of, or bar or stay againstcollecting, all or any of the obligations evidenced by the Note or owing underany of the Loan Documents; and

######  

###### (P)           any defense or benefit based upon anyBorrower Entity’s, or any other party’s, resignation of the portion of anyobligation secured by the Pledge Agreement to be satisfied by any payment fromany other Borrower Entity or any such party.

######  

(x)            EachBorrower Entity waives:

 

###### (A)          all rights and defenses arising out ofan election of remedies by Lender even though the election of remedies, such asnonjudicial foreclosure with respect to security for the Loan or any otheramounts owing under the Loan Documents, may have destroyed such 

######  

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###### BorrowerEntity’s rights of subrogation and reimbursement against any other BorrowerEntity;

######  

###### (B)           intentionally omitted; and

######  

###### (C)           any claim or other right which anyBorrower Entity might now have or hereafter acquire against any other BorrowerEntity or any other person that arises from the existence or performance of anyobligations under the Note, this Agreement, the Pledge Agreement or the otherLoan Documents, including, without limitation, any of the following: (i) anyright of subrogation, reimbursement, exoneration, contribution (other than theright 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 anyother Borrower Entity or any collateral security therefor, whether or not suchclaim, remedy or right arises in equity or under contract, statute or commonlaw.

######  

Section 9.10           CertainAdditional Rights of Lender; VCOC.

 

Subject to theterms hereof, Lender shall have the right:

 

#### (a)           to routinely consultwith Borrower’s management regarding the significant business activities andbusiness and financial developments of Borrower; provided, however, that suchconsultations shall not include discussions of environmental complianceprograms or disposal of hazardous substances. Routine consultation meetings mayoccur no more frequently than quarterly, with Lender having the right to callspecial meetings at any reasonable time (but not more frequently than once perquarter) and upon reasonable advance notice. Borrower shall have no obligationto adhere to any advice proposed by Lender, except where otherwise specificallyrequired elsewhere in the Loan Documents;

####  

#### (b)           in accordance withthe terms of this Agreement, to examine the books and records of Borrower atany reasonable times upon reasonable notice;

####  

#### (c)           in accordance withthe terms of this Agreement, to receive financial reports and other statementsas provided in Section 5.1.10 hereof;

####  

#### (d)           in accordance withthe terms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to approve any acquisitionby Borrower of any other significant property;

####  

#### (e)           in accordance withthe terms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to restrict the transfer ofinterests in Borrower, except for any such transfer that is a permittedtransfer, including, without limitation those transfers not deemed “Transfers”under Section 5.2.10(c) hereof;

####  

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#### (f)            in accordance withthe terms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to restrict financing to beobtained in connection with future property transactions, refinancing of anyacquisition financings, and unsecured debt;

####  

#### (g)           in accordance withthe terms of the Agreement Regarding Management Agreement, but withoutrestricting any other right of Lender under this Agreement (including anysimilar right), to restrict, upon the occurrence of an Event of Default,Borrower’s payments of management fees to Manager; and

####  

#### (h)           in accordance withthe terms of this Agreement, but without restricting any other right of Lenderunder this Agreement (including any similar right), to exercise certainapproval rights with respect to the proposed annual operating budgets asprovided in Section 5.1.10(e) hereof.

####  

The rightsdescribed above may be exercised by any entity which owns and controls,directly or indirectly, substantially all of the interests in Lender. Nothingcontained in this Section 9.10 is intended (i) to confer upon Lender any rightsor privileges greater than those inuring to Lender under the other provisionsof this Agreement, (ii) to impose upon Borrower any duties, obligations orliabilities greater than or in addition to those owed by Borrower under theother provisions of this Agreement, or (iii) to constitute Lender a partner ormember of Borrower or a third-party beneficiary of Borrower’s OrganizationalDocuments.

 

Section 9.11           MortgageLoan Defaults.

 

#### (a)           Without limiting thegenerality of the other provisions of this Agreement, and without waiving orreleasing Borrower from any of its obligations hereunder, if there shall occurany Mortgage Loan Event of Default, and without regard to any other defenses oroffset rights Mortgage Borrower may have against Mortgage Lender, Borrower herebyexpressly agrees that Lender shall have the immediate right, without notice toor 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 arethen due and payable and to perform any act or take any action on behalf ofMortgage Borrower, as may be appropriate, to cause all of the terms, covenantsand conditions of the Mortgage Loan Documents on the part of Mortgage Borrowerto 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 shallreasonably determine to be necessary to protect or preserve the rights andinterests of Lender in the Loan and/or the Collateral. Lender shall have noobligation to complete any cure or attempted cure undertaken or commenced byLender. All sums so paid and the costs and expenses incurred by Lender inexercising rights under this Section (including, without limitation, reasonableattorneys’ and other professional fees), with interest at the Default Rate, forthe period from the date of demand by Lender to Borrower for such payments tothe date of payment to Lender, shall constitute a portion of the Debt, shall besecured by the Pledge Agreement and shall be due and payable to Lender withinten (10) days following demand therefor.

 

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#### (b)           Subject to therights of tenants, Borrower hereby grants, and shall cause Mortgage Borrower togrant, Lender and any Person designated by Lender the right to enter upon theProperty at any time for the purpose of carrying out the rights granted to Lenderunder this Section 9.11.

####  

#### (c)           Borrower shallindemnify and hold harmless Lender from and against all actual out-of-pocketliabilities, obligations, losses, damages, penalties, assessments, actions, orcauses of action, judgments, suits, claims, demands, costs, expenses(including, without limitation, reasonable attorneys’ and other professionalfees, whether or not suit is brought, and settlement costs), and disbursementsof any kind or nature whatsoever which may be imposed on, incurred by orasserted against Lender as a result of the foregoing actions described inSection 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, illegalacts, gross negligence or willful misconduct of Lender. Lender shall have noobligation to Borrower, Mortgage Borrower or any other party to make any suchpayment or performance. Borrower shall not impede, interfere with, hinder ordelay, and shall cause Mortgage Borrower to not impede, interfere with, hinderor delay, any effort or action on the part of Lender to cure any default orasserted default under the Mortgage Loan, or to otherwise protect or preserveLender’s interests in the Loan and the Collateral following a default orasserted default under the Mortgage Loan, in either case, in accordance withthe provisions of this Agreement and the other Loan Documents.

####  

#### (d)           If Lender shallreceive a copy of any notice of a Mortgage Loan Event of Default sent byMortgage Lender to Mortgage Borrower, such notice shall constitute fullprotection to Lender for any action taken or omitted to be taken by Lender, ingood faith, in reliance thereon. As a material inducement to Lender’s makingthe Loan, Borrower hereby absolutely and unconditionally releases and waivesall claims against Lender arising out of Lender’s exercise of its rights andremedies provided in this Section other than claims arising out of the fraud,illegal acts, gross negligence or willful misconduct of Lender. In the eventthat Lender makes any payment in respect of the Mortgage Loan, Lender shall besubrogated, to the extent of such payment, to all of the rights of MortgageLender under the Mortgage Loan Documents against the Property, in addition toall other rights it may have under the Loan Documents.

####  

Section 9.12           IntentionallyOmitted.

 

Section 9.13           IntentionallyOmitted.

 

Section 9.14           IntercreditorAgreements.

 

#### (a)           Lender, MortgageLender, Mezzanine B Lender and Bank Loan Agent are parties to one or moreintercreditor agreements dated as of the date hereof (collectively, the “IntercreditorAgreements”) memorializing their relative rights and obligations withrespect to the Mortgage Loan, the Loan, the Mezzanine B Loan, the Bank Loan,Mortgage Borrower, Borrower, Mezzanine B Borrower, Bank Loan Borrower and theProperties. Borrower hereby acknowledges and agrees that (i) such Intercreditor

####  

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#### Agreements areintended solely for the benefit of Lender, Mezzanine B Lender, Mortgage Lenderand Bank Loan Agent and (ii) Borrower, Mortgage Borrower, Mezzanine BBorrower and Bank Loan Borrower are not intended third-party beneficiaries ofany of the provisions therein and shall not be entitled to rely on any of theprovisions contained therein. Lender, Mortgage Lender, Mezzanine B Lender andBank Loan Agent shall have no obligation to disclose to Borrower, MortgageBorrower, Mezzanine B Borrower or Bank Loan Borrower the contents of theIntercreditor Agreements. Borrower’s obligations hereunder are independent ofsuch Intercreditor Agreements and remain unmodified by the terms and provisionsthereof.

####  

#### (b)           In the event theLender is required pursuant to the terms of the Intercreditor Agreements to payover to Mortgage Lender or Mezzanine B Lender any payment or distribution ofassets, whether in cash, property or securities which is applied to the Debt,including, without limitation, any proceeds of the Properties previouslyreceived by Lender on account of the Loan, then Borrower shall indemnify Lenderfor any amounts so paid, and any amount so paid shall continue to be owingpursuant to the Loan Documents as part of the Debt notwithstanding the priorreceipt of such payment by Lender.

####  

Section 9.15           Discussionswith Mortgage Lender.

 

#### (a)           In connection withthe exercise of its rights set forth in the Loan Documents, Lender shall havethe 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 orMortgage Lender’s consultants, agents or representatives without notice to orpermission from Borrower or any other Loan Party. Lender shall not have anyobligation to disclose such discussions or the contents thereof with Borroweror any other Loan Party.

####  

#### (b)           In connection withthe exercise of its rights set forth in the Loan Documents, Lender shall havethe right at any time to discuss the Properties, the Mortgage Loan, theMezzanine B Loan, the Loan or any other matter directly with Mezzanine B Lenderor Mezzanine B Lender’s consultants, agents or representatives without noticeto or permission from Borrower or any other Loan Party. Lender shall not haveany obligation to disclose such discussions or the contents thereof withBorrower or any other Loan Party.

####  

Section 9.16           IndependentApproval Rights.

 

If any action,proposed action or other decision is consented to or approved by MortgageLender, such consent or approval shall not, except as otherwise expresslyprovided in this Agreement or the other Loan Documents, be binding orcontrolling on Lender. Borrower hereby acknowledges and agrees that (i) therisks of Mortgage Lender in making the Mortgage Loan are different from therisks of Lender in making the Loan, (ii) [intentionally omitted], (iii)[intentionally omitted], (iv) in determining whether to grant, deny, withholdor condition any requested consent or approval Mortgage Lender and Lender mayreasonably reach different conclusions, and (v) Lender has an 

 

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independent right to grant, deny, withhold or condition any requestedconsent or approval based on its own point of view, subject, however, to anyrequirements of reasonableness or good faith expressly set forth in thisAgreement or the other Loan Documents. Further, the denial by Lender of arequested consent or approval shall not, provided such denial shall notconstitute a default by Lender under this Agreement, create any liability orother obligation of Lender if the denial of such consent or approval resultsdirectly or indirectly in a default under the Mortgage Loan and Borrower herebywaives any claim of liability against Lender arising from any such denial,provided such denial shall not constitute a default by Lender under thisAgreement. Notwithstanding anything to the contrary contained in this Section9.16, to the extent that Mortgage Lender requires Mortgage Borrower to perform,or refrain from performing, any action pursuant to the terms of the MortgageLoan Documents, Lender shall not withhold its consent to the performance or, orthe refraining from performing, such action only if such failure to act orrefrain from acting by Mortgage Borrower (after the expiration of anyapplicable notice and cure periods) would be a Mortgage Loan Event of Default.

 

**X.            MISCELLANEOUS**

 

Section 10.1           Survival.

 

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

 

Section 10.2           Lender’sDiscretion.

 

Wheneverpursuant to this Agreement, Lender exercises any right given to it to approveor disapprove, or any arrangement or term is to be satisfactory to Lender, thedecision of Lender to approve or disapprove or to decide whether arrangementsor terms are satisfactory or not satisfactory shall (except as is otherwisespecifically herein provided) be in the sole discretion of Lender and shall befinal and conclusive.

 

Section 10.3           GoverningLaw.

 

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

####  

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#### (b)           WITH RESPECT TO ANYCLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS AGREEMENT, THE NOTE, OR THEOTHER LOAN DOCUMENTS, EACH OF BORROWER AND LENDER (A) IRREVOCABLY SUBMITS TOTHE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THEUNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK,NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY WAIVES ANYOBJECTION 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 ANDIRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHTIN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THISAGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMED TOPRECLUDE LENDER OR BORROWER FROM BRINGING AN ACTION OR PROCEEDING WITH RESPECTHERETO IN ANY OTHER JURISDICTION.

####  

Section 10.4           Modification,Waiver in Writing.

 

Nomodification, amendment, extension, discharge, termination or waiver of anyprovision of this Agreement, the Note, or of any other Loan Document, norconsent to any departure by Borrower or Lender therefrom, shall in any event beeffective unless the same shall be in a writing signed by the party againstwhom enforcement is sought, and then such waiver or consent shall be effectiveonly in the specific instance, and for the purpose, for which given. Except asotherwise expressly provided herein, no notice to, or demand on Borrower, shallentitle Borrower to any other or future notice or demand in the same, similaror other circumstances.

 

Section 10.5           DelayNot a Waiver.

 

Neither anyfailure nor any delay on the part of Lender in insisting upon strictperformance of any term, condition, covenant or agreement, or exercising anyright, power, remedy or privilege hereunder, or under the Note or under anyother Loan Document, or any other instrument given as security therefor, shalloperate as or constitute a waiver thereof, nor shall a single or partialexercise thereof preclude any other future exercise, or the exercise of anyother right, power, remedy or privilege. In particular, and not by way oflimitation, by accepting payment after the due date of any amount payable underthis Agreement, the Note or any other Loan Document, Lender shall not be deemedto have waived any right either to require prompt payment when due of all otheramounts due under this Agreement, the Note or the other Loan Documents, or todeclare a default for failure to effect prompt payment of any such otheramount.

 

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Section 10.6           Notices.

 

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

 

If to Borrower:                                                                 c/oArchstone-Smith Operating Trust9200 E. Panorama Circle, Suite 400Englewood, Colorado 80112Attention:  General CounselFacsimile No.:  (303) 708-6954

 

with a copyto:                                                                 TishmanSpeyer 45 Rockefeller PlazaNew York, New York 10111Attention:  Chief Legal OfficerFacsimile No.:  (212) 895-0353

 

and to:                                                                                                           TishmanSpeyer 45 Rockefeller PlazaNew York, New York 10111Attention:  Chief Financial OfficerFacsimile No.:  (212) 895-0314

 

and to:                                                                                                           SchulteRoth & Zabel LLP919 Third AvenueNew York, New York 10022Attention:  Andrew J. Dady, Esq.Facsimile No.:  (212) 593-5955

 

If to Lender:                                                                               LehmanBrothers Holdings Inc. ****399 Park AvenueNew York, New York 10022Attention:  Charles MannaFacsimile No.:  (646) 758-5366

 

and to:                                                                                                           Bankof America, N.A.Capital Markets Servicing Group900 West Trade Street, Suite 650Mail Code: NC1-026-06-01Charlotte, North Carolina 28255

 

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                                                                                                                                                Attention:  Dean B. RobersonFacsimile No.:  (704) 317-4501

 

and to:                                                                                                           BarclaysCapital Real Estate Finance Inc. ****200 Park Avenue, 4th FloorNew York, New York 10166Attention:  Lori Ann RungFacsimile No.:  (212) 412-1664

 

with a copyto:                                                                 ThacherProffitt & Wood LLPTwo World Financial Center New York, New York 10281Attention:  Mitchell G. Williams, Esq. Facsimile No.:  (212) 912-7751

 

or addressedas such party may from time to time designate by written notice to the otherparties.

 

Either partyby notice to the other may designate additional or different addresses forsubsequent notices or communications.

 

Section 10.7           Trialby Jury.

 

EACH OFBORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUETRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THEEXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOANDOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTIONTHEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY ANDVOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLYEACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULDOTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THISPARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHERPARTY.

 

Section 10.8           Headings.

 

The Articleand/or Section headings and the Table of Contents in this Agreement areincluded herein for convenience of reference only and shall not constitute apart of this Agreement for any other purpose.

 

Section 10.9           Severability.

 

Whereverpossible, each provision of this Agreement shall be interpreted in such manneras to be effective and valid under Applicable Law, but if any provision of thisAgreement shall be prohibited by or invalid under Applicable Law, such provisionshall 

 

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be ineffective to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provision or the remaining provisions ofthis Agreement.

 

Section 10.10         Preferences.

 

Lender shallhave the continuing and exclusive right to apply or reverse and reapply any andall payments by Borrower to any portion of the obligations of Borrowerhereunder. To the extent Borrower makes a payment or payments to Lender, whichpayment or proceeds or any part thereof are subsequently invalidated, declaredto be fraudulent or preferential, set aside or required to be repaid to atrustee, receiver or any other party under any bankruptcy law, State or federallaw, common law or equitable cause, then, to the extent of such payment orproceeds received, the obligations hereunder or part thereof intended to besatisfied shall be revived and continue in full force and effect, as if suchpayment or proceeds had not been received by Lender.

 

Section 10.11         Waiverof Notice.

 

Borrower shallnot be entitled to any notices of any nature whatsoever from Lender except withrespect to matters for which this Agreement or any of the other Loan Documentsspecifically and expressly provides for the giving of notice by Lender toBorrower and except with respect to matters for which Borrower is not, pursuantto applicable Legal Requirements, permitted to waive the giving of notice. Borrowerhereby expressly waives the right to receive any notice from Lender with respectto any matter for which this Agreement or any of the other Loan Documents doesnot specifically and expressly provide for the giving of notice by Lender toBorrower.

 

Section 10.12         Remediesof Borrower.

 

In the eventthat a claim or adjudication is made that Lender or its agents have actedunreasonably or unreasonably delayed acting in any case where by law or underthis Agreement or the other Loan Documents, Lender or such agent, as the casemay be, has an obligation to act reasonably or promptly, Borrower agrees thatneither Lender nor its agents shall be liable for any monetary damages, andBorrower’s sole remedies shall be limited to commencing an action seekinginjunctive relief or declaratory judgment. The parties hereto agree that anyaction or proceeding to determine whether Lender has acted reasonably shall bedetermined by an action seeking declaratory judgment.

 

Section 10.13         Expenses;Indemnity.

 

#### (a)           Except as otherwiseexpressly 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 receiptof written notice from Lender, for all reasonable out-of-pocket costs andexpenses (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 andcovenants contained in this Agreement and the other Loan Documents on its partto be performed or complied with after the Closing Date, including, withoutlimitation, confirming compliance with environmental and insurancerequirements; (iii) Lender’s ongoing performance and 

####  

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#### compliancewith all agreements and conditions contained in this Agreement and the otherLoan Documents on its part to be performed or complied with after the ClosingDate; (iv) the negotiation, preparation, execution, delivery and administrationof any consents, amendments, waivers or other modifications to this Agreementand the other Loan Documents and any other documents or matters reasonablyrequested by Lender; (v) securing Borrower’s compliance with any requests madepursuant to the provisions of this Agreement; (vi) the filing and recordingfees and expenses, title insurance and reasonable fees and expenses of counselfor providing to Lender all required legal opinions, and other similar expensesincurred in creating and perfecting the Liens in favor of Lender pursuant tothis Agreement and the other Loan Documents; (vii) enforcing or preserving anyrights, in response to third party claims or the prosecuting or defending ofany action or proceeding or other litigation, in each case against, under oraffecting Borrower, this Agreement, the other Loan Documents, the Collateral,any Mortgage Principal’s general partner interest in the related MortgageBorrower Entity, the Properties or any other security given for the Loan; and(viii) enforcing any obligations of or collecting any payments due from Borrowerunder this Agreement, the other Loan Documents or with respect to theCollateral or in connection with any refinancing or restructuring of the creditarrangements provided under this Agreement in the nature of a “workout” or ofany insolvency or bankruptcy proceedings; *provided, however*,that Borrower shall not be liable for the payment or reimbursement of any suchcosts and expenses to the extent the same arise by reason of the grossnegligence, illegal acts, fraud or willful misconduct of Lender.

####  

#### (b)           Borrower shallindemnify, defend and hold harmless Lender from and against any and all otherliabilities, obligations, losses, damages, penalties, actions, judgments,suits, claims, costs, expenses and disbursements of any kind or naturewhatsoever (including, without limitation, the reasonable out-of-pocket feesand disbursements of counsel for Lender in connection with any investigative,administrative or judicial proceeding commenced or threatened, whether or notLender shall be designated a party thereto), that may be imposed on, incurredby, or asserted against Lender in any manner relating to or arising out of (i)any breach by Borrower of its obligations under, or any materialmisrepresentation by Borrower contained in, this Agreement or the other LoanDocuments, 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 Lenderhereunder 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 orwillful misconduct of Lender. To the extent that the undertaking to indemnify,defend and hold harmless set forth in the preceding sentence may beunenforceable because it violates any law or public policy, Borrower shall paythe maximum portion that it is permitted to pay and satisfy under ApplicableLaw to the payment and satisfaction of all Indemnified Liabilities incurred byLender.

####  

#### (c)           Borrower shall, atits sole cost and expense, protect, defend, indemnify, release and holdharmless Lender and the Indemnified Parties from and against any and all losses(including, without limitation, reasonable attorneys’ fees and costs incurredin the investigation, defense, and settlement of losses incurred in correctingany prohibited 

####  

163

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#### transaction orin the sale of a prohibited loan, and in obtaining any individual prohibitedtransaction exemption under ERISA, the Code, any State statute or other similarlaw 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 5.2.8hereof.

####  

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

####  

Section 10.14         Schedulesand Exhibits Incorporated.

 

The Schedulesand Exhibits annexed hereto are hereby incorporated herein as a part of thisAgreement with the same effect as if set forth in the body hereof.

 

Section 10.15         Offsets,Counterclaims and Defenses.

 

Any assigneeof Lender’s interest in and to this Agreement, the Note and the other LoanDocuments shall take the same free and clear of all offsets, counterclaims ordefenses which are unrelated to the Loan and the Loan Documents which Borrowermay otherwise have against any assignor of such documents, and no suchunrelated counterclaim or defense shall be interposed or asserted by Borrowerin any action or proceeding brought by any such assignee upon the Loan or theLoan Documents, and any such right to interpose or assert any such unrelatedoffset, counterclaim or defense in any such action or proceeding is herebyexpressly waived by Borrower.

 

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

 

#### (a)           Borrower and Lenderintend that the relationship created hereunder and under the other LoanDocuments be solely that of borrower and lender. Nothing herein or therein isintended to create a joint venture, partnership, tenancy in common, or jointtenancy relationship between Borrower and Lender.

####  

#### (b)           This Agreement andthe other Loan Documents are solely for the benefit of Lender and Borrower, andnothing contained in this Agreement or the other Loan Documents shall be deemedto confer upon anyone other than Lender and Borrower any right to insist uponor to enforce the performance or observance of any of the obligations containedherein or therein. All conditions to the obligations of Lender to make the Loanhereunder are imposed solely and exclusively for the benefit of Lender and noother Person shall have standing to require satisfaction of such conditions inaccordance with their terms or be entitled to assume that Lender will refuse tomake the Loan in the absence of strict compliance with any or all thereof andno other Person shall under any circumstances be deemed to be a beneficiary ofsuch conditions, any or all of which may be freely waived in whole or in partby Lender if, in Lender’s sole discretion, Lender deems it advisable ordesirable to do so.

####  

164

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Section 10.17         Counterparts.

 

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

 

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

 

#### (a)           To the fullestextent permitted by Applicable Law, Borrower, for itself and its successors andassigns, waives all rights to a marshalling of the assets of Borrower, Borrower’spartners and others with interests in Borrower, and of the Collateral, or to asale in inverse order of alienation in the event of foreclosure of the PledgeAgreement, and agrees not to assert any right under any laws pertaining to themarshalling of assets, the sale in inverse order of alienation, homesteadexemption, the administration of estates of decedents, or any other matterswhatsoever to defeat, reduce or affect the right of Lender under the LoanDocuments to a sale of the Properties for the collection of the Debt withoutany prior or different resort for collection or of the right of Lender to thepayment of the Debt out of the net proceeds of the Properties in preference toevery other claimant whatsoever. In addition, Borrower, for itself and itssuccessors and assigns, waives in the event of foreclosure of any portion ofthe Collateral, any equitable right otherwise available to Borrower which wouldrequire the separate sale of any portion of the Collateral or require Lender toexhaust its remedies against any portion of the Collateral or any combinationof portions of the Collateral before proceeding against any other portion ofthe Collateral or combination of portions of the Collateral; and Borrowerhereby expressly consents to and authorizes, at the option of Lender in theevent of such foreclosure, the foreclosure and sale either separately ortogether of any portion of the Collateral or combination of portions of theCollateral.

####  

#### (b)           Borroweracknowledges that Lender has made the Loan to Borrower upon the security of itscollective interest in the Collateral and in reliance upon the aggregate of theCollateral taken together being of greater value as collateral security thanthe sum of any portion of the Collateral taken separately.

####  

Section 10.19         Waiverof Counterclaim.

 

Borrowerhereby waives the right to assert a counterclaim, other than a compulsorycounterclaim, in any action or proceeding brought against it by Lender or itsagents.

 

Section 10.20         Conflict;Construction of Documents; Reliance.

 

In the eventof any conflict between the provisions of this Agreement and any of the otherLoan Documents, the provisions of this Agreement shall control. The partieshereto acknowledge that they were represented by competent counsel inconnection with the negotiation, drafting and execution of the Loan Documentsand that the Loan Documents shall not be subject to the principle of construingtheir meaning against the party which drafted same. Borrower acknowledges that,with respect to the Loan, 

 

165

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Borrower shall rely solely on its own judgment and advisors in enteringinto the Loan without relying in any manner on any statements, representationsor recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lendershall not be subject to any limitation whatsoever in the exercise of any rightsor remedies available to it under any of the Loan Documents or any otheragreements or instruments which govern the Loan by virtue of the ownership byit or any parent, subsidiary or Affiliate of Lender of any direct or indirectequity interest any of them may acquire in Borrower, and Borrower hereby irrevocablywaives the right to raise any defense or take any action on the basis of theforegoing with respect to Lender’s exercise of any such rights or remedies. Borroweracknowledges that Lender engages in the business of real estate financings andother real estate transactions and investments which may be viewed as adverseto or competitive with the business of Borrower or its Affiliates.

 

Section 10.21         Brokersand Financial Advisors.

 

Borrowerhereby represents that it has dealt with no financial advisors, brokers,underwriters, placement agents, agents or finders in connection with thetransactions contemplated by this Agreement. Borrower hereby agrees toindemnify, 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-pocketattorneys’ fees and expenses) in any way relating to or arising from a claim byany Person that such Person acted on behalf of Borrower or Lender in connectionwith the transactions contemplated herein. The provisions of this Section 10.21shall survive the expiration and termination of this Agreement and the paymentof the Debt.

 

Section 10.22         PriorAgreements.

 

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

 

Section 10.23         Jointand Several Liability.

 

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

 

Section 10.24         USAPatriot Act.

 

Each Lenderhereby notifies each Borrower that pursuant to the requirements of the USAPatriot Act (Title III of Pub. L. 107-56 (signed into law October 26,2001)), it is required to obtain, verify and record information that identifieseach Borrower, which information includes the name and address of each Borrowerand other information that will allow such Lender to identify each Borrower inaccordance with such Act.

 

**[NO FURTHER TEXT ON THIS PAGE]**

 

166

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IN WITNESSWHEREOF, the parties hereto have caused this Mezzanine A Loan Agreement to beduly executed by their duly authorized representatives, all as of the day andyear 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.          ArchstoneVanoni Ranch, 10676 Veronica Lane, Ventura, California

 

----

 

SCHEDULE 4.1.1

 

(Organizational Chart)

 

----

 

SCHEDULE 4.1.4

 

(Litigation)

 

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

 

----

 

SCHEDULE 4.1.9

 

(Exceptions to Compliance with LegalRequirements)

 

1.                                       CertainIndividual Properties, owned by Mortgage Borrower or other entities affiliatedwith Archstone-Smith Operating Trust, are identified in the Equal RightsCenter v. Archstone litigation (Civil Action No. 04-03975 (AMD), U.S. Dist.Ct., D. Md.) as having potential construction/design violations under theFair 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 LicensesExceptions)

 

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)

 

**ArchstoneVanoni Ranch**

 

1. PromissoryNote made by ASN Vanoni Ranch LLC and Tishman Speyer Archstone-Smith VanoniRanch Lessee, L.L.C. (together, the “Vanoni Borrower”), as borrower in favor ofLehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Inc. (together, the “Lender”), as lender, in the original principalamount of $69,149,000.00

 

2. LoanAgreement between Vanoni Borrower and Lender

 

3. Deed ofTrust between Vanoni Borrower and Lender

 

4. ReplacementReserve Agreement between Vanoni Borrower and Lender

 

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

 

6. Cross Collateralization Agreement between VanoniBorrower and Lender

 

7. Post Closing Letter executed by VanoniBorrower

 

8. Escrow Agreement executed by VanoniBorrower and Lender

 

9. Hedge Agreement between Vanoni Borrower and Lender

 

10. ADA Agreement between Vanoni Borrower and Lender

 

11. California Guaranty executed by Guarantor

 

**ArchstoneWarner Center**

 

1. PromissoryNote made by ASN Warner Center LLC (“Warner Borrower”), as borrower in favor ofLehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $110,405,000.00

 

2. LoanAgreement between Warner Borrower and Lender

 

3. Deed ofTrust between Warner Borrower and Lender

 

4. ReplacementReserve Agreement between Warner Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

----

 

6. Cross Collateralization Agreement between WarnerBorrower and Lender

 

7. Post Closing Letter executed by WarnerBorrower

 

8. Escrow Agreement executed by WarnerBorrower and Lender

 

9. Hedge Agreement between Warner Borrower and Lender

 

10. Debt Service Escrow Agreement between WarnerBorrower and Lender

 

11. California Guaranty executed by Guarantor

 

**ArchstoneCity Place**

 

1. PromissoryNote made by ASN City Place LLC (“City Place Borrower”), as borrower in favorof Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $48,428,000.00

 

2. LoanAgreement between City Place Borrower and Lender

 

3. Deed ofTrust between City Place Borrower and Lender

 

4. ReplacementReserve Agreement between City Place Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between CityPlace Borrower and Lender

 

7. Post Closing Letter executed by CityPlace Borrower

 

8. Escrow Agreement executed by City PlaceBorrower and Lender

 

9. Hedge Agreement between City PlaceBorrower and Lender

 

10. California Guaranty executed by Guarantor

 

**ArchstoneFox Plaza**

 

1. PromissoryNote made by ASN Fox Plaza LLC (“Fox Borrower”), as borrower in favor of LehmanBrothers Holdings Inc.; Bank of America, N.A.; Barclays Capital Real EstateFinance Inc. (together, the “Lender”), as lender, in the original principalamount of $61,634,500.00

 

2. LoanAgreement between Fox Borrower and Lender

 

----

 

3. Deed ofTrust between Fox Borrower and Lender

 

4. ReplacementReserve Agreement between Fox Borrower and Lender

 

5. Guaranty executedby Guarantor

 

6. Cross Collateralization Agreement between FoxBorrower and Lender

 

7. Post Closing Letter executed by FoxBorrower

 

8. Escrow Agreement executed by FoxBorrower and Lender

 

9. Hedge Agreement between Fox Borrower and Lender

 

10. Repair Agreement between Fox Borrower and Lender

 

11. California Guaranty executed by Guarantor

 

**ArchstoneBoston Common**

 

1. PromissoryNote made by ASN Park Essex LLC (“Boston Borrower”), as borrower in favor ofLehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $152,926,000.00

 

2. LoanAgreement between Boston Borrower and Lender

 

3. Mortgagebetween Boston Borrower and Lender

 

4. ReplacementReserve Agreement between Boston Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between BostonBorrower and Lender

 

7. Post Closing Letter executed by BostonBorrower

 

8. Escrow Agreement executed by Boston Borrower and Lender

 

9. Debt Service Escrow Agreement between BostonBorrower and Lender

 

10. Hedge Agreement between Boston Borrower and Lender

 

----

 

**ArchstoneRedmond Campus**

 

1. PromissoryNote made by Tishman Speyer Archstone-Smith Redmond Campus, L.L.C. (“RedmondCampus Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bankof 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. LoanAgreement between Redmond Campus Borrower and Lender

 

3. Mortgagebetween Redmond Campus Borrower and Lender

 

4. ReplacementReserve Agreement between Redmond Campus Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between RedmondCampus Borrower and Lender

 

7. Post Closing Letter executed by RedmondCampus Borrower

 

8. Escrow Agreement executed by RedmondCampus Borrower and Lender

 

9. Hedge Agreement between Redmond CampusBorrower and Lender

 

**ArchstoneHarbour Pointe**

 

1. PromissoryNote made by Tishman Speyer Archstone-Smith Harbour Pointe, L.L.C. (“HarbourPointe Borrower”), as borrower in favor of Lehman Brothers Holdings Inc.; Bankof 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. LoanAgreement between Harbour Pointe Borrower and Lender

 

3. Mortgagebetween Harbour Pointe Borrower and Lender

 

4. ReplacementReserve Agreement between Harbour Pointe Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between HarbourPointe Borrower and Lender

 

7. Post Closing Letter executed by HarbourPointe Borrower

 

8. Escrow Agreement executed by HarbourPointe Borrower and Lender

 

9. Hedge Agreement between Harbour PointeBorrower and Lender

 

----

 

**ArchstoneNorthcreek**

 

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

 

2. LoanAgreement between Northcreek Borrower and Lender

 

3. Mortgagebetween Northcreek Borrower and Lender

 

4. ReplacementReserve Agreement between Northcreek Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between NorthcreekBorrower and Lender

 

7. Post Closing Letter executed by NorthcreekBorrower

 

8. Escrow Agreement executed by NorthcreekBorrower and Lender

 

9. Hedge Agreement between NorthcreekBorrower and Lender

 

10. ADA Agreement between Borrower and Lender

 

**ArchstoneRedmond Park**

 

1. PromissoryNote made by ASN Redmond Park LLC (“Redmond Park Borrower”), as borrower infavor of Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays CapitalReal Estate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $41,063,000.00

 

2. LoanAgreement between Redmond Park Borrower and Lender

 

3. Mortgagebetween Redmond Park Borrower and Lender

 

4. ReplacementReserve Agreement between Redmond Park Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between RedmondPark Borrower and Lender

 

7. Post Closing Letter executed by RedmondPark Borrower

 

8. Escrow Agreement executed by RedmondPark Borrower and Lender

 

----

 

9. Hedge Agreement between Redmond ParkBorrower and Lender

 

**StoneCreek at Bellevue (Redmond Court)**

 

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

 

2. LoanAgreement between Stone Creek Borrower and Lender

 

3. Mortgagebetween Stone Creek Borrower and Lender

 

4. ReplacementReserve Agreement between Stone Creek Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between StoneCreek Borrower and Lender

 

7. Post Closing Letter executed by StoneCreek Borrower

 

8. Escrow Agreement executed by Stone CreekBorrower and Lender

 

9. Hedge Agreement between Stone CreekBorrower and Lender

 

**WallStreet Tower**

 

1. PromissoryNote made by ASN Belltown LLC (“Wall Street Borrower”), as borrower in favor ofLehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $54,410,000.00

 

2. LoanAgreement between Wall Street Borrower and Lender

 

3. Mortgagebetween Wall Street Borrower and Lender

 

4. ReplacementReserve Agreement between Wall Street Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between WallStreet Borrower and Lender

 

7. Post Closing Letter executed by WallStreet Borrower

 

8. Escrow Agreement executed by Wall StreetBorrower and Lender

 

----

 

9. Hedge Agreement between Wall StreetBorrower and Lender

 

**ArchstoneThousand Oaks Crest (aka Oakwood Village)**

 

1. PromissoryNote made by ASN Thousand Oaks Crest LLC (“Oakwood Borrower”), as borrower infavor of Lehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays CapitalReal Estate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $46,000,000.00

 

2. LoanAgreement between Oakwood Borrower and Lender

 

3. Deed ofTrust between Oakwood Borrower and Lender

 

4. ReplacementReserve Agreement between Oakwood Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

6. Cross Collateralization Agreement between OakwoodBorrower and Lender

 

7. Post Closing Letter executed by OakwoodBorrower

 

8. Escrow Agreement executed by OakwoodBorrower and Lender

 

9. Hedge Agreement between Oakwood Borrower and Lender

 

10. Repair Agreement between OakwoodBorrower and Lender

 

11. Completion Guaranty executed by Guarantor

 

12. California Guaranty executed by Guarantor

 

**The Flatsat Dupont Circle**

 

1. PromissoryNote made by ASN Dupont Circle LLC (“Dupont Borrower”), as borrower in favor ofLehman Brothers Holdings Inc.; Bank of America, N.A.; Barclays Capital RealEstate Finance Inc. (together, the “Lender”), as lender, in the originalprincipal amount of $90,066,000.00

 

2. LoanAgreement between Dupont Borrower and Lender

 

3. Deed ofTrust between Dupont Borrower and Lender

 

4. ReplacementReserve Agreement between Dupont Borrower and Lender

 

5. Guarantyexecuted by Guarantor

 

----

 

6. Cross Collateralization Agreement between DupontBorrower and Lender

 

7. Post Closing Letter executed by DupontBorrower

 

8. Escrow Agreement executed by DupontBorrower and Lender

 

9. Hedge Agreement between Dupont Borrower and Lender

 

----

 

SCHEDULE 4.1.48

 

(Condominium Properties)

 

1.             Archstone Fox Plaza, 1390 MarketStreet, San Francisco, California

 

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SCHEDULE 5.1.20

 

(Capital Improvements)

 

None

 

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SCHEDULE 5.2.10(c)(vii)

 

Bank Loan Pledged Interests

 

All entitiesthat have pledged their assets as collateral for the Bank Loan pursuant to theBank Loan Documents.

 

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