**Exhibit 10.9**

** **

**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

 

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| **I.**       | DEFINITIONS;  PRINCIPLES OF CONSTRUCTION           | 9      |
|--------------|----------------------------------------------------|--------|
| ** **   |                                               |   |
| Section 1.1  | Definitions                                        | 9      |
| Section 1.2  | Principles of Construction                         | 36     |
|         |                                               |   |
| **II.**      | GENERAL  TERMS                                     | 36     |
| ** **   |                                               |   |
| Section 2.1  | Loan Commitment; Disbursement to Borrower          | 36     |
| 2.1.1        | Agreement to Lend and Borrow                       | 36     |
| 2.1.2        | Single Disbursement to Borrower                    | 36     |
| 2.1.3        | The Note, Pledge Agreement and Loan  Documents     | 36     |
| 2.1.4        | Use of Proceeds                                    | 37     |
| Section 2.2  | Interest; Loan Payments; Late Payment Charge       | 37     |
| 2.2.1        | Payments                                           | 37     |
| 2.2.2        | Interest Calculation                               | 37     |
| 2.2.3        | Payments Before Maturity Date                      | 37     |
| 2.2.4        | Intentionally Omitted                              | 37     |
| 2.2.5        | Payment on Maturity Date                           | 37     |
| 2.2.6        | Payments after Default                             | 38     |
| 2.2.7        | Late Payment Charge                                | 38     |
| 2.2.8        | Usury Savings                                      | 38     |
| 2.2.9        | Foreign Taxes                                      | 39     |
| Section 2.3  | Prepayments                                        | 40     |
| 2.3.1        | Voluntary Prepayments                              | 40     |
| 2.3.2        | Liquidation Events                                 | 41     |
| 2.3.3        | Prepayments After Default                          | 42     |
| 2.3.4        | Making of Payments                                 | 42     |
| 2.3.5        | Application of Principal Prepayments               | 42     |
| Section 2.4  | Intentionally Omitted                              | 42     |
| Section 2.5  | Intentionally Omitted                              | 42     |
| Section 2.6  | Release of an Individual Property                  | 42     |
| Section 2.7  | Intentionally Omitted                              | 44     |
| Section 2.8  | Release on Payment in Full                         | 44     |
| Section 2.9  | Substitution of Properties                         | 44     |
| Section 2.10 | Approval of Requests under Mortgage Loan Agreement | 51     |
|              |                                                    |        |  |

 

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| **III.**    | MORTGAGE  BORROWER DISTRIBUTIONS   | 51     |
|-------------|------------------------------------|--------|
| ** **  |                               |   |
| Section 3.1 | Mortgage Borrower Distributions    | 51     |
|        |                               |   |
| **IV.**     | REPRESENTATIONS  AND WARRANTIES    | 52     |
| ** **  |                               |   |
| Section 4.1 | Borrower Representations           | 52     |
| 4.1.1       | Organization                       | 52     |
| 4.1.2       | Proceedings                        | 52     |
| 4.1.3       | No Conflicts                       | 53     |
| 4.1.4       | Litigation                         | 53     |
| 4.1.5       | Agreements                         | 53     |
| 4.1.6       | Solvency                           | 54     |
| 4.1.7       | Full and Accurate Disclosure       | 54     |
| 4.1.8       | No Plan Assets                     | 55     |
| 4.1.9       | Compliance                         | 55     |
| 4.1.10      | Financial Information              | 55     |
| 4.1.11      | Condemnation                       | 56     |
| 4.1.12      | Federal Reserve Regulations        | 56     |
| 4.1.13      | Utilities and Public Access        | 56     |
| 4.1.14      | Not a Foreign Person               | 56     |
| 4.1.15      | Separate Lots                      | 56     |
| 4.1.16      | Assessments                        | 56     |
| 4.1.17      | Enforceability                     | 57     |
| 4.1.18      | No Prior Assignment                | 57     |
| 4.1.19      | Insurance                          | 57     |
| 4.1.20      | Use of Property                    | 57     |
| 4.1.21      | Certificate of Occupancy; Licenses | 57     |
| 4.1.22      | Flood Zone                         | 58     |
| 4.1.23      | Physical Condition                 | 58     |
| 4.1.24      | Boundaries                         | 58     |
| 4.1.25      | Leases                             | 58     |
| 4.1.26      | Title                              | 59     |
| 4.1.27      | Intentionally Omitted              | 60     |
| 4.1.28      | Filing and Recording Taxes         | 60     |
|             |                                    |        |  |

 

2

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| 4.1.29      | Intentionally Omitted                               | 61     |
|-------------|-----------------------------------------------------|--------|
| 4.1.30      | Management Agreement                                | 61     |
| 4.1.31      | Illegal Activity                                    | 61     |
| 4.1.32      | No Change in Facts or Circumstances;  Disclosure    | 61     |
| 4.1.33      | Investment Company Act                              | 61     |
| 4.1.34      | Principal Place of Business; State of  Organization | 61     |
| 4.1.35      | Single Purpose Entity                               | 62     |
| 4.1.36      | Business Purposes                                   | 69     |
| 4.1.37      | Taxes                                               | 69     |
| 4.1.38      | Forfeiture                                          | 69     |
| 4.1.39      | Environmental Representations and  Warranties       | 70     |
| 4.1.40      | Taxpayer Identification Number                      | 70     |
| 4.1.41      | OFAC                                                | 70     |
| 4.1.42      | Intentionally Omitted                               | 70     |
| 4.1.43      | Deposit and Securities Accounts                     | 70     |
| 4.1.44      | Embargoed Person                                    | 71     |
| 4.1.45      | Affiliates                                          | 71     |
| 4.1.46      | Mortgage Borrower Representations                   | 71     |
| 4.1.47      | List of Mortgage Loan Documents                     | 71     |
| 4.1.48      | Intentionally Omitted                               | 72     |
| 4.1.49      | Intentionally Omitted                               | 72     |
| 4.1.50      | Mortgage Loan Event of Default                      | 72     |
| Section 4.2 | Survival of Representations                         | 72     |
|        |                                                |   |
| **V.**      | BORROWER  COVENANTS                                 | 72     |
| ** **  |                                                |   |
| Section 5.1 | Affirmative Covenants                               | 72     |
| 5.1.1       | Existence; Compliance with Legal  Requirements      | 72     |
| 5.1.2       | Taxes and Other Charges                             | 73     |
| 5.1.3       | Litigation                                          | 74     |
| 5.1.4       | Access to the Properties                            | 75     |
| 5.1.5       | Notice of Default                                   | 75     |
| 5.1.6       | Cooperate in Legal Proceedings                      | 75     |
| 5.1.7       | Award and Insurance Benefits                        | 75     |
|             |                                                     |        |  |

 

3

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| 5.1.8       | Further Assurances                                         | 75 |
|-------------|------------------------------------------------------------|----|
| 5.1.9       | Mortgage and Intangible Taxes                              | 76 |
| 5.1.10      | Financial Reporting                                        | 76 |
| 5.1.11      | Business and Operations                                    | 79 |
| 5.1.12      | Costs of Enforcement                                       | 79 |
| 5.1.13      | Estoppel Statement                                         | 80 |
| 5.1.14      | Loan Proceeds                                              | 81 |
| 5.1.15      | Performance by Borrower                                    | 81 |
| 5.1.16      | Confirmation of Representations                            | 81 |
| 5.1.17      | Leasing Matters                                            | 82 |
| 5.1.18      | Management Agreement                                       | 85 |
| 5.1.19      | Environmental Covenants                                    | 87 |
| 5.1.20      | Alterations                                                | 89 |
| 5.1.21      | Intentionally Omitted                                      | 90 |
| 5.1.22      | OFAC                                                       | 90 |
| 5.1.23      | Intentionally Omitted                                      | 90 |
| 5.1.24      | Mortgage Loan Reserve Funds                                | 90 |
| 5.1.25      | Notices                                                    | 90 |
| 5.1.26      | Special Distributions                                      | 90 |
| 5.1.27      | Mortgage Borrower Covenants                                | 91 |
| 5.1.28      | Mortgage Loan Estoppels                                    | 91 |
| 5.1.29      | Intentionally Omitted                                      | 91 |
| Section 5.2 | Negative Covenants                                         | 91 |
| 5.2.1       | Liens                                                      | 91 |
| 5.2.2       | Dissolution                                                | 92 |
| 5.2.3       | Change in Business                                         | 92 |
| 5.2.4       | Debt Cancellation                                          | 92 |
| 5.2.5       | Zoning                                                     | 93 |
| 5.2.6       | No Joint Assessment                                        | 93 |
| 5.2.7       | Name, Identity, Structure, or Principal  Place of Business | 93 |
| 5.2.8       | ERISA                                                      | 93 |
| 5.2.9       | Affiliate Transactions                                     | 94 |
| 5.2.10      | Transfers                                                  | 94 |

 

4

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| 5.2.11      | Permitted Transfer                              | 98     |
|-------------|-------------------------------------------------|--------|
| 5.2.12      | Limitations on Securities Issuances             | 100    |
| 5.2.13      | Distributions                                   | 100    |
| 5.2.14      | Refinancing or Prepayment of the Mortgage  Loan | 100    |
| 5.2.15      | Acquisition of the Mortgage Loan                | 101    |
| 5.2.16      | Material Agreements                             | 101    |
|        |                                            |   |
| **VI.**     | INSURANCE;  CASUALTY AND CONDEMNATION           | 102    |
| ** **  |                                            |   |
| Section 6.1 | Insurance                                       | 102    |
| Section 6.2 | Casualty                                        | 108    |
| Section 6.3 | Condemnation                                    | 108    |
| Section 6.4 | Restoration                                     | 108    |
| Section 6.5 | Rights of Lender                                | 109    |
|        |                                            |   |
| **VII.**    | RESERVE  FUNDS                                  | 109    |
| ** **  |                                            |   |
| Section 7.1 | Completion/Repair Reserves                      | 109    |
| Section 7.2 | Impositions and Imposition Deposits             | 110    |
| Section 7.3 | Replacement Reserves                            | 110    |
| Section 7.4 | Other Mortgage Reserves                         | 110    |
| Section 7.5 | Debt Service Reserve Funds                      | 111    |
| Section 7.6 | Intentionally Omitted                           | 112    |
| Section 7.7 | Intentionally Omitted                           | 112    |
| Section 7.8 | Reserve Funds, Generally                        | 112    |
| Section 7.9 | Letters of Credit                               | 113    |
| 7.9.1       | Delivery of Letters of Credit                   | 113    |
| 7.9.2       | Provisions Regarding Letters of Credit          | 114    |
|        |                                            |   |
| **VIII.**   | DEFAULTS                                        | 115    |
| ** **  |                                            |   |
| Section 8.1 | Event of Default                                | 115    |
| Section 8.2 | Remedies                                        | 119    |
| Section 8.3 | Remedies Cumulative; Waivers                    | 120    |
| Section 8.4 | Right to Cure Defaults                          | 120    |
| Section 8.5 | Mortgage Loan Reserve Funds                     | 121    |
| Section 8.6 | Power of Attorney                               | 121    |
|             |                                                 |        |  |

 

5

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| **IX.**      | SPECIAL  PROVISIONS                                                               | 121    |
|--------------|-----------------------------------------------------------------------------------|--------|
| ** **   |                                                                              |   |
| Section 9.1  | Sale of Notes and Securitization                                                  | 121    |
| Section 9.2  | Disclosure Document Cooperation                                                   | 123    |
| Section 9.3  | Servicer                                                                          | 123    |
| Section 9.4  | Exculpation                                                                       | 124    |
| Section 9.5  | Limitation on Borrower’s Obligations                                         | 126    |
| Section 9.6  | Reallocation of Loan Amounts                                                      | 128    |
| Section 9.7  | Syndication                                                                       | 129    |
| 9.7.1        | Syndication                                                                       | 129    |
| 9.7.2        | Sale of Loan, Co-Lenders, Participations  and Servicing                           | 129    |
| 9.7.3        | Cooperation in Syndication                                                        | 132    |
| 9.7.4        | Payment of Agent’s, and Co-Lender’s  Expenses                           | 133    |
| 9.7.5        | Intentionally Omitted                                                             | 134    |
| 9.7.6        | No Joint Venture                                                                  | 134    |
| Section 9.8  | Restructuring of Loan and/or Mezzanine B Loan; Creation of New  Mezzanine Loan(s) | 134    |
| Section 9.9  | Contributions and Waivers                                                         | 136    |
| Section 9.10 | Certain Additional Rights of Lender; VCOC                                         | 139    |
| Section 9.11 | Mortgage Loan Defaults                                                            | 140    |
| Section 9.12 | Intentionally Omitted                                                             | 142    |
| Section 9.13 | Intentionally Omitted                                                             | 142    |
| Section 9.14 | Intercreditor Agreements                                                          | 142    |
| Section 9.15 | Discussions with Mortgage Lender                                                  | 142    |
| Section 9.16 | Independent Approval Rights                                                       | 143    |
|         |                                                                              |   |
| **X.**       | MISCELLANEOUS                                                                     | 143    |
| ** **   |                                                                              |   |
| Section 10.1 | Survival                                                                          | 143    |
| Section 10.2 | Lender’s Discretion                                                          | 144    |
| Section 10.3 | Governing Law                                                                     | 144    |
| Section 10.4 | Modification, Waiver in Writing                                                   | 144    |
| Section 10.5 | Delay Not a Waiver                                                                | 145    |
| Section 10.6 | Notices                                                                           | 145    |
| Section 10.7 | Trial by Jury                                                                     | 146    |
| Section 10.8 | Headings                                                                          | 147    |
|              |                                                                                   |        |  |

 

6

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| Section 10.9                                                        | Severability                                                             | 147    |
|---------------------------------------------------------------------|--------------------------------------------------------------------------|--------|
| Section 10.10                                                       | Preferences                                                              | 147    |
| Section 10.11                                                       | Waiver of Notice                                                         | 147    |
| Section 10.12                                                       | Remedies of Borrower                                                     | 147    |
| Section 10.13                                                       | Expenses; Indemnity                                                      | 148    |
| Section 10.14                                                       | Schedules and Exhibits Incorporated                                      | 149    |
| Section 10.15                                                       | Offsets, Counterclaims and Defenses                                      | 149    |
| Section 10.16                                                       | No Joint Venture or Partnership; No Third Party Beneficiaries            | 149    |
| Section 10.17                                                       | Counterparts                                                             | 150    |
| Section 10.18                                                       | Waiver of Marshalling of Assets; Cross-Default; Cross  Collateralization | 150    |
| Section 10.19                                                       | Waiver of Counterclaim                                                   | 151    |
| Section 10.20                                                       | Conflict; Construction of Documents; Reliance                            | 151    |
| Section 10.21                                                       | Brokers and Financial Advisors                                           | 151    |
| Section 10.22                                                       | Prior Agreements                                                         | 151    |
| Section 10.23                                                       | Joint and Several Liability                                              | 152    |
| Section 10.24                                                       | USA Patriot Act                                                          | 152    |
|                                                                |                                                                     |   |
| EXHIBIT A  (Borrower Entities)                                      | 155                                                                      |
|                                                                |                                                                     |
| EXHIBIT B  (Lender Approved Standard Form of Lease)                 | 156                                                                      |
|                                                                |                                                                     |
| EXHIBIT C  (Allocated Loan Amounts)                                 | 157                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.1 (Organizational Chart)                              | 158                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.4 (Litigation)                                        | 159                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.9 (Exceptions to Compliance with Legal Requirements)  | 160                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.10 (Financial Information Exceptions)                 | 161                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.13 (Utilities and Public Access Exceptions)           | 162                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.21 (Certificate of Occupancy and Licenses Exceptions) | 163                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.23 (Physical Condition Exceptions)                    | 164                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.25 (Lease Representation Exceptions)                  | 165                                                                      |
|                                                                |                                                                     |
| SCHEDULE  4.1.32 (Changes in Facts or Circumstances)                | 166                                                                      |

 

7

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| SCHEDULE  4.1.47 (List of Mortgage Loan Documents)     | 167    |
|--------------------------------------------------------|--------|
|                                                   |   |   |
| SCHEDULE  5.1.20 (Capital Improvements)                | 168    |
|                                                   |   |   |
| SCHEDULE  5.2.10(c)(vii) (Bank Loan Pledged Interests) | 169    |

 

8

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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 at200 Park Avenue, New York, New York 10166 (“Barclays”; together withLehman and 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, Borrowerdesires 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 the covenants,agreements, representations and warranties set forth in this Agreement, theparties hereto hereby covenant, agree, represent and warrant as follows:

 

**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:

 

“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.

 

“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.

 

9

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“Additional Guarantor” shall mean any entitythat enters into a confirmation and joinder agreement as provided in theGuaranty and, with regard to any concurrent transfer, such transfer shall notcause a reduction of the direct or indirect interests in the Guarantors held bythe Lehman Entities and/or the Tishman Speyer Control Persons below 9.7% in theaggregate.

 

“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 LoanDocuments, 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 an interest rate equal to         %per annum.

 

“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.

 

10

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

 

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

 

“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.

 

“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.

 

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

 

11

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

 

“Business Day”shall mean any day other than a Saturday, Sunday or any other day on 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.

 

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

 

“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.

 

“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.

 

“control” (andthe correlative terms “controlled by” and “controlling”) shall mean, withrespect to any entity, the possession, directly or indirectly, of the power to 

 

12

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direct or cause the direction of management and policies of thebusiness and affairs of such entity by reason of the ownership of beneficialinterests, by contract or otherwise.

 

“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 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.

 

“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 the caseof a State chartered depository institution or trust company, is subject toregulations substantially similar to 12 C.F.R.§9.10(b), having in either case acombined capital and surplus of at least $50,000,000 and subject to supervisionor examination by federal and State authority. An Eligible Account will not beevidenced by a certificate of deposit, passbook or other instrument.

 

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“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 thebenefit of Lender, as the same may be amended, restated, replaced, supplementedor otherwise 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 andLiability Act and the Resource Conservation and Recovery Act.

 

“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.

 

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

 

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

 

“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 

 

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owner of such payment, any U.S. Tax imposed with respect to paymentsmade under the Note to a fiduciary or partnership to the extent that thebeneficial owner or member of the partnership would not have been entitled tothe additional amounts if such beneficial owner or member of the partnershiphad been the holder of the Note; or (iii) any taxes on profits, branch profits,franchise taxes and taxes imposed on or measured by all or part of gross or netincome of the recipient of such payment by the jurisdiction under the laws ofwhich the recipient is organized, 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.

 

“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, utility and other similar deposits andany disbursements to Borrower or Mortgage Borrower from the Mortgage LoanReserve Funds and any extraordinary non-

 

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recurring items of income. Gross income shall not be diminished as aresult of the Security Instruments or the creation of any intervening estate orinterest in an Individual Property or any part thereof.

 

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

 

“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, successors and assignsof any and all of the foregoing (including but not limited to (a) any otherPerson who holds or acquires or will have held a participation or other full orpartial interest in the Loan or the Properties, whether during the term of theLoan or as a part of or following a foreclosure of the Loan, and (b) successorsby merger, consolidation or acquisition of all or a substantial portion ofLender’s assets and business).

 

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

 

“IndividualProperty” shall mean each parcel of real property, the Improvements thereon andall Personal Property owned by the applicable Mortgage Borrower Entity andencumbered by a Security Instrument, together with all rights pertaining tosuch Property and Improvements, as more particularly described in the grantingclause 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 

 

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the past, a litigant, plaintiff or defendant in any suit broughtagainst or by Lender; or (i) a trust for the benefit of one or more individualssatisfying the criteria of clause (h) above.

 

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

 

“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.

 

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

 

“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, construction, use, alteration, occupancy or operationthereof, or any part thereof, whether now or hereafter enacted and in force,and all permits, licenses and authorizations and regulations relating thereto,and all covenants, agreements, restrictions and encumbrances contained in 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 withLehman Brothers Holdings Inc., a Delaware corporation.

 

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“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 NewYork, New York or in such other city as Lender may reasonably determine, issuedby Bank of America, N.A., JPMorgan Chase Bank or another domestic bank or theU.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.

 

“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.

 

“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 TWELVE MILLION ONE HUNDREDTWENTY-FIVE THOUSAND AND 00/100 DOLLARS ($12,125,000.00) made by Lender toBorrower pursuant to this Agreement and the other 

 

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Loan Documents, as the same may hereafter be amended or split pursuantto the 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, inthe aggregate, (ii) any Lease relating to residential space which, individuallyor together with all other Leases to the same tenant and to all Affiliates ofsuch tenant covers more than ten percent (10%) of the total number ofresidential units at any Individual Property, (iii) any Lease for the operationof any parking garage or facility, or (iv) any Lease which is with an Affiliateof 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; *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.

 

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“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, 2017, 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.

 

“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.

 

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“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$34,594,951.49 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 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 $34,594,951.49, 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 and MortgageLender.

 

“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” and “IDOTGuarantor” in the Mortgage Loan Agreement.

 

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

 

“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.

 

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

 

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

 

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

 

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

 

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

 

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

 

“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 Mortgage LoanAgreement.

 

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

 

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

 

“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.

 

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

 

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“MultifamilyParallel Guarantor II” shall mean Tishman Speyer Archstone-Smith MultifamilyParallel Guarantor II, 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 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 aCasualty or Condemnation, Borrower’s, Mortgage Borrower’s, Lender’s and/orMortgage Lender’s reasonable out-of-pocket costs incurred in connection withthe recovery 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 excessInsurance Proceeds 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 of Default,reasonable and customary out-of-pocket costs and expenses of sale or otherdisposition (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 theMortgage Loan Documents, (ix) intentionally omitted, (x) intentionally omitted,(xi) in the case of a refinancing of the Mortgage Loan, such costs and expenses(including attorneys’ fees) of such refinancing, (xii) intentionally omitted,(xiii) intentionally omitted, and (xiv) the amount of any prepayments 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 subtractingOperating Expenses for such period from Gross Income from Operations for suchperiod.

 

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“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 TWELVE MILLION ONE HUNDRED TWENTY-FIVE THOUSANDAND 00/100 DOLLARS ($12,125,000.00), made by Borrower in favor of Lender, asthe same may be amended, restated, replaced, extended, renewed, supplemented,severed, split, or otherwise modified from time to time in accordance with theapplicable 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.

 

“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 anofficer of 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 excludingdepreciation, Debt Service, Capital Expenditures and contributions to theReserve Funds, if applicable, 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 partnershipinterests, 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.

 

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“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.

 

“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 beingcontested in good faith and by appropriate proceedings in accordance with theapplicable provisions of the Loan Documents or the Mortgage Loan Documents, (d)other Liens that are being contested in good faith and by appropriateproceedings in accordance with the applicable provisions of the Loan Documentsor the Mortgage Loan Documents, (e) the rights of the lessors or securedparties under any Equipment Lease Agreements permitted under the Mortgage LoanAgreement, and any financing statements filed as evidence of such lessors’ orsecured parties’ rights, (f) easements, rights-of-way, restrictions,encroachments, and other minor defects or irregularities in title, in eachcase, which are necessary for the operation of the Property and do not or wouldnot have a Material Adverse Effect, and (g) such other title and surveyexceptions as Mortgage Lender has approved or may approve in writing inMortgage Lender’s sole discretion.

 

“PermittedInvestments” shall mean any one or more of the following obligations orsecurities (including those issued by Servicer, the trustee under anySecuritization or any of their respective Affiliates) acquired at a purchaseprice of not greater than par, and payable on demand or having a maturity datenot later than the Business Day immediately prior to the date upon which suchfunds are required to be drawn and meeting one of the appropriate standards setforth 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 

 

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guaranteed obligations), the Farmers Home Administration (certificatesof beneficial ownership), the General Services Administration (participationcertificates), the U.S. Maritime Administration (guaranteed Title XIfinancing), the Small Business Administration (guaranteed participationcertificates and guaranteed pool certificates), the U.S. Department of Housingand Urban Development (local authority bonds) and the Washington MetropolitanArea Transit Authority (guaranteed transit bonds); *provided,however*, that the investments described in this clause must (A) havea predetermined fixed dollar of principal due at maturity that cannot vary orchange, (B) if rated by S&P, must not have an “r” highlighter affixed totheir rating, (C) if such investments have a variable rate of interest, suchinterest rate must be tied to a single interest rate index plus a fixed spread(if any) and must move proportionately with that index, and (D) suchinvestments must not be subject to liquidation prior to their maturity;

 

(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 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;

 

(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” highlighteraffixed to their rating, (C) if such investments have a variable rate ofinterest, such interest rate must be tied to a single interest rate index plusa fixed spread (if any) and must move proportionately with that index, and (D)such investments must not be subject to liquidation prior to their maturity;

 

(v)           fully Federal Deposit 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 

 

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Rating Agencies, rated by at least one Rating Agency in the highestshort term rating category and otherwise acceptable to each other RatingAgency, as confirmed in writing that such investment would not, in and ofitself, result in a downgrade, qualification or withdrawal of the then currentratings assigned to the Securities); *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;

 

(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 Rating Agency 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) in itshighest long term unsecured rating category; *provided,however*, that the investments described in this clause must (A) havea predetermined fixed dollar of principal due at maturity that cannot vary orchange, (B) if rated by S&P, must not have an “r” highlighter affixed totheir rating, (C) if such investments have a variable rate of interest, suchinterest rate must be tied to a single interest rate index plus a fixed spread(if any) and must move proportionately with that index, and (D) suchinvestments must not be subject to 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 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;

 

(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 

 

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withdrawal of the then current ratings assigned to the Securities) formoney 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.

 

“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 to Lender 

 

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as security for the Loan, as the same may be amended, restated,replaced, supplemented or otherwise modified from time to time.

 

“Policies”shall have the meaning ascribed to the term “Insurance Policies” as set forthin the Mortgage Loan Agreement.

 

“PrepaymentConsideration” shall mean the greater of:

 

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

 

(ii)           the product obtained by multiplying:

 

(A)          the amount of principal being prepaid,

 

*by*

 

(B)                                thedifference obtained by subtracting from the Applicable Interest Rate the yieldrate (the “Yield Rate”) on the                     %U.S. Treasury Security due                                  (the“Specified U.S. Treasury Security”), on the twenty-fifth (25th)Business Day preceding (x) the intended date of prepayment, or (y) the dateLender accelerates the Loan or otherwise accepts a prepayment pursuant to thisAgreement, as the Yield Rate is reported in *The Wall Street Journal,*

 

*by*

 

(C)           the present value factor calculatedusing the following formula:

 
|   | 1 – (1 + r)-n/12 |   |
|--------|-----------------------|--------|
|   | r                     |   |

 

[r =          Yield Rate

 

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

 

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

 

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No Prepayment Consideration shall be payablewith respect to any prepayment made after the Prepayment Consideration PeriodEnd Date.

 

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

 

“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;

 

(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.

 

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“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 in theaggregate 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.

 

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

 

“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 an amount equal to:

 

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

 

(ii)           if the release price for suchIndividual Property under the Mortgage Loan is determined to be greater thanthe allocated loan amount for such Individual Property under the Mortgage Loan,an amount equal to (x) the quotient obtained by dividing (A) the release pricefor such Individual Property under the Mortgage Loan by (B) the outstandingprincipal balance of the Mortgage Loan immediately prior to the application 

 

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of such release price to the prepayment of the Mortgage Loan,multiplied by (y) the outstanding principal balance of the Loan immediatelyprior to the application of the Release Price determined hereunder to theprepayment of the Loan.

 

In no eventshall the Release Price be less than the Allocated Loan Amount for theapplicable Individual Property to be released.

 

“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 oragainst Mortgage Borrower of any petition for relief under the Bankruptcy Codeand the proceeds from the sale or other disposition of the Leases.

 

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

 

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

 

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

 

“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.

 

“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.

 

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“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” shallhave 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.

 

“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.

 

“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.

 

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

 

“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 theCollateral and 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 sodefined. 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 Agreement notwithstandingthe fact that the Mortgage Loan shall no longer be effective for any reason. Thephrase “Borrower shall cause Mortgage Borrower to” or “Borrower shall not causeor permit Mortgage Borrower to” (or phrases of similar meaning), as usedherein, shall mean Borrower shall cause Mortgage Borrower to so act or not toso act, as applicable (or that Borrower shall permit Mortgage Borrower to soact or not to so act, as applicable).

 

**II.            GENERALTERMS**

 

Section 2.1             LoanCommitment; Disbursement to Borrower.

 

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 on theoutstanding principal balance of the Note shall accrue from the Closing Date tobut excluding the Maturity Date at the Applicable Interest Rate.

####  

#### (b)           All payments andother amounts due under the Note, this Agreement and the other Loan Documentsshall be made without any setoff, defense or irrespective of, and withoutdeduction 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        PaymentsBefore Maturity Date.

 

Monthlyinstallments of interest only, in arrears, shall be paid on each Payment Datecommencing on December 1, 2007, and on each subsequent Payment Date thereafterto but not including the Maturity Date. Interest on the outstanding principalamount of the Loan to but not including October 31, 2007, shall be paid byBorrower on the Closing Date.

 

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 and upon not less than thirty (30) days’ (if given via U.S.Postal Service) or twenty (20) days’ (if given via facsimile, email orovernight courier), but no more than sixty (60) days’ prior written notice toLender, prepay the Debt in whole or in part, provided (i) Borrower pays toLender all accrued and unpaid interest on the amount of principal being prepaidthrough and including the date of prepayment and, if such prepayment occurs ona date which is not a Payment Date, all interest which would have accrued onthe amount of principal being prepaid after the date of such prepayment to thenext Payment Date (the “Interest Shortfall”); (ii) Mezzanine B Borrowersimultaneously prepays the Mezzanine B Loan in whole, but not in part (exceptin connection with the release of an Individual Property in accordance withSection 2.6 of the Mezzanine B Loan Agreement) pursuant to the Mezzanine B LoanAgreement by a dollar amount which bears the same relation to the principalamount of the Mezzanine B 

 

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Loan outstanding immediately prior to such prepayment as the amount ofthe Loan prepaid pursuant to this Section 2.3.1 bears to the principal amountof the Loan outstanding immediately prior to such prepayment; and (iii) if suchprepayment occurs prior to the Prepayment Consideration Period End Date,Borrower pays to Lender the Prepayment Consideration.

 

Borrower shallbe permitted the right to rescind and revoke or postpone its notice ofprepayment given in accordance with this Section 2.3.1, provided that (i) awritten notice of such rescission and revocation or postponement is received byLender no sooner than three (3) Business Days prior to the date of prepaymentindicated by Borrower and (ii) Borrower pays Lender’s reasonable out-of-pocketcosts and expenses incurred as a result of Lender’s receipt of such notice ofprepayment.

 

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 Property, (iii) a Transferof any Individual Property in connection with realization thereon by the MortgageLender following a Mortgage Loan Event of Default, including without limitationa foreclosure sale, (iv) intentionally omitted, (v) intentionally omitted or(vi) any refinancing of the Properties or the Mortgage Loan (each, a “LiquidationEvent”), Borrower shall cause the related Net Liquidation Proceeds AfterDebt Service (if any) to be deposited with Lender and to be applied inaccordance with the applicable provisions of this Section 2.3.2(a). On eachdate on which Lender actually receives a distribution of Net LiquidationProceeds After Debt Service, if such date is a Payment Date, such NetLiquidation Proceeds After Debt Service shall be applied to the outstandingprincipal balance of the Note and all other sums then due hereunder or underthe Loan Documents and any remaining Net Liquidation Proceeds After DebtService shall be disbursed to Borrower. In the event Lender receives adistribution of Net Liquidation Proceeds After Debt Service on a date otherthan a Payment Date, such amounts shall be held by Lender as collateralsecurity for the Loan in an interest bearing account, with such interestaccruing 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.

 

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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 LiquidationProceeds After Debt Service received in connection with a Casualty orCondemnation of all or a portion of any Individual Property), such tender orrecovery shall be deemed a voluntary prepayment by Borrower and Borrower shallpay, in addition to the Debt, (i) the Prepayment Consideration, if any, and(ii) all accrued and unpaid interest calculated at the Applicable Interest Rateon the amount of principal being prepaid through and including the date ofprepayment and, if such prepayment occurs on a date which is not a PaymentDate, all interest which would have accrued on the amount of principal beingprepaid after the date of such prepayment to the next Payment Date.

 

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

 

Section 2.4             IntentionallyOmitted.

 

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 

 

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Loan Documents (other than those expressly stated to survive), upon thesatisfaction of each of the following conditions:

 

#### (a)           (i) All conditions tothe 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, if suchprepayment occurs on a date which is not a Payment Date, the InterestShortfall; and (ii) if such prepayment is made prior to the PrepaymentConsideration Period End Date, Borrower pays to Lender the Prepayment Consideration,if any;

####  

#### (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 shall provide all other customary documentation Lenderreasonably requires to be delivered by Borrower in connection with suchrelease, together with an Officer’s Certificate certifying that suchdocumentation (i) is in compliance with all applicable Legal Requirements, (ii)will, following execution by Lender and recordation thereof, effect suchreleases in accordance with the terms of this Agreement, and (iii) will notimpair or otherwise adversely affect the Liens, security interests and otherrights of Lender under the Loan Documents not being released (or as to theparties 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;

 

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#### (i)            Intentionally Omitted;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.

 

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 Mortgage Loan Agreement, the Mortgage Note and the other MortgageLoan Documents (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:

 

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#### (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.

####  

#### (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 

 

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#### respect toBorrower, the Properties, the Substitute Property or the Loan as (i) Lender(applying the requirements of a prudent institutional mortgage loan lender), ifa Securitization 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 Substitute Allocated Loan Amount forsuch Substitute Properties shall not exceed the aggregate Allocated Loan Amountfor 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 inaccordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSMLand Title Surveys. Such Survey shall reflect the same legal descriptioncontained in the Mortgage Title Insurance Policy relating to such SubstituteProperty and shall include, among other things, a metes and bounds descriptionof the real property constituting part of such Substitute Property (unless suchreal property has been satisfactorily designated by lot number on a recordedplat). The surveyor’s seal shall be affixed to each Survey and each Surveyshall certify whether or not the surveyed property is located in a “one-hundred-yearflood hazard area.”

 

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#### (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 anyapplicable Legal 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 Borrower to deposit with Mortgage Lender (A) cash, (B) aLetter of Credit, or (C) an indemnity by a reasonably acceptable indemnitor, ineither event in an amount equal to one hundred twenty five percent (125%) of suchestimated cost, which deposit shall constitute additional security for theMortgage Loan and shall be released to Mortgage Borrower upon the delivery toMortgage Lender of (1) an update to such report indicating that there is nolonger any Hazardous Substance on the Substitute Property that has not beenremediated or contained in accordance with applicable Legal Requirements in allmaterial respects or any material danger of contamination from any off siteHazardous Substance in contravention of any applicable Legal Requirement, and(2) a certificate from Mortgage Borrower stating that all such remediation workhas been paid in full or will be paid for out of the amounts reserved withMortgage Lender. In the event that Mortgage Lender elects not to require suchdeposit, Borrower shall deliver 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 

 

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#### on the ClosingDate; (B) good standing certificates, certificates of qualification to dobusiness in the jurisdiction in which the Substitute Property is located (ifrequired in such jurisdiction); and (C) resolutions of Borrower or suchAffiliate, as applicable, authorizing the substitution and any actions taken inconnection 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.

####  

#### (p)           Borrower shall havepaid or reimbursed Lender for all reasonable out-of-pocket costs and expensesactually 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)           Lender shall havereceived annual operating statements and occupancy statements for theSubstitute Property for the most current completed fiscal year and a currentoperating statement for the Release Property, each certified by Borrower toLender as being true and correct in all material respects, and a certificatefrom Borrower certifying that there has been no material adverse change in thefinancial condition of the Substitute Property since the date of such operatingstatements.

####  

#### (r)            Borrower shall havedelivered to Lender estoppel certificates from all tenants under Major Leasesat the Substitute Property. All such estoppel certificates shall 

 

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#### be in the formor containing those statements required under such Major Lease or substantiallyin the form approved by Lender in connection with the origination of the Loanand shall indicate that (1) the subject Major Lease is a valid and bindingobligation of the tenant thereunder, (2) to the tenant’s knowledge, there are nodefaults under such Major Lease on the part of the landlord or tenantthereunder, (3) the tenant thereunder has no knowledge of any defense or offsetto the payment of rent under such Lease, (4) no rent under such Lease has beenpaid more than one (1) month in advance, (5) the tenant thereunder has nooption under such Lease to purchase all or any portion of the SubstituteProperty, and (6) all tenant improvement work required under such Lease hasbeen substantially completed and the tenant under such Lease is in actualoccupancy of its leased premises. If an estoppel certificate indicates that alltenant improvement work required under the subject Lease has not yet beencompleted, Borrower shall deliver to Lender financial statements indicatingthat Borrower has adequate funds to pay all costs related to such tenantimprovement work as required under such Lease.

####  

#### (s)           Lender shall havereceived copies of all Major Leases demising space at the Substitute Propertycertified by Borrower as being true and correct.

####  

#### (t)            IntentionallyOmitted.

####  

#### (u)           IntentionallyOmitted.

####  

#### (v)           Lender shall havereceived a Physical Conditions Report with respect to the Substitute Propertystating that the Substitute Property and its use comply in all materialrespects with all applicable Legal Requirements (including, without limitation,zoning, subdivision and building laws) and that the Substitute Property is ingood condition and repair and free of damage or waste in all material respects.If compliance with applicable Legal Requirements is not addressed by thePhysical Conditions Report, such compliance shall be confirmed by delivery toLender of a letter from the municipality in which such Property is located, ora certificate of a surveyor that is licensed in the state in which theSubstitute Property is located (with respect to zoning and subdivision laws, ifoffered in the jurisdiction in which the Substitute Property is located), or anALTA 3.1 zoning endorsement to the applicable Title Insurance Policy (withrespect to zoning laws) or a subdivision endorsement to the applicable TitleInsurance Policy (with respect to subdivision laws). If the Physical ConditionsReport recommends that any immediate repairs be made with respect to theSubstitute Property, a substitution shall not be allowed without Lender’s priorwritten consent (not to be unreasonably withheld or delayed) with respect tosuch proposed Substitute Property at any time prior to a Securitization of theLoan. If, subsequent to a Securitization of the Loan, any such PhysicalConditions Report recommends that any immediate repairs be made with respect tothe Substitute Property, the proposed substitution shall not be allowed unless(i) such report shall include an estimate of the cost of such recommendedrepairs, (ii) the estimated cost of such recommended repairs does not exceedten percent (10%) of the Allocated Loan Amount for such Substitute Property,and (iii) Borrower shall cause Mortgage Borrower to deposit with MortgageLender (A) cash, (B) a Letter of Credit, or (C) an indemnity by a reasonablyacceptable indemnitor, in each such event in an amount equal to one hundredtwenty five percent (125%) of such estimated cost, 

 

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#### which depositshall constitute additional security for the Loan and shall be released toMortgage Borrower 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)          Lender shall havereceived evidence which would be satisfactory to a prudent institutionalmortgage loan lender to the effect that all material building and operatinglicenses and permits necessary for the use and occupancy of the SubstituteProperty as a luxury residential apartment building****including, but not limited to, current certificates ofoccupancy, have been obtained and are in full force and effect in all materialrespects.

####  

#### (x)            In the event theRelease Property is subject to a Management Agreement along with one or moreadditional Properties, Lender shall have received a certified copy of anamendment to the Management Agreement reflecting the deletion of the ReleaseProperty and the addition of the Substitute Property as a property managedpursuant thereto, and Manager shall have executed and delivered to Lender anamendment to the Agreement Regarding Management Agreement reflecting suchamendment to the Management Agreement. In the event that the Release Propertyis subject to a Management Agreement relating only to such Release Property,Lender shall have received a certified copy of a new Management Agreement forthe Substitute Property, which new Management Agreement shall be reasonablyacceptable to a prudent institutional mortgage loan lender, and the Managerthereunder shall have executed and delivered to Lender an Agreement RegardingManagement Agreement with respect to such new Management Agreement onsubstantially the same terms as used in connection with the Release Property orsuch other terms as would be acceptable to a prudent institutional mortgageloan lender.

####  

#### (y)           Lender shall havereceived such other approvals, opinions, documents and information inconnection 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)            Lender shall havereceived copies of all contracts and agreements relating to the leasing andoperation of the Substitute Property (other than the Management Agreement),each of which shall be in such form and substance as would be satisfactory to aprudent institutional mortgage loan lender.

####  

#### (aa)         Lender shall havereceived certified copies of all material consents, licenses and approvals ofrelevant Governmental Authorities, if any, required to be obtained by MortgageBorrower in connection with the substitution of a Substitute Property, andevidence that such consents, licenses and approvals are in full force andeffect.

 

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#### (bb)         IntentionallyOmitted.

####  

#### (cc)         IntentionallyOmitted.

####  

#### (dd)         IntentionallyOmitted.

####  

#### (ee)         If Mortgage Borrowerowns a leasehold estate in the Substitute Property, Lender shall have received,(i) a certified copy of the ground lease for the Substitute Property, togetherwith all amendments and modifications thereto and a recorded memorandumthereof, which ground lease would be reasonably satisfactory in all respects toa prudent institutional mortgage loan lender and which contains customaryleasehold mortgagee provisions and protections, and which shall provide, amongother things, (A) for a remaining term of no less than 20 years from the MaturityDate, (B) that the ground lease shall not be terminated until Mortgage Lenderhas received notice of a default thereunder and has had a reasonableopportunity to cure or complete foreclosure, and fails to do so in a diligentmanner, (C) for a new lease on the same terms to Mortgage Lender as tenant ifthe ground lease is terminated for any reason, (D) the non-merger of fee andleasehold interests, and (E) that insurance proceeds and condemnation awardswill be applied pursuant to the terms of this Agreement, and (ii) a groundlease estoppel, executed by the fee owner and ground lessor of the SubstituteProperty, in form and substance reasonably acceptable to a prudentinstitutional mortgage loan lender.

####  

#### (ff)           IntentionallyOmitted.

####  

#### (gg)         Upon the satisfactionof the foregoing conditions precedent, Borrower will be entitled to causeMortgage Borrower to obtain the release of the Lien of the Mortgage LoanDocuments from the Release Property and the Substitute Property shall be deemedto be an Individual Property for purposes of this Agreement, and (except asotherwise provided in the proviso to the last sentence of Section 2.9(h)hereof) the Substitute Allocated Loan Amount with respect to such SubstituteProperty shall be deemed to be the Allocated Loan Amount with respect to suchSubstitute Property for all purposes hereunder.

####  

Section 2.10           Approvalof Requests under Mortgage Loan Agreement.

 

Lender’sconsent shall be required in connection with any Requests made under theMortgage Loan Agreement. Such consent shall not be unreasonably withheld solong as no Event of Default then exists and Lender reasonably determines thatall of the terms and conditions of the Mortgage Loan Agreement have beensatisfied relating to such Request.

 

**III.           MORTGAGEBORROWER DISTRIBUTIONS**

 

Section 3.1             MortgageBorrower 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 

 

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shall constitute distributions from Mortgage Borrower to Borrower, and,in each 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.           REPRESENTATIONSAND WARRANTIES**

 

Section 4.1             BorrowerRepresentations.

 

Borrowerrepresents and warrants as of the Closing Date that:

 

4.1.1        Organization.

 

#### (a)           Each Borrower Entityis duly organized and is validly existing and in good standing in thejurisdiction in which it is organized, with requisite power and authority toown the assets owned by such Borrower Entity and to transact the businesses inwhich it is now engaged. Each Borrower Entity is duly qualified to do businessand is in good standing in the State of Delaware. Borrower possesses allrights, 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)           Each Borrower Entityhas the power and authority and the requisite Ownership Interest to control theactions of Mortgage Borrower, and upon the realization on the Collateral underthe Pledge Agreement, Lender or any other party succeeding to the Borrower’sinterest in the Collateral described in the Pledge Agreement would have suchcontrol. Without limiting the foregoing, Borrower has sufficient control overMortgage Borrower to cause Mortgage Borrower to (i) take any action on MortgageBorrower’s part required by the Loan Documents and the Mortgage Loan Documentsand (ii) refrain from taking any action prohibited by the Loan Documents andthe Mortgage Loan Documents.

####  

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).

 

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4.1.3        NoConflicts.

 

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.

 

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, 

 

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to Borrower’s Actual Knowledge, Mortgage Borrower, the Collateral, anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity or any Individual Property is otherwise bound, other than (a)obligations incurred in the ordinary course of the business relating to eachBorrower Entity’s ownership and operation of the Collateral, (b) obligationsincurred in the ordinary course of business relating to each Mortgage BorrowerEntity’s ownership and operation of such Individual Property and (c)obligations under or permitted by the Loan Documents and the Mortgage LoanDocuments.

 

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, immediatelyfollowing the making of the Loan will not, constitute an insufficient amount ofcapital to 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 partners or members is contemplating either thefiling of a petition by it under the Bankruptcy Code or similar statebankruptcy or insolvency law or the liquidation of all or a major portion ofBorrower’s or Mortgage Borrower’s assets or property, and Borrower has noActual Knowledge of any Person contemplating the filing of any such petitionagainst Borrower, Principal, Mortgage Borrower, Mortgage Principal, Guarantor,TSP or any of their respective partners or members.

 

4.1.7        Fulland 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 

 

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material fact or omits to state any material fact necessary to makestatements contained herein or therein not misleading in any material respect.

 

4.1.8        NoPlan 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 ordemand of such Governmental Authority. Lender acknowledges the existence ofthose certain 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      FinancialInformation. 

 

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, unusual forward or longterm commitments or unrealized or anticipated losses from any unfavorablecommitments that are known to Borrower and reasonably likely to have amaterially adverse effect on the Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity or any IndividualProperty or the operation thereof as a luxury residential apartment building,except as referred to or reflected in such financial statements or in **Schedule 4.1.10** annexed hereto. To Borrower’s ActualKnowledge, since the date of such financial statements, there has been nomaterially adverse change in the financial condition or operations of theProperties from that set forth in such financial statements.

 

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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      FederalReserve 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      Utilitiesand 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      Nota Foreign Person.

 

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

 

4.1.15      SeparateLots.

 

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 

 

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improvements or otherwise affecting any Individual Property, nor arethere any contemplated improvements to any Individual Property that, toBorrower’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      NoPrior 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.

 

MortgageBorrower has obtained and Borrower has delivered to Lender certified copies ofall insurance 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      Useof Property.

 

Each IndividualProperty is used exclusively for (a) luxury residential apartment purposes(including ancillary retail space), (b) other uses expressly permitted underthe 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.

 

4.1.21      Certificateof 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.

 

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4.1.22      FloodZone.

 

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      PhysicalCondition.

 

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.

 

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 Borrower is the sole ownerof the entire lessor’s interest in the Leases; (ii) to Borrower’s ActualKnowledge, the Leases are valid and enforceable and in full force and effect;(iii) to Borrower’s Actual Knowledge, all of the Leases are arms-lengthagreements with bona fide, independent third parties; (iv) to Borrower’s ActualKnowledge, no party under any Lease is in default in the performance of any ofsuch party’s material obligations under such Lease beyond the expiration of anyapplicable 

 

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grace or cure period; (v) to Borrower’s Actual Knowledge, all Rents dueunder any of the Leases have been paid in full; (vi) to Borrower’s ActualKnowledge, Borrower has delivered or made available to Lender true and correctcopies of all Major Leases including all amendments and modifications thereto;(vii) none of the Rents reserved in the Leases have been assigned or otherwisepledged or hypothecated by Mortgage Borrower in favor of any party other thanMortgage Lender; (viii) none of the Rents have been collected by MortgageBorrower or Manager for more than one (1) month in advance (except that asecurity deposit or prepayment of first month’s and last month’s rent shall notbe deemed rent collected in advance); (ix) to Borrower’s Actual Knowledge, thepremises demised under the Leases have been completed (other than with respectto tenant improvements that remain outstanding and for which Mortgage Lenderhas reserved funds under the Mortgage Loan Documents) and the tenants under theLeases have accepted the same and have taken possession of the same on arent-paying basis; (x) no tenant under any of the Leases has asserted inwriting to Borrower, Mortgage Borrower or Manager any offset or defense to thepayment 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 Lease (other than those for whichMortgage Lender has reserved funds under the Mortgage Loan Documents).

 

4.1.26      Title.

 

#### (a)           Each Loan Partypurporting to grant a Lien on any Collateral is the record and beneficial ownerof, and has good title to, such Collateral, free and clear of all Lienswhatsoever, other than Permitted Encumbrances. The Pledge Agreement, togetherwith the UCC Financing Statements relating to the Collateral when properlyfiled in the appropriate records, will create a valid, perfected first prioritysecurity interests in and to such Collateral, all in accordance with the termsthereof for which a Lien can be perfected by filing a UCC Financing Statement. Forso long as the Lien of the Pledge Agreement is outstanding with respect to anyCollateral, Borrower shall forever warrant, defend and preserve such title andthe validity and priority of the Lien of the Pledge 

 

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#### Agreement withrespect to such Collateral and shall forever warrant and defend such title,validity and priority to Lender against the claims of all persons whomsoever.

####  

#### (b)           Each MortgageBorrower Entity has good title to the applicable Individual Property andpossesses a fee simple absolute estate in such Individual Property and it ownssuch Individual Property free and clear of all liens, encumbrances and chargeswhatsoever 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 Pledge Agreementor the other Loan Documents. Other than Mortgage Lender, no Person other thanMortgage Borrower owns any interest in any payments due under the Leases. EachBorrower Entity shall cause the applicable Mortgage Borrower Entity to foreverwarrant, defend and preserve the title to the applicable Individual Propertyand to forever warrant and defend the same to Lender against the claims of allpersons whomsoever.

####  

#### (c)           Each MortgagePrincipal has good title to its ownership interests in the applicable MortgageBorrower 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      IntentionallyOmitted.

 

4.1.28      Filingand 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, anyother 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.

 

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4.1.29      IntentionallyOmitted.****

 

4.1.30      ManagementAgreement.

 

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 the passageof time and/or the giving of notice would constitute a material defaultthereunder.

 

4.1.31      IllegalActivity.

 

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      NoChange 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      InvestmentCompany 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.

 

4.1.34      PrincipalPlace of Business; State of Organization.

 

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.

 

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4.1.35      SinglePurpose Entity.

 

#### (a)           Borrower representsand warrants that it has not, and that no Principal has, since its date offormation, and covenants and agrees that its organizational documents shallprovide that it shall not, and that the organizational documents of eachPrincipal shall provide that such Principal shall not:

####  

##### (i)            with respect to Borrower, engage in any business oractivity other than acquiring, owning, holding, managing, operating, financing,refinancing, encumbering, selling, exchanging and otherwise dealing with anddisposing of all or any portion of the Collateral, and entering into the Loan,and activities incidental thereto, and with respect to any Principal, engage inany business or activity other than the ownership of its interest in therelated Borrower Entity, and activities incidental thereto;

#####  

##### (ii)           with respect to Borrower, acquire or own any materialassets other than (i) the Collateral, and (ii) such Personal Property as may benecessary for, or incidental to, the ownership of the Collateral, and withrespect to any Principal, acquire or own any material asset other than itsinterest in the related Borrower Entity;

#####  

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

#####  

##### (iv)          with respect to any Borrower Entity, (i) fail to observeits organizational formalities or preserve its existence as an entity dulyorganized, validly existing and in good standing (if applicable) under the lawsof the jurisdiction of its organization or formation, or (ii) without the priorwritten consent of Lender, amend, modify, terminate or fail to comply in anymaterial respects with the provisions of such Borrower Entity’s LimitedPartnership Agreement, Certificate of Limited Partnership, Limited LiabilityCompany Agreement, Certificate of Formation or similar organizationaldocuments, as the case may be, or of the related Principal’s Limited LiabilityCompany Agreement, Certificate of Formation or similar organizationaldocuments, as the case may be, whichever is applicable;

#####  

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

#####  

##### (vi)          commingle its assets with the assets of any of its members,general partners, Affiliates, Principals or of any other Person, participate ina cash management system with any other Person (other than each other BorrowerEntity, so long as the assets of each Borrower Entity are able to be easily

 

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#####  

##### segregated) or fail to use itsown separate stationery, telephone number, invoices and checks;

#####  

##### (vii)         with respect to Borrower, incur any debt, secured orunsecured, direct or contingent (including guaranteeing any obligation), otherthan the Debt, except for liabilities incurred in the ordinary course of itsbusiness relating to the ownership of the Collateral and the routineadministration of Mortgage Borrower, in amounts not to exceed $100,000 andwhich liabilities are not more than ninety (90) days past due and are notevidenced by a note, and with respect to any Principal, incur any debt securedor unsecured, direct or contingent (including guaranteeing any obligations)except for liabilities incurred in the ordinary course of its business relatingto the ownership of the Collateral and the routine administration of Borrower,in amounts not to exceed $100,000 and which liabilities are not more thanninety (90) days past due and are not evidenced by a note (the “PermittedDebt”);

#####  

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

#####  

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

#####  

##### (x)            enter into any contract or agreement with any member,general partner, principal or Affiliate of any Borrower Entity or of anyPrincipal, as the case may be, Guarantor, or any member, general partner,principal or Affiliate thereof, except upon terms and conditions that arecommercially reasonable, intrinsically fair and substantially similar to thosethat would be available on an arm’s-length basis (taking into account therelative standards of quality and reputation of the party rendering theservice) with third parties other than any member, general 

#####  

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##### 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; *provided, however*, that the foregoingprohibition shall not apply to any Management Agreement with TSP or anAffiliate of TSP so long as such Management Agreement is on market terms andnegotiated on an arm’s length basis (i.e., in this context, negotiated with anon-Affiliate representing the interests of the property owner);

#####  

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

#####  

##### (xii)          fail to correct any known misunderstandings regarding theseparate identity of any Borrower Entity, or of any Principal, as the case maybe, or any member, general partner, principal or Affiliate thereof or any otherPerson;

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

#####  

##### (xviii)      share any common logo with or hold itself out as or beconsidered as a department or division of (A) any general partner, principal,member or Affiliate of any Borrower Entity or of any Principal, as the case maybe, (B) any Affiliate

#####  

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#####  

##### of a general partner, principalor member of any Borrower Entity or of any Principal, as the case may be, or(C) any other Person;

#####  

##### (xix)         fail to allocate fairly and reasonably any overhead expensesthat are shared with an Affiliate, including paying for office space and servicesperformed by any employee of an Affiliate;

#####  

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

#####  

##### (xxi)         [intentionally omitted];

#####  

##### (xxii)        fail to provide in its (i) Limited Liability CompanyAgreement, if it is a limited liability company, (ii) Limited PartnershipAgreement, if it is a limited partnership or (iii) Certificate ofIncorporation, 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 in its own name;

#####  

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

#####  

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

#####  

##### (xxvi)       violate or cause to be violated the assumptions made withrespect to the Borrower Entities and their respective Principals in theInsolvency Opinion.

#####  

#### (b)           Borrower covenantsand agrees that, if any Borrower Entity is a single member limited liabilitycompany that complies with the requirements of Section 4.1.35(d) below, itsorganizational documents shall provide that such Borrower Entity shall not, andif any Borrower Entity is not a single member limited liability company thatcomplies with the requirements of Section 4.1.35(d) below, the organizationaldocuments of such Borrower Entity’s Principal shall provide that such Principalshall not, fail at any time to have at least one independent manager ordirector (the “Independent Director”) that is not and has not been forat least five (5) years:  (i) astockholder, director, officer, employee, partner, member, attorney or counselof such Borrower Entity or of such Borrower Entity’s Principal or any Affiliateof either of them (other than his or her service as an independent director ofsuch Borrower Entity or any of its Affiliates); (ii) a customer, supplier orother Person who derives its purchases or revenues (other than any fee paid tosuch director as compensation for such director to serve as an IndependentDirector) from its activities with such Borrower Entity, such Principal or anyAffiliate of 

####  

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####  

#### either of them(a “Business Party”); (iii) a Person controlling or under common controlwith any such stockholder, partner, member, director, officer, attorney,counsel or Business Party; or (iv) a member of the immediate family of any suchstockholder, director, officer, employee, partner, member, attorney, counsel orBusiness Party; *provided, however*, that a Personshall not be deemed to be a director of an Affiliate solely by reason of suchPerson being a director of an affiliated single-purpose entity (other thanMezzanine B Borrower 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 inthe Mortgage Loan Agreement) for Mortgage Borrower or Mortgage Principal.

####  

#### (c)           Borrower covenantsand agrees that, if any Borrower Entity is a single member limited liabilitycompany that complies with the requirements of Section 4.1.35(d) below, itsorganizational documents shall provide that such Borrower Entity shall not, andif any Borrower Entity is not a single member limited liability company thatcomplies with the requirements of Section 4.1.35(d) below, the organizationaldocuments of such Borrower Entity’s Principal shall provide that such Principalshall not, permit its board of directors to take, without the vote of theIndependent Director, any action which, under the terms of any certificate ofincorporation, by-laws, voting trust agreement with respect to any common stockor other applicable organizational documents, requires the unanimous vote ofone hundred percent (100%) of the members of the board.

####  

#### (d)           Borrower covenantsand agrees that, in the event that any Borrower Entity or its Principal is aDelaware limited liability company that does not have a managing member whichcomplies with the foregoing requirements of this Section 4.1.35, the limitedliability company agreement of such Borrower Entity or such Principal, asapplicable (an “LLC Agreement”), shall provide that (A) upon theoccurrence of any event that causes the last remaining member of such BorrowerEntity or such Principal, as applicable, (“Member”) to cease to be themember of such Borrower Entity or such Principal, as applicable, (other than(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), any person acting as Independent Director of such Borrower Entityor such Principal, as applicable, shall, without any action of any other Personand simultaneously with the Member ceasing to be the member of such BorrowerEntity or such Principal, as applicable, automatically be admitted to suchBorrower Entity or such Principal, as applicable, (“Special Member”) andshall continue such Borrower Entity or such Principal, as applicable, withoutdissolution and (B) Special Member may not resign from such Borrower Entity orsuch Principal, as applicable, or transfer its rights as Special Member unless(1) a successor Special Member has been admitted to such Borrower Entity orsuch Principal, as applicable, as Special Member in accordance with the 

####  

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####  

#### applicable LLCAgreement and (2) such successor Special Member has also accepted itsappointment as an Independent Director. Each LLC Agreement shall furtherprovide that (v) Special Member shall automatically cease to be a member ofsuch Borrower Entity or Principal, as applicable, upon the admission to suchBorrower Entity or such Principal, as applicable, of a substitute Member, (w)Special Member shall be a member of such Borrower Entity or such Principal, asapplicable, that has no interest in the profits, losses and capital of suchBorrower Entity or such Principal, as applicable, and has no right to receiveany distributions of such Borrower Entity or Principal, as applicable, assets,(x) pursuant to Section 18-301 of the Delaware Limited Liability Company Act(the “Act”), Special Member shall not be required to make any capitalcontributions to such Borrower or such Principal, as applicable, and shall notreceive a limited liability company interest in such Borrower Entity or suchPrincipal, as applicable, (y) Special Member, in its capacity as SpecialMember, may not bind such Borrower Entity or such Principal, as applicable, and(z) except as required by any mandatory provision of the Act, Special Member,in its capacity as Special Member, shall have no right to vote on, approve orotherwise consent to any action by, or matter relating to, such Borrower Entityor such Principal, as applicable, including, without limitation, the merger, consolidationor conversion of such Borrower Entity or such Principal, as applicable; *provided, however*, such prohibition shall not limit theobligations of Special Member, in its capacity as Independent Director, to voteon such matters as may be expressly required by the applicable LLC Agreement. Inorder to implement the admission to any Borrower Entity or any Principal, asapplicable, of Special Member, Special Member shall execute a counterpart ofthe applicable LLC Agreement. Prior to its admission to any Borrower Entity orany Principal, as applicable, as Special Member, no Person acting asIndependent Director shall be a member of such Borrower Entity or suchPrincipal, 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 suchPrincipal, 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 

 

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Member and Special Member waives any right it may have to agree inwriting to dissolve any Borrower Entity or any Principal, as applicable, uponthe occurrence of any action initiated by or brought against Member or SpecialMember under any Creditors Rights Laws, or the occurrence of an event thatcauses Member or Special Member to cease to be a member of such Borrower orsuch Principal, as applicable.

 

#### (e)           Borrower covenantsand agrees that, in the event any Borrower Entity is a Delaware limitedpartnership that has a general partner which directly owns a zero percent (0%)economic interest in Borrower Entity, the limited partnership agreement of suchBorrower Entity (an “LP Agreement”), shall provide that (A) upon theoccurrence of any event that causes the last remaining limited partner of suchBorrower Entity (“Partner”) to cease to be the limited partner of suchBorrower Entity (other than (1) upon an assignment by Partner of all of itspartnership 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), any person acting as or any person that meets thedefinition of Independent Director of such Borrower Entity shall, without anyaction of any other Person and simultaneously with the Partner ceasing to bethe Partner of such Borrower Entity, automatically be admitted to Borrower (“SpecialLimited Partner”) and shall continue such Borrower Entity withoutdissolution and (B) Special Limited Partner may not resign from such BorrowerEntity or transfer its rights as Special Limited Partner unless a successorSpecial Limited Partner has been admitted to such Borrower Entity as SpecialLimited 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 Borrower Entity of SpecialLimited Partner, Special Limited Partner shall execute a counterpart of theapplicable 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 

 

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extent permitted by law, the personal representative of Partner shall,within ninety (90) days after the occurrence of the event that terminated thecontinued limited partnership of Partner in such Borrower Entity, agree inwriting (A) to continue such Borrower Entity and (B) to the admission of thepersonal representative or its nominee or designee, as the case may be, as asubstitute limited partner of such Borrower Entity, effective as of theoccurrence of the event that terminated the continued limited partnership ofPartner of such Borrower Entity. Any action initiated by or brought against Partneror Special Limited Partner under any Creditors Rights Laws shall not causePartner or Special Limited Partner to cease to be a limited partner of anyBorrower Entity, and upon the occurrence of such an event, the business of suchBorrower Entity shall continue without dissolution. Each LP Agreement shallprovide that each of Partner and Special Limited Partner waives any right itmay have to agree in writing to dissolve the applicable Borrower Entity uponthe occurrence of any action initiated by or brought against Partner or SpecialLimited Partner under any Creditors Rights Laws, or the occurrence of an eventthat causes Partner or Special Limited Partner to cease to be a limited partnerin 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 Agreement which relate to the special purpose / single purpose nature ofMortgage Borrower and Mortgage Principal.

 

4.1.36      BusinessPurposes.

 

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 federal government or any State or local government the right of forfeitureas against any of the Collateral, any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity or any Individual Property orany material part thereof or any monies paid in performance of Borrower’sobligations under the Note, this Agreement or the other Loan Documents. Borrowerhereby covenants and agrees not to commit, permit or suffer to exist any act oromission affording such right of forfeiture.

 

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4.1.39      EnvironmentalRepresentations 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      TaxpayerIdentification 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 theirrespective Affiliates is a Prohibited Person, and Borrower, Mortgage Borrower,Mezzanine B Borrower, Guarantor and, to Borrower’s Actual Knowledge, theirrespective Affiliates are in full compliance with all applicable orders, rulesand regulations of The Office of Foreign Assets Control of the U.S. Departmentof the Treasury.

 

4.1.42      IntentionallyOmitted.

 

4.1.43      Depositand Securities Accounts.

 

#### (a)           IntentionallyOmitted;

####  

#### (b)           Each of the Accountsconstitutes a “securities account” or a “deposit account” within the meaning ofthe UCC;

####  

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####  

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

####  

#### (d)           IntentionallyOmitted;

####  

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

####  

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

####  

4.1.44      EmbargoedPerson.

 

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      MortgageBorrower 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      Listof 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, 

 

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complete and correct copies of all Mortgage Loan Documents, and none ofthe Mortgage Loan Documents has been amended or modified as of the datethereof.

 

4.1.48      IntentionallyOmitted.

 

4.1.49      IntentionallyOmitted.

 

4.1.50      MortgageLoan Event of Default.

 

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

 

Section 4.2             Survivalof 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.            BORROWERCOVENANTS**

** **

Section 5.1             AffirmativeCovenants.

 

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 Legal Requirements.

 

#### (a)           Borrower shall do orcause to be done all things necessary to preserve, renew and keep in full forceand effect its existence, rights, licenses, permits and franchises, and shallcomply, or cause Mortgage Borrower to comply in all material respects, with allLegal Requirements applicable to it, the Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity and theProperties. There shall never be committed by Borrower, and Borrower shall notpermit or cause Mortgage Borrower to permit any other Person in occupancy of orinvolved with the operation or use of the Properties any act or omissionaffording the federal government or any State or local government the right offorfeiture against any Individual Property or any part thereof or any moniespaid in performance of Borrower’s obligations under any of the Loan Documents. Borrowerhereby covenants and agrees not to permit or cause Mortgage Borrower to commit,permit or suffer to exist any act or omission affording such right offorfeiture. Borrower shall at all times cause Mortgage Borrower to maintain,preserve and protect all material franchises and trade names and preserve allthe remainder of its property used or useful in the conduct of its business andshall keep the Properties in good working order and repair, and from time totime make, or cause to

####  

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#### be made, allrepairs, renewals, replacements, betterments and improvements theretoreasonably necessary to maintain each Individual Property as a first classluxury residential apartment building and in a condition similar to other firstclass luxury residential apartment buildings of a type and size similar to suchIndividual Property, all as more fully provided in this Agreement.

####  

#### (b)           After prior writtennotice to Lender, Borrower, at no expense to Lender, may, or may cause MortgageBorrower to, contest by appropriate legal proceeding, promptly initiated andconducted in good faith and with due diligence, the validity or applicabilityof any Legal Requirements to Mortgage Borrower, Mortgage Borrower or anyIndividual Property, or the assertion or claim by any Governmental Authority orother Person 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        Taxesand 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

 

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whatsoever or otherwise has Actual Knowledge of the existence of suchlien or charge. Except to the extent sums sufficient to pay all Taxes have beendeposited with Mortgage Lender in accordance with the terms of the MortgageLoan Documents, Borrower shall furnish, or cause Mortgage Borrower to furnish,to Lender paid receipts for the payment of the Taxes and Other Charges or otherreasonably satisfactory evidence of the payment of such Taxes and Other Chargesprior to the date the same shall become delinquent. Borrower may, at its ownexpense, or may cause Mortgage Borrower, at its expense, to, contest (afterprior written notice to Lender, if the taxes being contested are not paid infull prior to such contest) by appropriate legal proceedings, promptlyinitiated and conducted in good faith and with due diligence, the amount or validityor application in whole or in part of any of the Taxes, Other Charges orutility service charges, provided (i) no Event of Default has occurred and iscontinuing under the Note, this Agreement or any of the other Loan Documents,(ii) such proceeding shall not violate the provisions of any other mortgage,deed of trust or deed to secure debt affecting any Individual Property, (iii)such proceeding shall suspend the collection of the Taxes, Other Charges orutility service charges, as applicable, from Mortgage Borrower and from anyIndividual Property or Borrower or Mortgage Borrower shall have paid all of theTaxes, Other Charges or utility service charges, as applicable, under protest,(iv) such proceeding shall be permitted under and be conducted in accordancewith the provisions of any other instrument to which Borrower or MortgageBorrower is subject and shall not constitute a default thereunder, (v) none ofthe Collateral, any Mortgage Principal’s general partner interest in therelated Mortgage Borrower Entity or any Individual Property nor any partthereof or interest therein will be in danger of being sold, forfeited,terminated, cancelled or lost as a result of such proceeding, (vi) Borrowershall have, or shall have caused Mortgage Borrower to, deposit with Lenderadequate reserves for the payment of the Taxes, Other Charges or utilityservice charges, as applicable, together with all interest and penaltiesthereon, unless Borrower or Mortgage Borrower has paid all of the Taxes, OtherCharges or utility service charges, as applicable, under protest (*provided, however,* that with respect to Taxes, Borrowershall not be required to deposit such reserves with Lender, or to furnish thesecurity required under clause (vii) below, in the event that funds sufficientto pay such Taxes shall theretofore have been deposited with or collected byMortgage Lender pursuant to the Mortgage Loan Documents except as may berequired in such proceeding as set forth under clause (vii) below), and (vii)Borrower shall have furnished, or shall have caused Mortgage Borrower to havefurnished, the security as may be required in such proceeding, or as may bereasonably requested by Lender to insure the payment of any contested Taxes,Other Charges or utility service charges, as applicable, together with allinterest 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.

 

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5.1.4        Accessto 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        Noticeof 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.

 

5.1.6        Cooperatein Legal Proceedings.

 

Borrowershall, and shall cause Mortgage Borrower to, cooperate in all reasonablerespects with Lender with respect to any proceedings before any court, board orother Governmental Authority which may in any way adversely affect the rightsof Lender hereunder or any rights obtained by Lender under any of the otherLoan Documents and, in connection therewith, Borrower shall, and shall causeMortgage Borrower to, permit Lender, at its election, to participate in anysuch proceedings.

 

5.1.7        Awardand 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 reasonableout-of-pocket attorneys’ fees and disbursements, and the payment by Borrower ofthe expense of an appraisal on behalf of Lender in case of Casualty orCondemnation affecting any Individual Property or any part thereof) out of suchAward or Insurance Proceeds; *provided, however*,that in no event shall Borrower be obligated to pay for more than one (1)appraisal in connection with any single Casualty or Condemnation.

 

5.1.8        FurtherAssurances.

 

Borrowershall, at Borrower’s sole cost and expense:

 

#### (a)           furnish to Lenderall instruments, documents, boundary surveys, footing or foundation surveys,certificates, plans and specifications, appraisals, title and other insurancereports and agreements relating to the Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity, anyIndividual Property, and each and every other document, certificate, agreementand instrument required to be furnished by Borrower pursuant to the terms ofthe Loan Documents;

####  

#### (b)           execute and deliverto Lender such customary documents, instruments, certificates, assignments andother writings, and do such other customary acts necessary or desirable, toevidence, preserve and/or protect the collateral at any time securing orintended to secure the obligations of Borrower under the Loan Documents, asLender

####  

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#### may reasonablyrequire, including, without limitation, the authorization of Lender to file anyUCC financing statements; and

####  

#### (c)           do and execute alland such further lawful, customary and reasonable acts, conveyances andassurances for the better and more effective carrying out of the intents andpurposes of this Agreement and the other Loan Documents, as Lender shallreasonably require from time to time.

####  

5.1.9        Mortgageand 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 executionof the Pledge Agreement and the filing of the UCC Financing Statements and/orupon the execution and delivery of the Note.

 

5.1.10      FinancialReporting.

 

#### (a)           Borrower will keepand maintain on a Fiscal Year basis, in accordance with GAAP or on a federalincome tax basis, to the extent applicable, or in accordance with other methodsacceptable to Lender in its reasonable discretion, consistently applied, properand accurate books, records and accounts reflecting all of the financialaffairs of Borrower and all items of income and expense with respect to theCollateral.

####  

#### (b)           Borrower shall causeMortgage Borrower to keep adequate books and records of account in accordancewith GAAP or on a federal income tax basis, to the extent applicable, or inaccordance with other methods acceptable to Lender in its reasonablediscretion, consistently applied. Borrower shall be deemed to have compliedwith the requirements of this Section 5.1.10(b) with respect to any period ifit shall have caused Mortgage Borrower to maintain the books and recordsrequired under Section 6.03 of the Mortgage Loan Agreement to be maintained byMortgage Borrower.

####  

#### (c)           Borrower willfurnish, and cause to be furnished, to Lender, within ninety (90) days afterthe 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. 

####  

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#### The combinedtotals of these supplemental schedules will reconcile to the audited balancesheet and statement of operations for the Fiscal Year, respectively.

 

#### (d)           Borrower willfurnish, and cause to be furnished, to Lender, within sixty (60) days aftereach of the first three fiscal quarters of each Fiscal Year, the unauditedcombined balance sheet of the Guarantors as of the end of such fiscal quarter,the unaudited statement of operations and the unaudited statements of cashflows of each Guarantor for the portion of the Fiscal Year ended with the lastday of such quarter, all prepared in accordance with GAAP and in reasonabledetail and, commencing in the second Fiscal Year during the term of the Loan,stating in comparative form (solely to the extent such previous year endedafter the Closing Date) the respective figures for the corresponding date andperiod in the previous fiscal year, accompanied by a certificate of anauthorized representative of the Guarantor, stating that the referencedfinancial statements present fairly, in all material respects and subject toyear-end adjustments, the financial position, results of operations and cashflows for the applicable periods in conformity with GAAP.

####  

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

####  

#### (f)            Borrower willfurnish, and cause to be furnished, to Lender annually, within ninety (90) daysafter the close of each Fiscal Year, an annual statement of income and expensesof each Individual Property prepared in accordance with GAAP and accompanied bya certificate of an authorized representative of each Mortgage Borrower Entityand each Guarantor reasonably acceptable to Lender to the effect that each suchstatement of income and expenses fairly, accurately and completely presents theoperations of each such Individual Property for the period indicated.

####  

#### (g)           Borrower shall, orcause Mortgage Borrower to, furnish to Lender a copy of the financialstatements and all other materials Mortgage Borrower is required to provideMortgage Lender under Sections 6.03 and 6.05 of the Mortgage Loan Agreementwithin the time periods required under such Section.

####  

#### (h)           Borrower shall causeMortgage Borrower to submit to Lender the annual operating budget required tobe delivered under the Mortgage Loan Documents.

####  

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

####  

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#### (j)            Borrower agreesthat 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 in writing that certainof the Furnished Information be kept confidential, (i) Lender agrees that itshall keep such Furnished Information confidential unless such FurnishedInformation is required to be disclosed by Applicable Law and (ii) if inconnection with a Securitization or Syndication of the Loan, Lender furnishessuch Furnished Information to any Investor, any Rating Agency rating suchparticipations and/or Securities, any prospective Investor, or any organizationmaintaining databases on the underwriting and performance of commercialmortgage or mezzanine loans, Lender shall inform any such Investor, RatingAgency, prospective Investor, or organization that directly receives suchFurnished 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)           Within a reasonabletime after Lender’s request, Borrower shall, and shall cause Mortgage Borrowerto, furnish Lender with such other additional financial or managementinformation as may, from time to time, be reasonably required by Lender in formand substance reasonably satisfactory to Lender, subject, however, to theconfidentiality requirements set forth in Section 5.1.10(j) hereof.

####  

#### (l)            Borrower shall, andshall cause Mortgage Borrower to, furnish to Lender and its agents convenientfacilities for the examination and audit of any of the books and recordsdescribed in Sections 5.1.10(a), 5.1.10(b), 5.1.10(c), 5.1.10(d), 5.1.10(e) and5.1.10(f) hereof.

####  

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

####  

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#### financialstatements meet the requirements set forth in the first sentence of thisSection 5.1.10(m).

####  

#### (n)           If requested byLender and reasonably required in connection with a Securitization, Borrowershall provide Lender, promptly upon request (but subject to the last sentenceof Section 5.1.10(j) hereof), with any other or additional financialstatements, or financial, statistical or operating information, as Lender shallreasonably determine to be required pursuant to Regulation S-K or RegulationS-X, as applicable, Regulation AB or any amendment, modification or replacementthereto or other legal requirements in connection with any Disclosure Documentor any Exchange Act filing in connection with or relating to a Securitizationor as shall otherwise be reasonably requested by the Lender.

####  

#### (o)           In the event Lenderreasonably determines, in connection with a Securitization, that the financialstatements required in order to comply with Regulation S-K or Regulation S-X,as applicable, Regulation AB or other legal requirements are other than asprovided herein, then notwithstanding the provisions of Sections 5.1.10(m) and5.1.10(n) hereof (but subject to the last sentence of Section 5.1.10(j)hereof), Lender may request, and Borrower shall promptly provide, such otherfinancial statements as Lender determines to be necessary or appropriate forsuch compliance.

####  

#### (p)           Lender shall havethe right from time to time at all times during normal business hours uponreasonable advance written notice to examine such books, records and accountsat the office of Borrower, Mortgage Borrower or any other Person maintainingsuch books, records and accounts and to make such copies or extracts thereof asLender shall reasonably require. After the occurrence and during thecontinuance of an Event of Default, Borrower shall pay any costs and expensesincurred by Lender to examine Borrower’s accounting records with respect to theCollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity and the Properties or any Loan Party, as Lender shallreasonably determine to be necessary or appropriate in the protection of Lender’sinterest.

####  

5.1.11      Businessand 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      Costsof 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

 

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Borrower or any of its constituent Persons or an assignment by Borroweror any of its constituent Persons for the benefit of its creditors, Borrower,its successors or assigns, shall be chargeable with and agrees to pay all costsof collection and defense, including reasonable out-of-pocket attorneys’ feesand costs, incurred by Lender or Borrower in connection therewith and inconnection with any appellate proceeding or post-judgment action involvedtherein, together with all required service or use taxes.

 

5.1.13      EstoppelStatement.

 

#### (a)           After request byLender, Borrower, within ten (10) Business Days, shall furnish Lender or anyproposed assignee with a statement, duly acknowledged and certified, settingforth (i) the amount of the original principal amount of the Note, (ii) theunpaid principal amount of the Note, (iii) the Applicable Interest Rate, (iv)the Maturity Date, (v) the date installments of interest and/or principal werelast paid, (vi) that, except as provided in such statement, to Borrower’sActual Knowledge, there are no defaults or events which with the passage oftime or the giving of notice or both, would constitute an Event of Default,(vii) that this Agreement, the Note, the Pledge Agreement and the other LoanDocuments are valid, legal and binding obligations of Borrower and have notbeen modified or, if modified, giving particulars of such modification, (viii)whether, to Borrower’s Actual Knowledge, any offsets or defenses exist againstthe obligations secured by the Pledge Agreement and, if any are alleged toexist, a detailed description thereof, (ix) to Borrower’s Actual Knowledgeafter due inquiry of the Manager, all Leases are in full force and effect andhave not been modified (or if modified, setting forth all modifications), (x)the date to which the Rents thereunder have been paid pursuant to the Leases,(xi) whether or not, to Borrower’s Actual Knowledge after due inquiry of theManager, any of the lessees under the Leases are in default under the Leases,and, if any of the lessees are in default, setting forth the specific nature ofall such defaults, (xii) the amount of security deposits held by MortgageBorrower under each Lease and that such amounts are consistent with the amountsrequired under each Lease, and (xiii) as to any other matters reasonablyrequested by Lender and reasonably related to the Obligations, the Properties,this Agreement, the Collateral or any Mortgage Principal’s general partnerinterest in the related Mortgage Borrower Entity. With respect to clauses (ix),(x), (xi) and (xii) above, such certifications shall only be included in suchstatement if requested by the Rating Agencies or the Investors and suchcertifications may only be requested by Lender once in any calendar year.

####  

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

####  

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#### (c)           Borrower shall use,and shall cause Mortgage Borrower to use, commercially reasonable efforts (andbest efforts in connection with a Securitization or Syndication, excludinglitigation or the payment of any required purchase price or other compensationfor same to tenants) to obtain and deliver to Lender, promptly upon Lender’srequest (to be made no more frequently by Lender or Mortgage Lender than oncein any twelve-month period, unless such request is made in connection with aSecuritization or Syndication), duly executed estoppel certificates from thelessees under one or more Major Leases, as required by Lender, attesting tosuch facts regarding such Major Leases as Lender may reasonably require,including but not limited to attestations that each Major Lease covered therebyis in full force and effect with no defaults thereunder on the part of anyparty, that none of the Rents payable under such Major Lease have been paidmore than one month in advance, and that the lessee claims no defense or offsetagainst the full and timely performance of its obligations under such MajorLease.

####  

5.1.14      LoanProceeds.

 

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      Performanceby Borrower.

 

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

####  

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

####  

5.1.16      Confirmationof 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 of such Securitization or Syndication (or, to theextent any of such representations shall

 

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no longer be accurate in all material respects as of the date of suchclosing, disclosing any material inaccuracy in such representations), and (b)certificates of the relevant Governmental Authorities in all relevantjurisdictions indicating the good standing and qualification of each BorrowerEntity and each Principal as of the date of the closing of such Securitizationor Syndication.

 

5.1.17      LeasingMatters.

 

#### (a)           Borrower may causeor permit Mortgage Borrower enter into a proposed Lease (including the renewalor extension of an existing Lease (a “Renewal Lease”)) without the priorwritten consent of Lender, provided such proposed Lease or Renewal Lease (i)provides for rental rates and terms comparable or superior to existing localmarket rates and terms (taking into account the type and quality of the tenantand the location and quality of the space to be leased) as of the date suchLease is executed by Mortgage Borrower (unless, in the case of a Renewal Leaseor a Lease covering expansion space, the rent payable during such renewal orwith respect to such expansion space, as the case may be, or a formula or othermethod to compute such rent, is provided for in the original Lease), (ii) is anarms-length transaction with a bona fide, independent third party tenant, (iii)does not have a materially adverse effect on the value or quality of theapplicable Individual Property, (iv) [intentionally omitted], (v) is written onthe standard form of residential lease approved by Lender (such approval not tobe unreasonably withheld, delayed or conditioned) (which such standard form oflease currently approved by Lender is attached hereto as Exhibit B), unlessMortgage Borrower determines in good faith that deviations from the approvedLease form do not materially and adversely affect Mortgage Borrower’s interestsunder the Lease or Renewal Lease, and (vi) is not a Major Lease. All proposedLeases which do not satisfy the requirements set forth in this Section 5.1.17shall be subject to the prior approval of Lender (such approval not to beunreasonably withheld, delayed or conditioned), at Borrower’s expense. AtLender’s request, Borrower shall cause Mortgage Borrower to promptly deliver toLender copies of all Leases which are entered into pursuant to this Section5.1.17(a), together with Borrower’s certification that it has satisfied orcaused Mortgage Borrower to satisfy all of the conditions of this Section5.1.17(a) (other than conditions waived in writing by Lender) applicable tosuch Leases. Any Lease submitted to Lender for Lender’s approval shall bedeemed approved if Lender shall not have notified Borrower in writing of itsapproval or disapproval (together with a statement of the grounds of suchdisapproval, 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 Lender shall be entitledto Lender’s Approval Extension Period and such request to

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#### 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 Borrowerdetermines in good faith that such deviation shall materially and adverselyaffect either (A) Mortgage Borrower’s interest under the Lease or (B) Lender’sinterest in the Pledge Agreement or the other Loan Documents, (ii)[intentionally omitted] or (iii) is not fully executed within one hundredtwenty (120) days after the Lease Term Sheet is received by Lender; *provided, however*, that (x) nothing contained in thissentence shall be construed to require Lender’s approval of any Lease for whichapproval is not required by the other provisions of this Section 5.1.17, (y)Borrower shall cause Mortgage Borrower to deliver to Lender copies of thefollowing:  (1) the fully-executed Leaseentered into by Mortgage Borrower in accordance with this Section 5.1.17 and(2) the final Lease Term Sheet, if any (to the extent that such final LeaseTerm Sheet contains revisions or changes that were not contained in the LeaseTerm Sheet initially reviewed and approved or deemed approved by Lender inaccordance with this Section 5.1.17(a)), and (z) Mortgage Borrower’s deliveryof the documents referred to in (y) above shall be deemed to be Borrower’scertification that the terms and conditions of this Section 5.1.17 have beensatisfied.

####  

#### (b)           Borrower shall causeMortgage Borrower to (i) observe and perform all the obligations imposed uponthe lessor under the Leases in all material respects and shall not do or permitto be done anything to impair the value of any of the Leases as security forthe Debt; (ii) promptly send copies to Lender of all notices of default whichMortgage Borrower shall send or receive thereunder; (iii) enforce in acommercially 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,provided Lender is entitled to Lender’s Approval Extension Period and suchrequest for approval complies with Section 5.1.17(g) hereof).

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#### (c)           Borrower may,without the consent of Lender, cause or permit Mortgage Borrower to amend,modify or waive the provisions of any Lease or terminate, reduce rents under,accept a surrender of space under, or shorten the term of, any Lease (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 notsatisfy the requirements set forth in this Subsection shall be subject to theprior approval of Lender (such approval not to be unreasonably withheld,delayed or conditioned and to be deemed granted if Lender shall not havedisapproved such amendment, modification, waiver, termination, rent reduction,space surrender or term shortening, as the case may be, in writing within ten(10) Business Days after Borrower’s request for Lender’s approval (fifteen (15)Business Days for any termination, rent reduction, space surrender or termshortening request), provided that Lender is entitled to Lender’s ApprovalExtension Period and such request for approval complies with the requirementsof Section 5.1.17(g) hereof), at Borrower’s expense. Borrower shall causeMortgage Borrower to promptly deliver to Lender copies of all Leases,amendments, modifications and waivers which are entered into pursuant to thisSection 5.1.17(c), together with Borrower’s certification that it has satisfiedor caused 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)           Upon the occurrenceand during the continuance of an Event of Default, to the extent permitted bylaw and subject to the rights of Mortgage Lender pursuant to the terms of theMortgage Loan Documents, Borrower shall promptly deposit with Lender any and allmonies then held by Borrower representing security deposits under the Leases(collectively, the “Security Deposits”). Borrower and not Lender shallbe liable for the delivery of security deposits to tenants under Leases whichare not delivered to and held by Lender pursuant to this Section 5.1.17(e). Lendershall hold the Security Deposits in accordance with the terms of the respectiveLeases, and shall only release the Security Deposits in order to return atenant’s Security Deposit to such tenant if such tenant 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.

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5.1.18      ManagementAgreement.

 

#### (a)           The Properties arecurrently self-managed by Mortgage Borrower. In the event that the Improvementson each Individual Property are operated under the terms and conditions of aManagement Agreement, the provisions of this Section 5.1.18 shall apply. Borrowershall not permit any Mortgage Borrower Entity to retain a manager to manage anyIndividual Property unless such manager is a Qualified Manager and has enteredinto a Management Agreement and an Agreement Regarding Management Agreement,each in form and substance, reasonably acceptable to Lender. All managementfees payable pursuant to the Management Agreements shall be market fees similarto those payable to managers of properties of a similar type and qualitypursuant to arm’s-length management agreements, taking into account differencesin 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 and arm’s-length.Borrower shall cause Mortgage Borrower to (i) diligently perform and observeall of the material terms, covenants and conditions of the ManagementAgreements on the part of Mortgage Borrower to be performed and observed to theend that all things shall be done which are necessary to keep unimpaired therights of Mortgage Borrower under the Management Agreements and (ii) promptlynotify Lender of the giving of any notice to Mortgage Borrower of any defaultby Mortgage Borrower in the performance or observance of any of the terms,covenants or conditions of any Management Agreement on the part of MortgageBorrower to be performed and observed and deliver to Lender a true copy of eachsuch notice. Borrower shall not cause or permit Mortgage Borrower to surrenderany Management Agreement, consent to the assignment by Manager of its interestunder any Management Agreement, or terminate or cancel any Management Agreementor, in any respect that would have a Material Adverse Effect, modify, change, supplement,alter or amend any Management Agreement, either orally or in writing. Notwithstandingthe foregoing, Borrower shall be entitled to cause or permit Mortgage Borrowerto enforce and terminate any Management Agreement in accordance with the termsthereof; provided, however, that if the Management Agreement for any IndividualProperty is terminated, Borrower shall cause the applicable Mortgage BorrowerEntity to simultaneously enter into a replacement Management Agreement for suchIndividual Property. Subject to the rights of Mortgage Lender pursuant to theterms and conditions of the Mortgage Loan Documents, if Mortgage Borrower shalldefault in the performance or observance of any material term, covenant orcondition of any Management Agreement on the part of Mortgage Borrower to beperformed or observed, and such default shall continue beyond the expiration ofany applicable grace or cure period, then, without limiting the generality ofthe other provisions of this Agreement, and without waiving or releasingBorrower from any of its obligations hereunder, Lender shall have the right,but shall be under no obligation, to pay any sums and to perform any act ortake any action as may be appropriate to cause all the terms, covenants andconditions of such Management Agreement on the part of Mortgage Borrower to beperformed or observed to be promptly performed or observed on behalf ofMortgage Borrower, to the end that the rights of Mortgage Borrower in, to andunder such Management Agreement shall be kept unimpaired and free from default.Lender and any person designated by Lender shall have, and are hereby granted,the right to enter upon any Individual Property at any time and from time totime while an uncured Event of Default exists for the purpose of taking anysuch action. If the Manager under any Management Agreement shall deliver toLender a copy of any notice sent to Borrower or Mortgage Borrower of defaultunder such Management Agreement, such notice shall constitute full protectionto Lender for any action taken or omitted to be taken by Lender in good faith,in reliance thereon. Borrower shall notify Lender if the Manager sub-contractsto a third party any or all of its management responsibilities under anyManagement Agreement. Borrower shall, from time to time, use its best efforts(or commercially 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 date ofpayment to Lender, shall be deemed to constitute a portion of the Debt, shallbe secured by the lien of the Pledge Agreement and the other Loan Documents andshall be due and payable promptly upon demand by Lender therefor.

####  

#### (b)           Without limitationof the foregoing, Borrower, upon the request of Lender, shall cause MortgageBorrower to terminate any Management Agreement and replace the Manager (so longas such termination and/or replacement is not prohibited under the MortgageLoan Documents), without penalty or fee, if at any time during the Loan: (i)there exists an uncured Event of Default, (ii) there exists a default byManager (other than TSP or any other Affiliated Manager) under such ManagementAgreement, which default shall have continued beyond the expiration of anyapplicable grace or cure period, (iii) the Manager shall become insolvent or adebtor in any bankruptcy or insolvency proceeding, or (iv) the Maturity Dateoccurs and the Loan is not paid in full. At such time as the Manager is removedas the Manager with respect to any Individual Property, a Qualified Managershall assume management of such Individual Property pursuant to a replacementManagement Agreement, and shall receive a property management fee not to exceedthen current market rates for managers of properties of a similar type andquality pursuant to arm’s length management agreements and taking into accountdifferences in the quality or level of service provided; provided, however,that (A) if a Securitization has occurred, Lender shall receive writtenconfirmation from the Rating Agencies that management of such IndividualProperty by such Qualified Manager will not result in a downgrade, withdrawalor qualification of the initial, or, if higher, the then current ratings issuedin connection with such Securitization, and (B) if a Securitization has notoccurred, such Qualified Manager shall be subject to the approval of Lender,such approval not to be unreasonably withheld, delayed or conditioned.

####  

5.1.19      EnvironmentalCovenants.

 

#### (a)           Borrower covenantsand agrees that so long as the Loan is outstanding (i) all uses and operationson or of each Individual Property, whether by Mortgage Borrower or any otherPerson, shall be in compliance in all material respects with all applicable EnvironmentalLaws and permits issued pursuant thereto; (ii) there shall be no Releases ofHazardous Materials in, on, under or from any of the Properties in violation ofany Environmental Law; (iii) there shall be no Hazardous Materials in, on, orunder any Individual Property, except those that are in compliance with allapplicable Environmental Laws and with permits issued pursuant thereto, if andto the extent required; (iv) Borrower shall cause Mortgage Borrower to keepeach Individual Property free and clear of all liens and other encumbrancesimposed pursuant to any Environmental Law applicable to such IndividualProperty, 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 written requestsof 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)           In the event thatLender shall reasonably believe that any Individual Property is not incompliance in all material respects with all Environmental Laws applicable tosuch Individual Property, Lender and any other Person designated by Lender,including but not limited to any environmental consultant, and any receiverappointed by any court of competent jurisdiction, shall have the right, but notthe obligation, to enter upon such Individual Property at all reasonable timesand after reasonable prior written notice (and subject to the rights of tenantsunder their respective Leases), to assess any and all aspects of theenvironmental condition of such Individual Property and its use, including butnot limited to conducting any environmental assessment or audit (the scope ofwhich shall be determined by Lender in the exercise of its good faith businessjudgment) and taking samples of soil, groundwater or other water, air, orbuilding materials, and conducting other invasive testing. Borrower shall causeMortgage Borrower to cooperate in all reasonable respects with and provideaccess to Lender and any such Person designated by Lender at all reasonabletimes and after reasonable prior written notice (and subject to the rights oftenants 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 Agreement 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 createresponsibility or liability on behalf of Lender for their completeness, design,sufficiency or their compliance with Applicable Laws. Lender may condition anysuch approval upon receipt of a certificate of compliance with Applicable Lawsfrom an independent architect, engineer, or other person reasonably acceptableto Lender. 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      IntentionallyOmitted.

 

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      IntentionallyOmitted.

 

5.1.24      MortgageLoan Reserve Funds.

 

Borrower shallcause Mortgage Borrower to deposit and maintain each of the Mortgage Loan ReserveFunds as more particularly set forth in the Mortgage Loan Documents and toperform 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      SpecialDistributions.

 

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 the OrganizationalDocuments of Mortgage Borrower to cause Mortgage Borrower to make adistribution to Borrower, in each case in an aggregate amount such that Lendershall receive the amount required to be disbursed pursuant to the Mortgage LoanDocuments.

 

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5.1.27      MortgageBorrower Covenants.

 

Borrower shallcause Mortgage Borrower to comply with all obligations under the Mortgage LoanAgreement and all other Mortgage Loan Documents (including, without limitation,the affirmative and negative covenants set forth in the Mortgage LoanDocuments) with which Mortgage Borrower has expressly covenanted in theMortgage Loan Documents to comply, whether the Mortgage Loan has been repaid orthe related Mortgage Loan Document has been otherwise terminated (to the extentthat such covenants are cross-referenced herein), unless otherwise consented toin writing by Lender. Borrower shall cause Mortgage Borrower to promptly notifyLender of all material notices received by Mortgage Borrower under or inconnection with the Mortgage Loan, including, without limitation, any notice bythe Mortgage Lender to Mortgage Borrower of any default by Mortgage Borrower inthe performance or observance of any of the terms, covenants or conditions ofthe Mortgage Loan Documents on the part of Mortgage Borrower to be performed orobserved, and shall deliver to Lender a true copy of each such notice, togetherwith any other material consents, notices, requests or other writtencorrespondence between Mortgage Borrower and Mortgage Lender.

 

5.1.28      MortgageLoan 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      IntentionallyOmitted.

 

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

 

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the Mortgage Loan Documents or the Loan Documents, and (iii) Liens forTaxes or Other Charges not yet due. Borrower shall not create, incur, assume orsuffer to exist any Lien on any portion of the Collateral or any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity,or permit any such action to be taken, other than Permitted Encumbrances. Nothingcontained in this Section 5.2.1 shall affect Mortgage Borrower’s right tocontest 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        Changein Business.

 

#### (a)           Borrower shall notenter into any line of business other than those permitted under Section4.1.35(a) hereof, or make any material change in the scope or nature of itsbusiness objectives, purposes or operations or undertake or participate inactivities other than the continuance of its present business.

####  

#### (b)           Borrower shall notcause Mortgage Borrower to enter into any line of business other than thosepermitted under the Mortgage Loan Documents, or make any material change in thescope or nature of its business objectives, purposes or operations or undertakeor participate in activities other than the continuance of its presentbusiness.

####  

5.2.4        DebtCancellation.

 

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

 

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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        NoJoint 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.

 

5.2.8        ERISA.

 

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

####  

#### (b)           Borrower furthercovenants and agrees to deliver to Lender such certifications or other evidencefrom time to time throughout the term of the Loan as may be requested byLender, 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)            Equity interests such Loan Party are publicly offeredsecurities, within the meaning of 29 C.F.R. §2510.3-101(b)(2);

#####  

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#####  

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

#####  

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

#####  

5.2.9        AffiliateTransactions.

 

#### (a)           Borrower shall notenter into, or be a party to, any transaction with an Affiliate of Borrower,Principal or any of the partners of Borrower or Principal except in theordinary course of business and on terms which are fully disclosed to Lender inadvance 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)           Any contracts oragreements relating to the Property, the Collateral or any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity in any mannerbetween or among any Loan Parties or their Affiliates, including the ManagementAgreement and any other agreement specifically related to the Property, theCollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity or any Loan Party (collectively, the “AffiliateAgreements”) shall be made on an arm’s-length basis (taking into accountdifferences in the quality or standards of goods or services provided); and theparties to each Affiliate Agreement shall acknowledge and agree that, to theextent not prohibited under the Mortgage Loan Documents, any such agreement(other than the Management Agreement, as to which the provisions of theAgreement Regarding Management Agreement and Section 5.1.18 hereof shall beapplicable) shall be terminable by Mortgage Borrower or Lender within ten (10)days after notice, without the payment of any fee, penalty, premium orliability for future liabilities or obligations, if an Event of Default shallhave occurred and be continuing. To the extent not prohibited under theMortgage Loan Documents, upon the occurrence and during the continuation of anEvent of Default, if requested by Lender in writing, Borrower shall, or shallcause the applicable Loan Party or any Affiliate thereof to, terminate anyexisting Affiliate Agreement specified by Lender within ten (10) days afterdelivery of Lender’s request without payment of any penalty, premium ortermination fee.

####  

5.2.10      Transfers.

 

#### (a)           Except as otherwisepermitted under Section 5.2.10(c) or 5.2.11 hereof, Borrower shall not sell,convey, mortgage, grant, bargain, encumber, pledge, assign, grant options withrespect to, or otherwise transfer or dispose of (directly or indirectly,voluntarily or involuntarily, by operation of law or otherwise, and whether ornot for consideration or of record) any Individual Property, the Collateral,any Mortgage Principal’s general partner interest in the related MortgageBorrower Entity or any part thereof or any legal or beneficial interest thereinor permit a Sale or Pledge of any interest

####  

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#### in anyRestricted Party (collectively, a “Transfer”), without the prior writtenconsent of Lender, other than (i) pursuant to Leases of space in the Improvementsto tenants in accordance with the provisions of Section 5.1.17 hereof, (ii)Permitted Encumbrances, and (iii) the granting of a security interest or theentering into of an equipment lease by Mortgage Borrower with respect to theequipment located on an Individual Property and/or other Personal Property usedin connection with the operation and maintenance of an office in theImprovements or the maintenance of the common areas in the Improvements (“Equipment”)in the ordinary course of business, provided (A) any such security agreement orequipment lease agreement (collectively, the “Equipment Lease Agreements”)is entered into on customary terms and conditions in the ordinary course ofMortgage Borrower’s business, (B) the Equipment is readily replaceable withoutmaterial interference or interruption to the operation of any IndividualProperty as required pursuant to the provisions of this Agreement and theMortgage Loan Documents, and (C) the aggregate annual payments pursuant to theEquipment Lease Agreements together with the Trade Payables do not exceed inthe aggregate $150,000 with respect to any Individual Property at any time.

####  

#### (b)           A Transfer shallinclude, but shall not be limited to, (i) an installment sales agreementwherein (A) Mortgage Borrower agrees to sell one or more of the Properties orany part thereof or (B) Borrower agrees to sell the Collateral or any partthereof, for a price to be paid in installments; (ii) an agreement by MortgageBorrower to lease all or substantially all of any Individual Property for otherthan actual occupancy by a space tenant thereunder or a sale, assignment orother transfer of, or the grant of a security interest in, Mortgage Borrower’sright, title and interest in and to any Leases or any Rents; (iii) if aRestricted Party is a corporation, any merger, consolidation or Sale or Pledgeof such corporation’s stock or the creation or issuance of new stock; (iv) if aRestricted Party is a limited or general partnership or joint venture, anymerger or consolidation or the change, removal, resignation or addition of amanaging general partner or the Sale or Pledge of the partnership interest ofany managing general partner or any profits or proceeds relating to suchpartnership interest, or the Sale or Pledge of limited partner interests or anyprofits or proceeds relating to such limited partner interests or the creationor issuance of new limited partner interests; (v) if a Restricted Party is alimited liability company, any merger or consolidation or the change, removal,resignation or addition of a managing member or non-member manager (or if nomanaging member, any member) or the Sale or Pledge of the membership interestof a managing member (or if no managing member, any member) or any profits orproceeds relating to such membership interest, or the Sale or Pledge ofnon-managing membership interests or the creation or issuance of newnon-managing membership interests; or (vi) if a Restricted Party is a trust ornominee trust, any merger, consolidation or the Sale or Pledge of the legal orbeneficial interest in a Restricted Party or the creation or issuance of newlegal or beneficial interests; or (vii) the removal or the resignation of theManager (including, without limitation, an Affiliated Manager) other than inaccordance with the Mortgage Loan Agreement and Section 5.1.18 hereof; (viii)any deed-in-lieu or consensual foreclosure relating to any Individual Propertywith or for the benefit of Mortgage Lender or any Affiliate thereof; or (ix)any transaction, event or series of transactions or events that result inBorrower holding less than 100% of the direct limited

####  

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#### partnershipinterests or limited liability company interests, as applicable, in MortgageBorrower, or less than 100% of the membership interests in Mortgage Principal.

####  

#### (c)           Notwithstanding theprovisions of Sections 5.2.10(a) and 5.2.10(b) hereof, none of the followingtransfers shall be deemed to be a Transfer:

####  

##### (i)            a transfer by devise or descent or by operation of lawupon the death of a member, partner or shareholder of a Restricted Party (otherthan Mortgage Borrower or Mortgage Principal);

#####  

##### (ii)           intentionally omitted;

#####  

##### (iii)          intentionally omitted;

#####  

##### (iv)          the Pledge to Mezzanine B Lender of (A) the limitedpartnership or limited liability company interest in any Borrower Entity, asapplicable, held by the related Mezzanine B Borrower Entity, and (B) themembership interest in any Principal held by the related Mezzanine B BorrowerEntity, in each case as collateral security for the Mezzanine B Loan (or anyrestructuring thereof in accordance with Section 9.8 hereof), or anyregistration of such Pledge or the exercise of any rights or remedies MezzanineB Lender may have under the Mezzanine B Loan Documents with respect to suchPledge in accordance with the terms of the Intercreditor Agreements;

#####  

##### (v)           Intentionally Omitted;

#####  

##### (vi)          Intentionally Omitted;

#####  

##### (vii)         the Pledge to Bank Loan Agent for the benefit of the BankLoan Lenders of (A) the limited partnership or limited liability companyinterest in any Mezzanine B Borrower Entity, as applicable, held by the relatedBank Loan Borrower, (B) the membership interest in any Mezzanine B Principalheld by the related Bank Loan Borrower and (C) 100% of the equity interests ineach of the entities set forth on **Schedule5.2.10(c)(vii)** annexed hereto, in each case as collateral securityfor the Bank Loan, or any registration of such Pledge or the exercise of anyrights or remedies Bank Loan Lender may have under the Bank Loan Documents withrespect to such Pledge in accordance with the terms of the Bank LoanIntercreditor Agreement;

#####  

##### (viii)        Intentionally Omitted;

#####  

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

#####  

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#####  

##### the transferee in question, ifsuch Affiliate is not itself a subsidiary of any Guarantor, shall become anAdditional Guarantor;

#####  

##### (x)            transfers from one Guarantor to another Guarantor; or

#####  

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

#####  

##### With respect to the transfers referenced in (iv) through (vii) above,Lender shall receive no less than thirty (30) days’ prior written notice ofsuch 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:  (A) Principal, Borrower, Mortgage Borrower, MortgagePrincipal, Mezzanine B Borrower and Mezzanine B Principal shall be 100%owned, directly or indirectly, by ASOT; (B) one or more Lehman Entities and/orTishman Speyer Control Persons shall retain and maintain control over theday-to-day management and operations of the Properties, Mortgage Borrower,Mezzanine B Borrower and Borrower; (C) ASOT shall be 100% owned (exclusive ofpreferred unit interests existing on the Closing Date), directly or indirectly,by one or more Guarantors (other than ASOT); (D) the Guarantors shall be owned,directly or indirectly, at least nine and seven tenths percent (9.7%), in theaggregate, by one or more one or more Lehman Entities and/or Tishman SpeyerControl Persons; and (E) one or more Lehman Entities and/or Tishman SpeyerControl Persons shall retain and maintain control over the day-to-daymanagement and operations of each Guarantor.

#####  

#### (d)           Lender shall not berequired to demonstrate any actual impairment of its security or any increasedrisk of default hereunder in order to declare the Debt immediately due andpayable upon a Transfer in violation of this Section 5.2.10. This provisionshall apply to every Transfer regardless of whether voluntary or not, orwhether 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

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####  

#### confidential;notwithstanding the foregoing, Lender may disclose such information to a RatingAgency, Investor or prospective Investor that requests such information,provided that such Rating Agency, Investor or prospective Investor agrees inwriting to keep such information confidential and (c) in the event any transfer(whether or not such transfer shall constitute a Transfer) results in anyPerson that as of the date hereof owns less than forty-nine percent (49%) ofthe beneficial ownership interest in Mortgage Borrower, Mezzanine B Borrowerand Borrower owning in excess of forty-nine percent (49%) of the beneficialownership interest in Mortgage Borrower, Mezzanine B Borrower and Borrower anda Securitization has occurred, Borrower shall, prior to such transfer, deliveran updated Insolvency Opinion to Lender, which opinion shall be in form, scopeand substance reasonably satisfactory to Lender and the Rating Agencies.

####  

5.2.11      PermittedTransfer.

 

#### (a)           Without limiting theprovisions of Section 5.2.10 hereof, in the event that Mortgage Borrower ispermitted to transfer all of the Properties pursuant to Section 6.14 of theMortgage Loan Agreement, Lender shall not unreasonably withhold its consent toa 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)            Borrower or such Permitted Transferee shall pay any andall reasonable out-of-pocket costs incurred in connection with the transfer(including, without limitation, Lender’s reasonable counsel fees anddisbursements and all recording fees, title insurance premiums and mortgage andintangible taxes);

#####  

##### (ii)           Borrower shall cause the transferee to comply with all ofthe requirements of Section 4.1.35 hereof and to be wholly owned and controlledby one or more Institutional Investors or shall itself be an InstitutionalInvestor, and, inaddition, Lender shall be reasonably satisfied that each suchInstitutional Investor (1) is generally creditworthy and reputable, (2) is freefrom any pending or existing bankruptcy, reorganization or insolvencyproceedings in which such party is the debtor, (3) is not, at the time oftransfer or in the past, a litigant, plaintiff or defendant in any suit broughtagainst or by Lender, (4) has not been found by a court of competentjurisdiction to have committed a crime, fraud or similar malfeasance, (5) hasnot been indicted for any crime, and (6) has experience and a track record inowning and operating facilities similar to the Properties, in the case of eachof clauses (1) through (5) above, as reasonably determined by Lender based on aLexis/Nexis or similar background search of each such Person and its Affiliates(the “Permitted Transferee”);

#####  

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#####  

##### (iii)          Borrower shall cause the transferee to assume all of theobligations of Borrower arising from and after the transfer of this Agreement,the Note and the other Loan Documents and a replacement guarantor acceptable toLender in all respects shall assume all of the obligations of Guarantor,accruing from and after the date of such transfer, under the Guaranty, in eachcase, in a manner reasonably satisfactory to Lender in all respects, including,without limitation, by entering into an assumption agreement (the “AssumptionAgreement”) in form and substance reasonably satisfactory to Lender anddelivering such legal opinions as Lender may reasonably require;

#####  

##### (iv)          Borrower shall cause Mortgage Borrower to satisfy theconditions set forth in Section 6.14 of the Mortgage Loan Agreement (it beingagreed that Lender shall have the same rights to approve such transfer as theMortgage Lender has);

#####  

##### (v)           Intentionally Omitted;

#####  

##### (vi)          Intentionally Omitted;

#####  

##### (vii)         Borrower shall cause the transferee to execute and deliver apledge agreement in substantially the same form as the Pledge Agreement inrespect of the ownership interests in the new property owner(s)/mortgageborrower(s). The Ownership Interests described in this subsection (vii) shallotherwise comply with the requirements of the Loan Documents and be substantiallyidentical in structure, form and substance to the Collateral delivered atclosing of the Loan;

#####  

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

#####  

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

#####  

##### (x)            Borrower shall cause the transferee to provide opinionletters in substantially the same form and substance as such opinion lettersdelivered at the closing of the Loan (including enforcement and perfectionopinions and a substantive non-consolidation opinion of the transferee and itsconstituent entities, which and opinions shall be reasonably satisfactory toLender;

#####  

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

#####  

##### (xii)          Borrower shall cause the transferee to execute and deliversuch other replacement loan and closing documents in substantially the sameforms as the Loan Documents and such other closing documents as reasonablyrequested by Lender.

#####  

#### (b)           Intentionally omitted.

####  

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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      Limitationson Securities Issuances.

 

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)           Any and all dividends,including capital dividends, stock or liquidating dividends, distributions ofproperty, redemptions or other distributions made by Mortgage Borrower orMortgage Principal on or in respect of any interests in Mortgage Borrower, andany and all cash and other property received in payment of the principal of orin redemption of or in exchange for any such interests (collectively, the “Distributions”),shall become part of the Collateral. Notwithstanding the foregoing, Lenderexpressly 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)           If any Distributionsshall be received by Borrower or any Affiliate of Borrower after the occurrenceand during the continuance of an Event of Default, Borrower shall hold, orshall cause the same to be held, in trust for the benefit of Lender. Any andall revenue derived from the Property paid directly by tenants, subtenants oroccupants of the Property shall be held and applied in accordance with theterms and provisions of the Mortgage Loan Documents.

####  

5.2.14      Refinancingor Prepayment of the Mortgage 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 (including any prepayment premiums and other amounts due and payableto Lender

 

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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      Acquisitionof the Mortgage Loan.

 

#### (a)           No Loan Party or anyAffiliate of any of them or any Person acting at any such Person’s request ordirection, shall acquire or agree to acquire the lender’s interest in theMortgage Loan, or any portion thereof or any interest therein, or any direct orindirect ownership interest in the holder of the Mortgage Loan, by way ofpurchase, transfer, exchange or otherwise, and any breach or attempted breachof this provision shall constitute an Event of Default hereunder. If, solely byoperation of applicable subrogation law, Borrower shall have failed to complywith the foregoing, then Borrower: (i) shall promptly notify Lender of suchfailure; (ii) shall cause any and all such prohibited parties acquiring anyinterest in the Mortgage Loan Documents: (A) not to enforce the Mortgage LoanDocuments; and (B) upon the request of Lender, to the extent any of suchprohibited parties has or have the power or authority to do so, to promptly:(1) cancel the promissory note evidencing the Mortgage Loan, (2) re-convey andrelease the Lien securing the Mortgage Loan and any other collateral under theMortgage Loan Documents, and (3) discontinue and terminate any enforcementproceeding(s) under the Mortgage Loan Documents.

####  

#### (b)           Lender shall havethe right at any time to acquire all or any portion of the Mortgage Loan or anyinterest in any holder of, or participant in, the Mortgage Loan without noticeor consent of Borrower or any other Loan Party, in which event Lender shallhave and may exercise all rights of Mortgage Lender thereunder (to the extentof its interest), including the right, if and when permitted under the MortgageLoan Documents, (i) to declare that the Mortgage Loan is in default and (ii) toaccelerate the Mortgage Loan indebtedness, in accordance with the terms thereofand (iii) to pursue all remedies against any obligor under the Mortgage LoanDocuments. In addition, Borrower hereby expressly agrees that any claims,counterclaims, defenses, offsets, deductions or reductions of any kind whichMortgage Borrower or any other Person may have against Mortgage Lender relatingto or arising out of the Mortgage Loan shall be the personal obligation ofMortgage Lender, and in no event shall Mortgage Borrower be entitled to bring,pursue or raise any such claims, counterclaims, defenses, offsets, deductionsor reductions against Lender or any Affiliate of Lender or any other Person asthe successor holder of the Mortgage Loan or any interest therein; provided,however, that Mortgage Borrower may seek specific performance of itscontractual rights and Lender’s contractual obligations under the Mortgage LoanDocuments.

####  

5.2.16      MaterialAgreements.

 

#### (a)           Borrower shall not,and shall not permit any Loan Party to, enter into any Material Agreementwithout the consent of Lender, not to be unreasonably withheld or delayed. Lendermay condition its consent upon Mortgage Borrower also obtaining the consent ofMortgage Lender, if such consent shall be required under the Mortgage LoanDocuments. Each such Material Agreement shall be in form and substancereasonably

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

####  

#### (b)           Except asspecifically set forth herein, Borrower will not, and will not permit or causeany Loan Party or any Affiliate thereof to, amend, modify, supplement, rescindor terminate any Material Agreement, without Lender’s approval, not to beunreasonably withheld or delayed.

####  

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

####  

#### (d)           Lender’s approval ofany Material Agreement shall be subject to the same deemed approval provisionscontained in Section 5.1.17 hereof applicable to Leases.

####  

**VI.           INSURANCE;CASUALTY AND CONDEMNATION**

** **

Section 6.1             Insurance.

 

#### (a)           Borrower shallobtain and maintain, or cause Mortgage Borrower to maintain, Policies providingat least the following coverages:

####  

##### (i)            comprehensive all risk insurance, including the peril ofwind (named storms) on the Improvements and the Personal Property, in each case(A) having a 100% “Replacement Cost Valuation” clause or endorsement, which forpurposes of this Agreement shall mean actual replacement value of eachIndividual Property (exclusive of costs of excavations, foundations,underground utilities and footings), with a waiver of depreciation, (B)containing an agreed amount endorsement with respect to the Improvements andPersonal Property waiving all co-insurance provisions; (C) providing for nodeductible in excess of  $1,000,000(other than with respect to wind storm coverage, which deductible will notexceed 5% of the total insurable value of the Individual Property where thephysical loss or damage occurred); and (D) providing coverage for contingentliability from Operation of Building Laws, Demolition Costs and Increased Costof Construction Endorsements together with an “Ordinance or Law Coverage” or “Enforcement”endorsement if any of the Improvements or the use of any Individual Propertyshall at any time constitute legal non-conforming structures or uses;

#####  

##### (ii)           business interruption/loss of rents insurance (A) withloss payable to Lender, Mezzanine B Lender and/or Mortgage Lender, as theirinterests may appear; (B) covering all risks required to be covered by theinsurance provided for in Section 6.1(a)(i) above; (C) in an amount equal tothe greater of (1) the estimated gross income from the operation of eachIndividual Property, or (2) the projected operating expenses (including DebtService, Mezzanine B Debt Service and Mortgage Loan Debt Service) for themaintenance and operation of each Individual Property, in each case for theperiod of restoration on an actual loss sustained basis for limit purchased notless than the succeeding 18 month period;

#####  

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

#####  

##### (iv)          if and to the extent not covered by the insurance requiredto be maintained pursuant to Section 6.1(a)(i) and Section 6.1(a)(iii) hereof,at all times during which structural construction, repairs or alterations arebeing made with respect to the Improvements (A) owner’s contingent liabilityinsurance or its equivalent covering claims not covered by or under the termsor provisions of the commercial general liability insurance provided for inSection 6.1(a)(iii) hereof; and (B) the insurance provided for in Section6.1(a)(i) hereof shall be written in a so called builder’s risk completed valueform (1) on a non-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 ofthe State(s) in which each Individual Property is located, and employer’sliability insurance with a limit of at least $2,000,000 per accident and perdisease per employee, and $2,000,000 for disease in the aggregate in respect ofany work or operations on or about any Individual Property, or in connectionwith such Individual Property or its operation (if applicable);

#####  

##### (vi)          comprehensive boiler and machinery insurance, ifapplicable, in such amounts as shall be reasonably required by Lender (providedsuch insurance in such amounts is generally available at commerciallyreasonable premiums and is generally required by institutional lenders forproperties comparable to the Properties), on terms consistent with thecommercial property insurance policy required under Section 6.1(a)(i) hereof;

#####  

##### (vii)         if any portion of the Improvements on any IndividualProperty is at any time located in an area identified by the Secretary ofHousing and Urban Development or any successor thereto as an area havingspecial flood hazards pursuant to the National Flood Insurance Act of 1968, theFlood Disaster Protection Act of 1973 or the National Flood Insurance ReformAct of 1994, as each may be amended, or any successor law (the “FloodInsurance Acts”), flood hazard insurance of the following types and in thefollowing amounts: (A) coverage under Policies issued pursuant to the FloodInsurance Acts (the “Flood Insurance Policies”) in an amount equal tothe maximum limit of coverage available for such Individual Property under theFlood Insurance Acts, subject only to customary deductibles under such Policiesand (B) coverage under supplemental private Policies in an amount, which whenadded to the coverage provided under the Flood Insurance Policies with respectto such Individual Property, is not less the aggregate amount of the Loan, theMortgage Loan and the Mezzanine B Loan (provided such private floodhazard insurance is generally available at reasonable premiums and is generallyrequired by institutional lenders for similar properties);

#####  

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

#####  

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#####  

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

#####  

##### (x)            insurance against terrorism, terrorist acts or similaracts of sabotage, but excluding acts of war (“Terrorism Insurance”) withcoverage amounts of not less than an amount equal to the full insurable valueof the Improvements and the Personal Property (the “Terrorism InsuranceRequired Amount”). The business interruption/rent loss insurance Policyrequired pursuant to Section 6.1(a)(ii) hereof shall not contain an exclusionfrom coverage under such Policy for loss incurred as a result of an act ofterrorism (but may contain an exclusion for acts of war). If TRIA or similarstatue is not in effect, then Borrower shall be required to, or Borrower shallcause Mortgage Borrower to, carry Terrorism Insurance throughout the term ofthe Loan, as required by the preceding sentence, but in such event neitherBorrower nor Mortgage Borrower shall be required to spend on terrorisminsurance coverage more than two times the amount of the insurance premium thatis payable at such time in respect of the all-risk insurance, excluding thecost of earthquake, flood and terrorism coverage (and in such event suchterrorism coverage shall be from such insurers, and with such coverage, asshall be acceptable to Lender in its reasonable discretion) (the “TerrorismInsurance Cap”) and if the cost of the Terrorism Insurance Required Amountexceeds the Terrorism Insurance Cap, Borrower shall, or shall cause MortgageBorrower to, purchase the maximum amount of Terrorism Insurance obtainable fora premium equal in amount to the Terrorism Insurance Cap; and

#####  

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

#####  

#### (b)           All insuranceprovided for in Section 6.1(a) hereof shall be obtained under valid andenforceable policies (collectively, the “Policies” or in the singular,the “Policy”), in such forms and, from time to time after the datehereof, subject to the terms of Section 6.1(a) hereof, in such amounts as maybe 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)           The insurancecoverage required under Section 6.1(a) hereof may be effected under a blanketPolicy 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)           All Policiesprovided for or contemplated by Section 6.1(a) hereof, except for the Policyreferenced in Section 6.1(a)(v) hereof, shall name Borrower, Mortgage Borrowerand Mezzanine B Borrower, as the case may be, as the insured and Lender,Mortgage Lender and Mezzanine B Lender, as the additional insured, as theirinterests may appear, and in the case of property damage, boiler and machinery,flood and earthquake insurance, shall contain a so called New York standardnon-contributing mortgagee clause in favor of Lender, Mortgage Lender andMezzanine 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)           All Policies shallcontain clauses or endorsements to the effect that:

####  

##### (i)            no act or negligence of Borrower, Mortgage Borrower orMezzanine B Borrower, or anyone acting for Borrower, Mortgage Borrower orMezzanine B Borrower, or any tenant or other occupant, or failure to complywith the provisions of any Policy, which might otherwise result in a forfeitureof the insurance or any part thereof, except for the willful misconduct ofLender, Mortgage Lender or Mezzanine B Lender, in violation of the conditionsof such Policy, shall in any way affect the validity or enforceability of theinsurance insofar as Lender, Mortgage Lender or Mezzanine B Lender isconcerned;

#####  

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

#####  

##### (iii)          intentionally omitted; and

#####  

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#####  

##### (iv)          neither Lender, Mortgage Lender or Mezzanine B Lender shallbe liable for any Insurance Premiums thereon or subject to any assessmentsthereunder.

#####  

#### (f)            Borrower shall givewritten notice to Lender if the Policy has not been renewed 10 days prior tothe expiration. If at any time Lender is not in receipt of written evidencethat all insurance required hereunder is in full force and effect, Lender shallhave the right, without notice to Borrower, but subject to the terms of theMortgage Loan Documents, to take such action as Lender deems necessary toprotect its interest in the Properties, including, without limitation, theobtaining of such insurance coverage as Lender in its sole discretion deemsappropriate after three (3) Business Days’ notice to Borrower if prior to thedate upon which any such coverage will lapse or at any time Lender deemsnecessary (regardless of prior notice to Borrower) to avoid the lapse of anysuch coverage. All premiums incurred by Lender in connection with such actionor in obtaining such insurance and keeping it in effect shall be paid byBorrower 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)           For purposes of thisAgreement, Lender shall have the same approval rights over the insurancereferred to in the Mortgage Loan Documents (including, without limitation, theinsurers, deductibles and coverages thereunder, as well as the right to requireother reasonable insurance pursuant to the Mortgage Loan Documents) as areprovided in favor of the Mortgage Lender in the Mortgage Loan Documents. Allliability insurance provided for in the Mortgage Loan Documents shall provideinsurance with respect to the liabilities of Mortgage Borrower and Borrower. Theinsurance policies delivered pursuant to the Mortgage Loan Documents shallinclude endorsements of the type described thereof, but pursuant to which Lendershall have the same protections as the Mortgage Lender as referred to therein.

 

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#### (i)            In the event thatthe Mortgage Loan has been paid in full, except upon the occurrence andcontinuance of an Event of Default, Borrower shall permit Mortgage Borrower tosettle any insurance or condemnation claims with respect to Insurance Proceedsor Awards which in the aggregate are less than or equal to the Threshold Amount.Lender shall have the right to participate in and reasonably approve anysettlement for insurance or condemnation claims with respect to the InsuranceProceeds or Awards which in the aggregate are equal to or greater than theThreshold Amount. If an Event of Default shall have occurred and be continuingbut subject to the rights of Mortgage Lender, Borrower hereby irrevocablyempowers Lender, in the name of Mortgage Borrower as its true and lawfulattorney-in-fact, to file and prosecute such claim and to collect and to makereceipt 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)           Borrower shall, orshall cause Mortgage Borrower to, deliver to Lender all reports, plans,specifications, documents and other materials that are delivered to MortgageLender under****the Mortgage LoanDocuments 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)           Notwithstanding anyprovision in this Agreement to the contrary, all Insurance Proceeds or Awardswill be made available to Mortgage Borrower in accordance with the MortgageLoan Documents. In the event the Mortgage Loan has been paid in full and Lenderreceives any Insurance Proceeds or Awards, Lender shall either apply suchproceeds 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             Rightsof Lender.

 

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             Completion/RepairReserves.

 

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

####  

#### (b)           In the event (i)Mortgage Lender waives the requirement of Mortgage Borrower to maintain theCompletion/Repair Reserve pursuant to the terms of Section 11.04 of theMortgage Loan Agreement or any Completion/Repair and Security Agreementexecuted in accordance therewith or (ii) the Mortgage Loan has been repaid infull, Lender shall have the right to require Borrower to establish and maintainan escrow that will operate in substantially the same way as theCompletion/Repair Reserve described in Section 11.04 of the Mortgage LoanAgreement and any Completion/Repair and Security Agreement executed inaccordance therewith, but this sentence shall not be deemed to require Borrowerto maintain the Completion/Repair Reserve (or the applicable portion thereof)after Mortgage Borrower is no longer obligated to maintain same under theexpress provisions of the Mortgage Loan Agreement or any Completion/Repair andSecurity Agreement executed in accordance therewith.

 

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Section 7.2             Impositionsand Imposition Deposits.

 

#### (a)           Borrower shall causeMortgage Borrower to comply with all of the terms and conditions set forth inSections 11.01 and 11.02 of the Mortgage Loan Agreement and Section 7(a) ofeach Security Instrument.

####  

#### (b)           In the event (i)Mortgage Lender waives the requirement of Mortgage Borrower to make theImpositions and Imposition Deposits (each as defined in the Mortgage LoanAgreement) pursuant to the terms of Section 11.01 or 11.02 of the Mortgage LoanAgreement or Section 7(a) of each Security Instrument or (ii) the Mortgage Loanhas been repaid in full, Lender shall have the right to require Borrower toestablish and maintain an escrow that will operate in substantially the sameway as the escrow funds to which such Impositions and Imposition Depositsrelate as described in Sections 11.01 and 11.02 of the Mortgage Loan Agreementand Section 7(a) of each Security Instrument. Notwithstanding the foregoing,Lender shall not require Borrower to establish and maintain an escrow for thepayment of Insurance Premiums so long as Lender has reasonably determined thatthe Policies maintained by Mortgage Borrower covering the Properties constituteapproved blanket or umbrella Policies.

####  

Section 7.3             ReplacementReserves.

 

#### (a)           Borrower shall causeMortgage Borrower to comply with all of the terms and conditions set forth inSection 11.03 of the Mortgage Loan Agreement and any Replacement ReserveAgreement executed in accordance therewith.

####  

#### (b)           In the event (i)Mortgage Lender waives the requirement of Mortgage Borrower to maintain theReplacement Reserve pursuant to the terms of Section 11.03 of the Mortgage LoanAgreement or any Replacement Reserve Agreement executed in accordance therewithor (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 Replacement Reserve described in Section11.03 of the Mortgage Loan Agreement and any Replacement Reserve Agreementexecuted in accordance therewith, but this sentence shall not be deemed torequire Borrower to maintain the Replacement Reserve (or the applicable portionthereof) after Mortgage Borrower is no longer obligated to maintain same underthe express provisions of the Mortgage Loan Agreement or any ReplacementReserve Agreement executed in accordance therewith

####  

Section 7.4             OtherMortgage Reserves.

 

#### (a)           Borrower shall causeMortgage Borrower to comply with all of the terms and conditions set forth inthe Mortgage Loan Documents with respect to any reserves or escrows establishedthereunder that are not specifically referenced in any other section of thisArticle VII (the “Other Mortgage Reserves”).

####  

#### (b)           In the event (i)Mortgage Lender waives the requirement of Mortgage Borrower to maintain anyOther Mortgage Reserves pursuant to the terms of the Mortgage Loan Documents or(ii) the Mortgage Loan has been repaid in full, Lender

 

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#### shall have theright to require Borrower to establish and maintain an escrow that will operatein substantially the same way as the applicable Other Mortgage Reserves.

####  

Section 7.5             DebtService Reserve Funds.

 

#### (a)           On the Closing Date,Borrower shall deposit with Lender an amount equal to $[         ](the “Debt Service Reserve Deposit”), which is the amount of DebtService Shortfalls projected by Lender through the end of calendar year 2009and which shall be held and disbursed by Lender in accordance with theapplicable provisions of this Section 7.5. Amounts so deposited hereunder shallhereinafter be referred to as the “Debt Service Reserve Funds”.

####  

#### (b)           In lieu of makingthe Debt Service Reserve Deposit, Borrower may either (i) deliver to Lender aLetter of Credit in an amount equal to the Debt Service Reserve Deposit (the “LCOption”) or (ii) deliver to Lender a certificate of Bank Loan Borrowercertifying to Lender that (a) there are sufficient funds available to Bank LoanBorrower under the Bank Loan for the purpose of paying Debt Service Shortfallsas projected by Lender through the end of calendar year 2009, (b) Bank LoanBorrower will, in the event of any such Debt Service Shortfalls, borrow suchfunds pursuant to the Bank Loan and will contribute such funds to Mezzanine BBorrower and that Mezzanine B Borrower will contribute such funds to Borrowerand (c) Borrower will use such funds to pay for any such Debt ServiceShortfalls (the “Certificate Option”).

####  

#### (c)           In the eventBorrower elects to deliver cash under this Section 7.5, Borrower shall have theright, on any Determination Date, to receive a disbursement of amounts inexcess of the amount of the Debt Service Shortfalls then projected by Lenderthrough the end of calendar year 2009.

####  

#### (d)           In the eventBorrower elects to deliver a Letter of Credit under this Section 7.5 or electsthe LC Option on the date hereof, Borrower shall have the right, on 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)           On or prior to eachDetermination Date, Borrower shall deliver to Lender a certificate of Bank LoanBorrower certifying to Lender that (a) there are sufficient funds available toBank Loan Borrower under the Bank Loan for the purpose of paying for DebtService Shortfalls as projected by Lender through the end of calendar year2009, (b) Bank Loan Borrower will, in the event of any such Debt ServiceShortfalls, borrow such funds pursuant to the Bank Loan and will contributesuch funds to Mezzanine B Borrower and that Mezzanine B Borrower willcontribute such funds to Borrower and (c) Borrower will use such funds to payfor any such Debt Service Shortfalls. In the event that Borrower fails tocomply with the provisions of the foregoing sentence, Borrower shall, within five(5) Business Days following the applicable Determination Date, deposit withLender cash or deliver to Lender a Letter of Credit in an amount equal to theDebt Service Shortfalls as projected by Lender through the end of the calendaryear 2009.

 

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#### (f)            Provided no Eventof 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 7.5, 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 7.5(e) above, Lender shall return toBorrower the Debt Service Reserve Funds remaining on deposit with Lender orsuch Letter of Credit, as applicable.

####  

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

####  

Section 7.6             IntentionallyOmitted.

 

Section 7.7             IntentionallyOmitted.

 

Section 7.8             ReserveFunds, Generally.

 

#### (a)           Borrower grants toLender a first priority perfected security interest in each of the ReserveFunds and the related Accounts established hereunder, if any, and any and allmonies now or hereafter deposited in such Reserve Fund and each such relatedAccount as additional security for payment of the Debt. Until expended orapplied in accordance herewith, the Reserve Funds and the related Accountsestablished hereunder, if any, shall constitute additional security for theDebt.

####  

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

####  

#### (c)           Any Reserve Fundsestablished hereunder shall not constitute trust funds and may be commingledwith other monies held by Lender.

####  

#### (d)           Any Reserve Fundsestablished hereunder shall be held in interest-bearing accounts and allearnings or interest on a Reserve Fund shall be added to and become a part ofsuch Reserve Fund and shall be disbursed in the same manner as other moniesdeposited in such Reserve Fund.

 

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

####  

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

####  

Section 7.9             Lettersof Credit.

 

7.9.1        Deliveryof Letters of Credit.

 

#### (a)           The aggregate amountof any Letter of Credit and cash on deposit with respect to the Debt ServiceReserve Funds at any time during the term of the Loan shall at all times be atleast equal to the amount which Borrower would otherwise be required to have ondeposit pursuant to Section 7.5 hereof if Borrower did not elect to deliver aLetter of Credit in lieu thereof. In the event that a Letter of Credit isdelivered in lieu of any portion of the Debt Service Reserve Funds, Borrowershall be responsible for the direct payment of any Debt Service Shortfalls thatwould otherwise have been payable from such portion of the Debt Service ReserveFunds. Lender shall not draw on any Letter of Credit delivered in lieu of anyportion of the Debt Service Reserve Funds unless (i) Borrower fails to pay anyDebt Service Shortfall or (ii) an Event of Default has occurred and iscontinuing.

####  

#### (b)           Borrower shall giveLender not less than five (5) Business Days prior written notice of Borrower’selection to deliver a Letter of Credit and Borrower shall pay to Lender all ofLender’s reasonable out-of-pocket costs and expenses in connection therewith. Lendershall be the beneficiary of any Letter of Credit and Borrower shall not beentitled to draw down any such Letter of Credit for any reason whatsoever. Uponnot less than five (5) Business Days prior written notice to Lender, Borrowermay replace a Letter of Credit with a cash deposit to the Debt Service ReserveFund. Prior to the return of a Letter of Credit, Borrower shall deposit withLender cash in an amount that satisfies the Debt Service Reserve Fund depositrequirement.

 

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7.9.2        ProvisionsRegarding Letters of Credit.

 

#### (a)           Each Letter ofCredit delivered under this Agreement shall be additional security for thepayment of the Debt. Upon the occurrence and during the continuation of anEvent 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)           In addition to anyother right Lender may have to draw upon a Letter of Credit pursuant to theterms and conditions of this Agreement, Lender shall have the additional rightsto draw in full on any Letter of Credit:

####  

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

#####  

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

#####  

##### (iii)          if Lender has received notice that the bank issuing theLetter of Credit shall cease to be an Eligible Institution 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.

#####  

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 drawn the Letter of Credit, and in the event of theinsolvency of the bank issuing the Letter of Credit or if the bank issuing theLetter of Credit ceases to be an Eligible Institution, Borrower shall promptlyprovide to Lender either (y) a substitute Letter of Credit or (z) cash in theamount of the Letter of Credit.

 

#### (c)           If any Letter ofCredit or Letters of Credit delivered pursuant to Section 7.5 of thisAgreement, in the aggregate, are in an amount greater than ten percent (10%) ofthe then outstanding principal balance of the Loan, Borrower shall deliver toLender, together with such Letter of Credit, a new substantivenon-consolidation opinion substantially similar to the Insolvency Opiniondelivered on the date hereof in connection

 

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with the Loan, which newopinion shall be in form and substance reasonably acceptable to Lender, and, ifa Securitization has occurred, to the Rating Agencies.

####  

**VIII.        DEFAULTS**

** **

Section 8.1             Eventof Default. 

 

#### (a)           Each of thefollowing events shall constitute an event of default hereunder (an “Eventof Default”):

####  

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

#####  

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

#####  

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

#####  

##### (iv)          if Borrower transfers or encumbers any Individual Property(or any portion thereof), the Collateral or any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity in violation of theprovisions of Section 5.2.10 hereof or the Pledge Agreement (excluding theremoval or resignation of Manager, provided the replacement manager is aQualified Manager and Borrower employs such manager in accordance with Section5.1.18 hereof);

#####  

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

 

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##### representation, warranty,acknowledgement or statement true and correct in all material respects;

#####  

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

#####  

##### (vii)         if a receiver, liquidator or trustee shall be appointed forany Loan Party or Guarantor, or if any Loan Party or Guarantor shall beadjudicated a bankrupt or insolvent, or if any petition for bankruptcy,reorganization or arrangement pursuant to the Bankruptcy Code, or any similarfederal or State law, shall be filed by or against, consented to, or acquiescedin by, a Loan Party or Guarantor, or if any proceeding for the dissolution orliquidation of a Loan Party or Guarantor shall be instituted; *provided, however*, that if suchappointment, adjudication, petition or proceeding was involuntary and notconsented to by such Loan Party or Guarantor, no Event of Default shall existunless the same is not discharged, stayed or dismissed within sixty (60) days;

#####  

##### (viii)        if Borrower attempts to assign its rights under thisAgreement or any of the other Loan Documents or any interest herein or thereinin contravention of the Loan Documents;

#####  

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

#####  

##### (x)            intentionally omitted;

#####  

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

#####  

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

#####  

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

#####  

##### (xiv)        if any federal tax Lien or state or local income tax Lien isfiled against any Loan Party, Guarantor, the Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity or anyIndividual Property and, subject to Section 5.1.2 hereof, the same is not dischargedof record within sixty (60) days after same is filed;

 

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##### (xv)         (A) Borrower fails to timely provide Lender with the writtencertification and evidence referred to in Section 5.2.8 hereof, or (B) Borrowerconsummates a transaction which would cause the Loan or Lender’s exercise ofits rights under the Pledge Agreement, the Note, this Agreement or the otherLoan Documents to constitute a nonexempt prohibited transaction under ERISA orresult in a violation of a State statute regulating governmental plans,subjecting Lender to liability for a violation of ERISA, the Code or a Statestatute, unless Borrower shall successfully cure such violation (by rescindingsuch transaction or otherwise) within sixty (60) days after obtaining ActualKnowledge of such violation or such shorter cure period as may be prescribedunder ERISA, the Code or such state statute, as applicable;

#####  

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

#####  

##### (xvii)       intentionally omitted;

#####  

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

#####  

##### (xix)         with respect to any term, covenant or provision set forthherein which specifically contains a notice requirement or grace period, ifBorrower shall be in default under such term, covenant or condition after thegiving of such notice or the expiration of such grace period;

#####  

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

#####  

##### (xxi)         intentionally omitted;

#####  

##### (xxii)        intentionally omitted;

#####  

##### (xxiii)       intentionally omitted;

#####  

##### (xxiv)       intentionally omitted;

#####  

##### (xxv)        intentionally omitted;

#####  

##### (xxvi)       intentionally omitted;

#####  

##### (xxvii)      intentionally omitted;

#####  

##### (xxviii)     intentionally omitted;

 

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##### (xxix)       intentionally omitted;

#####  

##### (xxx)        intentionally omitted;

#####  

##### (xxxi)       if Borrower shall continue to be in Default under any of theother terms, covenants or conditions of this Agreement not specified insubsections (i) through (xxx) above, for ten (10) days after notice to Borrowerfrom Lender, in the case of any Default which can be cured by the payment of asum of money, or for thirty (30) days after notice from Lender in the case ofany other Default; *provided, however*,that if such non monetary Default is susceptible of cure but cannot reasonablybe cured within such thirty (30) day period, but Borrower shall have commencedto cure such Default within such thirty (30) day period and thereafterdiligently and expeditiously proceeds to cure the same, such thirty (30) dayperiod shall be extended for such time as is reasonably necessary for Borrowerin the exercise of due diligence to cure such Default, such additional periodnot to exceed one hundred eighty (180) days;

#####  

##### (xxxii)      if there shall be a default under the Pledge Agreement or anyof the other Loan Documents beyond any applicable notice and cure periodscontained in such documents, whether as to Borrower, the Collateral, anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity or any Individual Property (provided, however, that if no notice or cureperiod is specified, then the provisions of Section 8.1(a)(xxii) hereof shallapply to such default), or if any other such event shall occur or conditionshall exist, if the effect of such event or condition is to accelerate thematurity of any portion of the Debt or to permit Lender to accelerate thematurity of all or any portion of the Debt; or

#####  

##### (xxxiii)     a Mortgage Loan Event of Default shall occur, and shall not havebeen waived or settled by Mortgage Lender or cured by Mortgage Borrower, or ifMortgage Borrower enters into or otherwise suffers or permits any materialamendment, waiver, supplement, termination, extension, renewal, replacement orother modification of any Mortgage Loan Document without the prior writtenconsent of Lender, to the extent that such consent is required to be obtainedhereunder.

#####  

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

 

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#### limitation,all rights or remedies available at law or in equity; and upon any Event ofDefault described in clause (vi) or (vii) of Section 8.1(a) hereof, the Debtand all other obligations of Borrower hereunder and under the other LoanDocuments shall immediately and automatically become due and payable, withoutnotice or demand, and Borrower hereby expressly waives any such notice ordemand, anything contained herein or in any other Loan Document to the contrarynotwithstanding.

####  

Section 8.2             Remedies.

 

#### (a)           Upon the occurrenceof an Event of Default, all or any one or more of the rights, powers, privilegesand other remedies available to Lender against Borrower under this Agreement orany of the other Loan Documents executed and delivered by, or applicable to,Borrower or at law or in equity may be exercised by Lender at any time and fromtime to time, whether or not all or any of the Debt shall be declared due andpayable, and whether or not Lender shall have commenced any foreclosureproceeding or other action for the enforcement of its rights and remedies underany of the Loan Documents with respect to all or any part of the Collateral. Anysuch actions taken by Lender shall be cumulative and concurrent and may bepursued independently, singly, successively, together or otherwise, at suchtime and in such order as Lender may determine in its sole discretion, to thefullest extent permitted by Applicable Law, without impairing or otherwiseaffecting the other rights and remedies of Lender permitted by Applicable Law,equity or contract or as set forth herein or in the other Loan Documents. Withoutlimiting the generality of the foregoing, Borrower agrees that if an Event ofDefault is continuing all Liens and other rights, remedies or privilegesprovided to Lender with respect to the Collateral shall remain in full forceand effect until Lender has exhausted all of its remedies against theCollateral, and the Pledge Agreement has been foreclosed, sold and/or otherwiserealized upon in satisfaction of the Debt, or the Debt has been paid in full.

####  

#### (b)           With respect toBorrower and the Collateral, nothing contained herein or in any other LoanDocument shall be construed as requiring Lender to resort to any specificportion of the Collateral for the satisfaction of any of the Debt in preferenceor priority to any other Collateral, and Lender may seek satisfaction out ofthe Collateral or any part thereof, in its absolute discretion in respect ofthe Debt. In addition, Lender shall have the right from time to time topartially foreclose upon the Collateral in any manner and for any amountssecured by the Pledge Agreement then due and payable as determined by Lender inits sole discretion, including, without limitation, the followingcircumstances:  (i) in the event Borrowerdefaults beyond any applicable grace period in the payment of one (1) or morescheduled payments of principal and interest, Lender may foreclose upon anyportion of the Collateral to recover such delinquent payments, or (ii) in theevent Lender elects to accelerate less than the entire outstanding principalbalance of the Loan, Lender may foreclose upon the Collateral to recover somuch of the principal balance of the Loan as Lender may accelerate and suchother sums secured by the Pledge Agreement as Lender may elect. Notwithstandingone or more partial foreclosures, the Collateral not foreclosed upon shallremain subject to the Pledge Agreement to secure payment of sums secured by thePledge Agreement and not previously recovered.

 

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#### (c)           Lender shall havethe right, from time to time, to sever the Note, the Pledge Agreement and theother Loan Documents into one or more separate notes, pledges and othersecurity documents (the “Severed Loan Documents”) in such denominationsas Lender shall determine in its sole discretion for purposes of evidencing andenforcing its rights and remedies provided hereunder. Borrower shall executeand deliver to Lender from time to time, promptly after the written request ofLender, a severance agreement and such other documents as Lender shallreasonably request in order to effect the severance described in the precedingsentence, all in form and substance reasonably satisfactory to Lender. TheSevered Loan Documents shall not (x) contain any representations, warranties orcovenants not contained in the Loan Documents (and any such representations andwarranties contained in the Severed Loan Documents will be given by Borroweronly as of the Closing Date) or (y) change the Applicable Interest Rate or theMaturity Date, or (z) otherwise amend or modify any other material term of theNote, this Agreement, the Pledge Agreement or the other Loan Documents.

####  

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

####  

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             Rightto Cure Defaults.

 

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

 

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Event of Default or such failed payment or act or in appearing in,defending, or bringing any action or proceeding shall bear interest, at 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 Loan Documentsand shall be immediately due and payable upon demand by Lender therefor.

 

Section 8.5             MortgageLoan Reserve 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             Powerof Attorney.

 

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 and perform any acts such as are referred to in thissubsection in the name and on behalf of Borrower. This power of attorney is apower coupled with an interest and cannot be revoked.

 

**IX.           SPECIALPROVISIONS**

** **

Section 9.1             Saleof Notes and 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 suchfinancial and other information with respect to the Properties, the Collateral,Borrower, Mortgage Borrower, Principal, Mortgage Principal and any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity asmay be required to be delivered pursuant to Section 5.1.10 hereof (subject tothe provisions of Section 5.1.10(g) hereof), (ii) cause Mortgage Borrower toprovide (A) the information set forth on **Schedule9.1** annexed hereto and (B) the annual operating budgets relating tothe Properties in accordance with the requirements of the Mortgage LoanDocuments, and (iii) perform or permit or cause to be performed or permittedsuch site inspection, appraisals, market studies, environmental reviews and reports(Phase I’s

 

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#### and, ifappropriate, Phase II’s), engineering reports and other due diligenceinvestigations of the Properties, as may be reasonably requested by the holderof the Note or the Rating Agencies or as may be necessary or appropriate inconnection with the Securitization in accordance with the terms and conditionsof this Agreement (collectively, the “Provided Information”), togetherwith, if customary, appropriate verification and/or consents with respect tothe Provided Information reasonably acceptable to Lender and the RatingAgencies;

####  

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

####  

#### (c)           if required by theRating Agencies, use commercially reasonable efforts to obtain and deliver suchadditional tenant estoppel letters, subordination agreements or 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)           subject in all casesto the applicable provisions of Section 9.5 hereof, execute such amendments tothe Loan Documents as may be reasonably requested by the holder of the Note orthe Rating Agencies or otherwise to effect the Securitization;

####  

#### (e)           if Lender elects, inits sole discretion, prior to or upon a Securitization, to split the Loan intotwo or more parts, or any Note into multiple component notes or tranches, orreallocate the principal amounts of the Notes, which parts, components,tranches or Notes may have different interest rates, principal amounts andmaturities, Borrower agrees to cooperate with Lender in connection with theforegoing and, subject in all cases to the applicable provisions of Section 9.5hereof, to execute the required modifications and amendments to the Note, thisAgreement and the Loan Documents and to provide opinions necessary toeffectuate the same. Such Notes or components may be assigned differentinterest rates, so long as the weighted average of such interest rates does notexceed the Applicable Interest Rate (except for any deviation attributable tothe imposition of any rate of interest at the Default Rate or prepaymentspursuant to Section 2.3.2 or 2.3.3 hereof);

####  

#### (f)            deliver suchestoppel certificates as may be required to be delivered by Borrower pursuantto Section 5.1.13(a) hereof; and

####  

#### (g)           amend theOrganizational 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 in

 

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#### accordancewith 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 allof its actual out-of-pocket costs and expenses (other than the fees andexpenses of Borrower’s counsel) that Borrower incurs in connection with complyingwith a request made by Lender or any other Person acting on behalf of Lenderunder this 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.

 

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.

 

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Section 9.4             Exculpation.

 

#### (a)           Except as otherwiseexpressly provided in this Section 9.4, Lender shall not enforce the liabilityand obligation of Borrower to perform and observe the obligations contained inthis Agreement, the Note or the Pledge Agreement or any other Loan Document byany action or proceeding against Borrower or any Exculpated Party, except thatLender may bring a foreclosure action, action for specific performance or otherappropriate action or proceeding to enable Lender to enforce and realize uponthis Agreement, the Note, the Pledge Agreement, the other Loan Documents, andthe Collateral and any other collateral for the Debt in which a securityinterest is granted to Lender by this Agreement, the Pledge Agreement or theother 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 Borrower, or any affiliate,director, officer, employee, trustee or agent of any of the foregoing (each, an“Exculpated Party” and, collectively, the “Exculpated Parties”)in any such action or proceeding, under or by reason of or under or inconnection with this Agreement, the Note, the Pledge Agreement or the otherLoan 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 party defendantin any action or suit for judicial foreclosure and sale under the PledgeAgreement (subject, however, to the aforesaid limitation on Lender’s right tosue, seek or demand a deficiency or other money judgment against Borrower orany other Exculpated Party); (iii) affect the validity or enforceability of anyindemnity (including, without limitation, the Environmental Indemnity),guaranty, master lease or similar instrument made in connection with thisAgreement, the Note, the Pledge Agreement, or the other Loan Documents(subject, however, to any exculpatory or non-recourse provisions appearing insuch indemnity, guaranty or similar instrument); (iv) impair the right ofLender to obtain the appointment of a receiver; (v) [intentionally omitted];(vi) impair the right of Lender to enforce the provisions of Sections 4.1.8,4.1.28, 5.1.9 and 5.2.8 hereof (subject, however, to the aforesaid limitationon Lender’s right to sue, seek or demand a deficiency or other money judgmentagainst Borrower or any other Exculpated Party which such limitation, withrespect to Borrower, shall not apply to the Environmental Indemnity); or (vii)impair the right of Lender to obtain a deficiency judgment or other judgment onthe Note against Borrower if and to the extent necessary to obtain anyinsurance proceeds or condemnation awards to which Lender would otherwise beentitled under this Agreement; provided however, that Lender shall only beentitled to enforce such judgment to the extent of the insurance proceedsand/or condemnation awards.

 

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#### (b)           Notwithstanding theprovisions of this Section 9.4 to the contrary, Borrower and Guarantor pursuantto the Guaranty (but not any other Exculpated Parties) shall be personallyliable to Lender for any actual Losses Lender incurs due to the following(collectively, the “Recourse Events”):

####  

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

#####  

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

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##### (iii)          the misappropriation by Borrower, Mortgage Borrower or anyof their Affiliates or agents of any funds (including misappropriation ofRents, security deposits and/or Net Proceeds);

#####  

##### (iv)          any Transfer, Sale or Pledge of the Property, theCollateral or any interest of a Restricted Party therein, and in each case,which is prohibited hereunder;

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##### (v)           the intentional and material breach of any representationin the Environmental Indemnity or in Sections 4.1.39 or 5.1.19 hereof;

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##### (vi)          any voluntary filing by Borrower, Mortgage Borrower,Mortgage Principal or Principal under the Bankruptcy Code or any other federalor state bankruptcy or insolvency law;

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##### (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;

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

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

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#### (c)           IntentionallyOmitted.

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#### (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

 

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#### BankruptcyCode to file a claim for the full amount of the indebtedness secured by thePledge Agreement or to require that all collateral shall continue to secure allof the indebtedness owing to Lender in accordance with this Agreement, theNote, the Pledge 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 substantial part ofsuch Person’s assets, or the making of a general assignment for the benefit ofsuch 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;

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#### (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;

 

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#### (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;

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#### (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;

####  

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

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

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

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

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#### (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;

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

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#### (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;

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

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

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#### (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);

 

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

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#### (s)                                  materiallychange any obligation of Borrower pursuant to the actions taken herein orpursuant hereto or in connection herewith;

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#### (t)                                    resultin Borrower or any of its Affiliates (including, without limitation, MezzanineB Borrower, Mortgage Borrower, Bank Loan Borrower, Principal or Guarantor)being deemed an “issuer” of the Securities (or any of them); or

####  

#### (u)                                 otherwiseadversely affect Borrower or any of its Affiliates (including, withoutlimitation, Mezzanine B Borrower, Mortgage Borrower, Bank Loan Borrower,Principal or Guarantor) in any material way.

####  

Section 9.6                                      Reallocationof Loan Amounts.

 

Lender,without in any way limiting its other rights hereunder, shall have the right,in its sole and absolute discretion, to reallocate the amount of the Loan andthe Mezzanine B Loan, Borrower agrees to reasonably cooperate to facilitatesuch reallocation; *provided, however*,that (i) the aggregate principal amount of the Loan and the Mezzanine B Loanimmediately following such reallocation shall equal the outstanding principalbalance of the Loan and the Mezzanine B Loan immediately prior to suchreallocation; (ii) the weighted average interest rate of the Loan and theMezzanine B Loan immediately following such reallocation shall not exceed theweighted average interest rate which was applicable to the Loan and theMezzanine B Loan immediately prior to such reallocation (except for anydeviation attributable to the imposition of any rate of interest at the DefaultRate or prepayments pursuant to Section 2.3.2 or 2.3.3 hereof). Borrower shallcooperate with all reasonable requests of Lender in order to reallocate theamount of the Loan and the Mezzanine B Loan and shall execute and deliver suchdocuments as shall reasonably be required by Lender in connection therewith,including, without limitation, amendments to the Loan Documents and theMezzanine B Loan Documents and endorsements to the UCC title insurancepolicies, all in form and substance reasonably satisfactory to Lender. Borrowershall cause Mezzanine B Borrower to cooperate with all reasonable requests ofMezzanine B Lender in connection with the reallocation of the amount of theLoan and the Mezzanine B Loan, and shall execute and deliver such documents asshall reasonably be required by Mezzanine B Lender in connection therewith,including opinions of counsel and UCC insurance, all in form and substancereasonably satisfactory to Lender. Solely for the purposes of this Section 9.6,Lender shall reimburse Borrower for all of its reasonable out-of-pocket costsand expenses (including, any additional mortgage recording tax due and payableby Borrower in connection with such restructuring and any title or UCCinsurance premiums, costs and expenses incurred in connection with the issuanceof the insurance policies and endorsements required to be delivered by Borrowerpursuant to this Section 9.6, but excluding the fees and expenses of Borrower’scounsel) that Borrower incurs in connection with complying with any requestmade by Lender under this Section 9.6. Notwithstanding the foregoing, theprovisions of this Section 9.6 shall in no way limit, increase or otherwiseaffect any Borrower obligation to pay any costs

 

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expressly required to be paid by Borrower pursuant to any otherSections of this Agreement. It shall be an Event of Default hereunder ifBorrower fails to comply with any of the terms, covenants or conditions of thisSection 9.6 and such failure shall continue for more than ten (10) BusinessDays after Borrower 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.

 

9.7.2                        Sale of Loan, Co-Lenders,Participations and Servicing.

 

#### (a)                                  Lenderand any Co-Lender may, at their option, without Borrower’s consent (but withnotice to Borrower), sell with novation all or any part of their right, titleand interest in, and to, and under the Loan (the “Syndication”), to oneor more additional lenders (each a “Co-Lender”). Each additionalCo-Lender shall enter into an assignment and assumption agreement (the “Assignmentand Assumption”) 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)                                 Theliabilities of Lender and each of the Co-Lenders shall be several and not joint.Neither Lender nor any Co-Lender shall be responsible for the obligations ofany other Co-Lender. If for any reason any of the Co-Lenders shall fail orrefuse to abide by their obligations under this Agreement, Lender and the otherCo-Lenders shall not be relieved of their obligations, if any, hereunder.

####  

#### (c)                                  Borroweragrees that it shall, in connection with any sale of all or any portion of theLoan, whether in whole or to an additional Co-Lender or Participant, within ten(10) Business Days after requested by Lender, furnish Lender with thecertificates required under Sections 5.1.10 and 5.1.13 hereof and such otherinformation as reasonably requested by any additional Co-Lender or Participantin performing its due diligence in connection with its purchase of an interestin the Loan.

####  

#### (d)                                 Lender(or an Affiliate of Lender) shall act as administrative agent for itself andthe Co-Lenders (together with any successor administrative agent, the “Agent”)pursuant to this Section 9.7. Borrower acknowledges that Lender, as Agent,shall have the sole and exclusive authority to execute and perform thisAgreement and each Loan

 

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#### Document onbehalf of itself, as Lender and as agent for itself and the Co-Lenders untilreplaced as Agent pursuant to the terms of the Co-Lending Agreement; *provided, however*, (i) so long as no Event of Default shallthen exist or (ii) Agent shall not be in default under the Co-Lending Agreement(which would entitle the Co-Lenders to replace Agent), Borrower shall have theright to approve any replacement or successor Agent, which such approval shallnot be unreasonably withheld or delayed. Lender acknowledges that Lender, asAgent, shall retain the exclusive right to grant all approvals and giveconsents with respect to the operating budgets required to be deliveredhereunder and with respect to matters concerning the establishment andadministration of the Accounts. Except as otherwise provided herein, Borrowershall have no obligation to recognize or deal directly with any Co-Lender, andno Co-Lender shall have any right to deal directly with Borrower with respectto the rights, benefits and obligations of Borrower under this Agreement, theLoan Documents or any one or more documents or instruments in respect thereof. Borrowermay rely conclusively on the actions of Lender as Agent to bind Lender and theCo-Lenders, notwithstanding that the particular action in question may, pursuantto this Agreement or the Co-Lending Agreement be subject to the consent ordirection of some or all of the Co-Lenders. Lender may resign as Agent of theCo-Lenders, in its sole discretion or if required to by the Co-Lenders inaccordance with the term of the Co-Lending Agreement, in each case without theconsent of Borrower. Upon any such resignation, a successor Agent shall bedetermined pursuant to the terms of the Co-Lending Agreement. The term Agentshall mean any successor Agent.

####  

#### (e)                                  Notwithstandingany provision 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,obligations or liabilities of Agent shall be implied by or inferred from thisAgreement, the Co-Lending Agreement, or any other Loan Document, or otherwiseexist against Agent.

####  

#### (f)                                    Exceptto the extent 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)                                 Ifrequired by any Co-Lender, Borrower hereby agrees to execute supplemental notesin the principal amount of such Co-Lender’s pro rata share of the Loan in thesame form of the Note (provided any such supplemental note or notes do notrepresent any new or additional indebtedness), and such supplemental note shall(i) be payable to order of such Co-Lender, (ii) be dated as of the ClosingDate, and (iii) mature on the Maturity Date. Such supplemental note shallprovide that it evidences a portion of the existing indebtedness hereunder andunder the Note and not any new or additional

 

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#### indebtednessof Borrower (it being understood that the aggregate face amount and aggregateprincipal balance of such supplemental notes together with any other noteevidencing the Loan shall not exceed the then-outstanding principal balance ofthe Loan at the time of the execution of such supplemental notes). Simultaneouslywith the execution of such supplemental note or notes, Lender shall return theoriginal Note to Borrower. The term “Note” as used in this Agreement andin all the other Loan Documents shall include all such supplemental notes.

####  

#### (h)                                 Lender,as Agent, shall maintain at its domestic lending office or at such otherlocation as Lender, as Agent, shall designate in writing to each Co-Lender andBorrower a copy of each Assignment and Assumption delivered to and accepted byit and a register for the recordation of the names and addresses of theCo-Lenders, the amount of each Co-Lender’s proportionate share of the Loan andthe name and address of each Co-Lender’s agent for service of process (the “Register”).The entries in the Register shall be conclusive and binding for all purposes,absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders maytreat each Person whose name is recorded in the Register as a Co-Lenderhereunder for all purposes of this Agreement. The Register shall be availablefor inspection and copying by Borrower or any Co-Lender during normal businesshours upon reasonable prior notice to the Agent. A Co-Lender may change itsaddress and its agent for service of process upon written notice to Lender, asAgent, which notice shall only be effective upon actual receipt by Lender, asAgent, which receipt 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-Lender hereunderor under the Note or the Loan Documents. No Participant shall have any rightsunder this Agreement, the Note or any of the Loan Documents and the Participant’srights in respect of such participation shall be solely against Lender orCo-Lender, as the case may be, as set forth in the participation agreementexecuted by and between Lender or Co-Lender, as the case may be, and suchParticipant. No participation shall relieve Lender or Co-Lender, as the casemay be, from its obligations hereunder or under the Note or the Loan Documentsand Lender or Co- Lender, as the case may be, shall remain solely responsiblefor the performance of its obligations hereunder.

####  

#### (j)                                     Notwithstandingany other provision set forth in this Agreement, Lender or any Co-Lender may atany time create a security interest in all or any portion of its rights underthis Agreement (including, without limitation, amounts owing to it in favor ofany Federal Reserve Bank in accordance with Regulation A of the Board ofGovernors of the Federal Reserve System), provided that no such securityinterest or the exercise by the secured party of any of its rights thereundershall release Lender or Co-Lender from its funding obligations hereunder.

 

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9.7.3                        Cooperation in Syndication.

 

#### (a)                                  Borroweragrees to use commercially reasonable efforts to assist Lender in completingSyndication satisfactory to Lender. Such assistance shall include (i) directcontact between senior management and advisors of Borrower and the proposedCo-Lenders, (ii) assistance in the preparation of a confidential informationmemorandum and other marketing materials to be used in connection with theSyndication, (iii) the hosting, with Lender, of one (1) or more meetings of prospectiveCo-Lenders or with the Rating Agencies, (iv) the delivery of appraisalsreasonably satisfactory to Lender if required, and (v) working with Lender toprocure a rating for the Loan by the Rating Agencies.

####  

#### (b)                                 Lendershall manage all aspects of the Syndication of the Loan, including decisions asto the selection of institutions to be approached and when they will beapproached, when their commitments will be accepted, which institutions willparticipate, the allocations of the commitments among the Co-Lenders and theamount and distribution of fees among the Co-Lenders. To assist Lender in itsSyndication efforts, Borrower agrees promptly to prepare and provide to Lenderall information 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)                                  Ifrequired in connection with the Syndication, Borrower hereby agrees to:

####  

##### (i)                             amendthe Loan Documents to give Lender the right, at Lender’s sole cost and expense,to have the Properties reappraised on an annual basis;

#####  

##### (ii)                          deliverupdated financial and operating statements (as may be required to be deliveredpursuant to Section 5.1.10 hereof) and other information reasonably required byLender (as may be required to be delivered pursuant to Section 5.1.10 hereof)to facilitate the Syndication;

#####  

##### (iii)                       usecommercially reasonable efforts to deliver reliance letters reasonablysatisfactory to Lender with respect to the environmental assessments andreports delivered to Lender prior to the Closing Date, at

 

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

#####  

##### (iv)                      subject tothe terms of Section 9.7.4, if Lender elects, in its sole discretion, prior toor upon a Syndication, to split the Loan into two (2) or more parts, or theNote into multiple component notes or tranches which may have differentinterest rates, principal amounts, maturities, and priorities, Borrower agreesto reasonably cooperate with Lender in connection with the foregoing and,subject in all cases to the applicable provisions of Section 9.5 hereof, toexecute the required modifications and amendments to the Note, this Agreementand the Loan Documents and to provide opinions necessary to effectuate the same.Such notes or components or tranches may be assigned different interest rates,so long as the weighted average of such interest rates does not exceed theApplicable Interest Rate (except for any deviation attributable to theimposition of any rate of interest at the Default Rate or prepayments pursuantto Section 2.3.2 or 2.3.3 hereof);

#####  

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

#####  

##### (vi)                      amend theOrganizational 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.

#####  

9.7.4                        Payment of Agent’s, andCo-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 thisparagraph shall in no way limit or affect any Borrower obligation to pay anycosts expressly required to be paid by Borrower pursuant to any other Sectionsof this Agreement.

 

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9.7.5                        Intentionally Omitted.

 

9.7.6                        No Joint 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 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)                                  Lendershall have the right to establish different interest rates for the NewMezzanine Loan(s) and to require the payment of the New Mezzanine Loan(s) insuch order of priority as may be designated by Lender; *provided,however*, that (i) the total loan amounts for the New MezzanineLoan(s) shall equal the aggregate outstanding principal amount of the Loan andthe Mezzanine B Loan immediately prior to the creation of the New MezzanineLoan(s); (ii) the weighted average interest rate of the New Mezzanine Loan(s)shall equal the weighted average interest rate which was applicable to the Loanand the Mezzanine B Loan prior to the creation of the New Mezzanine Loan(s)(except for any deviation attributable to the imposition of any rate ofinterest at the Default Rate or prepayments pursuant to Section 2.3.2 or 2.3.3hereof); (iii) [intentionally omitted]; and (iv) no additional recording taxshall be payable as a result of the creation of the New Mezzanine Loan(s) (or,if such additional recording tax is payable, Lender shall pay the same). TheNew Mezzanine Loan(s) will be governed by the terms of an intercreditoragreement between or among the respective holders of the New Mezzanine Loan(s).

 

(b)                                 MezzanineB Borrower, Borrower and New Mezzanine Borrower shall be a special purpose,bankruptcy remote entity pursuant to applicable Rating Agency criteria

 

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and shall own directly or indirectly one hundred percent (100%) ofMortgage Borrower, Mezzanine B Borrower or Borrower, as applicable. Thesecurity for the New Mezzanine Loan(s) shall be a pledge of one hundred percent(100%) of the direct and indirect ownership interests held by such entity.

 

(c)                                  MezzanineB Borrower, Borrower and New Mezzanine Borrower shall cooperate, in allcommercially reasonable respects, with all reasonable requests of Lender inorder to divide the Loan and/or the Mezzanine B Loan into one or more NewMezzanine Loan(s) and shall execute and deliver such customary documents asshall reasonably be required by Lender and any Rating Agency in connectiontherewith, including, without limitation, (i) the delivery of non-consolidationopinions, (ii) the modification of Loan Documents solely to reflect theexistence of, and/or the terms and provisions of, the New Mezzanine Loan(s) andthe modification of organizational documents, provided such amendments shall relateexclusively to the single purpose bankruptcy remote nature of Borrower,Mezzanine B Borrower or New Mezzanine Borrower, (iii) authorize Lender to fileany UCC-1 Financing Statements reasonably required by Lender to perfect itssecurity interest in the collateral pledged as security for the New MezzanineLoan(s), (iv) subject in all cases to the applicable provisions of Section 9.5hereof, execute such other documents reasonably required by Lender inconnection with the creation of the New Mezzanine Loan(s), including, withoutlimitation, a guaranty substantially similar in form and substance to theGuaranty delivered on the date hereof in connection with the Loan, anenvironmental indemnity substantially similar in form and substance to theEnvironmental Indemnity delivered on the date hereof in connection with theLoan and an agreement regarding the management agreement substantially similarin form and substance to the Agreement Regarding Management Agreement, if any,delivered in connection with the Loan, (v) deliver appropriate authorization,execution and enforceability opinions with respect to the New Mezzanine Loan(s)and amendments to the Loan solely to reflect the existence of, and/or the termsand provisions of, the New Mezzanine Loan(s), and (vi) deliver such titleinsurance policies, “Eagle 9” or equivalent UCC title insurance policies,satisfactory to Lender, insuring the perfection and priority of the lien on thecollateral pledged as security for the 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

 

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way limit or affect any obligation of Borrower to pay any costsexpressly required to be paid by Borrower pursuant to any other Sections ofthis 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 equitableagreement to make contributions among each of the Borrower Entities in theevent any payment is made by any individual Borrower Entity hereunder to Lender(each such payment being referred to herein as a “Contribution,” whichterm shall, for purposes of this Section 9.9, include any exercise of recourseby Lender against any Collateral of a Borrower Entity and application ofproceeds of such Collateral in satisfaction of such Borrower Entity’sobligations 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 otherBorrower Entities have pledged their respective Pledged Interests (as definedin the Pledge Agreement) to secure the Obligations of such Borrower Entity toLender.

#####  

##### (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 total

 

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##### liabilities of such BorrowerEntity (including the maximum amount reasonably expected to become due inrespect of contingent liabilities) determined as of the date on which thepayment made by a Funding Borrower is deemed made for purposes hereof (givingeffect to all payments made by other Funding Borrowers as of such date in amanner 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 entitled toa Reimbursement Contribution from the other Borrowers in accordance with theprovisions 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)                              anyright to require Lender to proceed against any other Borrower Entity or anyother person or to proceed against or exhaust any security held by Lender atany time or to pursue any other remedy in Lender’s power before proceedingagainst any Borrower Entity;

######  

###### (B)                                thedefense of the statute of limitations in any action against any other BorrowerEntity or for the collection of any indebtedness or the performance of anyobligation under the Loan;

######  

###### (C)                                anydefense based upon any legal disability or other defense of any other BorrowerEntity, any guarantor of any other person or by reason of the cessation orlimitation of the liability of any other Borrower Entity or any guarantor fromany cause other than full payment of all sums payable under the Note, thisAgreement and any of the other Loan Documents;

 

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###### (D)                               anydefense based upon any lack of authority of the officers, directors, partnersor agents acting or purporting to act on behalf of any other Borrower Entity orany principal of any other Borrower or any defect in the formation of any otherBorrower Entity or any principal of any other Borrower Entity;

######  

###### (E)                                 anydefense based upon any statute or rule of law which provides that theobligation of a surety must be neither larger in amount nor in any otherrespects more burdensome than that of a principal;

######  

###### (F)                                 anydefense based upon any failure by Lender to obtain collateral for theindebtedness of any other Borrower Entity or any failure by Lender to perfect alien on any collateral of any other Borrower Entity;

######  

###### (G)                                presentment,demand, protest and notice of any kind with respect to the indebtedness of anyother Borrower Entity;

######  

###### (H)                               anydefense based upon any failure of Lender to give notice to such Borrower Entityof the sale or other disposition of any collateral of any other Borrower Entityor to any other person or entity or any defect in any notice that may be givenin connection with any sale or disposition of any collateral;

######  

###### (I)                                    anydefense based upon any failure of Lender to comply with Applicable Laws inconnection with the sale or other disposition of any collateral of any otherBorrower Entity, including, without limitation, any failure of Lender toconduct a commercially reasonable sale or other disposition of any collateral;

######  

###### (J)                                   anydefense based upon any election by Lender, in any bankruptcy proceeding, of theapplication or non-application of Section 1111(6)(2) of the Bankruptcy Code orany successor statute;

######  

###### (K)                               anydefense based upon any use of cash collateral under Section 363 of theBankruptcy Code;

######  

###### (L)                                 anydefense based upon any agreement or stipulation entered into by Lender with anyother Borrower Entity with respect to the provision of adequate protection inany bankruptcy proceeding;

######  

###### (M)                            anydefense based upon any borrowing or any grant of a security interest underSection 364 of the Bankruptcy Code by any other Borrower Entity;

######  

###### (N)                               anydefense based upon the avoidance of any security interest granted by any otherBorrower Entity in favor of Lender for any reason;

 

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###### (O)                               anydefense based upon any bankruptcy, insolvency, reorganization, arrangement,readjustment of debt, liquidation or dissolution proceeding, including anydischarge of, or bar or stay against collecting, all or any of the obligationsevidenced by the Note or owing under any of the Loan Documents; and

######  

###### (P)                                 anydefense or benefit based upon any Borrower Entity’s, or any other party’s,resignation of the portion of any obligation secured by the Pledge Agreement tobe satisfied by any payment from any other Borrower Entity or any such party.

######  

##### (x)                                   EachBorrower Entity waives:

#####  

###### (A)                              allrights and defenses arising out of an election of remedies by Lender eventhough the election of remedies, such as nonjudicial foreclosure with respectto security for the Loan or any other amounts owing under the Loan Documents,may have destroyed such Borrower Entity’s rights of subrogation andreimbursement against any other Borrower Entity;

######  

###### (B)                                intentionallyomitted; and

######  

###### (C)                                anyclaim or other right which any Borrower Entity might now have or hereafteracquire against any other Borrower Entity or any other person that arises fromthe existence or performance of any obligations under the Note, this Agreement,the Pledge Agreement or the other Loan Documents, including, withoutlimitation, any of the following: (i) any right of subrogation, reimbursement,exoneration, contribution (other than the right to contribution provided for inthis Section 9.9), or indemnification; or (ii) any right to participate in anyclaim or remedy of Lender against any other Borrower Entity or any collateralsecurity therefor, whether or not such claim, remedy or right arises in equityor under contract, statute or common law.

######  

Section 9.10                                CertainAdditional Rights of Lender; VCOC.

 

Subject to theterms hereof, Lender shall have the right:

 

#### (a)                                  toroutinely consult with Borrower’s management regarding the significant businessactivities and business and financial developments of Borrower; provided,however, that such consultations shall not include discussions of environmentalcompliance programs or disposal of hazardous substances. Routine consultationmeetings may occur no more frequently than quarterly, with Lender having theright to call special meetings at any reasonable time (but not more frequentlythan once per quarter) and upon reasonable advance notice. Borrower shall haveno obligation to adhere to any advice proposed by Lender, except whereotherwise specifically required elsewhere in the Loan Documents;

 

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#### (b)                                 inaccordance with the terms of this Agreement, to examine the books and recordsof Borrower at any reasonable times upon reasonable notice;

####  

#### (c)                                  inaccordance with the terms of this Agreement, to receive financial reports andother statements as provided in Section 5.1.10 hereof;

####  

#### (d)                                 inaccordance with the terms of this Agreement, but without restricting any otherrights of Lender under this Agreement (including any similar right), to approveany acquisition by Borrower of any other significant property;

####  

#### (e)                                  inaccordance with the terms of this Agreement, but without restricting any otherrights of Lender under this Agreement (including any similar right), torestrict the transfer of interests in Borrower, except for any such transferthat is a permitted transfer, including, without limitation those transfers notdeemed “Transfers” under Section 5.2.10(c) hereof;

####  

#### (f)                                    inaccordance with the terms of this Agreement, but without restricting any otherrights of Lender under this Agreement (including any similar right), torestrict financing to be obtained in connection with future propertytransactions, refinancing of any acquisition financings, and unsecured debt;

####  

#### (g)                                 inaccordance with the terms of the Agreement Regarding Management Agreement, butwithout restricting any other right of Lender under this Agreement (includingany similar right), to restrict, upon the occurrence of an Event of Default,Borrower’s payments of management fees to Manager; and

####  

#### (h)                                 inaccordance with the terms of this Agreement, but without restricting any otherright of Lender under this Agreement (including any similar right), to exercisecertain approval rights with respect to the proposed annual operating budgetsas provided 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)                                  Withoutlimiting the generality of the other provisions of this Agreement, and withoutwaiving or releasing Borrower from any of its obligations hereunder, if thereshall occur any Mortgage Loan Event of Default, and without regard to any otherdefenses or offset rights Mortgage Borrower may have against Mortgage Lender,Borrower hereby expressly agrees that Lender shall have the immediate right, withoutnotice to or demand on Borrower or Mortgage Borrower, but shall be under no

 

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#### 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.

####  

#### (b)                                 Subjectto the rights of tenants, Borrower hereby grants, and shall cause MortgageBorrower to grant, Lender and any Person designated by Lender the right toenter upon the Property at any time for the purpose of carrying out the rightsgranted to Lender under this Section 9.11.

####  

#### (c)                                  Borrowershall indemnify and hold harmless Lender from and against all actualout-of-pocket liabilities, obligations, losses, damages, penalties, assessments,actions, or causes of action, judgments, suits, claims, demands, costs,expenses (including, without limitation, reasonable attorneys’ and otherprofessional fees, whether or not suit is brought, and settlement costs), anddisbursements of any kind or nature whatsoever which may be imposed on,incurred by or asserted against Lender as a result of the foregoing actionsdescribed in Section 9.11(a) other than liabilities, obligations, losses,damages, penalties, assessments, actions, or causes of action, judgments,suits, claims, demands, costs, expenses and disbursements arising out of thefraud, illegal acts, gross negligence or willful misconduct of Lender. Lendershall have no obligation to Borrower, Mortgage Borrower or any other party tomake any such payment or performance. Borrower shall not impede, interferewith, hinder or delay, and shall cause Mortgage Borrower to not impede,interfere with, hinder or delay, any effort or action on the part of Lender tocure any default or asserted default under the Mortgage Loan, or to otherwiseprotect or preserve Lender’s interests in the Loan and the Collateral followinga default or asserted default under the Mortgage Loan, in either case, inaccordance with the provisions of this Agreement and the other Loan Documents.

####  

#### (d)                                 IfLender shall receive a copy of any notice of a Mortgage Loan Event of Defaultsent by Mortgage 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,

 

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#### Lender shallbe subrogated, 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,Mortgage Lender, Mezzanine B Lender and Bank Loan Agent are parties to one ormore intercreditor 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 IntercreditorAgreements are intended solely for the benefit of Lender, Mezzanine B Lender,Mortgage Lender and Bank Loan Agent and (ii) Borrower, Mortgage Borrower,Mezzanine B Borrower and Bank Loan Borrower are not intended third-partybeneficiaries of any of the provisions therein and shall not be entitled torely on any of the provisions contained therein. Lender, Mortgage Lender,Mezzanine B Lender and Bank Loan Agent shall have no obligation to disclose toBorrower, Mortgage Borrower, Mezzanine B Borrower or Bank Loan Borrower thecontents of the Intercreditor Agreements. Borrower’s obligations hereunder areindependent of such Intercreditor Agreements and remain unmodified by the termsand provisions thereof.

####  

#### (b)                                 Inthe event the Lender is required pursuant to the terms of the IntercreditorAgreements to pay over to Mortgage Lender or Mezzanine B Lender any payment ordistribution of assets, whether in cash, property or securities which isapplied to the Debt, including, without limitation, any proceeds of theProperties previously received by Lender on account of the Loan, then Borrowershall indemnify Lender for any amounts so paid, and any amount so paid shallcontinue to be owing pursuant to the Loan Documents as part of the Debtnotwithstanding the prior receipt of such payment by Lender.

####  

Section 9.15                                Discussionswith Mortgage Lender.

 

#### (a)                                  Inconnection with the exercise of its rights set forth in the Loan Documents,Lender shall have the right at any time to discuss the Properties, the MortgageLoan, the Loan, the Mezzanine B Loan, or any other matter directly withMortgage Lender or Mortgage Lender’s consultants, agents or representativeswithout notice to or permission from Borrower or any other Loan Party. Lendershall not have any obligation to disclose such discussions or the contentsthereof with Borrower or any other Loan Party.

####  

#### (b)                                 Inconnection with the exercise of its rights set forth in the Loan Documents,Lender shall have the right at any time to discuss the Properties, the MortgageLoan, the Mezzanine B Loan, the Loan or any other matter directly with

 

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#### Mezzanine BLender or Mezzanine B Lender’s consultants, agents or representatives withoutnotice to or permission from Borrower or any other Loan Party. Lender shall nothave any 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 independent rightto grant, deny, withhold or condition any requested consent or approval basedon its own point of view, subject, however, to any requirements ofreasonableness or good faith expressly set forth in this Agreement or the otherLoan Documents. Further, the denial by Lender of a requested consent orapproval shall not, provided such denial shall not constitute a default byLender under this Agreement, create any liability or other obligation of Lenderif the denial of such consent or approval results directly or indirectly in adefault under the Mortgage Loan and Borrower hereby waives any claim of liabilityagainst Lender arising from any such denial, provided such denial shall notconstitute a default by Lender under this Agreement. Notwithstanding anythingto the contrary contained in this Section 9.16, to the extent that MortgageLender requires Mortgage Borrower to perform, or refrain from performing, anyaction pursuant to the terms of the Mortgage Loan Documents, Lender shall notwithhold its consent to the performance or, or the refraining from performing,such action only if such failure to act or refrain from acting by MortgageBorrower (after the expiration of any applicable notice and cure periods) wouldbe 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.

 

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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).

####  

#### (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.

 

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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.

 

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 been depositedfor overnight delivery with any reputable overnight courier service, or (iii)three (3) Business Days after having been deposited in any post office or maildepository regularly maintained by the U.S. Postal Service and sent byregistered or certified mail, postage prepaid, return receipt requested,addressed as follows:

 
| If to  Borrower: |   | c/o  Archstone-Smith Operating Trust |
|------------------|--------|--------------------------------------|
|             |   | 9200 E.  Panorama Circle, Suite 400  |
|             |   | Englewood,  Colorado 80112           |
|             |   | Attention:  General Counsel          |
|             |   | Facsimile  No.: (303) 708-6954       |
|             |   |                                 |
| with a copy  to: |   | Tishman  Speyer                      |
|             |   | 45  Rockefeller Plaza                |
|             |   | New York,  New York 10111            |
|             |   | Attention:  Chief Legal Officer      |
|             |   | Facsimile  No.: (212) 895-0353       |
|             |   |                                 |
| and to:          |   | Tishman  Speyer                      |
|             |   | 45  Rockefeller Plaza                |
|             |   | New York,  New York 10111            |
|             |   | Attention: Chief  Financial Officer  |
|             |   | Facsimile  No.: (212) 895-0314       |
|             |   |                                 |
| and to:          |   | Schulte Roth  & Zabel LLP        |
|             |   | 919 Third  Avenue                    |
|             |   | New York,  New York 10022            |

 

145

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|            |   | Attention:  Andrew J. Dady, Esq.           |
|-----------------|--------|--------------------------------------------|
|            |   | Facsimile  No.: (212) 593-5955             |
|            |   |                                       |
| If to  Lender:  |   | Lehman  Brothers Holdings Inc.             |
|            |   | 399 Park  Avenue                           |
|            |   | New York,  New York 10022                  |
|            |   | Attention:  Charles Manna                  |
|            |   | Facsimile  No.: (646) 758-5366             |
|            |   |                                       |
| and to:         |   | Bank of America, N.A.                      |
|            |   | Capital Markets Servicing Group            |
|            |   | 900 West Trade Street, Suite 650           |
|            |   | Mail Code: NC1-026-06-01                   |
|            |   | Charlotte, North Carolina 28255            |
|            |   | Attention: Dean B. Roberson                |
|            |   | Facsimile No.: (704) 317-4501              |
|            |   |                                       |
| and to:         |   | Barclays  Capital Real Estate Finance Inc. |
|            |   | 200 Park  Avenue, 4th Floor                |
|            |   | New York,  New York 10166                  |
|            |   | Attention:  Lori Ann Rung                  |
|            |   | Facsimile  No.: (212) 412-1664             |
|            |   |                                       |
| with a copy to: |   | Thacher Proffitt & Wood LLP            |
|            |   | Two World Financial Center                 |
|            |   | New York, New York 10281                   |
|            |   | Attention: Mitchell G. Williams, Esq.      |
|            |   | Facsimile No.: (212) 912-7751              |

 

or 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

 

146

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COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THISWAIVER BY THE OTHER PARTY.

 

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.

 

Wherever possible,each provision of this Agreement shall be interpreted in such manner as to beeffective and valid under Applicable Law, but if any provision of thisAgreement shall be prohibited by or invalid under Applicable Law, suchprovision shall be ineffective to the extent of such prohibition or invalidity,without invalidating the remainder of such provision or the remainingprovisions of this 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 withrespect to any matter for which this Agreement or any of the other LoanDocuments does not specifically and expressly provide for the giving of noticeby Lender to Borrower.

 

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. 

 

147

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The parties hereto agree that any action or proceeding to determine whetherLender has acted reasonably shall be determined by an action seekingdeclaratory 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 compliance with allagreements and conditions contained in this Agreement and the other LoanDocuments on its part to be performed or complied with after the Closing Date;(iv) the negotiation, preparation, execution, delivery and administration ofany consents, amendments, waivers or other modifications to this Agreement andthe 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 fromBorrower under this Agreement, the other Loan Documents or with respect to the Collateralor 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

 

148

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

####  

#### (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

 

149

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#### 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.

####  

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

 

150

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#### 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, Borrower shall rely solely on its own judgment andadvisors in entering into the Loan without relying in any manner on anystatements, representations or recommendations of Lender or any parent,subsidiary or Affiliate of Lender. Lender shall not be subject to anylimitation whatsoever in the exercise of any rights or remedies available to itunder any of the Loan Documents or any other agreements or instruments whichgovern the Loan by virtue of the ownership by it or any parent, subsidiary orAffiliate of Lender of any direct or indirect equity interest any of them mayacquire in Borrower, and Borrower hereby irrevocably waives the right to raiseany defense or take any action on the basis of the foregoing with respect toLender’s exercise of any such rights or remedies. Borrower acknowledges thatLender engages in the business of real estate financings and other real estatetransactions and investments which may be viewed as adverse to or competitivewith 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 reasonableout-of-pocket attorneys’ fees and expenses) in any way relating to or arisingfrom a claim by any Person that such Person acted on behalf of Borrower orLender in connection with the transactions contemplated herein. The provisionsof this Section 10.21 shall survive the expiration and termination of thisAgreement and the payment of 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,

 

151

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between Borrower and/or its Affiliates and Lender are superseded by theterms of this 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 identifies eachBorrower, which information includes the name and address of each Borrower andother information that will allow such Lender to identify each Borrower inaccordance with such Act.

 

**[NO FURTHER TEXT ON THIS PAGE]**

 

152

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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 Bear Hill Mezzanine I, L.L.C.      |       | 4429275                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Quarry Hills Mezzanine I, L.L.C.   |       | 4429280                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Watertown Mezzanine I, L.L.C.      |       | 4429281                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Cupertino Mezzanine I, L.L.C.      |       | 4429283                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Emerald Park Mezzanine I, L.L.C.   |       | 4428913                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Hacienda Mezzanine I, L.L.C.       |       | 4429287                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Mountain View Mezzanine I, L.L.C.  |       | 4429289                                        |       | 90-0042860                           |       |
|                                                               |       |                                           |       |                                 |       |
| Tishman  Speyer Archstone-Smith Redwood Shores 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  Bear Hill        |       | $1,921,039.07 |       |
| Archstone  Quarry Hills     |       | $1,859,123.87 |       |
| Archstone  Watertown Square |       | $791,356.17   |       |
| Archstone  Cupertino        |       | $1,732,860.18 |       |
| Archstone  Emerald Park     |       | $1,445,190.98 |       |
| Archstone  Hacienda         |       | $2,357,943.23 |       |
| Archstone  Mountain View    |       | $709,208.30   |       |
| Archstone  Redwood Shores   |       | $1,308,278.19 |       |

 

----

 

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 the FairHousing 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)

 

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

 

Master Credit Facility Agreement betweenMortgage Borrower and Mortgage Lender

 

**[INSERT TITLE OF SECURITY INSTRUMENT]**made by                                           infavor of Mortgage Lender

 

**[INSERT ADDITIONAL MORTGAGE LOAN DOCUMENTS]**

 

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

 

----

 

SCHEDULE 5.1.20

 

(Capital Improvements)

 

None.

 

----

 

SCHEDULE 5.2.10(c)(vii)

 

(Bank Loan Pledged Interests)

 

All entities that have pledged their assetsas collateral for the Bank Loan pursuant to the Bank Loan Documents.

 

----